Best Shop for Vapors LLC d/b/a Beachside Vapors / BSV Vape, DAB TB8247 (2024)

ORDER GRANTING COMPLAINANT’S MOTION TO IMPOSE SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

On or around January 4, 2024, the Center for Tobacco Products (CTP) served a Complaint on Best Shop for Vapors LLC d/b/a Beachside Vapors / BSV Vape (Respondent), at 1518 South Babcock Street, Suite C, Melbourne, Florida 32901. A copy of the Complaint was subsequently filed with the Food and Drug Administration’s (FDA) Division of Dockets Management on January 18, 2024. CTP seeks to impose a $19,192 civil money penalty against Respondent for impermissibly manufacturing, selling, and/or distributing new tobacco products that lacked the required premarketing authorization, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. §§ 301 et seq.

On January 26, 2024, Respondent filed a timely Answer to CTP’s Complaint. However, over the past several months since filing its Answer, Respondent has failed to comply with multiple judicial orders and directives, and failed to defend its case, which has

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interfered with the speedy, orderly, or fair conduct of this proceeding. 21 C.F.R. § 17.35(a).

Currently, CTP’s Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions) is pending before me. CTP’s Motion to Impose Sanctions requests that I strike Respondent’s Answer as a sanction for failing to respond to CTP’s discovery requests and issue a default judgment against Respondent. After carefully considering the entire record, I grant CTP’s Motion to Impose Sanctions, strike Respondent’s Answer, and issue this default decision, pursuant to the provisions of 21 C.F.R. § 17.35(c)(3).

I. Procedural History

On or around January 4, 2024, CTP served an Administrative Complaint on Respondent by United States Postal Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. See Civil Remedies Division (CRD) Docket (Dkt.) Entry No. 1b.¹ On January 26, 2024, Respondent electronically filed an undated and unsigned Answer. CRD Dkt. Entry No. 3. In its Answer, Respondent denied the allegations, asserted defenses, and contested the civil money penalty. Id.

On January 30, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO) in this case. CRD Dkt. Entry No. 4 (APHO). The APHO set deadlines for the parties’ filings and exchanges, including a schedule for discovery. I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request. APHO ¶ 4; see also 21 C.F.R. § 17.23(a). I warned:

I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of the hearing. 21 C.F.R. § 17.35.

APHO ¶ 21.

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On February 5, 2024, Respondent filed a second Answer to the Complaint. CRD Dkt. Entry Nos. 6, 6a. Although formatted differently, the second Answer denies the same allegations and asserts the same defenses as the first Answer. See CRD Dkt. Entry Nos. 3, 6, 6a; see also CRD Dkt. Entry No. 11 at 1, n.1.

On February 23, 2024, CTP filed a Joint Status Report indicating that the parties were unable to reach a settlement in this case, and, absent an executed settlement agreement, intended to proceed to a hearing. CRD Dkt. Entry No. 7.

On March 22, 2024, CTP filed a Motion to Compel Discovery, asserting that Respondent had not responded to CTP’s discovery request as required by the APHO and the regulations. CRD Dkt. Entry No. 8 at 2. On that same date, CTP also filed a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the April 22, 2024 due date for CTP’s pre-hearing exchange . . . .” CRD Dkt. Entry No. 9 at 2. On March 25, 2024, I issued an Order advising Respondent that it had until April 12, 2024, to file a response to CTP’s Motion to Compel Discovery. CRD Dkt. Entry No. 10 at 2. I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.” Id.; see also APHO ¶¶ 20-21; 21 C.F.R. § 17.32(c). In my Order, I also held the parties’ pre‑hearing exchange deadlines in abeyance pending the resolution of CTP’s discovery request. CRD Dkt. Entry No. 10 at 2. Respondent failed to respond to CTP’s Motion to Compel Discovery, my March 25, 2024 Order, or otherwise comply with CTP’s Request for Production of Documents.

On May 10, 2024, I issued an Order granting CTP’s Motion to Compel Discovery and ordered Respondent to produce responsive documents to CTP’s Request for Production of Documents by May 24, 2024. I warned:

Failure to comply with this order may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

CRD Dkt. Entry No. 11 at 2 (emphasis in original).

On May 29, 2024, CTP filed a Status Report and Motion to Impose Sanctions. CRD Dkt. Entry No. 12. CTP advised that Respondent had not complied with the APHO or my May 10, 2024 Order Granting CTP’s Motion to Compel. Id. at 1-2. CTP argues that sanctions against Respondent for its repeated non-compliance are an appropriate remedy. Specifically, CTP asks that I strike Respondent’s Answer as a sanction and issue an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a $19,192 civil money penalty. Id. at 2. On May 29, 2024, CTP also filed a Motion to Stay Deadlines. CRD Dkt. Entry No. 13.

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On May 29, 2024, I issued an Order giving Respondent until June 28, 2024, to file a response to CTP’s Motion to Impose Sanctions. CRD Dkt. Entry No. 14 at 2. The May 29, 2024 Order also stayed the parties’ pre-hearing exchange deadlines. Id. at 2.

To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or the May 29, 2024 Order.

II. Striking Respondent’s Answer

I may sanction a party for:

1. Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;
2. Failing to prosecute or defend an action; or
3. Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.

21 C.F.R. § 17.35(a).

Respondent failed to comply with multiple judicial orders and directives. Specifically:

• the regulation at 21 C.F.R. § 17.23(a) and paragraph 4 of the APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• my May 10, 2024 Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by May 24, 2024.

I also find that Respondent failed to defend this action. 21 C.F.R. § 17.35(a)(2). Specifically:

• Respondent did not file a response to CTP’s Motion to Compel Discovery, as permitted by the regulations and my March 25, 2024 Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my May 29, 2024 Order.

I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly, and fair conduct of this proceeding. I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the nature and severity of the misconduct or failure to comply. 21 C.F.R. § 17.35(b). Here, Respondent failed to

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comply with a regulatory requirement and judicial orders, despite my explicit warnings that its failure could result in sanctions. See, e.g., CRD Dkt. Entry No. 11 at 1-2; see also APHO ¶ 21. Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding. I find that Respondent’s actions are sufficiently egregious to warrant striking its Answer and issuing a decision by default, without further proceedings. 21 C.F.R. § 17.35(b), (c)(3); see also KKNJ, Inc. d/b/a Tobacco Hut 12, DAB No. 2678 at 8 (2016) (concluding that “the ALJ [Administrative Law Judge] did not abuse her discretion in sanctioning Respondent’s ongoing failure to comply with the ALJ’s directions by striking Respondent’s answer to the complaint.”).

III. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered. Therefore, I am required to issue an initial decision by default, provided that the Complaint is sufficient to justify a penalty. 21 C.F.R. § 17.11(a). Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act.

For the purposes of this decision, I assume the facts alleged in the Complaint to be true, pursuant to the provisions of 21 C.F.R. § 17.11(a). Specifically:

• Respondent manufactures tobacco products and sells them through its online establishment that does business under the name Beachside Vapors / BSV Vape, which is accessible at the URL:  https://beachsidevapors.com. Complaint ¶ 14.
• On April 29, 2022, although there is no statutory requirement for FDA to do so, CTP issued a Warning Letter to Respondent, stating that, among other things, the new tobacco products that Respondent manufactures, sells, and/or distributes are adulterated and misbranded because they lack the required FDA marketing authorization order. Complaint ¶ 15.
• On August 30, 2023, an FDA-commissioned inspector conducted an inspection of Beachside Vapors / BSV Vape at the URL:  https://beachsidevapors.com. During this inspection, the inspector observed Respondent’s BSV Vape Rainbow Fluff E-Liquid 30 mL 3 mg product that it sells through its online establishment. During the inspection, FDA was able to purchase Respondent’s BSV Vape Rainbow Fluff E-Liquid 30 mL 3 mg product. Complaint ¶ 16.
• Respondent shipped the product from Florida to FDA in Maryland. Complaint ¶ 17.
• Respondent’s e-liquid products is a “new tobacco product” because it was not commercially marketed in the United States as of February 15, 2007. Complaint ¶ 18.

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• Respondent’s e-liquid product does not have a substantial equivalence (SE) order or found-exempt order in effect. Accordingly, it is required by 21 U.S.C. § 387j(a) to have premarket review. Complaint ¶ 19.
• Respondent did not submit a premarket tobacco product application to FDA for its e-liquid product. Complaint ¶ 20.
• Respondent’s e-liquid product does not have an order permitting marketing of the new tobacco product in effect under 21 U.S.C. § 387j(c)(1)(A)(i) and it is therefore, adulterated under 21 U.S.C. § 387b(6)(A). Complaint ¶ 21.
• Neither a SE report nor an abbreviated report has been submitted for Respondent’s e-liquid product, and it is therefore, misbranded under 21 U.S.C. § 387c(a)(6). Complaint ¶ 22.
• Respondent introduced or delivered for introduction into interstate commerce or caused the introduction or delivery for introduction into interstate commerce of the adulterated and misbranded tobacco product, in violation of 21 U.S.C. § 331(a). Complaint ¶ 23.

The Act prohibits adulterating or misbranding of a regulated tobacco product. 21 U.S.C. § 331(k). A tobacco product is adulterated if it has not obtained the required premarket authorization. 21 U.S.C. § 387b(6)(A). Under 21 U.S.C. § 387j(a)(2)(A), premarket authorization is required for a “new tobacco product.” 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). Respondent’s new tobacco products were not commercially marketed in the United States as of February 15, 2007, and Respondent’s new tobacco products did not have an order permitting marketing of a new tobacco product under 21 U.S.C. § 387j(c)(1)(A)(i). Thus, Respondent’s new tobacco products lacked the required premarketing authorization and is adulterated. 21 U.S.C. § 387b(6)(A).

A “new tobacco product” is exempt from this premarket authorization requirement only if there is a substantial equivalence or a found exempt order in effect for such product. 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A). Neither an SE report nor an abbreviated report was submitted for Respondent’s new tobacco products making it misbranded under 21 U.S.C. § 387c(a)(6). As a result, Respondent impermissibly offered for sale misbranded new tobacco products, under the provisions of 21 U.S.C. § 331(c). See also 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).

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Taking the above alleged facts as true, on August 30, 2023, Respondent violated that portion of the Act which prohibits introducing or delivering for introduction into interstate commerce, or causing the introduction or delivery for introduction into interstate commerce of, this adulterated and misbranded new tobacco product. 21 U.S.C. § 331(a); see also 21 U.S.C. § 387b(6)(A), 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A). These facts establish that Respondent is liable under the Act.

CTP has requested a civil money penalty of $19,192, which is a permissible penalty under 21 C.F.R. § 17.2 and 21 U.S.C. § 333(f)(9)(A). See also 45 C.F.R. § 102.3. Therefore, I find that a civil money penalty of $19,192 is warranted and order one imposed.

Order

For these reasons, I enter default judgment in the amount of $19,192 against Respondent, Best Shop for Vapors LLC d/b/a Beachside Vapors / BSV Vape. Pursuant to 21 C.F.R. § 17.11(b), this order becomes final and binding upon both parties after 30 days of the date of its issuance.

Endnotes

¹ On January 31, 2024, CTP emailed the Departmental Appeals Board’s Civil Remedies Division, requesting to substitute the initial complaint with a revised version of the complaint, apparently to remove an errant comment bubble included in the original filing. CRD Dkt. Entry Nos. 5a, 5b. On February 1, 2024, I issued an order advising CTP that if it wished to amend the complaint, it would need to file a motion pursuant to 21 C.F.R. § 17.5(c). CRD Dkt. Entry No. 5. CTP did not subsequently move to amend the complaint. Therefore, the initial complaint, filed on January 18, 2024, is the operative complaint in this case.