NAKV Enterprises Inc. d/b/a Fat Puff Wholesale, DAB TB10020 (2025)

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

On December 27, 2024, the Center for Tobacco Products (CTP) served an administrative complaint on Respondent, NAKV Enterprises Inc. d/b/a Fat Puff Wholesale, at 310 North Wickham Road, Suite 110, Melbourne, Florida 32935.1  A copy of the complaint was also filed with the Food and Drug Administration’s (FDA) Division of Dockets Management.  CTP seeks to impose a $21,348 civil money penalty against Respondent Fat Puff Wholesale for allegedly introducing into interstate commerce an electronic

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nicotine delivery system (ENDS) product that lacks the required premarketing authorization, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq.

Respondent’s CEO timely filed an answer and request for extension of time, which was granted by the Administrative Law Judge (ALJ) previously assigned to this case.2  Since filing its answer, however, Respondent has repeatedly disregarded orders and has been non-responsive to CTP’s requests.  Specifically, Respondent failed to respond to CTP’s request for production of documents, failed to respond to CTP’s Motion to Compel Discovery, failed to comply with my Order granting CTP’s Motion to Compel Discovery, and failed to respond to the present Motion to Impose Sanctions.

Currently before me is CTP’s Motion to Impose Sanctions, which requests that I impose sanctions against Respondent for its repeated noncompliance with the rules and orders governing this proceeding.  As a proposed sanction for Respondent’s conduct, CTP asks me to strike Respondent’s answer and issue a default judgment against Respondent pursuant to 21 C.F.R. § 17.35(c)(3).  For the reasons stated below, I find that the requested sanctions are warranted and appropriate under the circumstances.  Therefore, I grant CTP’s Motion to Impose Sanctions, strike Respondent’s answer, and issue this decision of default judgment imposing the requested civil money penalty against Respondent.

I. Procedural History

On December 27, 2024, CTP served an administrative complaint on Respondent by United Parcel Service in accordance with 21 C.F.R. §§ 17.5 and 17.7.  See Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 2 (Complaint), 2b (Proof of Service).  Respondent’s answer to the complaint was due by January 27, 2025.  See 21 C.F.R. § 17.9.

On January 14, 2025, Respondent timely submitted a response to the complaint.  In the response, Respondent stated it took “full responsibility for the situation,” noted it was “small business with no employees and limited resources,” and requested “an extension of 30 days to find the best route of resolving the CMP [civil money penalty].”  CRD Dkt. Entry No. 1.  On January 24, 2025, Judge Zina D. Ashourian, the ALJ initially assigned to this case, granted the requested extension and directed Respondent to file an answer by February 26, 2025.  CRD Dkt. Entry No. 3.

On March 21, 2025, after Respondent failed to file a new answer by the extended deadline, Judge Ashourian construed Respondent’s January 14, 2025 submission as its answer to the complaint and issued an Acknowledgment and Pre-Hearing Order (APHO).

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CRD Dkt. Entry No. 4 at1‑2.  The APHO outlined the procedures governing this case and established deadlines for the parties to complete discovery and file pre-hearing exchanges.  See id.  Among other provisions, the APHO directed the parties to serve all discovery requests by April 21, 2025, directed CTP to file its pre-hearing exchange by June 10, 2025, and directed Respondent to file its pre-hearing exchange by July 1, 2025.  Id. ¶ 6.

With respect to discovery, the APHO stated that a party must produce any requested documents no later than 30 days after receiving a request for documents from the opposing party.  Id. ¶ 4; see also 21 C.F.R. § 17.23(a).  The APHO also warned that sanctions may be imposed against a party, up to and including dismissal of the Complaint or answer, for failing to comply with any order in this case, failing to prosecute or defend its case, or engaging in misconduct that “interferes with the speedy, orderly, or fair conduct of the hearing.”  CRD Dkt. Entry No. 4 ¶ 21; see also 21 C.F.R. § 17.35.

On April 4, 2025, CTP requested a 30-day extension of all pre-hearing deadlines while it evaluated the impact of a recent staffing reduction on CTP’s operations.  CRD Dkt. Entry No. 5.  On April 8, 2025, Judge Ashourian granted the request and extended the discovery and pre-hearing exchange deadlines by 30 days.  CRD Dkt. Entry No. 6.

On May 6, 2025, CTP filed a Motion to Compel Discovery, stating that it served document requests on Respondent on March 28, 2025, but had not received any response.  CRD Dkt. Entry No. 7.  On the same date, CTP also requested a 30-day extension of all deadlines in this case due to the discovery delay.  CRD Dkt. Entry No. 8.

On May 7, 2025, Judge Ashourian issued an Order advising Respondent that it had until May 22, 2025, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 9.  Judge Ashourian also granted CTP’s request for an extension and extended the parties’ pre-hearing exchange deadlines by an additional 30 days.  Id. at 2.

On June 18, 2025, after this case was transferred to me, CTP filed a status report, stating that the parties had been unable to reach a settlement in this case. CRD Dkt. Entry No. 11.  In the filing, CTP indicated that it “attempted to contact Respondent to discuss the filing of a Joint Status Report but was unable to reach Respondent.”  Id.  CTP also noted that Respondent failed to respond to CTP’s Motion to Compel Discovery and that CTP still had not received any documents.  Id.  On July 28, 2025, CTP sent an email to my office, requesting clarification on its upcoming pre-hearing exchange deadline given Respondent’s continued failure to respond to the Motion to Compel Discovery.  CRD Dkt. Entry Nos. 12, 12a.

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On August 1, 2025, I issued an Order granting CTP’s Motion to Compel Discovery and ordered Respondent to produce all documents responsive to CTP’s document requests by August 18, 2025.  CRD Dkt. Entry No. 13.  I also extended the parties’ pre-hearing exchange deadlines by an additional 30 days to account for the discovery delay.  Id. at 3.  In the order, I specifically warned Respondent that:

[F]ailing 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.

Id. at 3 (emphasis in original).

On August 19, 2025, CTP filed the present Motion to Impose Sanctions.  CRD Dkt. Entry No. 14.  In the Motion, CTP states that Respondent failed to comply with my August 1, 2025 Order granting CTP’s Motion to Compel Discovery and still has not produced any documents in response to CTP’s document requests.  Id. at 1-2.  CTP asks that I sanction Respondent by striking its answer and issuing an Initial Decision and Default Judgment imposing the requested $21,348 civil money penalty.  Id. at 2.  CTP also filed a separate motion asking me to stay all deadlines pending resolution of its Motion to Impose Sanctions.  CRD Dkt. Entry No. 15.

On August 25, 2025, I issued an Order advising Respondent that it had until September 15, 2025, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 16 at 1-2.  I also granted CTP’s request to stay all deadlines pending resolution of the Motion to Impose Sanctions.  Id.

To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions.  Further, Respondent has not produced any documents in response to CTP’s discovery requests or otherwise complied with my Order granting CTP’s Motion to Compel Discovery.

II. Motion to Impose Sanctions

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.

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21 C.F.R. § 17.35(a).

Here, I find Respondent failed, and continues to fail, to comply with multiple orders and rules in this proceeding, including:

• The requirements in 21 C.F.R. § 17.23(a) and paragraph 4 of the APHO, by failing to respond to CTP’s document requests within 30 days; and
• My August 1, 2025 Order granting CTP’s Motion to Compel Discovery, by failing to respond to CTP’s document requests by August 18, 2025.

In addition, I find that Respondent has failed to defend this action.  Specifically, Respondent has not filed a response to CTP’s Motion to Compel Discovery or CTP’s Motion to Impose Sanctions, nor has it taken any action in this matter since filing its initial response to the complaint on January 14, 2025.  I also find that Respondent has interfered with the speedy, orderly, and fair conduct of this proceeding by preventing the case from moving forward to adjudication.  Therefore, I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted under the circumstances.

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’s conduct has caused unnecessary delays and disruptions, interfered with CTP’s ability to prosecute its case, and prevented me from conducting a hearing or issuing a decision on the merits.  While I recognize that Respondent is unrepresented, Respondent’s disregard for multiple orders and complete lack of responsiveness suggests it has abandoned its defense and is not interested in participating in these proceedings.

Based on the severity and ongoing nature of Respondent’s conduct, I find that the appropriate sanction is to strike Respondent’s answer to the complaint.  21 C.F.R. § 17.35(b), (c)(3); see also KKNJ, Inc. d/b/a Tobacco Hut 12, DAB No. 2678 at 10-11 (2016) (concluding ALJ did not abuse discretion by striking Respondent’s answer for failure to comply with discovery order).  While I recognize that this is a harsh remedy, I conclude that a lesser sanction would not effectively address Respondent’s repeated noncompliance and failure to defend this case.  Indeed, Respondent’s conduct has effectively brought this proceeding to a standstill without any explanation or justification.  Therefore, CTP’s Motion to Impose Sanctions is GRANTED and Respondent’s answer to the complaint is hereby STRICKEN from the record.

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

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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, CTP alleges the following facts in its complaint:

• Respondent sells and/or distributes tobacco products through its online establishment that does business under the name Fat Puff Wholesale, which is accessible at URL: https://fatpuffwholesale.com.  Complaint ¶ 13.
• In a Warning Letter issued on May 31, 2023, CTP informed Respondent that, among other things, the new tobacco products that Respondent sells and/or distributes are adulterated and misbranded because they lack the required FDA marketing authorization order.  Complaint ¶ 14.
• On May 2, 2024, an FDA-commissioned inspector conducted an inspection of Respondent’s online establishment at the URL: https://fatpuffwholesale.com.  During this inspection, FDA purchased Respondent’s Funky Republic Ti7000 California Cherry electronic nicotine delivery system (ENDS) product.  Complaint ¶ 15.
• In response to FDA’s order and purchase, Respondent shipped a Funky Lands Ti7000 California Cherry ENDS product (Respondent’s ENDS product), a different ENDS product than the one ordered, from Florida to FDA in Virginia, along with a packing slip that identified the product shipped as the Funky Republic Ti7000 California Cherry ENDS product.  Complaint ¶ 16.
• Respondent’s ENDS product is a “new tobacco product” because it was not commercially marketed in the United States as of February 15, 2007.  Complaint ¶ 17.
• Respondent’s ENDS product does not have a Marketing Granted Order (MGO) in effect and it is, therefore, adulterated.  Complaint ¶ 18.
• Neither a substantially equivalent order nor an abbreviated report has been submitted for Respondent’s ENDS product.  Complaint ¶ 19.
• 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 ENDS product.  Complaint ¶ 20.

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These facts establish Respondent Fat Puff Wholesale’s liability under the Act.  The Act prohibits the introduction or delivery for introduction into interstate commerce or causing the introduction or delivery for introduction into interstate commerce, any tobacco product that is adulterated or misbranded.  21 U.S.C. § 331(a); 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).

Accepting the above alleged facts as true, Respondent violated the Act’s prohibition against introducing or delivering for introduction into interstate commerce or causing the introduction or delivery for introduction into interstate commerce, any tobacco product that was adulterated and misbranded.  21 U.S.C. § 331(a).  Specifically, on May 2, 2024, Respondent offered for sale an ENDS product that was adulterated because it lacked the required FDA marketing authorization and was not exempt from this requirement.  21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A).  Under 21 U.S.C. § 387c(a)(6), Respondent’s ENDS product is also misbranded because it had no substantially equivalent determination or found-exempt order, as required by 21 U.S.C. § 387e(j).  Therefore, I find Respondent’s actions constitute violations of law that merit a civil money penalty.

CTP has requested a civil money penalty of $21,348, 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 conclude that a civil money penalty of $21,348 is appropriate and impose a penalty in that amount against Respondent.  See 21 C.F.R. § 17.11(a).

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ORDER

For these reasons, I enter default judgment in the amount of $21,348 against Respondent NAKV Enterprises Inc. d/b/a Fat Puff Wholesale.  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.