The $1.8 billion anti-weaponization fund the Trump administration has established drew criticism last week from both Democrats and some Republicans who framed it as a potential windfall for January 6th participants. But the story of Jason Cardiff, founder of Redwood Scientific Technologies and VPL Medical, illustrates precisely the kind of case the fund’s proponents have in mind, one that has nothing to do with January 6th, involves a small business owner who won a unanimous nine-to-zero Supreme Court ruling against the agency that targeted him, and still has no pathway to recovery because the Federal Trade Commission operates under sovereign immunity. Cardiff joined Dan Proft on Chicago’s Morning Answer to describe what regulatory weaponization looks like from the inside.
Redwood Scientific Technologies made a dissolvable mouth strip containing a well-known active ingredient used to help people stop smoking. In 2018, the FTC conducted a midnight raid on the company under section 13B of the FTC Act, immediately froze all of Cardiff’s funds, including personal accounts, corporate accounts, retirement accounts, and any business he was associated with, and installed a receiver who effectively worked on behalf of the FTC. The stated basis was not that the active ingredient was unsafe or untested, but that it had not been specifically tested in mouth strip delivery form, despite having been studied in more than twenty thousand people in pill and other formats including publications in the New England Journal of Medicine. Before Cardiff had any hearing, before any trial, every dollar he had was frozen. He could not pay his own bills, could not cover healthcare costs, and could not fund his own legal defense. Because the company had corporate defendants, he could not even represent himself, requiring retained counsel he had no access to funds to pay.
He fought the case and while doing so identified in early 2020 that no American company was manufacturing surgical face masks domestically. He built what became the first and largest three-ply surgical mask factory in California, employing approximately four hundred people. The Department of Health and Human Services vetted the company and awarded Cardiff a fourteen and a half million dollar contract to deliver twenty million American-made masks to the Strategic National Stockpile. Other branches of the federal government were also in discussions with him for mask supply as the pandemic peaked and concerns about Chinese-sourced PPE with particulate contamination were widespread.
The FTC discovered the new contract, which meant new money, and obtained a second injunction and asset freeze against VPL Medical, an entirely unrelated company from the original case. The same receiver was installed. At the height of the pandemic, with people dying and mask shortages acute, the receiver shut down the factory for three to four months to evaluate how it could operate, cancelled the HHS contract, and left four hundred workers without jobs. The FTC then told Cardiff that if he paid the receiver twenty-five thousand dollars per week, he would be allowed to run his own factory, despite the underlying VPL Medical company having no violations whatsoever. He described this as straightforward extortion.
Cardiff took the core legal question all the way to the Supreme Court: did the FTC have the power to take all of a private citizen’s money without a trial under section 13B? The Court ruled nine to zero that it did not, in a decision authored by Justice Stephen Breyer in his final term. Cardiff won. But the damage was done. Four years of litigation, a shuttered pharmaceutical company with a proven smoking cessation product, a shuttered mask factory that had employed four hundred people and fulfilled federal government contracts, bills unpaid, life insurance policies lapsed, school bills unpaid, child support payments the receiver had blocked him from making. And because the FTC operates under sovereign immunity, there is no pathway to seek compensation through the federal courts. The Federal Tort Claims Act does not apply. If the FTC spent forty years unlawfully seizing assets from private citizens under section 13B, as the unanimous Supreme Court ruling implies it did, the answer for the wronged parties is that the agency made a mistake and they receive nothing.
Making the case worse, two years after the civil case concluded, the Department of Justice initiated a criminal prosecution against Cardiff personally for the same issues already adjudicated in the civil proceeding, coming after a Supreme Court ruling that the underlying enforcement action had been unauthorized. He noted that Trump’s first term produced a policy called the No Piling On Act specifically designed to prevent exactly this kind of sequential prosecution, but it was not applied to his case. He now sits in criminal proceedings before a federal judge appointed by President Obama, with six motions to dismiss denied, and with a DOJ trial lawyer prosecuting the case who Cardiff says has filed no delegation of authority to be there and who therefore does not have the statutory authority to prosecute the case at all. He says he has raised this point more than thirty times with the district court and the judge ignores it.
Cardiff said he has filed his weaponization documents with the appropriate process and made clear in the filing that the weaponization is current and ongoing, not historical. He said the anti-weaponization fund matters precisely because the federal court system has provided him no meaningful remedy despite winning the most significant legal ruling available to him, and that sovereign immunity insulates the agency from accountability regardless of how thoroughly a court vindicates the person the agency destroyed.