Sonia and Ami, Inc. d/b/a Charlie's Food Mart, DAB TB9064 (2025)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks a $20,678 civil money penalty (CMP) against Respondent, Sonia and Ami, Inc. d/b/a Charlie’s Food Mart, at 12316 Bellefontaine Road, Saint Louis, Missouri 63138. Specifically, CTP alleges that Respondent Charlie’s Food Mart 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 reduced civil money penalty in the amount of $10,339 is appropriate.

I. Background and Procedural History

CTP began this matter by serving an administrative complaint and supporting documents on Respondent, at 12316 Bellefontaine Road, Saint Louis, Missouri 63138, by United Parcel Service, and by filing a copy of the complaint with the FDA’s Division of Dockets

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

On February 19, 2024, Respondent, through counsel, timely filed a Request for Extension, which I granted on February 20, 2024, finding good cause for a 30-day extension based upon Respondent’s counsel’s representation he was only recently retained as counsel. CRD Dkt. Entry Nos. 4, 5. On March 25, 2024, Respondent’s counsel filed a timely answer to the complaint, denying specifically referenced allegations and asserting some defenses. CRD Dkt. Entry No. 6.

On March 29, 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 25, 2024, CTP filed a Joint Status Report stating that the parties intended to engage in further settlement discussions and that CTP would notify the Departmental Appeals Board (DAB) if the parties finalized a settlement in this case. CRD Dkt. Entry No. 8.

On May 6, 2024, CTP filed Complainant’s Motion for a Protective Order (MPO), against Respondent’s discovery request, citing as its basis, that “Responding to Respondent’s requests in their entirety would require CTP to produce documents that are irrelevant, exempt from disclosure under 21 C.F.R. Part 20, and/or otherwise privileged.” CRD Dkt. Entry No. 10 (MPO) at 1. On May 28, 2024, CTP filed its Memorandum in Support of Complainant's Motion for a Protective Order, as well as exhibits in support of its motion, consisting of CTP Exhibit (Ex.) A - Respondent’s RFP, CTP Ex. B - Cover Letter, CTP Ex. C - Privilege Log, CTP Ex. D - Protective Order. CRD Dkt. Entry Nos. 12, 13, 14, 15.

On June 12, 2024, Respondent filed an Unopposed Motion to Extend Deadlines, requesting two additional days to file its memorandum in opposition of CTP’s MPO. Respondent stated that CTP concurred on the motion and notice, indicating that the motion and notice may be identified as unopposed. CRD Dkt. Entry No. 16.

On June 14, 2024, Respondent filed its Memorandum in Opposition to CTP’s Motion for a Protective Order, and submitted as Exhibit 1, Respondent’s Request for Production of Documents (RFP). CRD Dkt. Entry Nos. 17, 18.

On June 17, 2024, I granted Respondent’s unopposed motion, extending its deadline to file its memorandum in opposition of CTP’s MPO, until June 18, 2024. CRD Dkt. Entry No. 19.

On June 17, 2024, CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief and seven proposed exhibits. CRD Dkt. Entry Nos. 20-27. 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

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Compliance and Enforcement, CTP, FDA, and Kevin Weaver, an FDA-commissioned officer with the state of Missouri. CTP Exs. 1, 2.

On June 25, 2024, I issued an order holding the parties’ pre-hearing exchange deadlines in abeyance, in light of CTP’s pending motion for protective order. CRD Dkt. Entry No. 28.

On July 25, 2024, I granted CTP’s Motion for Protective Order in its entirety with respect to RFP Nos. 2, 4, 6, 7, 9,1 and CTP’s CMP Review Memo. CRD Dkt. Entry No. 29. On August 5, 2024, I issued an order to update the APHO deadlines, giving CTP until September 5, 2024, to supplement its pre-hearing exchange, and Respondent until October 3, 2024, to file its pre-hearing exchange. CRD Dkt. Entry No. 30.

On October 3, 2024, Respondent timely filed its pre-hearing exchange, consisting of a pre-hearing brief, pre-hearing disclosure and six proposed exhibits, including the written direct testimony of Vedang Goshi, one of Respondent’s store managers, and Manisha Patel, Respondent’s co-owner. CRD Dkt. Entry Nos. 31, 31a-g.

On November 13, 2024, I held a telephonic pre-hearing conference (PHC) with both parties present. See CRD Dkt. Entry No. 33 (Summary of Pre-Hearing Conference and Order Establishing Deadlines for Final Briefs). During the PHC, I went over various procedural matters, including the parties’ pre-hearing submissions and proposed exhibits. Id. Both parties stated they had no objections to the opposing party’s proposed exhibits. Id. at 2. Accordingly, I admitted CTP’s proposed exhibits 1-7 into the record as CTP Exhibits (CTP Exs.) 1-7. Id. I also admitted Respondent’s proposed exhibits as (R. Exs.) 1A-1B, 2-5 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. 33 at 1-2. Respondent stated it did not wish to cross-examine CTP’s proposed witnesses, and CTP also stated that it did not wish to cross-examine Respondent’s proposed witness. Id. at 2.Given this fact, I advised the parties that no hearing would be held, and I would decide the case based on 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 November 15, 2024, I issued a Summary of Pre-Hearing Conference and Order Establishing Deadlines for Final Briefs memorializing the issues discussed at the PHC and establishing a December 16, 2024, deadline for final briefs. CRD Dkt. Entry No. 33.

On December 16, 2024, Respondent submitted an untitled written motion, stating that it “resubmits for its Final Brief the previously submitted and admitted exhibits already

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featured in the written record final brief.” CRD Dkt. Entry No. 34. CTP did not file a 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. 33. Specifically, CTP submitted the following seven exhibits, marked as CTP Exs. 1-7:

• CTP Ex. 1: Declaration of James Bowling (CRD Dkt. Entry No. 21)
• CTP Ex. 2: Declaration of Kevin Weaver (CRD Dkt. Entry No. 22)
• CTP Ex. 3: August 2023 Narrative Report (CRD Dkt. Entry No. 23)
• CTP Ex. 4: August 2023 FDA’s Tobacco Inspection Management System (TIMS) Assignment Form (CRD Dkt. Entry No. 24)
• CTP Ex. 5: August 2023 Photographs of Esco Bars Peachy Melons ENDS Product CRD Dkt. Entry No. 25)
• CTP Ex. 6: August 2023 Form FDA 482 (CRD Dkt. Entry No. 26)
• CTP Ex. 7: June 2023 Warning Letter (CRD Dkt. Entry No. 27)

Respondent submitted the following six exhibits at the PHC, marked as Exs. 1A-1B, 2-5:

• Ex. 1A: Letter from Rajesh C. Vora, CPA, tax preparation consultant and 2023 tax returns (CRD Dkt. Entry No. 31b)
• Ex. 1B: 2022 Tax Return (CRD Dkt. Entry No. 31c)
• Ex. 2: June 2023 Warning Letter (CRD Dkt. Entry No. 31d)
• Ex. 3: Declaration of Vedang Doshi (CRD Dkt. Entry No. 31e)
• Ex. 4: Declaration of Manisha Patel (CRD Dkt. Entry No. 31f)
• Ex. 5: FDA Guidance Document (CRD Dkt. Entry No. 31g)

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 Esco Bars Peachy Melons ENDS product, and offered such product for sale on August 14, 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.

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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).

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 Kevin Weaver, an FDA-commissioned officer with the state of Missouri. CTP Exs. 1-2. Inspector Weaver testified that during the inspection on August 14, 2023, at approximately 9:20 AM, he observed an Esco Bars Peachy Melons ENDS product available for sale at Respondent’s establishment. CTP. Ex. at 2, ¶¶ 5-7; see also CTP Exs. 3-6 (Inspector Weaver’s narrative report, inspection results, photographs and notice of inspection dated August 14, 2023).

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Deputy Director Bowling testified that the Esco Bars Peachy Melons ENDS product observed during the August 14, 2023, inspection was manufactured in China by Pastel Cartel, LLC, which does not have any registered tobacco production facilities in the state of Missouri, where Respondent operates. CTP Ex. 1 at 3, ¶¶ 7, 10. Deputy Director Bowling further testified that Esco Bars Peachy Melons ENDS products were not commercially marketed in the United States as of February 15, 2007, and that at the time of inspection on August 14, 2023, there were no records of these products having an authorized FDA premarket authorization order in effect under 21 U.S.C. § 387j(c)(1)(A)(i). Id. at 4, ¶¶ 12-13. Finally, Deputy Director Bowling testified that there was no record of Esco Bars Peachy Melons ENDS products having a substantial equivalence order in effect under 21 U.S.C. § 387j(a)(2)(A)(ii) 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 under 21 U.S.C. § 387e(j)(1). Id. at 4, ¶ 14.

Respondent has not disputed any of the statements made by Inspector Weaver or Deputy Director Bowling. Rather, Respondent asserts a general denial of the current allegations cited in Complaint, including that its business establishment received tobacco products, specifically Esco Bars Peachy Melons ENDS products, in interstate commerce and that it delivered or proffered delivery of such tobacco products for pay or otherwise, that its ENDS product is a “new tobacco product,” and that it had any knowledge that its e-liquid products are adulterated or misbranded. Answer at ¶ 1; see also Complaint ¶¶ 14-21. Although Respondent admits to receiving a Warning Letter on June 8, 2023, Respondent contends that the Warning Letter was for a different product. Answer at ¶ 2. Further, Respondent also asserts that notwithstanding that it relied on the wholesalers to provide compliant products, upon receiving the Warning Letter, it removed all of the Escobar products from its store. Id.

I find that Respondent’s statements are not sufficient to overcome a finding of liability in this case. 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 unintentional violation of the law because it was warned of a different product and its subsequent remedial measures by removing the identified group of products from its store, are not valid affirmative defenses that can relieve Respondent of its liability.

Based on the uncontroverted testimony of Deputy Director Bowling and Inspector Weaver, as well as the corroborating evidence submitted by CTP, I find that the Esco Bars Peachy Melons ENDS product offered for sale at Respondent’s establishment on August 14, 2023, previously traveled in interstate commerce before Respondent’s receipt

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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 $10,339.

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. 20 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, on the other hand, contends the maximum penalty being sought by CTP is inappropriate because Respondent was warned about a different product prior to the August 14, 2023, inspection, that it already removed the brand of products identified in the complaint at a loss to its business, and that its business cannot afford to pay the CMP that CTP is seeking, arguing that paying this $20,678 “would undoubtedly affect Respondent’s ability to survive, if not outright kill it.” CRD Dkt. Entry No. 31 at 7. See CRD Dkt. Entry No. 6 at 2. Respondent offers its 2023 corporate tax returns in support of its claim of lack of sustainability of its business and requests that I reduce the penalty to $2,500. Id. at 8-9; CRD Dkt. Entry No. 31 at 8;see also Ex. 1A.

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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 $10,339 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 June 8, 2023, citing Respondent for offering for sale ENDS products that lacked the required marketing authorization. CRD Dkt. Entry No. 20 at 8-9; see also CTP Ex. 7. The Warning Letter notified Respondent that during an inspection on May 2, 2023, an FDA inspector observed Respondent offering for sale ENDS products lacking premarket authorization. CTP Ex. 7 at 1. Specifically, the Warning Letter stated Respondent offered for sale “Elfbar Rainbow Cloudz and Esco Bars PacificCooler ENDS products.” Id. The Warning Letter explained the sale of such product 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. 20 at 9. CTP also notes the Warning 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 Warning Letter, Respondent has demonstrated an “unwillingness or inability to correct the violations.” Id.

In its Answer, Respondent acknowledged receiving the June 8, 2023, Warning Letter, but asserts that the Warning Letter referenced two other products that were never previously mentioned to Respondent and not the product mentioned in the Complaint. Answer at 2. I have reviewed the June 8, 2023, Warning Letter, and it does reflect that the products CTP identified were “Elfbar Rainbow Cloudz and Esco Bars Pacific Cooler ENDS products” which is not the “Esco Bars Peachy Melons ENDS product” subsequently referenced in the Complaint. I find that it was not unreasonable for Respondent to believe that removing the specific products identified in the Warning Letter was sufficient to remedy the violation. The Warning Letter begins by notifying Respondent that Respondent “was observed to be in violation of the federal tobacco laws and

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regulations” and states “[f]ailure to address this violation may result in FDA initiating regulatory or legal action, including monetary penalties.” CTP Ex. 7 at 1. The Warning Letter further stated that “on May 2, 2023, the establishment offered for sale Elfbar Rainbow Cloudz and Esco Bars Pacific Cooler ENDS products” and instructs the Respondent to “take prompt action to address the violation listed above.” Id. at 1, 3.

The Warning Letter does not clearly indicate if other products being sold by Respondent may also lack the premarket authorization. See id. While the Warning Letter generally states that the “violation indicated in [the] letter may not be a complete list of violations at the establishment,” I note that this statement is in the middle paragraphs on page 3 of 5, without underlining or other marking to highlight this statement. Id. at 3. Had this indication been more prominently placed or plainly written, I might have given more consideration to CTP’s argument that Respondent’s violations are particularly serious because they occurred despite being previously warned.

After reviewing the parties’ submissions, I find that once Respondent was given notice of the current violation, Respondent did not continue to sell the tobacco products listed in the Warning Letter that did not have FDA’s premarket authorization. Further, despite the serious nature of the violations, I find the Respondent’s good faith attempt to comply with the law, while insufficient to relieve it of liability, is a mitigating factor that supports a significant reduction in the proposed CMP amount.

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

In evaluating this factor, I note that Respondent’s principal argument against the appropriateness of the CMP amount is its inability to pay. In its Complaint, CTP seeks to impose a CMP amount of $20,678 against Respondent. Complaint ¶ 1. In its Answer, Respondent contends that the CMP sought by CTP is too high because it was warned of a different product in the Warning Letter and that Respondent “cannot afford” to pay the CMP. Answer at 2. Specifically, Respondent asserts that they made “almost no income” in 2023, that they have taken out loans to purchase the store building and that they have used all available resources to maintain it. Informal Brief of Respondent at 7.

In support of these arguments, Respondent submitted its 2023 corporate income tax return, which shows gross receipts or sales of $1,673,293, gross profits of $325,208, and a total business income of $412,419 for 2023. See R. Ex. 1A. Respondent also submitted a declaration by the manager explaining its inability to pay the proposed $20,678 CMP. See R. Ex. 3. Although CTP did not have Respondent’s 2023 tax returns at the time it submitted Complainant’s Informal Brief, CTP did not dispute Respondent’s supplemental submissions in a Final Brief.

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While Respondent’s submissions provide some support for Respondent’s claims based on its loss in business income in 2023, I find that they do not demonstrate a complete inability to pay the proposed penalty or establish how much Respondent is able to pay. Respondent has not provided additional supporting documents, such as profit and loss statements, recent 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.

Thus, considering Respondent’s statements describing its financial circumstances and the supporting evidence, and in light of CTP’s failure to directly address or respond to Respondent’s financial evidence, I am persuaded that imposing the full CMP amount can negatively impact Respondent’s ability to continue doing business. As such, 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 although CTP argues that Respondent “has a history of violating the Act’s requirements” based on the previously discussed June 8, 2023, Warning Letter. CRD Entry 20 at 10. 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 laws and regulations. Id.

I do not agree with CTP that the Warning Letter establishes a significant history of prior violations and although it does demonstrate a prior violation, I note that the Warning Letter did not result in a CMP and Respondent did not have an opportunity to request a hearing or fully respond to that violation. I recognize that this is Respondent’s first violation resulting in a request by CTP to impose a CMP and that Respondent asserts it has taken steps to ensure future compliance with the law. Answer at 2. 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.

4. Degree of Culpability

Based on my finding that Respondent committed the violation alleged in the Complaint, I hold Respondent culpable for offering for sale a new tobacco product that was adulterated and misbranded, in violation of the Act. I acknowledge that the Act places a heavy burden on retailers who choose to sell tobacco products because of their highly dangerous and addictive nature. See 21 U.S.C. § 387 note. However, as explained above, Respondent has demonstrated its attempt to remedy the violation identified in the

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Warning Letter and the Complaint. Although Respondent’s remedial actions do not absolve Respondent of its responsibility as a retailer of tobacco products, Respondent’s actions demonstrate that it took concrete steps to correct its violations.

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 has no history of prior violations resulting in a CMP, and that as soon as Respondent was notified with CTP’s Warning Letter, they in good faith, removed the listed tobacco products. 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. See R. Ex. 3.

On the other hand, as a retailer engaged in the sale of tobacco products, Respondent should have already been familiar with the applicable laws 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 impede Respondent’s ability to continue to do business thus going far beyond deterring future violations, that it would not promote compliance, and would therefore, 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.

6. Penalty Determination

Respondent proposes a penalty in the amount of $2,500, on the basis that it had “virtually no income in 2023” and does not maintain “a large emergency fund” to pay the full penalty amount sought by CTP. See CRD Dkt. Entry No. 31 at 7. On the other hand, CTP has established Respondent’s liability and identified aggravating circumstances in this case noting Respondent’s failure to comply with the Warning Letter. Because the Act authorizes substantially higher penalties for the violation in this case, I find that a

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$2,500 penalty would not sufficiently promote compliance with the Act or deter future violations. Instead, as CTP has established Respondent’s liability and identified aggravating circumstances in this case, I find that CTP’s proposed penalty, which is permissible under the governing statute and regulations, provides a more reasonable starting point for determining an appropriate reduction. However, the CMP should not then be so punitive as to damage any future viability, but instead be sufficient to penalize Respondent for violating the Act and to deter it from doing so again in the future.

Based on the record evidence, the applicable law, and the various aggravating and mitigating factors outlined in this decision, I find that a 50% reduction in the penalty proposed by CTP is warranted. Therefore, I conclude that a reduced penalty of $10,339 is appropriate under 21 U.S.C. §§ 333(f)(5)(B), (f)(5)(C), and (f)(9).

V. Conclusion

For the reasons stated above, I impose a civil money penalty against Respondent, Sonia and Ami, Inc. d/b/a Charlie’s Food Mart in the amount of $10,339, 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.