Go Vapor #2, LLC, d/b/a Go Vapor, DAB TB8144 (2024)

INITIAL DECISION

I sustain the determination of the Center for Tobacco Products (“CTP”) of the United States Food and Drug Administration (“FDA”) to impose a civil money penalty of $19,192 against Go Vapor #2, LLC d/b/a Go Vapor (Respondent).

I. Background

Respondent, through counsel, challenges CTP’s determination to impose a civil money penalty for manufacturing, selling, and distributing new tobacco products, in violation of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. §§ 301 et seq.

CTP filed a pre-hearing brief, a closing brief, and 12 exhibits (Exs.), identified as CTP Ex. 1 – CTP Ex. 12, in support of its allegations. Respondent filed a pre-hearing brief, a closing brief, and no supporting exhibits.

I held a pre-hearing conference on February 22, 2024. CTP contended that an in-person hearing was unnecessary. Respondent argued that it should be allowed to cross-examine CTP’s witnesses. I afforded Respondent the opportunity to file an offer of proof demonstrating what it might accomplish via cross-examination. Respondent did not file an offer of proof. concluded that an in-person hearing was unnecessary because Respondent had not demonstrated that a hearing in person would produce facts that are not contained in the exhibits.

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The parties filed final briefs on April 26, 2024, and the record is now closed. decide this case based on the parties’ written exchanges, including CTP’s exhibits, which I admit into evidence.

II. Issues, Findings of Fact, and Conclusions of Law

A. Issues

CTP alleges that Respondent sold adulterated or misbranded tobacco products in interstate commerce in violation of applicable law and regulations. Petitioner does not deny that it sold tobacco products. It argues, however, that it did not sell products in interstate commerce as defined at 21 U.S.C. § 331(k). The issues that I hear and decide are whether:

1. Respondent manufactured or sold tobacco products in interstate commerce;

2. Any of the products that Respondent manufactured or sold were misbranded in violation of applicable law and regulations; and

3. A civil money penalty of $19,192 is reasonable.

B. Findings of Fact and Conclusions of Law

CTP determined to impose a civil money penalty against Respondent for allegedly violating the Act’s prohibition against manufacturing, selling, and distributing new tobacco products that are adulterated or misbranded. 21 U.S.C. § 331(k). The essence of CTP’s allegations is that Respondent sold new tobacco products – vaping products, also known as e-liquid products, containing nicotine and flavoring – that had not received pre-marketing approval by the FDA. According to CTP, this sale violates federal law and regulations.

Respondent admits that it manufactured and sold new tobacco products on April 15, 2023; that “such ‘new tobacco products’ were not commercially marketed in the United States as of February 15, 2007; and there is no FDA marketing authorization order in effect for such products.” See CRD Docket (Dkt.) Entry No. 11 (Respondent’s Pre-Hearing Brief) at 1-2. It contends, however, that FDA and CTP have no jurisdiction over the sales of Respondent’s products because these products were not sold by Respondent in interstate commerce. Furthermore, according to Respondent, the components of its products – albeit sold to Respondent in interstate commerce – were not intended for human consumption as individual products. CRD Dkt. Entry Nos. 7 (Answer) at 2; 20 (Respondent’s Final Brief) at 1.

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The evidence unequivocally establishes that Respondent sold unapproved new tobacco products that contain components that were distributed in interstate commerce. Respondent’s sale of these products are unlawful.

Generally, a new tobacco product containing components that are distributed in interstate commerce may not be sold lawfully absent prior approval by FDA. A “new tobacco product” is defined as any tobacco product that was not commercially marketed in the United States as of February 15, 2007, or any modification of a tobacco product where the modified product was commercially marketed in the United States after February 15, 2007. 21 U.S.C. § 387j(a)(1). Under 21 U.S.C. § 387j(a)(2)(A), premarket authorization is required for a “new tobacco product.” A tobacco product is adulterated if it has not obtained the required premarket authorization. 21 U.S.C. § 387b(6)(A). A “new tobacco product” is exempt from this premarket authorization requirement only if FDA has specifically exempted that product or if it is substantially equivalent to an exempt product. 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A). A “new tobacco product” is misbranded under 21 U.S.C. § 387c(a)(6) if it is not exempted. It is also a violation of the Act to ship components used to manufacturer new tobacco products via interstate commerce. 21 U.S.C. § 331(k).

On January 25, 2022, CTP issued Respondent a Warning Letter stating that the new tobacco products that Respondent manufactures, sells, and/or distributes were adulterated and misbranded, because they lacked the required FDA marketing authorization order. CRD Dkt. Entry No. 10j (CTP Ex. 9).

On April 15, 2023, FDA-commissioned inspector Garrett Carter conducted an inspection of Respondent’s business establishment. CRD Dkt. Entry No. 10c (CTP Ex. 2). The inspector determined that Respondent offered e-liquid products for sale. He found that Respondent manufactured e-liquid products. Id. ¶ 6. Inspector Carter photographed components used to manufacture new tobacco products, including Flavor West Grape, Vape On Wholesale prepacked nicotine, Liquid Nicotine Wholesalers Nicotine Salts, Bulk Apothecary nature’s Oil Glycerin, and Bulk Apothecary nature’s Oil Propylene Glycol. CRD Dkt. Entry Nos. 10g, 10h (CTP Exs. 6,7). In addition, e-liquid products that are manufactured by other manufactures, such as Esco Bar, Mike Tyson, Geek Bar, and Funky Republic, were also observed for sale. CRD Dkt Entry No. 10d (CTP Ex. 3) at 3. Many of the components observed by Inspector Carter had been distributed to retailers, including Respondent, in interstate commerce. CRD Dkt. Entry No. 10b (CTP Ex. 1) ¶¶ 7-9. These included the nicotine product that Respondent added to its e-liquid products. Id.

None of the e-liquid products manufactured and sold by Respondent had received premarket authorization from FDA nor were any of the products exempt from the authorization requirement. CTP Ex. 1 ¶ 11. The evidence obtained by Inspector Carter therefore establishes that Respondent unlawfully offered new tobacco products for sale

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because they are misbranded and adulterated. 21 C.F.R. § 1140.1(b); 21 U.S.C. § 387b(6)(A); see also 21 U.S.C. § 387c(a)(7)(B).

I have considered Respondent’s arguments and I find them to be without merit. Respondent offered no affirmative proof establishing that its products had received FDA approval or were exempt from approval.

Respondent argues that offering adulterated or misbranded tobacco products is not unlawful unless doing so is an introduction or delivery for introduction into interstate commerce. It asserts that it made no interstate sales of its e-liquid products and therefore, was not selling those products unlawfully.

This argument misstates the law. Although sale of a misbranded tobacco product in interstate commerce is certainly unlawful, so also is the sale of any misbranded product whose components travel in interstate commerce. 21 U.S.C. § 331(k); see also United States v. Dianovin Pharmaceuticals, Inc., 475 F.2d 100, 102-103, (1st Cir. 1973); United States v. Regenerative Services, LLC, 878 F. Supp. 2d. 248, 259 (D.D.C. 2012).

The evidence plainly establishes that Respondent’s products contain components that traveled interstate to Respondent’s enterprise in Louisiana. For instance, Flavor West MFG LLC, the company that manufactures the flavoring component of Respondent’s e-liquid products, is based in California. CTP Ex. 1; CRD Dkt. Entry No. 10l (CTP Ex. 11). Similarly, Liquid Nicotine Wholesalers, the company that manufactures the nicotine component, is based in Arizona. CTP Ex. 1; CRD Dkt. Entry No. 10m (CTP Ex. 12).

Additionally, Respondent argues that its e-liquid products are exempt from regulation because none of the components individually are intended for human consumption. Thus, according to Respondent, no human would consume the flavorings that Respondent uses to make its products unless they are combined with something else. Respondent’s Final Brief at 1. Similarly, no human would consume the nicotine elixir that Respondent combines with flavorings unless it is part of a finished product.

Respondent’s argument is wrong as a matter of law. Nothing in law requires that each element of an FDA-regulated product be independently consumable. The law applies to misbranded and adulterated products even if their components are not consumed in isolation from the final product.

Based on the analysis above, Respondent’s tobacco products are adulterated because Respondent failed to obtain the required premarket authorization. 21 U.S.C. § 387b(6)(A). The tobacco products at issue are also misbranded under the provisions of 21 U.S.C. § 387c(a)(6) in that they were not specifically exempted or substantially equivalent to an exempted product. See 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A).

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C. Civil Money Penalty

The regulation at 21 C.F.R. § 17.34 grants the presiding officer designated to decide an appeal and determine an appropriate amount of civil money penalties, the authority to consider any circumstances that mitigate or aggravate the violation, and “articulate in their opinion the reasons that support the penalties and assessments imposed.”

CTP seeks to impose a civil money penalty against Respondent of $19,192. This is the maximum penalty amount allowed by regulation. 21 C.F.R. § 17.2. I find the penalty amount to be reasonable.

Respondent’s noncompliance is extremely serious because of the dangerous nature of the products that it sold and also because it continued selling them after being warned not to do so. I take notice that nicotine products, whether in the form of tobacco or vaping products, are highly addictive. Consumption of these products can damage the user’s health and shorten a user’s life. FDA and CTP are justified by the dangerous nature of tobacco and vaping products to demand strict compliance with the law from retailers of such products.

Respondent persisted in selling misbranded products after being told explicitly by CTP that it must not do so. Respondent received an explicit warning in January 2022 that it was selling unlawful and dangerous products. CRD Dkt. Entry No. 10j (CTP Ex. 9) at 2. Warning notwithstanding, Respondent persisted for more than a year in selling misbranded nicotine products.

Respondent contends that it has ceased selling misbranded tobacco products. That may be so, but it does not excuse Respondent from paying a penalty for its past unlawful conduct. Furthermore, there is no guarantee that Respondent will continue to refrain from violating the law. The remedy in this case may apply to Respondent’s past conduct, but it also serves as an important reminder to Respondent not to engage in such conduct in the future.

Respondent contends that it lacks the wherewithal to pay the civil money penalty and that it will be forced to go out of business if the penalty is sustained. Respondent’s Pre-Hearing Brief at 3. But Respondent has not offered any evidence to support this contention. Therefore, I find that a civil money penalty of $19,192 is warranted and so order one imposed.