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Awad Corporation Inc. d/b/a Shish Me Up, DAB TB8778 (2024)


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

Center for Tobacco Products,
Complainant,

v.

Awad Corporation Inc.
d/b/a Shish Me Up,
Respondent.

Docket No.T-24-1647
FDA Docket No.FDA-2024-H-0694
Decision No.TB8778
November 25, 2024

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks a $20,678 civil money penalty (CMP) against Respondent Awad Corporation Inc. d/b/a Shish Me Up, at 645 Broadway, Pawtucket, Rhode Island 02860. Specifically, CTP alleges that Respondent Shish Me Up received in interstate commerce an electronic nicotine delivery system (ENDS) product that lacks the required premarketing authorization and offered such product for sale, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 331(c). For the reasons discussed below, I find Respondent violated the provisions of 21 U.S.C. § 331(c) and conclude that a civil money penalty in the amount of $14,475 is appropriate.

I. Background and Procedural History

CTP began this matter by serving an administrative complaint on Respondent at 645 Broadway, Pawtucket, Rhode Island 02860, by United Parcel Service, and by filing a copy of the complaint with the FDA’s Division of Dockets Management. Civil Remedies Division (CRD) Docket (Dkt.) Entry Nos. 1, 1b.

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On March 12, 2024, Respondent timely filed its answer to the complaint. CRD Dkt. Entry No. 4.1 Respondent also filed two documents in support of the answer: (a) a document entitled “Civil Monetary Penalty Settlement Discussion and Proposal,” which contains various statements and arguments regarding the violation and the proposed penalty; and (b) the first page of Respondent’s 2023 corporate income tax return. CRD Dkt. Entry Nos. 5, 6.

On March 14, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO) establishing deadlines for discovery and the parties’ pre-hearing exchanges. CRD Dkt. Entry No. 7. On April 9, 2024, CTP filed a Joint Status Report stating that the parties intended to engage in further settlement discussions and that CTP would notify my office if the parties finalized a settlement in this case. CRD Dkt. Entry No. 8.

On June 3, 2024, CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief, a list of proposed witnesses and exhibits, and seven proposed exhibits. CRD Dkt. Entry Nos. 9, 9a-9h. CTP’s pre-hearing exchange included the written direct testimony of two proposed witnesses, James Bowling, Deputy Director, Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, CTP, FDA, and Christopher Dempsey, an FDA-commissioned officer with the state of Rhode Island. CTP Exs. 1, 2.

On June 20, 2024, Respondent timely filed its pre-hearing exchange consisting of a pre- hearing brief, and six unmarked exhibits. CRD Dkt. Entry Nos. 10, 10a-10d. Respondent did not submit a list of proposed witnesses or provide any written direct testimony.

On July 17, 2024, I held a telephonic pre-hearing conference (PHC) with both parties present. See CRD Dkt. Entry No. 14 (Order Following PHC). During the PHC, I went over various procedural matters, including the parties’ pre-hearing submissions and proposed exhibits. Both parties stated they had no objections to the opposing party’s proposed exhibits. Id. at 1-2. Accordingly, I admitted CTP’s proposed exhibits 1-7 into the record as CTP Exhibits (CTP Exs.) 1-7. Id. at 2. I also verbally marked Respondent’s proposed exhibits as Respondent’s Exhibits (R. Exs.) 1-6 and admitted them into the record. Id.

At the PHC, I also discussed the purpose of an oral hearing and asked the parties whether a hearing was necessary in this case. CRD Dkt. Entry No. 14 at 2. Respondent stated it did not wish to cross-examine CTP’s proposed witnesses. Id. Since Respondent did not submit any testimony or identify any witnesses that could be cross-examined by CTP, I advised the parties that no hearing would be held and I would decide the case based on

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the administrative record. Id. I also stated that the parties would have an opportunity to file final briefs before I made my decision. Id.

On July 17, 2024, I issued an Order memorializing the issues discussed at the PHC and establishing deadlines for final briefs. CRD Dkt. Entry No. 14. The parties were given until August 19, 2024, to file final written briefs and until September 3, 2024, to file responses, if any. Id. at 2.

On August 12, 2024, Respondent submitted a final brief. CRD Dkt. Entry No. 15. CTP subsequently filed a Notice of Waiver of Final Brief, stating it would not file a final brief. CRD Dkt. Entry No. 16. Further, CTP did not file a response to Respondent’s final brief. Therefore, the administrative record is closed and this matter is ready for a decision based on the written record. See 21 C.F.R. §§ 17.41, 17.45(c), 17.19(b)(11), 17.19(b)(17).

II. Evidence

Both parties filed proposed exhibits, which were admitted into the record without objection at the PHC. See CRD Dkt. Entry No. 14. Specifically, CTP submitted the following seven exhibits, marked as CTP Exs. 1-7:

  • CTP EX. 1: Declaration of James Bowling
  • CTP Ex. 2: Declaration of Christopher Dempsey
  • CTP Ex. 3: December 2023 Narrative Report
  • CTP Ex. 4: December 2023 TIMS Assignment Form
  • CTP Ex. 5: December 2023 Photographs of Elbar Tobacco ENDS Product
  • CTP Ex. 6: December 2023 Form FDA 482
  • CTP Ex. 7: August 2023 Warning Letter

Respondent submitted the following six exhibits, which were verbally marked as R. Exs. 1-6 at the PHC:

  • R. Ex. 1: 2023 Corporate Tax Return (CRD Dkt. Entry No. 10)
  • R. Ex. 2: Screenshot of Sales Reports (CRD Dkt. Entry No. 10a)
  • R. Ex. 3: Document captioned “Important Resources” (CRD Dkt. Entry No. 10c at 1)
  • R. Ex. 4: Documents captioned “Employee Acknowledgment of Company Policy” (CRD Dkt. Entry No. 10c at 1)
  • R. Ex. 5: 2024 Employee Handbook (CRD Dkt. Entry No. 10c at 2)
  • R. Ex. 6: Photographs of sales orders or invoices (CRD Dkt. Entry No. 10d).

Page 4

III. Issues

There are two issues for me to decide in this case:

A. Whether Respondent received in interstate commerce an ENDS product that lacks the premarketing authorization required under the Act, specifically an Elfbar Tobacco ENDS product, and offered such product for sale on December 1, 2023, in violation of 21 U.S.C. § 331(c); and, if so,

B. Whether the $20,678 CMP proposed by CTP is appropriate, considering any mitigating or aggravating factors I find in this case. 21 C.F.R. § 17.45.

IV. Findings of Fact and Conclusions of Law

A. CTP has demonstrated by a preponderance of the evidence that Respondent received an adulterated and misbranded ENDS product in interstate commerce and delivered or offered such product for sale in violation of the Act.

CTP seeks to impose a CMP against Respondent pursuant to the authority conferred by the Act and implementing regulations at Part 21 of the Code of Federal Regulations. The burden is on CTP to prove Respondent’s liability and the appropriateness of any civil money penalty by a preponderance of the evidence. 21 C.F.R. § 17.33(b). The burden is on Respondent to prove any affirmative defenses and mitigating factors by a preponderance of the evidence. 21 C.F.R. § 17.33(c).

The Act prohibits the receipt in interstate commerce of any tobacco product that is adulterated or misbranded and the delivery, or proffered delivery, of any tobacco product that is adulterated or misbranded for pay or otherwise. 21 U.S.C. § 331(c); see also 21 U.S.C. § 321(b). Premarket authorization from the FDA is required for all “new tobacco products.” 21 U.S.C. § 387j(a)(2)(A).

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 required to have premarket review with a Marketing Granted Order (MGO) unless it has a substantial equivalence or substantial equivalence exemption order (found-exempt order) in effect for such product. 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A). A new tobacco product is adulterated if it has not obtained the required premarket authorization. 21 U.S.C. § 387b(6)(A). A new tobacco product for which a “notice or other information respecting it was not provided as required” under the substantial equivalence or substantial equivalence pathway is misbranded. 21 U.S.C. § 387c(a)(6).

Page 5

Here, CTP’s case against Respondent relies on the written direct testimony of James Bowling, Deputy Director, Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, CTP, FDA, and Inspector Christopher Dempsey, an FDA- commissioned officer with the state of Rhode Island. CTP Exs. 1-2. Inspector Dempsey testified that during the inspection on December 1, 2023, at approximately 12:13 PM, Inspector Dempsey observed an Elfbar Tobacco ENDS product available for sale at Respondent’s establishment. CTP. Ex. at 2, ¶¶ 4-6; see also CTP Exs. 3-6 (Inspector Dempsey’s narrative report, inspection results, photographs and notice of inspection dated December 1, 2023).

Deputy Director Bowling testified that the Elfbar Tobacco ENDS product observed during the December 1, 2023, inspection was manufactured in China, which is outside of the state in which Respondent operates. CTP Ex. 1 at 3, ¶ 7. Deputy Director Bowling further testified that Elfbar Tobacco ENDS products were not commercially marketed in the United States as of February 15, 2007, and that at the time of inspection on December 1, 2023, there were no records of these products having an authorized FDA premarket authorization order in effect under 21 U.S.C. § 387j(1)(A)(i). Id. at 4, ¶¶ 12-13. Finally, Deputy Director Bowling testified that there was no record of Elfbar Tobacco ENDS products having a substantial equivalence order in effect under 21 U.S.C. § 387j(a)(2)(A)(i) nor had a report requesting a substantial equivalence order under 21 U.S.C. §387e(j) been submitted; and that the products did not have a found-exempt order in effect under 21 U.S.C. § 387e(j)(3)(A) nor had an abbreviated report requesting a found-exempt order been submitted. Id. at 4, ¶ 14.

Respondent does not dispute any of the statements made by Inspector Dempsey or Deputy Director Bowling. In fact, Respondent admits it offered the Elfbar Tobacco ENDS Product for sale on December 1, 2023 in violation of the Act, but states the violation was unintentional and due to a misunderstanding. See CRD Dkt. Entry No. 5 at 1; CRD Dkt. Entry No. 15 at 2. Respondent claims its accountant mistakenly interpreted a prior warning letter from FDA regarding the sale of different Elfbar ENDS products as relating to the sale of tobacco products to minors. See CRD Dkt. Entry No. 5 at 2; CRD Dkt. Entry No. 15 at 4. Respondent also states it has since reviewed FDA training materials and created a new employee handbook to ensure compliance with the law. See CRD Dkt. Entry No. 5 at 2; R. Exs. 3, 4, 5.

I find that Respondent’s statements are not sufficient to overcome a finding of liability. Tobacco products are highly dangerous and addictive products and, as such, are heavily regulated. 21 U.S.C. § 387 note. Retailers that choose to sell tobacco products have the burden to ensure they understand the regulatory and legal requirements and sell such products in compliance with the law. Therefore, Respondent’s claims regarding its unfamiliarity with the law, misunderstanding of the warning letter, and subsequent remedial measures are not valid affirmative defenses that can relieve Respondent of its liability.

Page 6

Based on the uncontroverted testimony of Deputy Director Bowling and Inspector Dempsey as well as the corroborating evidence submitted by CTP, I find that the Elfbar Tobacco ENDS product offered for sale at Respondent’s establishment on December 1, 2023, previously traveled in interstate commerce before Respondent’s receipt and delivery, or proffered delivery, of such tobacco product for pay or otherwise. See 21 U.S.C. § 331(c); see also United States v. Sullivan, 332 U.S. 689, 696 (1948) (holding the Act applies “to articles from the moment of their introduction into interstate commerce all the way to the moment of their delivery to the ultimate consumer”). I also find the product was adulterated because it lacked the FDA premarketing authorization and was not exempt from this requirement. 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A). Finally, I find the product was misbranded under 21 U.S.C. § 387c(a)(6) because there was no substantially equivalent determination as required by 21 U.S.C. § 387e(j). Therefore, I conclude Respondent’s actions constitute violations of the Act that warrant a CMP.

B. Respondent has demonstrated by a preponderance of the evidence mitigating circumstances to support a reduced CMP of $14,475.

I have determined Respondent violated the prohibition against receiving and offering for sale a new tobacco product that was adulterated and misbranded. 21 U.S.C. § 331(c). Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a CMP not to exceed the amounts listed in FDA’s CMP regulations at 21 C.F.R. § 17.2; see also 45 C.F.R. § 102.3. When determining the appropriate amount of a CMP, I am required to consider any “circumstances that mitigate or aggravate the violation” and “the factors identified in the statute under which the penalty is assessed . . . .” 21 C.F.R. § 17.34(a), (b). Specifically, I must consider “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).

Here, CTP is proposing a CMP in the amount of $20,678, which is the maximum penalty permitted by the regulations. CRD Dkt. Entry No. 1, ¶ 1; 21 C.F.R. § 17.33(a); 45 C.F.R. § 102.3 (2022); 87 Fed. Reg. 15,100, 15,103 (March 17, 2022). CTP contends the maximum penalty is appropriate because Respondent continued offering unauthorized ENDS products for sale even after CTP previously warned Respondent about similar conduct. CRD Dkt. Entry No. 9 at 8-9. CTP further argues that the prior warning demonstrates a history of violations by Respondent and suggests Respondent is unwilling or unable to comply with the law. Id. at 10.

Respondent contends the maximum penalty is inappropriate because the violation was unintentional and due to a misunderstanding. CRD Dkt. Entry No. 5 at 1-2. Respondent also claims the proposed CMP is “beyond what the company can afford” and that imposing the proposed penalty will negatively impact Respondent’s ability to continue doing business. CRD Dkt. Entry No. 15 at 2; see also CRD Dkt. Entry No. 5 at 1; CRD

Page 7

Dkt. Entry No. 10b at 6 ¶ 6. Respondent asks me to reduce the penalty to $1,500, which it claims is based on its profits from selling unauthorized ENDS products, without accounting for costs. CRD Dkt. Entry No. 5 at 3; CRD Dkt. Entry No. 15 at 3.

For the reasons discussed below, after considering aggravating and mitigating factors and the underlying facts and circumstances in this case, I conclude that a reduced CMP of $14,475 is appropriate. 21 C.F.R. §§ 17.33(a), (c); 17.34(a)-(c).

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

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). There is no dispute that Respondent was in the business of selling a highly regulated and dangerous product. See generally 21 U.S.C. § 387 note (Findings and Purpose).

CTP argues Respondent’s violation is particularly serious because CTP previously issued a warning letter to Respondent on August 8, 2023, citing Respondent for offering for sale ENDS products that lacked the required marketing authorization. CRD Dkt. Entry No. 9 at 8; see also CTP Ex. 7. The warning letter notified Respondent that during an inspection on May 25, 2023, an FDA inspector observed Respondent offering for sale ENDS products lacking premarket authorization. CTP Ex. 7 at 1. Specifically, the letter stated Respondent offered for sale “Elbar Gumi and Elfbar Green Apple ENDS products.” Id. The letter explained the sale of such products was prohibited and warned Respondent to take action to correct the violation. Id. at 1-3.

In its pre-hearing brief, CTP notes that the warning letter specifically advised Respondent that future violations could result in enforcement action, “including, but not limited to, civil money penalties, seizure, and/or injunction by FDA.” CRD Dkt. Entry No. 9 at 9. CTP also notes the letter stated that “all new tobacco products on the market without the statutorily required premarket authorization are marketed unlawfully and are subject to enforcement action at FDA’s discretion.” Id. CTP contends that by continuing to sell prohibited ENDS products after receiving the letter, Respondent has demonstrated an “unwillingness or inability to correct the violations.” Id.

Respondent admits it received the warning letter, but claims it forwarded the letter to its accountant, who mistakenly interpreted it as a warning regarding the sale of tobacco products to minors. CRD Dkt. Entry No. 5 at 2; CRD Dkt. Entry No. 15 at 4-5. As a result of this alleged misunderstanding, Respondent claims its accountant issued a response to CTP addressing the “sale to minors” issue and did not advise Respondent that the letter related to the sale of ENDS products. CRD Dkt. Entry No. 5 at 2. Respondent claims it was not aware that the violation involved the sale of ENDS products until the second inspection on December 1, 2023. Id.

Page 8

I am not persuaded by Respondent’s explanation regarding the warning letter. Respondent is ultimately responsible for any duties or obligations delegated to its agents or employees and cannot shift the blame for disregarding CTP’s prior warning to its accountant. Further, I have carefully reviewed the warning letter and do not see how any reasonable person could have interpreted it as relating to the sale of tobacco products to minors. The letter unambiguously addressed the sale of unauthorized ENDS products and made no reference whatsoever to tobacco sales to minors. See CTP Ex. 7. As the operator of a business engaged in the sale of tobacco products, Respondent is obligated to review and reasonably interpret correspondence from regulatory agencies. Respondent’s failure to do that in this case is not a valid excuse for disregarding CTP’s warning letter.

After reviewing the parties’ submissions, I find that CTP has shown Respondent continued marketing and selling unauthorized ENDs products in violation of the Act, even after being previously warned about similar conduct and the potential consequences. Based on this finding, I conclude that CTP has demonstrated aggravating circumstances which support the imposition of a substantial CMP in this case.

2. Ability to Pay and Effect on Ability to Continue to Do Business

Respondent acknowledges it should pay a civil money penalty but contends the proposed CMP “is beyond what the company can afford.” CRD Dkt. Entry No. 15. at 2-3. Respondent states it has been in business for less than two years and that the proposed CMP would have a negative impact on its ability to continue doing business. CRD Dkt. Entry No. 10b at 6. Respondent also argues the penalty “would cause undue harm and potentially cause us to shut down.” CRD Dkt. Entry No. 5 at 1.

In support of these arguments, Respondent submitted its 2023 corporate income tax return, which shows gross profits of $73,853, a total income of $74,997, and a taxable income of $2,035 for 2023. R. Ex. 1. Respondent also submitted what appear to be monthly sales reports for February and March 2024, as well as a partial sales report from December 2023. R. Ex. 2.2 Based on the reports, Respondent’s monthly gross sales for February and March 2024 appear to have been $13,168 and $14,545, respectively. Id. CTP contends that Respondent’s tax return and sales reports are insufficient to establish Respondent’s inability to pay the proposed penalty. CRD Dkt. Entry No. 9 at 9-10.

While Respondent’s submissions provide some support for Respondent’s claims, I find that they do not demonstrate a complete inability to pay the proposed penalty or establish

Page 9

how much Respondent is able to pay. For example, Respondent has not provided profit and loss statements, bank statements, reports of its assets and liabilities, or any similar documentation to support its claim that it is unable to pay the full penalty amount. Such evidence would have provided a more complete picture of Respondent’s financial position, potentially resulting in a greater reduction in the penalty amount.

Still, considering Respondent’s statements and the supporting evidence, particularly the 2023 tax return, I am persuaded that imposing the full CMP amount would negatively impact Respondent’s ability to continue doing business. Indeed, the proposed penalty represents a sizeable portion of Respondent’s total income for 2023 and exceeds its taxable income for that year. R. Ex. 1. The sales reports also suggest the proposed penalty amount exceeds Respondent’s monthly gross sales. See R. Ex. 2. Thus, while I find Respondent’s evidence on this issue somewhat lacking, I do find that Respondent has established mitigating circumstances which support at least a partial reduction in the penalty amount.

3. History of Prior Violations

There is no indication in the record of any prior violations of section 331(c) of the Act resulting in a CMP. However, CTP argues that Respondent “has a history of violating the Act’s requirements” based on the previously discussed August 8, 2023, warning letter. CTP Br. at 9. CTP contends the maximum penalty of $20,678 is appropriate in this case because Respondent’s history demonstrates an “unwillingness or inability” to comply with the law. Id.

As discussed above, I have already found that the warning letter constitutes an aggravating factor. However, I do not agree with CTP that the warning letter also establishes a significant history of prior violations. Indeed, the letter was not a final agency determination and did not result in any penalties imposed against Respondent. See CTP Ex. 7 at 3 (“Please note that this warning letter does not constitute final agency action . . . .”). Further, Respondent did not have the opportunity to request a hearing or otherwise dispute the violations alleged in the letter. Id. I also note that Respondent has identified steps it has taken since the December 1, 2023 inspection to reduce the likelihood of future violations, which suggests it is willing and able to comply with the law moving forward. See CRD Dkt. Entry No. 5 at 2; R. Exs. 3, 4, 5.

In sum, this is Respondent’s first violation resulting in a CMP. Respondent also appears to be making an effort to ensure future compliance with the law. As a result, I find that Respondent does not have a significant history of prior violations or a substantial likelihood of committing future violations, which is a mitigating factor that supports a reduction in the penalty amount.

Page 10

4. Degree of Culpability

Based on my finding that Respondent committed the violation alleged in the Complaint, I find Respondent fully culpable for offering for sale new tobacco products that were adulterated and misbranded, in violation of the Act. The Act places a heavy burden on retailers who choose to sell prohibited tobacco products because of their highly dangerous and addictive nature. See 21 U.S.C. § 387 note. Although Respondent claims to have taken steps to reduce the likelihood of future violations, I find that those actions do not absolve Respondent of its responsibility as a retailer of tobacco products.

5. Other Considerations

The Act gives me discretion to consider “other matters as justice may require” to mitigate the amount of the CMP. See 21 U.S.C. § 333(f)(5)(B). As noted above, CTP is requesting the maximum penalty amount permitted by the regulations. See 45 C.F.R. § 102.3 (2022); 87 Fed. Reg. 15,100, 15,103 (March 17, 2022). In assessing the appropriateness of CTP’s request, I find that justice requires me to consider the full range of available penalties in light of the specific facts and circumstances of the case, separate and apart from the factors discussed above. In doing so, I note that the overall purpose of a CMP is to promote compliance with the law and deter future violations. Therefore, a CMP should be significant, but not overly punitive.

Here, the record shows Respondent is a small retailer with no history of prior violations resulting in a CMP. Further, Respondent did not manufacture or commercially distribute the ENDS product at issue in this case. Instead, the record suggests Respondent was selling the product for individual use. In addition, Respondent has actively participated in these proceedings, appears to be taking this matter seriously, and has identified steps it is taking to reduce the likelihood of future violations, including by researching the law and creating a new employee handbook regarding the sale of tobacco products. See R. Exs. 3-5. On the other hand, as a retailer engaged in the sale of tobacco products, Respondent should have already been familiar with the applicable law and known which products it was permitted to sell. Further, CTP previously warned Respondent about similar conduct and the potential consequences of continuing to offer unauthorized ENDS products for sale. See CTP Ex. 7.

After weighing these competing factors, I find that imposing the maximum penalty would be overly punitive and would not serve the interests of justice. However, I also find that Respondent’s conduct was serious and warrants a proportional penalty. Therefore, based on this additional consideration, I conclude that a reduced, but still substantial, CMP is appropriate in this case.

Page 11

6. Penalty Determination

Respondent proposes a penalty in the amount of $1,500, which it claims is based on its alleged profits from the sale of unauthorized ENDS products without accounting for costs. See CRD Dkt. Entry No. 5 at 3; CRD Dkt. Entry No. 15 at 3.3 However, this amount is less than one-tenth of what CTP is seeking. Further, I do not agree that merely disgorging Respondent’s profits from its unauthorized sales, even without accounting for costs, would sufficiently promote compliance with the Act or deter future violations. In fact, this proposed methodology could encourage noncompliance by limiting a retailer’s potential exposure to its unlawful profits and relatively low costs if caught. Instead, as CTP has established Respondent’s liability and identified aggravating circumstances in this case, I find that CTP’s proposed penalty provides a more reasonable starting point for determining an appropriate reduction.

Based on the record evidence, the applicable law, and the various aggravating and mitigating factors outlined in this decision, I find that a thirty percent reduction in the penalty proposed by CTP is warranted. Therefore, I conclude that a reduced penalty of $14,475 is appropriate under 21 U.S.C. §§ 333(f)(5)(B), (f)(5)(C), and (f)(9).

IV. Conclusion

For the reasons stated above, I impose a civil money penalty against Respondent Awad Corporation Inc. d/b/a Shish Me Up in the amount of $14,475 for receiving in interstate commerce an ENDS product that lacks the premarketing authorization required under the Act and offering such product for sale. Pursuant to 21 C.F.R. § 17.45(d), this order becomes final and binding upon both parties after 30 days of the date of its issuance.

/s/

Adam R. Gazaille Administrative Law Judge

  • 1

    Earlier the same day, Respondent requested an extension of time to file its answer. See CRD Dkt. Entry No 3. As Respondent subsequently filed its answer on time, the request for extension is moot.

  • 2

    The sales reports, which are not authenticated or supported by testimony or any other source, appear to be screenshots taken with a cell phone. See R. Ex. 2. Portions of the reports are cut off and illegible, including the time period covered by the December 2023 report. Id. Given these defects, I am unable to consider the December 2023 report and give only minimal consideration to the February and March 2024 reports.

  • 3

    I am unable to verify Respondent’s claims regarding its profits and costs from the sale of ENDS products, as the partial sales reports and invoices provided by Respondent are not sufficiently detailed or complete. See R. Exs. 2, 6.

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