Active: Fourth Circuit appeal challenges agency’s attempt to avoid court

Jake’s Fireworks, started in 1940 by the Marietta family in Pittsburg, Kansas, has played a huge role in the nation’s fireworks industry. Over the years, their products have illuminated countless skies during celebrations across the country. Today, Jake’s operates distribution centers in seven states and serves customers in more than 20 states.

At the same time, Jake’s has maintained its family focus and commitment to hard work, fairness, and giving back to the community by partnering with organizations like the Folds of Honor Foundation to support America’s military families and offering fundraising opportunities for a wide variety of charitable causes, churches, and entrepreneurs.

However, for nearly a decade, Jake’s has faced the threat of federal prosecution and millions of dollars in penalties because one of its products might sometimes make the wrong type of noise.

The Consumer Product Safety Commission is charged with enforcing some of the nation’s fireworks laws. In applying one such regulation, the commission itself concocted an astonishingly arbitrary noise test, whereby agency staff—sometimes a single employee—launches fireworks samples into the air and listens to the sound.

Under federal law, a “pop” or “poof” is legal. A “boom” or “bang” is not.

Armed with this capricious application of the regulation, the agency peppered Jake’s with notices from 2014 to 2018 stating that millions of dollars’ worth of its fireworks failed the so-called poof/bang test and were thus banned under federal law. The CPSC demanded the entire shipment be destroyed and threatened civil penalties of over $15 million for selling them.

In response, Jake’s diligently followed CPSC guidelines and submitted evidence to prove the agency wrong: The Audible Effects Regulation isn’t intended for Jake’s products at all but for hand-held devices with dangerously powerful explosives intended to make loud sounds, devices used by farmers for pest control. The agency’s own records confirm Jake’s products fall outside of the regulation’s purview.

But the agency ignored Jake’s efforts to resolve the case, so Jake’s sued in federal court—twice. Both times, the court agreed with the CPSC that its notices were not “final agency actions” and thus couldn’t be challenged in federal court under the Administrative Procedure Act.

This has left Jake’s in legal limbo. The company is sitting on over $2 million of fireworks it can’t sell because the CPSC says they’re banned. Yet, Jake’s cannot challenge the CPSC’s determination that they’re banned because the CPSC says its determination isn’t “final”; nor does Jake’s have any means for making it so.

Agencies’ bullying people into action through informal threats are unfortunately all-too-common due process failures within government agencies. They’re also unconstitutional. A unanimous Supreme Court said in PLF’s wins in Sackett I and again in Hawkes that government agencies can’t issue determinations that spell out punishment and then claim such decisions aren’t “final.”

The CPSC’s treatment of Jake’s is no exception. If Jake’s were to sell the disputed fireworks, the agency could use the supposedly non-final notices as evidence of willful violations and hit Jake’s with even-more-severe penalties. In this case, the CPSC’s explicit determination that Jake’s fireworks “are banned hazardous substances” and the agency’s demand that Jake’s destroy its fireworks constitute a clear, final agency action that Jake’s should be allowed to challenge in court.

With no further review options and crushing legal consequences, Jake’s is appealing the lower courts’ dismissal at the Fourth Circuit to hold the CSPC to the rule of law.

What’s At Stake?

  • Jake’s Fireworks is caught in a legal Catch-22: They can’t go on with business as normal unless they comply with the CSPC’s threats, but they can’t challenge them in court. PLF’s previous Supreme Court wins in Sackett I and Hawkes demonstrate that agency decisions backed with the threat of fines can be challenged in federal court.

Case Timeline

June 26, 2024
Opinion
United States Court of Appeals for the Fourth Circuit
October 18, 2023
Opening Brief
United States Court of Appeals for the Fourth Circuit