Session Supply Co, LLC d/b/a Session Supply , DAB TB9156 (2025)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a $20,678 civil money penalty (CMP) against Session Supply Co, LLC d/b/a Session Supply Company (Respondent) for impermissibly manufacturing, selling, and/or distributing new tobacco products that lack the premarketing authorization required under the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. §§ 301 et seq.  For the reasons discussed below, I find Respondent violated the Act as alleged by CTP and conclude that a reduced CMP in the amount $4,136 is appropriate.

I. Background and Procedural History

CTP began this matter by serving a complaint on Respondent at 5664 North Academy Boulevard, Colorado Springs, Colorado 80918 by United Parcel Service (UPS), 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 (Complaint), 1b (Delivery Notification).

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On May 11, 2024, Respondent timely filed an answer to the complaint.  CRD Dkt. Entry No. 3 (Answer).  Respondent also filed two additional documents with the answer: (a) a copy of CTP’s complaint (CRD Dkt. Entry No. 3a); and (b) a three-page summary of its manufacturing process with supporting photographs (CRD Dkt. Entry No. 3b).  In its answer, Respondent denied the allegations of liability made in CTP’s complaint and asserted, in part, that it does not “manufacture for sale any nicotine products,” and “[n]one of the products we manufacture contain nicotine at any point . . . .”  CRD Dkt. Entry No. 3 at 1.  Respondent also stated that no CMP should be assessed.  Id. at 2.

On May 15, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO) establishing procedural deadlines for discovery and the parties’ pre-hearing exchanges.  CRD Dkt. Entry No. 4.  On June 14, 2024, CTP filed a Joint Status Report stating that the parties were unable to reach a settlement in this case.  CRD Dkt. Entry No. 5.

On July 18, 2024, CTP filed an Unopposed Motion to Extend Deadlines, requesting a 30-day extension of any deadlines to allow Respondent an opportunity to fully respond to CTP’s request for production of documents.  CRD Dkt. Entry No. 6.  On July 18, 2024, I granted the Motion and extended the deadline for CTP’s pre-hearing exchange to Respondent to September 4, 2024, and Respondent’s pre-hearing exchange to CTP to September 25, 2024.  CRD Dkt. Entry No. 7.

On September 4, 2024, CTP timely submitted its pre-hearing exchange, consisting of a pre-hearing brief, a list of proposed witnesses and exhibits, and ten proposed exhibits.  CRD Dkt. Entry Nos. 9, 9a-9k.  CTP’s pre-hearing exchange included the written direct testimony of two proposed witnesses: (a) James Bowling, Deputy Director, Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, FDA, CTP (CTP Ex. 1); and (b) Audra Lenhart, an FDA Regulatory Officer, Office of Medical Products and Tobacco Operations, Office of Regulatory Affairs, FDA (CTP Ex. 2).  Respondent did not submit a prehearing exchange or otherwise identify any proposed exhibits or witnesses.

On October 29, 2024, I held a pre-hearing conference (PHC) with both parties present.  See CRD Dkt. Entry No. 14 (Order Following PHC).  At the PHC, I noted that Respondent did not submit a pre-hearing exchange or any proposed exhibits and asked whether it intended to submit any additional evidence or arguments.  Id. at 2.  Respondent stated it did not intend to submit anything beyond what was provided with its Answer.  Id.  Respondent also stated that it had no objections to CTP’s proposed exhibits.  Id.  As a result, I admitted CTP’s proposed exhibits into evidence as CTP’s Exhibits (Exs.) 1-10.  Id.; see also CRD Dkt. Entry Nos. 9b-9k.

During the PHC, I also explained that the purpose of a hearing was to allow for the cross-examination of any witnesses who have provided written direct testimony.  CRD Dkt. Entry No. 14 at 1.  Respondent declined to cross-examine either of CTP’s proposed 

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witnesses and the parties agreed to waive a formal hearing and proceed to decision based on the written record.  Id. at 2.  I explained that the parties would have an opportunity to file final briefs before I issued a decision.  Id.

On October 31, 2024, I issued an Order memorializing the issues discussed at the PHC and establishing deadlines for final briefs.  CRD Dkt. Entry No. 14.  In the Order, I gave the parties until December 6, 2024 to file final briefs.  Id. at 2.

On December 6, 2024, CTP filed a Notice of Waiver of Final Brief, stating it would not file a final brief.  CRD Dkt. Entry No. 15.  On December 13, 2024, Respondent filed an untimely final brief.  CRD Dkt. Entry No. 16.1

The administrative record is now closed, and this matter is ready for a decision based on the written record.  21 C.F.R. § 17.41; 21 C.F.R. § 17.45(c) 21 C.F.R. § 17.19(b)(11), (17).

II. Evidence

CTP filed ten proposed exhibits, which were admitted into the record without objection at the PHC.  See CRD Dkt. Entry No. 14 at 2.  Specifically, CTP submitted the following ten exhibits, marked as CTP Exs. 1-10:

• CTP Ex. 1: Declaration of James Bowling;
• CTP Ex. 2: Declaration of Audra Lenhart;
• CTP Ex. 3: January 2024 Establishment Inspection Report;
• CTP Ex. 4: January 2024 Photographs of Nude Nicotine Base Bottle;
• CTP Ex. 5: Respondent’s Nude Nicotine Account Orders and Invoices;
• CTP Ex. 6: TRLM NG Respondent’s Establishment Registration;
• CTP Ex. 7: Respondent’s Flavor Menu;
• CTP Ex. 8: January 2024 Photographs of Respondent’s E-Liquid Labels;
• CTP Ex. 9: January 15, 2021 Warning Letter; and
• CTP Ex. 10: June 8, 2021, Follow-Up Letter re: Warning Letter and subsequent responses from Respondent.

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Respondent did not file a pre-hearing exchange or any proposed exhibits.

III. Issues

1. A. Whether Respondent manufactured or sold in interstate commerce an adulterated and misbranded tobacco product in violation of 21 U.S.C. § 331(k) on January 17-18, 2024; and, if so,
2. B. Whether the $20,678 civil money penalty by CTP is appropriate, considering any mitigating or aggravating factors that I find in this case.  21 C.F.R. § 17.45.

IV. Findings of Fact and Conclusions of Law

1. A. CTP has demonstrated by a preponderance of the evidence that Respondent manufactured and sold in interstate commerce an adulterated and misbranded tobacco product in violation of the Act.

CTP claims Respondent manufactured or sold in interstate commerce adulterated and misbranded tobacco products in violation of 21 U.S.C. § 331(k).  Pursuant to the authority conferred by the Act and implementing regulations at Part 21 of the Code of Federal Regulations, CTP seeks to impose a CMP against Respondent in the amount of $20,678, which is the maximum penalty permitted under 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).  To prevail, CTP must prove Respondent’s liability and the appropriateness of the penalty, including any aggravating factors, by a preponderance of the evidence.  21 C.F.R. § 17.33(b).2  The burden is on Respondent to prove any affirmative defenses or mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).

The Act prohibits the manufacturing or sale of any regulated tobacco product in interstate commerce that is adulterated or misbranded.  21 U.S.C. § 331(k); 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 

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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 order 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 that is required to have premarket review and does not have an MGO in effect under 21 U.S.C. § 387j(c)(1)(A)(i), is adulterated.  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 exemption pathway is misbranded.  21 U.S.C. § 387c(a)(6).

CTP’s case against Respondent relies on the written direct testimony of Audra Lenhart, FDA Investigator, Office of Medical Products and Tobacco Operations, Office of Regulatory Affairs, and James Bowling, Deputy Director, Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, CTP, FDA.  CTP Exs. 1, 2.  Investigator Lenhart testified that she conducted an inspection of Respondent’s establishment on January 17 and 18, 2024 and memorialized her findings in an Establishment Inspection Report.  CTP Ex. 2 ¶ 4; CTP Ex. 3 (Establishment Inspection Report).

Investigator Lenhart testified that during the January 2024 inspection, she observed “e-liquid components” at Respondent’s establishment, including bulk containers of propylene glycol (PG) and vegetable glycerin (VG) solutions, flavoring, nicotine, and labels.  CTP Ex. 2 ¶ 5; see also CTP Exs. 4, 8 (photographs of products and labels).  According to Investigator Lenhart’s report, Respondent’s owner explained during the inspection that Respondent orders individual 120 ml bottles of salt nicotine base and bulk 1-gallon containers of PG and VG solutions from Nude Nicotine, a company located in San Diego, California.  CTP Ex. 3 at 1-2, 4, 5-6; CTP Ex. 2 ¶¶ 5-6; see also CTP Ex. 4 (photographs of products); CTP Ex. 5 (Nude Nicotine invoices).  Respondent then repackages the PG and VG into 60 ml bottles, labels the 60 ml bottles under the brand name Session Supply Company, adds flavoring upon request, and sells the final product to customers as e-liquid products.  CTP Ex. 3 at 2, 6; CTP Ex. 2 ¶¶ 5-7; see also CTP Ex. 7 (Flavor Menu), CTP Ex. 8 (photographs of labels).  According to Investigator Lenhart’s report and testimony, Respondent does not add nicotine to the e-liquid products but re-sells the bottles of Nude Nicotine salt nicotine base as a separate product.  CTP Ex. 3 at 6; CTP Ex. 2 ¶ 8; see also CTP Ex. 4 at 2 (photograph of nicotine product).

Deputy Director Bowling testified that a search of the FDA’s Tobacco Registration and Product Listing Module Next Generation (TRLM NG) showed that Respondent registered its establishment as a tobacco product manufacturer on October 22, 2019, and last updated its registration on January 27, 2021.  CTP Ex. 1 ¶ 6.  According to Deputy Director Bowling, Respondent’s “establishment and product registration were in Active status when [he] reviewed the information stored and maintained in TRLM-NG.”  Id.; see also CTP Ex. 6.  Deputy Director Bowling further testified that Respondent’s e-liquid 

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products are manufactured from components sourced from a California business, were not commercially marketed in the United States as of February 15, 2007, and that at the time of the inspection, there were no records of Respondent’s products having an FDA marketing granted order in effect under 21 U.S.C. § 387j(c)(1)(A)(i). CTP Ex. 1, ¶¶ 8, 10-11.  In addition, Deputy Director Bowling testified that there was no record of Respondent’s e-liquid 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 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. ¶ 12.

Respondent does not dispute the testimony or evidence presented by CTP, but instead disputes CTP’s conclusion that it manufactures tobacco products.  See CRD Dkt. Entry No. 3, 3b.  In a document attached to its answer, Respondent admits it manufactures and sells nicotine-free e-liquids using materials obtained from Nude Nicotine, an out-of-state supplier.  CRD Dkt. Entry No. 3b at 1.  Respondent also admits that it sells sealed bottles of nicotine at its establishment, which are obtained from the same out-of-state supplier.  Id. at 2.  Respondent further states that it provides customers with an “empty dropper bottle with a measuring chart on the label.”  Id. at 3.  Respondent states the dropper bottle is labeled with the intent that it will be used by customers to add the nicotine to the e-liquid products after purchase.  Id. at 3.  However, because it does not add the nicotine to the e-liquids itself, Respondent claims that its e-liquid products are not tobacco products and do not require premarket authorization under the Act.  Id. at 3; CRD Dkt. Entry No. 3 at 1-2.  Respondent claims it devised this process during a “group call” with the FDA in January 2021 and was advised by the FDA that the process is “completely legal.”  CRD Dkt. Entry No. 3 at 2; CRD Dkt. Entry No. 3b at 3.

While Respondent’s manufacturing process is certainly creative, I am not convinced that Respondent’s e-liquid products are exempt from the Act’s premarket authorization requirements.  The Act defines “tobacco product” to include “any component, part, or accessory of a tobacco product.” 21 U.S.C. § 321(rr)(1).  Further, the implementing regulations define “component” or “part” to include “any software or assembly of materials intended or reasonably expected: (1) to alter or affect the tobacco product’s performance, composition, constituents, or characteristics; or (2) to be used with or for the human consumption of a tobacco product.”  21 C.F.R. §§ 1100.3, 1107.12, 1114.3, 1140.3.

In this case, the e-liquid products manufactured and sold by Respondent can reasonably be described as an “assembly of materials” that are expected “to be used with or for the human consumption of a tobacco product.”  Indeed, Respondent acknowledges that the intent is for customers to add the nicotine it sells to its e-liquid products after purchase.  CTP Ex. 3b at 3.  Respondent even provides customers with a pre-labeled dropper bottle for this purpose.  Id.  Given the structure and intent of Respondent’s process, I find that 

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CTP properly concluded Respondent’s e-liquid products qualify as “components” or “parts” of tobacco products and, therefore, fall within the definition of “tobacco products” under the Act.  See 21 U.S.C. § 321(rr)(1); 21 C.F.R. §§ 1100.3, 1107.12, 1114.3, 1140.3; see also Nicopure Labs, LLC v. FDA, 266 F. Supp. 3d 360, 390-91 (D.D.C. 2017), aff’d, 944 F.3d 267 (D.C. Cir. 2019) (upholding CTP’s determination that nicotine-free e-liquids are tobacco products subject to the pre-market authorization requirements in the Act).

Moreover, I find that Respondent’s statements concerning the alleged “group call” with FDA do not relieve Respondent of liability in this case.  As a threshold matter, Respondent has not submitted any testimony or other evidence to support its claims concerning the alleged group call.  Further, as CTP correctly argues, even accepting Respondent’s statements about the group call as fact, such informal communications are not binding on CTP and cannot excuse Respondent from complying with the law.  See 21 C.F.R. § 10.85(k); see also Fed. Crop. Ins. Corp. v. Merrill, 332 U.S. 380, 384-85 (1947) (arrangements and assurances by government officials do not override written law); Holistic Candlers & Consumers Ass’n v. FDA, 664 F.3d 940, 945-46 (D.C. Cir. 2012) (informal communications by FDA officials not binding on agency).  In short, Respondent has a duty to ensure it manufactures and sells tobacco products in accordance with the applicable law and cannot avoid liability by claiming it relied on undocumented and off-the-record assurances by unnamed FDA officials.

Respondent also raises various policy arguments which are outside the scope of this case.  For example, Respondent accuses CTP of overreach and claims it is destroying small businesses.  R. Final Br. at 1.  Respondent also argues that this case will “set precedent” for CTP to penalize any company that re-sells nicotine products.  Id.  While I recognize that Respondent is frustrated by CTP’s actions, my findings as an independent adjudicator are based solely on the application of the relevant statutory and regulatory provisions to the specific facts of this case.  Respondent’s status as a small business does not excuse it from complying with the Act.  Further, this decision is not precedential and does not in any way expand or modify the scope of the tobacco regulations or CTP’s enforcement authority.  Finally, as explained above, the issue in this case is not that Respondent re-sold nicotine products, but that Respondent manufactured for sale “parts” or “components” of tobacco products (i.e., e-liquids) without the required pre-market authorization.

In sum, the uncontroverted testimony of Deputy Director Bowling and Investigator Lenhart, as well as the corroborating evidence submitted by CTP and Respondent’s own admissions, establish that Respondent caused tobacco products to become adulterated or misbranded while held for sale and after shipment of one or more of their components in interstate commerce.  21 U.S.C. § 331(k).  Specifically, the evidence shows that Respondent, which operates in Colorado, received e-liquid components in interstate commerce from a supplier in California.  21 U.S.C. § 331(k).  Respondent then used 

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those materials to manufacture e-liquid products, which are tobacco products within the meaning of the Act and offered those products for sale.  See 21 U.S.C. § 321(rr)(1); 21 C.F.R. §§ 1100.3, 1107.12, 1114.3, 1140.3.  I find that the e-liquid products manufactured and sold by Respondent were adulterated because they lacked the FDA premarketing authorization and were not exempt from this requirement.  21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A).  I also find the products were 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 a violation of the Act which warrant a penalty.

2. B. Based on the aggravating and mitigating circumstances in this case, I conclude that a reduced CMP of $4,136 is appropriate.

I have determined that Respondent violated the prohibition against manufacturing for sale new tobacco products that are adulterated and misbranded because they lack the required premarketing authorization.  21 U.S.C. § 331(k).  Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a CMP not to exceed the amounts listed in FDA’s regulations at 21 C.F.R. § 17.2.  See 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.  See 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).  For the reasons discussed below, after considering the aggravating and mitigating factors and the underlying facts and circumstances in this case, I conclude that a reduced CMP of $4,136 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).  Per my findings above, Respondent was in the business of manufacturing and selling highly regulated and dangerous tobacco products.  Therefore, Respondent’s failure to comply with the law constitutes a serious offense which undermines public health.

CTP argues that the violation in this case is particularly serious because Respondent was previously warned about similar conduct.  CTP Br. at 9-10.  Specifically, CTP points to a 

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warning letter it issued to Respondent on January 15, 2021, stating that CTP had reviewed Respondent’s website and determined Respondent was manufacturing and offering for sale e-liquid products without the required premarket authorization.  CTP Ex. 9.  The letter identified two products offered for sale on Respondent’s website that allegedly lacked premarket authorization—Sesh Sauce 30 ml and Sesh Sauce 60 ml.  Id. at 2.  The letter explained that Respondent’s e-liquid products were subject to regulation under the Act “because they are made or derived from tobacco and intended for human consumption.”  Id. at 1.  The letter directed Respondent to address the violations, “as well as violations that are the same or similar to those stated above,” and warned that failure to do so may result in regulatory action.  Id. at 2.   CTP contends that by violating the Act after receiving the warning letter, Respondent demonstrated an “unwillingness or inability to correct the violations.”  CTP Br. at 10.

In its answer, Respondent states that after receiving the warning letter, it developed its current process of manufacturing and selling e-liquid products without adding nicotine, supposedly with the FDA’s blessing.  CRD Dkt. Entry Nos. 3, 3b.  Specifically, Respondent states it had a “group call” with the FDA in January 2021 to “settle the complaint.”3   CRD Dkt. Entry Nos. 3 at 2, 3b at 3.  Respondent claims that during the call, it devised its current process with the FDA and was advised by the FDA that the process was “completely legal.”  CRD Dkt. Entry No. 3b at 3.  I also note that the record shows that CTP sent a follow-up letter to Respondent on June 8, 2021, acknowledging that Respondent had taken “corrective actions” that were acceptable to CTP to address the violations in the warning letter.  CTP Ex. 10.

After considering the evidence in the record, as well as the statements in Respondent’s answer, I am not convinced that the nature and circumstances of the violation in this case support imposing the maximum penalty.  As an initial matter, the warning letter, which was issued more than three years before the current violation, only referenced e-liquid products “made or derived from tobacco and intended for human consumption,” and specifically directed Respondent to address violations “that are the same or similar to those stated above.”  CTP Ex. 9 at 1.  The warning letter did not disclose or discuss CTP’s position that nicotine-free e-liquids constitute “parts” or “components” of tobacco products, nor did it include any warnings about nicotine-free e-liquids.  While I agree with CTP that such products may be subject to regulation under the Act, I do not agree that a three-year old warning letter concerning a different class of products necessarily raises the severity of the violation in this case.  Based on the language in the warning letter, I also find that it was not completely unreasonable for Respondent to believe its modified manufacturing process was sufficient to correct the violations in the letter.

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Further, I note that CTP’s June 8, 2021 follow-up letter to Respondent specifically acknowledged that Respondent implemented “corrective actions” to address the violations in the warning letter.  CTP Ex. 10.  Because the follow-up letter does not describe exactly which “corrective actions” were taken, it is unclear if those actions included Respondent’s modified manufacturing process.  However, Respondent claims, and CTP does not dispute, that Respondent implemented the new process after communicating with CTP in January 2021.  CRD Dkt. Entry Nos. 3 at 2, 3b at 3.  On the present record, I find at least some support for the proposition that Respondent believed, based on the language in both the warning letter and the follow-up letter, that its current manufacturing process complied with the law and sufficiently addressed the violations in the warning letter.  The follow-up letter also shows Respondent did, in fact, take steps to address the conduct identified in the warning letter, which conflicts with CTP’s claim that Respondent is unwilling or unable to correct its violations.

Still further, while I acknowledge that Respondent failed to present any evidence concerning the alleged group call with the FDA, I find it notable that CTP neither denies that the call occurred nor disputes Respondent’s characterization of the call.  Instead, CTP only argues that any statements made during the alleged group call cannot bind the agency or excuse Respondent from complying with the law.  CTP Br. at 12-13.  While I agree (and have already concluded) that informal communications are not binding on CTP and cannot absolve Respondent of liability, that does not preclude me from considering Respondent’s statements concerning the group call, in combination with the evidence in the record, in evaluating the appropriateness of the proposed penalty.  Given the lack of evidence concerning the call, I do not accept as fact Respondent’s conclusory assertion that CTP helped design or explicitly signed off on its current manufacturing process.  However, based on the Respondent’s claims concerning the group call, as well as the language in CTP’s letters, I find it at least plausible that CTP may have made informal statements to Respondent that suggested its manufacturing process did not violate the law.

Finally, it is apparent that Respondent’s current manufacturing process was specifically (though unsuccessfully) structured to avoid violating the Act.  It seems unlikely that Respondent would have implemented such a process on a whim, and I find it somewhat compelling that Respondent implemented the process after receiving the warning letter and communicating with CTP.  Considering the totality of the circumstances, it appears Respondent believed, at least in part based on its communications with CTP, that its manufacturing process was lawful.  Thus, despite my conclusion that Respondent committed a serious violation in this case, I find that the conduct is not as egregious as CTP contends.

In sum, after considering the parties’ positions and the evidence in the record, I do not agree with CTP that the circumstances of this case warrant the maximum penalty.  Importantly, these findings do not absolve Respondent of liability or excuse the 

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seriousness of its violation.  As a manufacturer and retailer of tobacco products, Respondent had an independent duty to ensure it manufactured and sold its products in accordance with the Act.  Because Respondent failed to fulfill that duty, a reasonable penalty is appropriate to protect public health interests and discourage future violations.  Given the mitigating circumstances described above, however, I conclude that a substantial reduction in the proposed penalty is warranted.

2. Respondent’s ability to pay and effect on ability to do business.

Respondent states that it may be forced to file for bankruptcy if it is required to pay the full penalty amount.  CRD Dkt. Entry No. 16.  However, Respondent failed to file any evidence to support this claim.4

While I am sympathetic to Respondent’s statements, I am limited to the evidence in the administrative record.  Without evidence demonstrating the financial state of Respondent’s business, such as tax returns, bank statements, profit and loss statements, or other financial records, I am unable to make any findings concerning Respondent’s ability to pay the proposed penalty or the potential impact of the penalty on Respondent’s ability to continue doing business.  Therefore, I find that Respondent has failed to establish mitigating circumstances with respect to its ability to pay or continue doing business.

3. History of prior violations.

There is no evidence in the record of any prior violations of the Act resulting in a CMP.  Nevertheless, CTP argues that Respondent “has a history of violating the Act’s requirements” based on the previously discussed January 15, 2021 warning letter.  CTP Br. at 11.  CTP contends Respondent’s “violation history” demonstrates an “unwillingness or inability” to comply with the law.  Id.

I do not agree with CTP that the warning letter demonstrates a significant history of violations.  The letter was not a final agency determination and did not provide Respondent with an opportunity to be heard or fully respond to the alleged violations.  See CTP Ex. 9.  The mere fact that CTP previously accused Respondent of a violation is not sufficient, on its own, to classify Respondent as a repeat offender.  Further, as discussed above, the circumstances surrounding the warning letter are not as clear-cut as CTP suggests and do not demonstrate that Respondent is unwilling or unable to comply with the law.  Thus, contrary to CTP’s position, I find that Respondent does not have a 

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significant history of violations resulting in a CMP, 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 find Respondent fully culpable for manufacturing for sale adulterated and misbranded tobacco products in violation of the Act.  The Act places a heavy burden manufacturers of tobacco products because of their highly dangerous and addictive nature.  See 21 U.S.C. § 387 note (Findings and Purpose).  While Respondent may have believed its manufacturing process did not violate the Act, that belief does not absolve Respondent of its responsibility to understand and comply with the law as a manufacturer and retailer of tobacco products.

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. 21 U.S.C. § 333(f)(5)(B).  The purpose of a CMP is to ensure manufacturers and retailers comply with the Act and its implementing regulations with the overarching goal of protecting the health of the American people.  However, the tobacco regulations are not intended to unjustly and disproportionately penalize manufacturers and retailers who made an earnest attempt to comply with law.  When a party earnestly attempts to comply with the law or correct its wrongdoing, imposing the maximum CMP for a single violation is unnecessarily punitive and does not encourage compliance or accountability.

Based on the record evidence, the applicable law, and the aggravating and mitigating factors outlined in this decision, I conclude that a penalty amount of $4,136 is appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

V. Conclusion

For these reasons set forth above, I impose a civil money penalty against Respondent Session Supply Co, LLC d/b/a Session Supply Company in the amount of $4,136 for manufacturing, selling, and/or distributing new tobacco products that lacked the required premarketing authorization.  Pursuant to 21 C.F.R. §§ 17.11(b), 17.45(d), this decision becomes final and binding upon both parties after 30 days of the date of its issuance.