Chester Shop and Save Food Market, Inc. d/b/a Chester Shop and Save Food Market, DAB TB8204 (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 Respondent, Chester Shop and Save Food Market, Inc. d/b/a Chester Shop and Save Food Market.

I. Background

Respondent requested a hearing to challenge CTP’s determination to impose a civil money penalty. I held a pre-hearing conference on April 1, 2024 in which I received into evidence CTP’s and Respondent’s exhibits. CTP filed a pre-hearing exchange that included a brief and 10 proposed exhibits that it identified as CTP Exhibit (Ex.) 1- CTP Ex. 10. Respondent filed a pre-hearing brief and eighteen exhibits that it identified as R. Ex. 1 - R. Ex. 18. Additionally, the parties agreed that this case would be decided based on their written exchanges and arguments, and the parties were afforded the opportunity

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to submit final briefs. On May 1, 2024, both CTP and Respondent filed a Supplemental Brief.

Accordingly, the record is now closed, and I am issuing a decision on the record in this case.

II. Issues, Findings of Fact and Conclusions of Law

A. Remaining Issues Outlined in the Pre-Hearing Conference

1. Whether the notice provided to Respondent in this case was sufficient to advise Respondent whether the products it was selling were approved for sale;
2. Whether Respondent had a duty to determine if the products it was selling were approved for sale by the FDA; and
3. If Respondent is liable for penalties or assessments, the appropriate amount of any such penalties or assessments, considering any mitigating or aggravating factors that I find in this case .

B. Findings of Fact and Conclusions of Law

CTP determined to impose a civil money penalty against Respondent pursuant to the authority conferred by the Federal Food, Drug, and Cosmetic Act (“Act”) and implementing regulations at Part 21 of the Code of Federal Regulations (“C.F.R.”). The Act prohibits the receipt in interstate commerce of any tobacco product that is adulterated or misbranded and the delivery or proffered delivery thereof for pay or otherwise. 21 U.S.C. § 331(c). A “tobacco product” means “any product made or derived from tobacco, or containing nicotine from any source, that is intended for human consumption, including any component, part, or accessory of a tobacco product.” 21 U.S.C. § 321(rr). “Interstate commerce” means, among other things, “commerce between any State or Territory and any place outside thereof.” 21 U.S.C. § 321(b). The Act defines “new tobacco product” at 21 U.S.C. § 387j(a)(1) to include “any tobacco product . . . that was not commercially marketed in the United States as of February 15, 2007.” All new tobacco products must have FDA authorization prior to their marketing. See 21 U.S.C. § 387j(a)(2)(A). A new tobacco product that is required by 21 U.S.C. § 387j(a) to have premarket review and does not have a Marketing Granted Order (“MGO”) permitting marketing of the new tobacco product in effect under 21 U.S.C. § 387j(c)(1)(A)(i), is adulterated under 21 U.S.C. § 387b(6)(A). Under 21 U.S.C. § 387c(a)(6), a new tobacco product is misbranded if a “notice or other information respecting it was not provided as required” under the substantial equivalence (“SE”) or SE exemption pathway, including an SE report or an abbreviated report.

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Respondent owns an establishment that does business under the name Chester Shop and Save Food Market and is located at 1516 West 9th Street, Chester, Pennsylvania 19013. CRD Dkt. Entry No. 8 (Amended Complaint). Respondent’s establishment received tobacco products in interstate commerce, including Elfbar Lemon Mint and Elfbar Blueberry Ice electronic nicotine delivery system (“ENDS”) products, and delivered or proffered delivery of such tobacco products for sale that were adulterated and misbranded. Id. at 2-3. On August 19, 2023, an FDA-commissioned inspector conducted an inspection of Chester Shop and Save Food Market. Id. at 4¶ 15. During this inspection, the inspector observed Elfbar Lemon Mint and Elfbar Blueberry Ice ENDS products for sale at Respondent’s establishment. Id. Respondent's ENDS products are "new tobacco products" because they were not commercially marketed in the United States as of February 15, 2007. Respondent's ENDS products did not have an MGO in effect under 21 U.S.C. § 387j(c)(1)(A)(i) and they are, therefore, adulterated under 21 U.S.C. § 387b(6)(A). Neither an SE report nor an abbreviated report has been submitted for any of Respondent's ENDS products, and they are, therefore, misbranded under 21 U.S.C. § 387c(a)(6).

There is no dispute that Respondent sold adulterated and misbranded products in interstate commerce on August 19, 2023. Respondent admits to the sale of such products. CRD Docket (Dkt.) Entry Nos. 3a, 6, 9, 19 and 42.

Although there was no statutory requirement for FDA to do so, on June 13, 2023, CTP issued a Warning Letter to Respondent. CRD Dkt. Entry No. 18h. The Warning Letter stated, among other things:

These products do not have FDA marketing authorization orders in effect under Section 910(c)(1)(A)(i) of the FD&C Act and are not otherwise exempt from the marketing authorization requirement. Therefore, these products are adulterated under Section 902(6)(A) of the FD&C Act (21 U.S.C. § 387b(6)(A)). In addition, they are misbranded under Section 903(a)(6) of the FD&C Act (21 U.S.C. § 387c(a)(6)) because a notice or other information respecting these products were not provided as required by Section 905(j) of the FD&C Act (21 U.S.C. § 387e(j)).

Id. at 2.

I find Respondent’s contention that CTP’s Warning Letter was insufficient to put it on notice that the products it was selling were not approved by the FDA for sale, not credible. Although, the Warning Letter referred to products of different flavors than the flavors observed available for sale on August 19, 2023, they were produced by the same manufacturer. CTP’s Warning Letter was sufficient to put Respondent on notice that Elfbar vape products were not approved and not simply certain flavors of Elfbar products.

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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 to consider any circumstances that mitigate or aggravate the violation, and “articulate in their opinions the reasons that support the penalties and assessments imposed.”

Further, when determining the amount of a civil money penalty, I am required to consider “the nature, circumstance, extent and gravity of the violations and, with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require.” 21 U.S.C. § 333(f)(5)(B).

On August 19, 2023, Respondent violated the prohibition against selling and/or distributing tobacco products that were adulterated because they lacked the required FDA marketing authorization order and misbranded because they did not obtain a substantially equivalent order or possess an exempt order. 21 U.S.C. §§ 387b(6)(A), 387c(a)(6), 387j(a)(2)(A). Respondent’s argument that it was not aware that different flavors of Elfbar products were prohibited for sale is disingenuous given that the products Respondent had available for sale on August 19, 2023 were by the same manufacturer and contained similar packaging to the products identified in CTP’s Warning Letter. Respondent received an explicit warning that it was selling unlawful products but continued to offer Elfbar products for sale without the required FDA marking authorization order. Respondent has a duty to ensure that the products it is selling are properly authorized for sale. These products are a delivery system of addictive and dangerous substances. Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty and CTP’s proposed penalty in this case is reasonable.

I have considered Respondent’s financial condition as a small business. See CRD Dkt. Entry Nos. 21-38. However, Respondent has not proven that paying the $19,192 civil money penalty would create an undue hardship despite its assertions and evidentiary documentation. Id. Respondent was given an opportunity to comply with CTP’s warnings to avoid a civil money penalty for selling unapproved vape products, and instead, continued to sale Elfbar products without proper authorization.

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CTP has requested a civil money penalty of $19,192 which is a permissible penalty under the regulation. 21 C.F.R. § 17.2. A penalty of $19,192 is reasonable given the dangers of tobacco products and Respondent’s continued sale of Elfbar products. Therefore, I find that a civil money penalty of $19,192 is warranted and so order one imposed.