Ocean Drive Store Inc. d/b/a Seaside Deli and Market, DAB TB9129 (2025)

INITIAL DECISION

Found:

1) Respondent violated 21 U.S.C. § 301 et seq., specifically 21 U.S.C. § 331(c), as charged in the Complaint;

2) Respondent committed at least one violation as set forth hereinafter; and

3) Respondent is hereby assessed a civil penalty in the amount of $16,000.

Glossary:

ALJ                                          administrative law judge1
CTP/Complainant             Center for Tobacco Products
CMP                                        Civil Money Penalty
FDCA                                      Federal Food, Drug, and Cosmetic Act (21 U.S.C.A Chap. 9) 

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FDA                                         Food and Drug Administration
HHS                                        Dept. of Health and Human Services
OSC                                        Order to Show Cause to Respondent
POS                                        UPS Proof of Service
SOP                                        Service of Process
Respondent                       Ocean Drive Store Inc. d/b/a Seaside Deli and Market
TCA                                        The Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, 123 Stat. 1776 (2009)

I.     JURISDICTION

        I have jurisdiction to hear this case pursuant to my appointment by the Secretary of Health and Human Services and my authority under the Administrative Procedure Act (5 U.S.C. §§ 554-556), 5 U.S.C.A. § 3106, 21 U.S.C. § 333(f)(5), 5 C.F.R. §§ 930.201 et seq. and 21 C.F.R. Part 17.2

II.     PROCEDURAL BACKGROUND

        The Center for Tobacco Products (CTP/Complainant) filed a Complaint on February 12, 2024, against Ocean Drive Store Inc. d/b/a Seaside Deli and Market (Respondent or Seaside Deli and Market), located at 4635 North Ocean Boulevard, Boynton Beach, Florida 33435.  Civil Remedies Division (CRD) Docket (Dkt.) Entry No. 1 (Complaint), 1b (Cover Letter), 1c (Proof of Service).  The Complaint alleges that Respondent received an electronic nicotine delivery system (ENDS) product in interstate commerce that lacked the premarketing authorization required and offering such product for sale, in violation of 21 U.S.C. § 331(c).  CRD Dkt. Entry No. 1 ¶ 1.

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        Respondent was served with process on February 12, 2024, by United States Postal Service.  CRD Dkt. Entry No. 1b.  On March 8, 2024, Respondent requested an extension to file an Answer.  CRD Dkt. Entry No. 4 (Request for Extension).  On March 12, 2024, I issued an order granting Respondent’s request for an extension to file an Answer.  CRD Dkt. Entry No. 5 (Order Granting Request for Extension).  On April 11, 2024, Respondent’s representative filed a timely Answer to the Complaint, along with a copy of the business’s U.S. Income Tax Return for an S Corporation for Tax Year 2023. CRD Dkt. Entry Nos. 6 (Answer), 7 (2023 Tax Return).  In its Answer, Respondent admitted having the products at issue on the premises but denied “willfully knowing about the inspection and continuing to sell the product.”  CRD Dkt. Entry No. 6 at 1.  In its Answer, Respondent also denied any awareness that the complaint was received by anyone in its establishment.  Id.

        On April 12, 2024, I issued a Pre-Hearing Order (PHO) which established deadlines for discovery and the parties’ pre-hearing exchanges.  CRD Dkt. Entry No. 8 (PHO).  The PHO directed the parties to file their pre-hearing exchanges by July 11, 2024.  Id. ¶ 4.  On May 23, 2024, Respondent submitted a narrative statement, accompanied by one attached document, which I infer to be Respondent’s pre-hearing exchange submission.3  CRD Dkt. Entry Nos. 12, 13.  On July 11, 2024, CTP filed their pre-hearing exchange consisting of a pre-hearing brief, a list of proposed witnesses, and

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eight proposed exhibits.  CRD Dkt. Entry Nos. 14, 14a-14i.  CTP included the written testimony of two proposed witnesses: James Bowling, Deputy Director, Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, CTP, FDA; and FDA-commissioned Inspector Marcus Wesker.  CRD Dkt. Entry Nos. 14b, 14c.

        On October 4, 2024, I issued an order scheduling a hearing for November 7, 2024. CRD Dkt. Entry No. 20 (Order Scheduling Hearing).  The Order directed parties to file any motions, such as motions to exclude or objections to CTP’s proposed exhibits, and to indicate which witnesses, if any, they wish to cross-examine by October 14, 2024.  Id. at 2.  The Order Scheduling Hearing also informed parties that if Respondent chooses not to cross-examine either of CTP’s witnesses, I would cancel the November 7, 2024, hearing and issue a written decision on the record.  Id.

        On October 25, 2024, I issued an order cancelling the hearing as parties did not to file any motions, objections, or indicate any witnesses that parties intended to cross‑examine at the scheduled hearing.  CRD Dkt. Entry No. 21 (Order Cancelling Hearing).  My Order Cancelling Hearing also gave the parties until November 4, 2024, to move by written motion to admit its respective proposed exhibits into evidence.  Id. at 2.

        On November 1, 2024, CTP moved to admit their eight proposed exhibits into evidence.  CRD Dkt. Entry No. 22 (Complainant’s Motion to Admit Evidence).  That same day, Respondent filed a one-page document captioned “Response for Leniency” which re-asserts the arguments raised in its Answer and disputes the excessiveness of the civil money penalty (CMP) sought.  CRD Dkt. Entry No. 23.

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        On November 6, 2024, I issued an order establishing a schedule for submission of final briefs (Final Briefing Order), which gave the parties until December 6, 2024, to submit final written briefs on the merits of the case.  CRD Dkt. Entry No. 24.  In the Final Briefing Order, I also granted CTP’s Motion to Admit Evidence and admitted CTP Exs. 1-8 into the administrative record.  Id. at 2.

        On December 5, 2024, Respondent submitted its final brief in the form of a narrative statement.  CRD Dkt. Entry No. 25.  On December 6, 2024, CTP filed its final brief.  CRD Dkt. Entry No. 26.  The administrative record is now closed and this case is ready for a decision based on the written record.  21 C.F.R. § 17.45(c).

III.     BURDEN OF PROOF

        As the petitioning party, CTP, has the burden to prove, by a preponderance of the evidence, that Respondent is liable and that the proffered penalty is appropriate.  21 C.F.R. § 17.33.

IV.     LAW

        21 U.S.C. § 301 et seq., specifically 21 U.S.C. § 331(c), 21 U.S.C. § 387b(6)(A), 21 U.S.C. § 387c(a)(6), and 21 U.S.C. § 387j(a)(2)(A).

V.     ISSUE

        Did Respondent violate 21 U.S.C. § 301 et seq., specifically 21 U.S.C. § 331(c), as alleged in the Complaint?

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VI.     ALLEGATIONS

1. Complainant’s Recitation of the Facts

        In its Complaint, CTP alleged that Respondent owns an establishment, doing business under the name Seaside Deli and Market, located at 4635 North Ocean Boulevard, Boynton Beach, Florida 33435.  Complaint ¶ 13.  CTP also alleged that Respondent’s establishment received tobacco products, including an Elfbar Honeydew Pineapple Orange ENDS product, in interstate commerce and delivered or proffered delivery of such tobacco product for pay or otherwise.  Id. ¶ 14.

        CTP’s Complaint further alleged that on August 8, 2023, CTP issued a Warning Letter to Respondent, stating that the new tobacco products that Respondent sells and/or distributes are adulterated and misbranded because they lack the required FDA marketing authorization.  Id. ¶ 20.

        During an inspection of Seaside Deli and Market on December 2, 2023, an FDA‑commissioned inspector observed an Elfbar Honeydew Pineapple Orange ENDS product for sale at Respondent’s establishment.  Id. ¶ 15.

        Respondent’s ENDS product is a “new tobacco product” because it was not commercially marketed in the United States as of February 15, 2007.  Id. ¶ 16. Respondent’s ENDS product does not have a Marketing Granted Order (MGO) permitting marketing of the new tobacco product under 21 U.S.C. § 387j(c)(1)(A)(i) and are therefore adulterated under 21 U.S.C. § 387b(6)(A).  Id. ¶ 17.

        Respondent neither submitted a substantial equivalent report nor an abbreviated

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report for Respondent’s ENDS product, and the product is, therefore, misbranded under 21 U.S.C. § 387c(a)(6).  Id. ¶ 18.

        Respondent’s receipt of an adulterated and misbranded ENDS product in interstate commerce and delivery or proffer thereof for pay or otherwise violates of 21 U.S.C. § 331(c).  Id. ¶ 19.

2. Respondent’s Recitation of the Facts

        In its Answer, Respondent admits that it owns the establishment that does business under the name Seaside Deli and Market, located at 4635 North Ocean Boulevard, Boynton Beach, Florida 33435.  CRD Dkt. Entry No. 6 at 1.  Respondent also admits having the tobacco product at issue present in the establishment.  Id.  However, Respondent denies having any knowledge regarding receipt of CTP’s Complaint, specifically who signed for the Complaint as the return receipt card lacks the signature of the individual who received the Complaint.  Respondent also denies that it willfully knew the tobacco product at issue was banned.  Id.  Respondent further contends that:

.  .  .  We would never do anything willfully the FDA deems unfit .  .  . 

Neither Mohamed S. Amin nor I were personally served with the complaint[,] we were completely unaware of its arrival; we didn’t see a name of[sic] the mail receipt to question who may have received it.  Neither of us were made aware of the law banning such products.  If we [knew] we would have immediately taken it off the shelf and destroyed it or tried contacting the vendor who sold it to us. We thought the vendor selling us would adhere to the law and not even offer us this product .  .  . 

A document of this importance was thought to be personally delivered and had to be signed by one of the business owners on record, but it was not, it was given to an hourly employee, yes, she was told to make us aware of such a document she had to sign for, but for whatever reason it did not

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happen.

Id.  

In its Answer, Respondent also states:

A fine of [$20,678] would surely hurt us and our employees, we barely broke even in 2023, as attached tax return will show .  .  .

This infraction was not done intentionally, it was an oversite[sic] along the way, we have since placed stricter directions to all our employees about the mail.  Please allow us to pay a much lower fine and carry on as small business owners.

CRD Dkt. Entry No. 6 at 2.

VII.     FAMILY SMOKING PREVENTION AND TOBACCO CONTROL ACT

        The “relevant statute” in this case is actually a combination of statutes and regulations:  The Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111 31, 123 Stat. 1776 (2009) (TCA), amended the Food, Drug, and Cosmetic Act, 21 U.S.C.A. Chap. 9, (FDCA) and created a new subchapter of that Act that dealt exclusively with tobacco products, 21 U.S.C. §§ 387-387u, and it also modified other parts of the FDCA explicitly to include tobacco products among the regulated products whose misbranding can give rise to civil, and in some cases criminal, liability.  The 2009 amendments to the FDCA contained within the TCA also charged the Secretary of Health and Human Services with, among other things, creating regulations to govern tobacco sales. 

        As of August 8, 2016, pursuant to 21 U.S.C. §§ 387a and 387f(d) (Section 906(d) of the Act), FDA revised the definition of tobacco products to incorporate additional

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products, subject to regulation under the Act.  These products include, but are not limited to, electronic nicotine delivery systems (including e-cigarettes), e-liquids, and pipe tobacco.  See Final Rule, Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act; Restrictions on the Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products, 8 Fed. Reg. 28,974 (May 10, 2016), available at https://federalregister.gov/a/2016-10685 (hereafter “Deeming Regulation”).

        The TCA prohibits the sale of any “new tobacco product” without authorization from the FDA.  21 U.S.C. § 387(j)(a); 21 U.S.C. § 387a(b) (delegating the FDA the authority to determine what constitutes new tobacco products).  A new tobacco product is any tobacco product that was not commercially marketed in the United States as of February 15, 2007.  21 U.S.C. § 387j(a)(1).  The Secretary’s regulations on tobacco products appear in Part 1140 of Title 21, Code of Federal Regulations (CFR).

        The TCA requires new tobacco products to have a premarket authorization in effect.  21 U.S.C. § 387j(a)(2).  To obtain premarket authorization, manufacturers of new tobacco products are required to submit a premarket tobacco application (PMTA) to the FDA for approval to sell their products.  21 U.S.C. § 387j(b)(1).  Alternatively, the product manufacturer may submit a substantial equivalence report, in response to which the FDA may issue an order finding the product is substantially equivalent to a predicate tobacco product.  21 U.S.C. § 387e(j).  Or, the product manufacturer may submit a report, in response to which the Secretary may issue an exemption order.  21 U.S.C. § 387e(j)(3).

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        The TCA directs FDA to review PMTAs to determine whether “permitting such tobacco product to be marketed would be appropriate for the protection of the public health.”  21 U.S.C. § 387j(c)(2)(A).  Absent an approval from the FDA, the new tobacco products are considered adulterated and misbranded if they lack the required FDA marketing authorization order, substantial equivalence order, or an exemption order.  21 U.S.C. §§ 387b(6) and 387c(6).

        Under the FDCA, “[a] tobacco product shall be deemed to be misbranded if, in the case of any tobacco product sold or offered for sale in any State, it is sold or distributed in violation of regulations prescribed under section 387f(d).”  Under 21 U.S.C. § 387c(a)(6), a new tobacco product is misbranded if a “notice or other information respecting it was not provided as required” under the substantial equivalence or substantial equivalence exemption pathway, including a substantial equivalence report or an abbreviated report. 21 U.S.C. § 387c(a)(6).  Section 387 a-1 directed FDA to re-issue, with some modifications, regulations previously passed in 1996.  21 U.S.C. § 387 a-1(a) (2012).

        Under the FDCA, a tobacco product is adulterated if it has not obtained the required premarket authorization.  21 U.S.C. § 387b(6)(A).  Thus, when a retailer does not submit a PMTA for its ENDS products, or when a retailer submits a PMTA for its ENDS products and receives a denial order, the products are being adulterated. 21 U.S.C. § 387b(6)(A).  The adulterated and misbranded ENDS products in turn violates the FDCA.

        The FDCA prohibits the receipt in interstate commerce of any tobacco product

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that is adulterated or misbranded and the delivery or proffered delivery thereof for pay or otherwise.  21 U.S.C. § 331(c).  The FDA may seek a civil money penalty from “any person who violates a requirement of this chapter which relates to tobacco products.”  21 U.S.C. § 333(f)(9)(A) (2012).  Penalties are set by 21 U.S.C. § 333 note and 21 C.F.R. § 17.2.

VIII.     LIABILITY

        CTP alleges that Respondent received in interstate commerce and offered for sale an Elfbar Honeydew Pineapple Orange ENDS product that required FDA premarket authorization, in violation of 21 U.S.C. § 331(c), on December 2, 2023.  Complaint ¶¶ 15, 19. 

        In its Answer, Respondent’s representative admitted that the Elfbar ENDS product at issue was present in its establishment (CRD Dkt. Entry No. 6 at 1), but denies “willfully knowing the products were banned” (Id.; CRD Dkt. Entry No. 25 at 1). Respondent asserts that had it been aware that the ENDS product was banned, it would have been removed from the shelf immediately.  Id.  Respondent’s representative disputes that the Complaint as the proof of service submitted by CTP shows that the Complaint was received and signed for by an employee that is no longer working at the establishment and “the owners have no idea where the letters went to, therefore, the owners were never notified of the banned product.”  CRD Dkt. Entry Nos. 13; 25 at 1. Respondent further asserts that the CMP sought by CTP should not be assessed.  CRD Dkt. Entry Nos. 6 at 1-2; 23; 25 at 1, 2.

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        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 Marcus Wesker, an FDA-commissioned officer with the state of Florida.  CTP Exs. 1, 2.

        Regarding the unauthorized product, CTP submitted the sworn declaration Deputy Director James Bowling.  CTP Ex. 1.  In his official capacity, Deputy Director Bowling has personal knowledge of CTP’s tobacco record keeping, registration process, and new tobacco product premarket authorization requirements.  Id. ¶ 3.  Deputy Director Bowling confirmed that a search of the Tobacco Registration and Product Listing Module Next Generation (TRLM NG) did not reveal any registered establishments containing the name “Elfbar” or any listed product named “Elfbar Honeydew Pineapple Orange” in Florida or elsewhere in the United States.  Id. ¶ 6.

        Additionally, Deputy Director Bowling confirms that the Elfbar Honeydew Pineapple Orange ENDS product observed for sale during the December 2, 2023 inspection, is manufactured in China by Guangdong Qisitech Co., Ltd.  Id. ¶ 7.  Deputy Director Bowling confirmed that Guangdong Qisitech Co., Ltd. does not have any registered tobacco production facilities in the state of Florida.  Id. ¶ 10.  Further, Deputy Director Bowling confirms that Elfbar Honeydew Pineapple Orange ENDS products were not commercially marketed in the United States as of February 15, 2007.  Id. ¶ 12. FDA did not have any record of an FDA marketing granted order in effect for the Elfbar

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ENDS product at issue, a Substantial Equivalence Order or an abbreviated report requesting a Found-Exempt Order.  Id. ¶¶ 13-14.

        Respondent did not object to Deputy Director Bowling’s declaration or wish to cross-examine him at a hearing.  Therefore, I find Deputy Director Bowling’s statements about the Elfbar Honeydew Pineapple Orange ENDS product and its manufacturer credible with respect to the question of whether it had marketing authorization, or if the manufacturer was registered for business in the United States for its new tobacco products.  I also find that the Elfbar Honeydew Pineapple Orange ENDS product is adulterated and misbranded as its manufacturer did not obtain FDA’s required premarket authorization. 

        Deputy Director Bowling’s declaration also supports a finding that the unauthorized product was received via interstate commerce, as the product manufacturer is based in China.  Id. ¶ 7.

        As to Respondent’s possession of the unauthorized product, CTP relies on the sworn declaration of Inspector Marcus Wesker.  CTP Ex. 2.  In the declaration, Inspector Wesker states that, on December 2, 2023, at approximately 3:43 PM, a compliance check inspection was conducted at Respondent’s business establishment.  CTP Ex. 2 ¶ 5. During the inspection, Inspector Wesker observed that the establishment “sold FDA-regulated tobacco products and had a sales display containing tobacco products, including an Elfbar Honeydew Pineapple Orange [ENDS] product, available for sale.”  Id. ¶ 7. Photographs were taken by Inspector Wesker of the business establishment, as well as the

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unauthorized product and its placement within the establishment.  Id.; see also CTP Exs. 3-6 (Inspector Wesker’s narrative statement; Tobacco Inspection Management System (TIMS) Assignment Form for December 2023; photographs of the establishment site and Elfbar ENDS product; and Form FDA 482 dated December 2, 2023).  The inspection was recorded in FDA’s TIMS record system and a Narrative Report was created.  Id. ¶ 8. Respondent did not object to Inspector Wesker’s declaration or wish to cross-examine her at a hearing.  Therefore, I find Inspector Wesker’s statements regarding what he observed during the December 2, 2023, inspection of Respondent’s business, including that the establishment had a sales display containing tobacco products, including an Elfbar Honeydew Pineapple Orange ENDS product, to be credible.

        Based on the uncontroverted testimony of Deputy Director Bowling and Inspector Wesker, as well as the corroborating photographs, reports, and other evidence submitted by CTP, I find and conclude that the Elfbar Honeydew Pineapple Orange ENDS product offered for sale at Respondent’s establishment on December 2, 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”). 

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        I find and conclude that the ENDS 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 and conclude that the ENDS product at issue 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 warrants the imposition of a CMP.

IX.     PENALTY

        There being liability under the relevant statute, I must now determine the amount of penalty to impose.  Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a civil money penalty not to exceed the amounts listed in FDA’s civil money penalty regulations at 21 C.F.R. § 17.2.  In its Complaint, CTP sought to impose the maximum penalty amount of $20,678 against Respondent for violating the Act.  Complaint ¶ 1.

        Since I found that CTP met its burden by a preponderance of the evidence and concluded that Respondent committed violation of the Act, the next step is to determine the amount of the civil money penalty.  When making that determination, 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).

1. The Nature, Circumstances, Extent, and Gravity of the Violation

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        The TCA 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, among other things, offering for sale an ENDS product that lacked the required marketing authorization.  CRD Dkt. Entry No. 14 at 9; see also CTP Ex. 7.  The warning letter notified Respondent that during a two-part inspection on May 23 and 24, 2023, an FDA inspector observed Respondent offering for sale cigars and ENDS products; specifically, an Elfbar Mango Peach Apricot ENDS product, which lacked premarket authorization.  Id.; see also CTP Ex. 7 at 1, 2.  The warning letter explained the sale of such products was prohibited and warned Respondent to take action to correct the violation.  Id. at 2-4.

        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. 14 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

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letter, Respondent has demonstrated an “unwillingness or inability to correct the violations.”  Id. at 10. 

        Respondent’s representative contends that it was never advised of any violation and it never received notice to remove the ENDS product from the shelf.  CRD Dkt. Entry No. 25 at 1, 2.  Respondent also argues that it did not receive CTP’s Complaint.  Id. at 1; see also CRD Dkt. Entry Nos. 6 at 1; 13.  Respondent further asserts that the proof of service does not contain the signature of the person who signed for the delivered package.  Id.  First and foremost, Respondent does not dispute that CTP issued a warning letter or that it received CTP’s warning letter.  In the subsequent inspection on December 2, 2023, Inspector Wesker found ENDS products, specifically, an Elfbar Honeydew Pineapple Orange ENDS product, on display.  CTP Ex. 2 ¶ 7.  Respondent’s continued marketing and selling of new tobacco products demonstrates it did not comply with federal tobacco law, which is serious in nature and demands a proportional civil money penalty amount.

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

        Respondent acknowledges it should pay a civil money penalty but contends that, among other things, “[Respondent’s] tax returns .  .  .  show the business is not profitable .  .  .  .” and that the proposed CMP “.  .  .  is excessive for a business that has no prior offences.”  CRD Dkt. Entry No. 25. at 2.  Respondent states “a fine of this magnitude, $20,000, would affect people’s jobs and livelihoods.”  CRD Dkt. Entry No. 25 at 1. Respondent also argues the penalty “would hurt not only our families but also our

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employee’s families.”  CRD Dkt. Entry No. 6 at 2.

        In support of these arguments, Respondent submitted its 2023 corporate income tax return, which shows gross profits of $122,859, a total income of $130,155, and a business income of -$1,255 for tax year 2023.  CRD Dkt. Entry No. 7 at 5.  CTP contends that Respondent’s tax return is insufficient to establish Respondent’s inability to pay the proposed penalty.  CRD Dkt. Entry No. 14 at 10.

        While Respondent’s submission provides some support for Respondent’s claims, I find that it does not demonstrate a complete inability to pay the proposed penalty or establish how much Respondent is able to pay.  For example, Respondent has not provided bank statements 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.  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

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Act resulting in a CMP.  However, CTP argues that Respondent “has a history of violating the Act’s requirements” based on the August 8, 2023, warning letter.  CRD Dkt. Entry No. 14 at 10-11.  CTP contends a CMP of $20,678 is appropriate in this case because Respondent’s history demonstrates an “unwillingness or inability” to comply with the law.  Id. at 11.

        As discussed above, I have already found that the warning letter helps to establish the nature, circumstances, extent, and gravity of the violation.  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.  I also note that Respondent has identified steps it has taken since the December 2, 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 Nos. 23; 25 at 2.

        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.

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4. Degree of Culpability

        As noted above, Respondent received written notice that it was in violation of federal law by selling “new tobacco products” that did not have a marketing authorization order.  Respondent claims they are unaware of who received and/or signed for the complaint as “the mail receipt has not received signature on it.”  CRD Dkt. Entry No. 6 at 1.  However, the record supports otherwise, leading me to infer there was negligence on Respondent’s part to review the correspondence sent by the FDA to Respondent’s business establishment.  Respondent’s continued sale of these unauthorized products results in a finding of its culpability.

5. Other Matters as Justice May Require

        The Act gives me discretion to consider any other evidence or arguments 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 reflects Respondent is a small retailer with no history of prior violations resulting in a CMP.  In addition, Respondent has participated in these

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proceedings, appears to be taking this matter seriously, and has identified steps it is taking to reduce the likelihood of future violations, including creation and implementation of new policies and practices for regular communications and updates with the vendors regarding tobacco regulations, and regular mail review for incoming CTP/FDA correspondence.  CRD Dkt. Entry Nos. 23; 25 at 2.  However, as a retailer engaged in the sale of tobacco products, Respondent should have 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 factors and evaluating the entire administrative record, 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, I find that a reduction in the civil money penalty proposed by CTP is warranted.  Therefore, I conclude that a reduced penalty of $16,000 is appropriate in this case under 21 U.S.C. §§ 333(f)(5)(B), (f)(5)(C), and (f)(9).

X.     CONCLUSION

        Respondent received adulterated and misbranded ENDS products in interstate commerce and delivered or proffered thereof for pay or otherwise, as set forth in the Complaint.  Respondent is liable for a civil money penalty of $16,000.  See 21 C.F.R. § 17.2.

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        WHEREFORE, evidence having read and considered it be and is hereby ORDERED as follows:

1. I find Respondent has been served with process herein and is subject to this forum.
2. I find and conclude that the evidentiary facts, by a preponderance of the evidence standard, support a finding Respondent violated 21 U.S.C. § 331(c) on December 2, 2023.
3. I assess a monetary penalty in the amount of $16,000.