Texas Tobacco Barn LLC, d/b/a TXVapeBarn, DAB TB8759 (2024)

INITIAL DECISION

The Center for Tobacco Products (CTP), of the United States Food and Drug Administration (FDA), seeks to impose a $19,192 civil money penalty against Respondent, Texas Tobacco Barn LLC d/b/a TXVapeBarn for failure to obtain the required premarket authorization for Respondent’s new tobacco product, in violation of 21 U.S.C. § 331(k) of the Federal Food, Drug, and Cosmetic Act (Act).

For the reasons discussed below, I find that Respondent violated 21 U.S.C. § 331(k) of the Act, as alleged in the Complaint, and I conclude that a $19,192 civil money penalty against Respondent is appropriate.

I. Background and Procedural History

CTP began this matter by serving an Administrative Complaint (Complaint) on Respondent at 3833 50th Street, Suite 2, Lubbock, Texas, 79413 by United States Postal Service (USPS), and by filing a copy of the Complaint with the FDA’s Division of

Page 2

Dockets Management. Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 1, 1b.

On September 9, 2023, Respondent filed a timely request for extension of time to file an Answer. CRD Dkt. Entry No. 3. On September 12, 2023, I issued an Order granting the Respondent’s request for an extension. CRD Dkt. Entry No. 4. On October 11, 2023, attorney J. Gregory Troutman filed an Entry of Appearance on behalf of Respondent in this case. CRD Dkt. Entry No. 5. On the same date, Mr. Troutman filed an Answer and Affirmative Defenses. CRD Dkt. Entry No. 5a (Answer). In its Answer, Respondent asserts, as defenses, that CTP, through FDA, lacks the statutory authority necessary to seek a civil money penalty against Respondent in this case, and that CTP’s Complaint against Respondent is invalid because it violates Respondent’s constitutional rights. Id. at 2-7. In its Answer, Respondent also sought for CTP’s Complaint to be dismissed with prejudice. Id. at 7.

On October 17, 2023, I issued an Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of Respondent’s Answer and establishing procedural deadlines in this case. CRD Dkt. Entry No. 6.

On November 17, 2023, CTP filed Complainant’s Motion for a Protective Order seeking to limit discovery of documents requested by Respondent. CRD Dkt. Entry No. 9. On December 4, 2023, Respondent filed a Response in Opposition to Complainant’s Motion for Protective Order arguing that “a protective order would hamstring TTB [Respondent] from presenting its intended defenses.” CRD Dkt. Entry No. 10 at 3. On December 7, 2023, CTP filed Complainant’s Memorandum of Law in Support of Its Motion for a Protective Order, a copy of Respondent’s Interrogatories, Requests for Production of Documents and Requests for Admissions Propounded Upon Complainant, and Complainant’s Privileged Document Log. CRD Dkt. Entry Nos. 11, 11a-11b.

On December 7, 2023, CTP also filed a Motion to Compel Discovery asserting that Respondent had not responded to CTP’s Request for Production of Documents. CRD Dkt. Entry Nos. 12, 12a, 12b (Motion to Compel Discovery). On that same date, CTP also requested an extension of the pre-hearing exchange deadlines. CRD Dkt. Entry No. 13. On December 8, 2023, I issued an Order, which advised Respondent that it had until December 27, 2023, to file a response to CTP’s Memorandum of Law in support of the motion for a protective order. CRD Dkt. Entry No. 14. My Order also granted CTP’s Motion to Extend Deadlines. Id. at 2.

On December 29, 2023, Respondent filed Respondent’s Objections and Responses to Complainant’s Request for Production of Documents, its Response in Opposition of Complainant’s Motion to Compel Discovery, and its Motion to Hold in Abeyance. CRD Dkt. Entry Nos. 15, 16, 17. On January 12, 2024, CTP filed CTP’s Opposition to Respondent’s Motion to Hold in Abeyance. CRD Dkt. Entry No. 18.

Page 3

On January 17, 2024, I issued an Order Granting in Part and Denying in Part Complainant’s Motion for a Protective Order. CRD Dkt. Entry No. 19. In the same Order, I denied Respondent’s Motion to hold this matter in abeyance because one of my regulatory obligations is to avoid delay. 21 C.F.R. § 17.19(a); Id. at 8. On the same date, I issued an Order Scheduling Pre-Hearing Conference. CRD Dkt. Entry No. 22.

On January 23, 2024, after I had issued my ruling on the motion, Respondent filed a Reply to Complainant’s Response to Motion to Hold in Abeyance reaffirming its request for “an Order which holds this matter in abeyance pending the Supreme Court’s ruling in Jarkesy.” CRD Dkt. Entry No. 23 at 3.

On January 25, 2024, I held a video pre-hearing conference (PHC) in this case. In the Post Pre-Hearing Conference Order (PH Order) dated January 26, 2024, the parties were ordered to “indicate in writing whether they have any objections to the other parties’ proposed exhibits, whether they have any objections to the other parties’ proposed witnesses, or whether they agree to a decision based on the written record.” PH Order at 2, CRD Dkt. Entry No. 25. On January 29, 2024, Respondent filed a Hearing Brief of Respondent Texas Tobacco Barn LLC and Motion for Summary Disposition.¹ (R. PH Br.) CRD Dkt. Entry No. 26. On February 16, 2024, CTP filed a Pre-Hearing Exchange Brief (CTP PH Br.) and 13 proposed exhibits, including the written sworn statements from two proposed witnesses. Respondent did not submit any proposed exhibits or proposed witnesses. Subsequently, Respondent indicated it wished to cross-examine the two witnesses proposed by CTP. CRD Dkt. Entry No. 29.

In considering Respondent’s Motions for Summary Disposition, I note that under the provisions of 21 C.F.R. § 17.17(a) a party may move for a summary decision on any issue in the hearing. The governing regulation then indicates that I “shall grant the motion if the pleading, affidavits, and other material filed in the record . . . show that there is no genuine issue as to any material fact and that the party is entitled to summary decision as a matter of law.” 21 C.F.R. § 17.17(b) (emphasis added).

The significant question raised by section 17.17 is what are the “material facts” in this case about which there can be no genuine issue? Respondent poses the issue before me to be whether the Tobacco Control and Family Smoking Prevention Act “is an unconstitutional delegation of authority to the FDA such that CTP must be barred from enforcing any regulation of ENDS products.” Respondent’s Post-Trial Brief (Final) (R. POH Br.) at 2 (emphasis removed). However, the issue as posed by Respondent is one over which I have no jurisdiction. 21 C.F.R. § 17.19(c) expressly states that the presiding officer does not have the authority to find federal statutes or regulations invalid. 21 C.F.R. § 17.45(b) sets forth the issues on which I must make findings in the decision:

Page 4

(1) Whether the allegations in the complaint are true, and, if so, whether respondent’s actions identified in the complaint violated the law;

(2) Whether any affirmative defenses are meritorious; and

(3) If the respondent is liable for penalties or assessments, the appropriate amount of any such penalties or assessments, considering any mitigating or aggravating factors that he or she finds in the case.

The “allegations in the complaint” in this case involve an inspection of Respondent’s establishment on May 13, 2023, and the reported findings of that inspection. CRD Dkt. Entry No. 1. Thus, the “material facts” to be considered are those relating to the allegations in the Complaint. Respondent indicated that it wished to cross-examine the witnesses of CTP, the purpose of which can only be to challenge the facts alleged by CTP. Therefore, it is clear that there are genuine issues as to material facts in this case and the Motions for Summary Decision are denied.

As noted above, Respondent did not submit a pre-hearing exchange beyond its Hearing Brief of Respondent Texas Tobacco Barn LLC and Motion for Summary Disposition. As such, the only evidence relevant to the issues before me is contained in CTP’s Proposed Exhibits 1 through 13. Since Respondent did not file any objections to these proposed exhibits, CTP’s Exhibits (Exs.) 1-13 are admitted into the record.

On June 24, 2024, I held a video hearing conference in this case to allow Respondent to cross-examine Loretta Chi, Senior Regulatory Counsel in the Office of Compliance and Enforcement of CTP, and FDA-commissioned Inspector Garrett Carter, and to resolve procedural matters. Hearing Transcript (Tr.). During the hearing, I denied CTP’s Motion to Compel Discovery. Under the provisions of 21 C.F.R. § 17.35(c), if a party fails to comply with the discovery order, I can draw an inference in favor of the requesting party with regard to the information sought. Given this authority, and the failure on the part of Respondent to provide any evidence with respect to any of the issues before me, the Motion to Compel Discovery filed by CTP was denied as moot. See Tr. at 6.

At the hearing, I also denied Respondent’s Motion to Hold in Abeyance filed on January 23, 2024, for the reasons stated in my Order dated January 17, 2024, which denied the initial Motion to Hold in Abeyance. Tr. at 6-7.

In response to my July 19, 2024 Order Establishing Deadlines for Transcript Corrections and Post-Hearing Briefs, on September 3, 2024, both parties filed post-hearing responsive briefs; CTP filed its Complainant’s Post-Hearing Brief (CTP POH Br.) and Respondent filed its Post-Hearing Brief of Respondent Texas Tobacco Barn LLC and Renewed Motion for Summary Disposition (R. POH Br.). CRD Dkt. Entry Nos. 38, 39, respectively. Accordingly, the record is now closed.

Page 5

II. Issues

• Whether Respondent violated 21 U.S.C. § 331(k) of the Act, as alleged in the Complaint; and
• If so, whether the $19,192 civil money penalty sought by CTP is appropriate, considering any aggravating and mitigating factors.

III. Analysis, Findings of Fact, Conclusions of Law

In order to prevail, CTP has the burden to prove Respondent’s liability and appropriateness of the penalty by a preponderance of the evidence. 21 C.F.R. § 17.33(b). The U.S. Supreme Court has described the preponderance of the evidence standard as requiring that the trier-of-fact believe that the existence of a fact is more probable than not before finding in favor of the party that had the burden to persuade the judge of the fact’s existence. In re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe and Prods. of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993). Respondent has the burden to prove any affirmative defenses and any mitigating factors likewise by a preponderance of the evidence. 21 C.F.R. § 17.33(c).

The Act prohibits adulterating or misbranding a regulated tobacco product. 21 U.S.C. § 331(k). Specifically, Title 21, United States Code, Section 331 reads:

The following acts and the causing thereof are prohibited: (k) The alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any act with respect to, a . . . tobacco product . . . if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded.

21 U.S.C. § 331(k).

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). A “new tobacco product” is exempt from this premarket authorization requirement only if the Secretary has issued a substantial equivalence report or a found exempt order for such product. 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A). The Secretary issued the regulations at 21 C.F.R. Part 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see also; 81 Fed. Reg. 28,974 (May 10, 2016).

The FDA has the authority to seek civil money penalties from any person who violates any Act requirement that relates to tobacco products. 21 U.S.C. § 333(f)(9)(A). The

Page 6

term “person” is defined to include individuals, partnerships, corporations, and associations. 21 U.S.C. § 321(e). Manufacturers who violate a requirement of the Act that relates to tobacco products may incur a civil money penalty up to the maximum amounts provided for by law, which was $19,192 during the relevant period, for each such violation, not to exceed $1,279,448 for all violations adjudicated in a single proceeding. 21 U.S.C. § 333(f)(9)(A); 21 C.F.R. § 17.2; 45 C.F.R. § 102.3.

1. Violations of 21 U.S.C. § 331(k) of the Act

A. Respondent’s e-liquid tobacco product is a “new tobacco product.”

As noted above, 21 U.S.C. § 387j(a)(1) defines “new tobacco product” as any tobacco product that was not commercially marketed in the United States as of February 15, 2007. In its Answer, Respondent denied the allegation that the product at issue here was a “new tobacco product.” CRD Dkt. Entry No. 5a at 4. However, it has offered no evidence to establish that the TXV BARN BREWED Beetle Juice 12mg 30ML e-liquid product was commercially marketed in the United States as of February 15, 2007. In her Declaration, Loretta Chi stated that she had “reviewed the results of FDA’s searches in: TLRM NG, Inventory Tracking Recording and Control (iTRAC)/IMAGE, Product Management Service (PMS), Rhapsody, Address Book, and Online Search and Retrieval System (OSAR), and no evidence was revealed that Respondent’s e-liquid products were commercially marketed in the United States as of February 15, 2007.” CTP Ex. 1 at 4. Respondent did not challenge this statement during its cross-examination of Ms. Chi at the hearing. Given this uncontroverted evidence, I find that the e-liquid product observed at the time of the inspection on May 13, 2023 was a “new tobacco product,” as defined in 21 U.S.C. § 387j(a)(1).

B. Respondent’s e-liquid product does not have a marketing grant order (MGO), a substantially equivalent order, or a found exempt order.

A new tobacco product is required by 21 U.S.C. § 387j(a)(2)(A) to have premarket review and an MGO unless it has a substantial equivalence (SE) order or found-exempt order in effect. CTP has submitted evidence indicating that Respondent did submit an application for an FDA premarket authorization for its e-liquid products on September 8, 2021, which was denied. CTP Ex. 1 at 5. As a result, CTP alleges that Respondent’s e‑liquid products do not have an MGO in effect under 21 U.S.C. § 387j(c)(1)(A)(i). Id. In its Answer, Respondent acknowledged that its e-liquid products did not have an MGO in effect. CRD Dkt. Entry No. 5a at 5. Respondent further admitted that “neither an SE report nor an abbreviated report has been submitted for its e-liquid products.” CRD Dkt. Entry No. 5a at 5.

C. Respondent’s e-liquid product is adulterated and misbranded.

Page 7

A new tobacco product that is required by 21 U.S.C. § 387j(a) to have premarket review and does not have an MGO in effect under 21 U.S.C. § 387j(c)(1)(A)(i), is adulterated under 21 U.S.C. § 387b(6)(A). 21 U.S.C. § 387c(a)(6) provides that a tobacco product is misbranded if a notice or other information respecting it was not provided as required by section 387e(j), governing substantial equivalence orders. The above evidence establishes that Respondent’s e-liquid product is both adulterated and misbranded.

D. Respondent manufactured a tobacco product and held such product for sale after shipment in interstate commerce.

21 U.S.C. § 331(k) prohibits, in relevant part, doing any act with respect to a tobacco product, if such act is done while such article is held for sale after shipment in interstate commerce and results in such article being adulterated or misbranded. CTP has alleged that Respondent is in violation of this section of the Act. Respondent disputes this conclusion, citing “two critical evidentiary failings” on the part of CTP. R. POH Br. at 12.

Respondent initially asserts that the specific product that CTP alleges to be the subject matter of the Complaint does not match the description of the product in CTP Ex. 11,² which CTP introduced to prove the use of ingredients shipped in interstate commerce. R. POH Br. at 12-13. Respondent cited the differences between the product pictured in CTP Ex. 6 and that described in CTP Ex. 11, noting the differences in the percentages of nicotine by volume in the two products. Id. at 14. In his questioning of Ms. Chi, Respondent first attempted to make the point that the nicotine content of the product listed in CTP Ex. 11 was different from the nicotine content of the product photographed in CTP Ex. 6; Tr. 13-20. There is no dispute on that point. As Ms. Chi noted, CTP Ex. 11 was a form filed by Respondent on October 2, 2018, to register as a tobacco product manufacturer. CTP Ex. 1 at 2. At no point does CTP assert that the products pictured in CTP Ex. 6 are the same as that described by Respondent in CTP Ex. 11. So, the relevance of this point is not clear.³

Page 8

CTP alleges that Respondent received at least one component from outside Texas that it used to manufacture its tobacco products. CRD Dkt. Entry No. 1 at 4. Respondent has not offered any evidence to counter the statements from Ms. Chi that the products depicted in CTP Ex. 5 traveled in interstate commerce. In her Declaration, Ms. Chi stated that “[t]he Flavor Apprentice flavoring, observed in the establishment during the May 13, 2023 inspection, is manufactured, produced and/or fulfilled in The Flavor Apprentice’s facility in California and shipped to Respondent’s establishment in Texas. I have confirmed that The Flavor Apprentice’s labels show that it is manufactured in Scotts Valley, California. See May 2023 VIA Inspection Results Report, CTP Ex. 3 at 4, ¶¶ 28-29; May 2023 Photographs of E-Liquid Manufacturing Components, CTP Ex. 5 at 13-16.” CTP Ex. 1 at 3. She further stated in her Declaration that the Capella flavoring was from a production and fulfillment center in Kenilworth, New Jersey and Nicotine River nicotine was manufactured in California and both were shipped to Respondent in Texas. Id. at 4. Respondent did not challenge these statements during its cross‑examination of Ms. Chi at the hearing. Thus, it is clear that the products photographed during the inspection on May 13, 2023, as seen in CTP Ex. 5, did travel in interstate commerce.

Respondent is correct, however, that CTP has the burden of establishing that the products depicted in CTP Ex. 5 were used in the manufacture of Respondent’s e-liquid product pictured in CTP Ex. 6. It argues that “CTP has failed to establish proof of the linchpin question: that TTB was offering a product manufactured with ingredients supplied via interstate commerce.” R. POH Br. at 17.

In resolving this issue, I note that Respondent questioned Ms. Chi, who was unable to confirm with “absolute certainty” that the ingredients photographed in CTP Ex. 5 were used to manufacture the product shown in CTP Ex. 6 at 4-11. Tr. at 22. During his testimony, Inspector Carter acknowledged that he did not observe any manufacturing of tobacco products at the time of his inspection because the inspection was on a Saturday, and he had been told that the company only manufactured during the week. Tr. at 27-28. However, when asked for “proof” that the ingredients photographed in CTP Ex. 5 were used in the manufacturing of the tobacco products photographed in CTP Ex. 6, Inspector Carter testified that he was told by Mr. Winograd and the MRP⁴ that “they manufactured for the retail front, which all those products listed on that shelf were part of their manufacturing in that lab.” Tr. at 32. This testimony is consistent with his Declaration, in which Inspector Carter stated that “[d]uring the inspection, Daniel Winograd stated the finished e-liquid product manufactured by TXVapeBarn is sold in the retail area of the establishment. The MRP present in the establishment, Caroline Smyer, also told me that finished e-liquid products are sold in the establishment to consumers.” CTP Ex. 3 at 3. In his inspection report, Inspector Carter similarly stated that the Compliance Officer for Colorado Vape & Glass and TX Vape Barn, Daniel Winograd, indicated that the

Page 9

manufacturing is done by TX Vape Barn, which is located in a separate lab room beyond the retail area, but in the same brick and mortar location. CTP Ex. 3 at 7.

Thus, the proof offered by CTP was the statements from two employees of Respondent that they manufactured for the retail front of the business. Concededly, the statements from Mr. Winograd and the MRP are hearsay. However, I am not bound by the Federal Rules of Evidence and instead consider whether the evidence is “relevant or material.” 21 C.F.R. § 17.39(b) and (c). In this case, the statements from Mr. Winograd and the MRP are relevant and material to the issues before me. In determining the weight to be given to the statements from these individuals, as reported by the inspector, I note that Respondent has not countered these statements with any other evidence, other than to suggest that the MRP was not authorized to speak on behalf of the business. Tr. at 32-33. Even accepting that as fact, it does not lessen the reliability of those statements. Respondent had every opportunity to have those two individuals appear as witnesses but declined to do so.

The statements from Respondent’s employees reported by Inspector Carter are also consistent with the physical evidence. The photographs of the Beetle Juice e-liquid product indicate the ingredients included 12mg/ml Nicotine, 65VG/35PG. CTP Ex. 6 at 9-10. The bulk ingredients photographed in CTP Ex. 5 included Beetle Juice flavoring, E-liquid Nicotine, and several large containers of vegetable glycerin and propylene glycol, the ingredients listed on the Beetle Juice e-liquid product in CTP Ex. 6 at 9-10. CTP Ex. 5 at 1, 4, 6, 7, 8, 9. There is no reason to believe that Respondent purchased those items for any reason other than to manufacture an e-liquid product by using smaller portions of those components in a finished product. It is difficult to imagine why a for‑profit business would purchase bulk containers of ingredients if it did not intend to use them in the manufacture of a product. Thus, the weight of the evidence establishes that the bulk ingredients photographed in CTP Ex. 5, which traveled in interstate commerce, were used in the manufacture of the products photographed in CTP Ex. 6.

Respondent next argued that the products photographed during the inspection were not “held for sale” because the inspector did not see any prices for the products and did not observe any sales being made during the inspection. Tr. at 31. It asserts that “[i]t thus cannot be said that TTB offered the specimen product for sale in the absence of any identification of price.” R. POH Br. at 19.

Inspector Carter did testify that he did not see any sales prices for the products photographed, did not observe any sales of those products, and did not review sales records at the inspection. Tr. at 31. The photographs of the e-liquid products in CTP Ex. 6 do not reflect any sales prices in front of those products. However, he also testified the products in question were “being sold on the retail floor.” Tr. at 28. Moreover, there were statements from two employees to Inspector Carter indicating the e-liquid products were being sold. In his Declaration, Inspector Carter indicated that “[d]uring the

Page 10

inspection, Daniel Winograd stated that the finished e-liquid product manufactured by TXVapeBarn is sold in the retail area of the establishment. CTP Ex. 2 at 3. The MRP present in the establishment, Caroline Smyer, also told me that finished e-liquid products are sold in the establishment to consumers.” Id. Respondent did not provide any evidence to counter these statements from its own employees and did not elect to have them testify if it disputed their statements.

These statements are consistent with the physical evidence. Inspector Carter stated that he “observed TXV Barn Brewed Beetle Juice flavored 12 mg finished e-liquid on the shelf available for purchase by customers in the retail area of the establishment.” Id. The record contains photographs of Respondent’s e-liquid products in a space with other products for sale, such as vaping kits, Elf Bar products and Kratom.⁵ CTP Ex. 6 at 1, 2; CTP Ex. 5 at 17. Thus, the weight of the record establishes that Respondent “held for sale” the TXV Barn Brewed Beetle Juice 12 mg 30 ML e-liquid product observed during the inspection on May 13, 2023. Therefore, I find that Respondent violated Section 331(k) of the Act by manufacturing a tobacco product while such product was held for sale after shipment in interstate commerce, resulting in such product being adulterated and misbranded.

E. I have no jurisdiction to rule on Respondent’s affirmative defenses.

Throughout these proceedings, Respondent has sought a ruling essentially finding that the remedies sought by CTP are unconstitutional. See R. POH Br.; R. PH Br.; Motion to Hold in Abeyance. However, as I consistently noted, the decision I issue must be based only on the administrative record and include findings on whether the allegations in the Complaint are true, and if so, whether Respondent’s actions identified in the Complaint violated the law; whether any affirmative defenses are meritorious, and, if Respondent is liable for penalties or assessments, the appropriate amount of any such penalties or assessments, considering any mitigating or aggravating factors. 21 C.F.R. § 17.45(a). I am also aware that 21 C.F.R. § 17.19(c) specifically indicates that I do not have the authority to find federal statutes or regulations invalid. Given that limitation on my authority, I am unable to grant the relief sought by Respondent.

2. Civil Money Penalty

I have found that Respondent violated Section 331(k) of the Act. CTP may seek civil money penalties from any person who violates the Act’s requirements as they relate to the sale of regulated tobacco products. 21 U.S.C. § 333(f)(9). In its Complaint, CTP

Page 11

sought to impose the maximum penalty amount of $19,192 against Respondent. See Complaint, CRD Dkt. Entry No. 1 ¶¶ 1, 26. When determining the appropriate amount of a civil money penalty, I must consider any aggravating or mitigating circumstances and the factors listed in the Act. 21 C.F.R. § 17.34(a)-(b). Specifically, I am required to take into account “the nature, circumstances, 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); 21 C.F.R. § 17.45(b)(1)-(3). Respondent must prove any mitigating factors by a preponderance of the evidence. 21 C.F.R. § 17.33(c).

A. Nature, Circumstances, Extent and Gravity of the Violations

As noted above, The Family Smoking Prevention and Tobacco Control Act was enacted for the purpose of authorizing regulation of tobacco products for the “protection of the public health.” 21 U.S.C. § 387f(d). Respondent was in the business of manufacturing and selling this highly regulated and dangerous product. It received a written warning on January 27, 2022 that the “FDA has determined that you manufacture, sell, and/or distribute to customers in the United States TXV BARN BREWED Beetle Juice 12mg 30ML e-liquid product without a marketing authorization order,” which was a prohibited act under 21 U.S.C. § 331(k). CTP Ex. 8 at 2. Yet, after it received this warning that it was in violation of federal law, it continued to manufacture and sell this and other “new tobacco products.” The inability of Respondent to comply with federal tobacco law is serious in nature and demands a proportional civil money penalty amount.

B. Respondent’s Ability to Pay and Effect on Ability to Continue to Do Business

Respondent has not provided any argument or evidence relating to its ability to pay. Accordingly, I cannot find that Respondent has established an inability to pay. Respondent has also not provided any argument or evidence relating to its ability to continue to do business. Given that the photographs in CTP Ex. 5 reveal many other products in its retail business, there is no apparent reason why it cannot continue in business selling lawful products.

C. History of Prior Violations

There is no indication in the record of any prior violations of Section 331(k) resulting in a civil money penalty. However, Respondent did receive a warning letter dated January 27, 2022, advising that it was in violation of federal law for manufacturing and selling a new tobacco product without marketing authorization. CTP Ex. 8. Thus, Respondent was on notice that it was in violation of Section 331(k) but continued to manufacture and market its new tobacco products after this warning.

Page 12

D. Degree of Culpability

As noted above, Respondent received written notice that it was in violation of federal law by manufacturing and selling “new tobacco products” without obtaining a marketing authorization order. This notice was contained in the warning letter dated January 27, 2022, which contained the directive to “take prompt action to address any violations that are referenced above, as well as violations that are the same as or similar to the ones stated above and take any necessary actions to bring your tobacco products into compliance with the FD&C Act” and it was offered FDA guidance materials for assistance. CTP Ex. 8 at 2. Yet, Respondent continued to manufacture and sell these same products, without any apparent modification to its business practices or attempts to contact the FDA for information or assistance, until at least the time of the inspection on May 13, 2023. Thus, I must find that this degree of culpability does not merit a reduction in the civil money penalty.

E. Additional Mitigating Factors

Respondent has not provided any evidence establishing any mitigating factors.

F. Penalty

Based on the foregoing, I find that the $19,192 civil money penalty sought by CTP against Respondent is appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

IV. Conclusion

For the above reasons, I enter judgment in the amount of $19,192 against Respondent, Texas Tobacco Barn LLC d/b/a TXVapeBarn for manufacturing, selling, and/or distributing a new tobacco product that lacked the premarketing authorization required by the Act, 21 U.S.C. §§ 301 et seq. Pursuant to 21 C.F.R. § 17.45(d), this decision becomes final and binding upon both parties after 30 days of the date of its issuance.

Endnotes

¹ Respondent renewed its Motion for Summary Decision in its Post-Hearing Brief.

² Although Respondent does not refer to the exhibits it cites as CTP Exs. 6 and 11, it is presumed that the references are to CTP’s exhibits since Respondent did not submit any proposed exhibits for the record.

³ Respondent argues that CTP failed to introduce proof that the bulk items shown in CTP Ex. 5 were among the bulk items shown in CTP Ex. 11 and were sourced from the companies shown in CTP Exs. 12 and 13. R. POH Br. at 17, n.14. However, this argument misses the point. The question is whether the bulk products photographed on May 13, 2023, were used in the manufacturing of the e-liquid product pictured in CTP Ex. 6.

⁴ Most Responsible Person. CTP Ex. 3 at 1.

⁵ One wonders what would be the point of displaying the countless e-liquid products observed in CTP Ex. 6 at 1-3 and extolling the virtues of the Strawberry Kiwi product in signage, if not to sell those products.