Court Rulings That Could Reshape Health Agency Fines

Conflicting appeals court decisions leave federal enforcement uncertain, Seton Hall Law professor Anjali Deshmukh and Joan H. Krause of the University of North Carolina School of Law write in the New England Journal of Medicine.

---

Anjali D. Deshmukh, a physician and professor at Seton Hall University School of Law, warns that recent court rulings could weaken federal health agencies’ ability to enforce regulations designed to protect patients.

In "The Future of Health Agency Enforcement Fines," a Perspective article in the Oct. 29 issue of The New England Journal of Medicine, Deshmukh and co-author Joan H. Krause of the University of North Carolina School of Law examine conflicting federal appeals court decisions involving the Food and Drug Administration and the Centers for Medicare & Medicaid Services.

Both cases address whether federal agencies can impose civil monetary penalties through administrative proceedings without providing a jury trial. In June, the 5th U.S. Circuit Court of Appeals struck down an FDA fine against a Texas vape shop, ruling that the enforcement system violated the Seventh Amendment. Weeks earlier, the 4th Circuit upheld CMS’ authority to fine a Maryland nursing home about $1.5 million following a tuberculosis outbreak.

“These cases are already impacting how our healthcare agencies approach enforcement,” Deshmukh said.

The authors write that the legal uncertainty could lead agencies to rely on more severe enforcement measures, such as excluding facilities from Medicare or seizing products. Those actions could disrupt patients’ access to care, they say. They also warn that inconsistent enforcement across jurisdictions could harm patients.

“Rules governing federal fines are likely to remain in flux until the Supreme Court addresses how far Jarkesy extends into public health matters,” the authors write.