Royal Vape & Tobacco, LLC d/b/a Royal Vape & Smoke, DAB TB9204 (2025)

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

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, Royal Vape & Tobacco, LLC d/b/a Royal Vape & Smoke, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $687.  The Complaint alleges that Respondent impermissibly sold regulated tobacco products to underage purchasers and failed to verify that a purchaser was 21 years of age or older, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. pt.  1140.  CTP seeks a civil money penalty of $687.

During the course of these administrative proceedings, Respondent failed to comply with judicial orders and procedures governing this proceeding and failed to defend its action, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).  Accordingly, pursuant to 21 C.F.R. § 17.35, I strike Respondent’s Answer and issue this decision of default judgment.

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Procedural History

On August 20, 2024, CTP served the Complaint on Respondent, located at 2320 West Road, Trenton, Michigan 48183, by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Nos. 1 (Complaint), 1b (Proof of Service).  On August 28, 2024, CRD received Respondent’s timely filed Answer.  CRD Dkt. Entry No. 3.  In its Answer, Respondent denied the allegations, offered some defenses, and stated that the penalty was too high.  Id.  

On September 9, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO), acknowledging receipt of Respondent’s Answer and establishing procedural deadlines for this case.  CRD Dkt. Entry No. 4.  The APHO ordered the parties to serve requests for documents no later than October 9, 2024, and ordered the party receiving the request to provide the requested documents no later than 30 days after the request was made.  Id. ¶ 4.  Further, the APHO warned the parties that “I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of this hearing.”  Id. ¶ 21, citing 21 C.F.R. § 17.35.

On October 9, 2024, CTP filed a Joint Status Report stating that parties were unable to reach a settlement.  CRD Dkt. Entry No. 6.  On November 18, 2024, CTP filed a Motion to Compel Discovery and a Motion to Extend Deadlines.  CRD Dkt. Entry Nos. 7, 8.  CTP stated that it served its Request for Production of Documents on Respondent on October 9, 2024, but CTP had not received a response.  CRD Dkt. Entry No. 7 at 1.  On November 19, 2024, I issued an Order instructing Respondent to file a response to CTP’s Motion to Compel Discovery by December 4, 2024 and granted CTP’s Motion to Extend Deadlines.  CRD Dkt. Entry No. 9.  Respondent was warned “that if it fail[ed] to respond, I may grant CTP’s motion in its entirety.”  Id. at 1.

On December 16, 2024, as Respondent had not responded to CTP’s Motion to Compel Discovery as instructed, I issued an order granting CTP’s Motion to Compel Discovery and gave Respondent until December 31, 2024, to comply with CTP’s Request for Production of Documents.  CRD Dkt. Entry No. 10 at 1.  Respondent was again warned that:

[F]ailure to comply may result in sanctions, which may include striking its filings and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

Id. at 1-2.

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On January 7, 2025, CTP filed a Status Report and Motion to Impose Sanctions as well as a Motion to Stay Deadlines.  CRD Dkt. Entry Nos. 11, 12.  However, in both motions, the CRD docket number was listed as “T‑24-3100,” the FDA docket number was listed as “FDA-2024-H-2547,” and Respondent’s name was listed as “Aha, Inc. d/b/a Plum Convenience.”  Id.  The CRD docket number in this case is “T-24-4140,” the FDA docket number is “FDA‑2024‑H‑3914,” and Respondent’s name is “Royal Vape & Tobacco, LLC d/b/a Royal Vape & Smoke.”  As the two filings were not related to this case, on January 14, 2025, I issued an order excluding the filings from the record, but they remained in the Departmental Appeals Board e-filing system.  CRD Dkt. Entry No. 14.  I also instructed CTP to resubmit its motions with the correct information in order for its motions to be taken into consideration.  Id. 

On January 14, 2025, CTP resubmitted its Status Report and Motion to Impose Sanctions with the correct information.  CRD Dkt. Entry No. 14.  CTP also resubmitted its Motion to Stay Deadlines with the correct information as well.  CRD Dkt. Entry No. 15.  In its Status Report and Motion to Impose Sanctions, CTP advised that Respondent did not produce responsive documents in compliance with the December 16, 2024 Order Granting Motion to Compel Discovery.  CRD Dkt. Entry No. 14. at 1-2.  On January 14, 2025, I issued an Order giving Respondent until January 29, 2025, to respond to CTP’s Motion to Impose Sanctions and stayed all deadlines as requested.  CRD Dkt. Entry No. 16.  My January 14, 2025 Order also warned Respondent that if it failed to file a response, “I may grant CTP’s Motion to Impose Sanctions ….”  Id. at 2.    
 

I.    Striking Respondent’s Answer

I may sanction a party for:

(1)      Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;
(2)      Failing to prosecute or defend an action; or
(3)      Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.

21 C.F.R. § 17.35(a).

Respondent failed to comply with multiple judicial orders and procedures governing this proceeding.  Specifically:

• Respondent failed to comply with paragraph 4 of the APHO, when it failed to respond to CTP’s Request for Production of Documents; and

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• Respondent failed to comply with the December 16, 2024 Order Granting Motion to Compel Discovery, requiring Respondent to comply with CTP’s Request for Production of Documents.

Respondent also failed to defend its action.  21 C.F.R. § 17.35(a)(2).  Specifically, Respondent failed to file a response to the November 19, 2024 Order, giving it an opportunity to respond to CTP’s Motion to Compel Discovery and failed to file a response to my January 14, 2025 Order, giving it an opportunity to file a response to CTP’s Motion to Impose Sanctions.  This leads me to conclude that Respondent has abandoned its defense of this case.

In the absence of any explanation from Respondent, I find no basis to excuse Respondent’s repeated failure to comply with various orders in this administrative proceeding.  Despite explicit warnings that failure to comply with Orders could result in sanctions, Respondent did not comply with two Orders.  See CRD Dkt. Entry Nos. 4 ¶ 20; 10.  Accordingly, I find that Respondent failed to comply with judicial orders and procedures governing this proceeding, failed to defend its case, and, as a result, engaged in a pattern of misconduct that interfered with the speedy, orderly, and fair conduct of the hearing.  The harshness of the sanctions I impose must relate to the nature and severity of the misconduct or failure to comply. 21 C.F.R. § 17.35(b).

I find that Respondent’s actions are sufficiently egregious and warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3); see also KKNJ, Inc. d/b/a Tobacco Hut 12, DAB No. 2678 at 8 (2016) (concluding that “the ALJ [Administrative Law Judge] did not abuse her discretion in sanctioning Respondent’s ongoing failure to comply with the ALJ’s directions by striking Respondent’s answer to the Complaint.”).

II.    Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered.  Therefore, I am required to issue an initial decision by default, provided that the Complaint is sufficient to justify a penalty.  21 C.F.R. § 17.11(a).  Pursuant to 21 C.F.R. § 17.11(a), I am required to “assume the facts alleged in the [C]omplaint to be true” and, if those facts establish liability under the Act, issue a default judgment and impose a civil money penalty.

Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

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• Respondent owns Royal Vape & Smoke, an establishment that sells tobacco products and is located at 2320 West Road, Trenton, Michigan 48183.  Complaint ¶ 11-12.
• An FDA-commissioned inspector conducted an inspection of Respondent’s establishment on August 28, 2023, at approximately 3:24 PM, during which “a person younger than 21 years of age was able to purchase a Breeze Smoke Strawkiwi electronic nicotine delivery system (ENDS) product . . . .”  Complaint ¶ 15.
• On September 26, 2023, CTP issued a Warning Letter to Respondent regarding the August 28, 2023 inspection.  The letter explained that the inspector documented a violation of federal law, and that the named violation was not necessarily intended to be an exhaustive list of all violations at the establishment.  The Warning Letter also stated that if Respondent failed to correct the violation, regulatory action by the FDA or a civil money penalty action could occur and that it is Respondent’s responsibility to comply with the law.  Complaint ¶¶ 15-16.
• An FDA-commissioned inspector conducted a subsequent inspection of Respondent’s establishment on June 2, 2024, at approximately 1:28 PM, during which “a person younger than 21 years of age was able to purchase a Breeze Smoke Pro Edition Grape ENDS product. . . .”  Additionally, “the underage purchaser’s age was not verified before the sale . . . .”  Complaint ¶ 13.

These facts establish Respondent Royal Vape & Smoke’s liability under the Act.  The Act prohibits misbranding of a regulated tobacco product.  21 U.S.C. § 331(k).  A regulated tobacco product is misbranded if sold or distributed in violation of regulations issued under section 906(d) of the Act.  21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  The Secretary issued the regulations at 21 C.F.R. Parts 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see 21 U.S.C. § 387f(d)(1); 75 Fed.  Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016); 89 Fed. Reg. 70, 483, 70, 485 (Aug. 30, 2024).  Under section 906(d)(5) of the Act, no retailer may sell regulated tobacco products to any person younger than 21 years of age and retailers must verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age.

Taking the above alleged facts as true, Respondent violated the prohibition against selling regulated tobacco products to persons younger than 21 years of age on August 28, 2023 and June 2, 2024.  Act § 906(d)(5).  On June 2, 2024, Respondent also violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age.  21 C.F.R. § 1140.14(b)(2)(i).  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty.

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CTP has requested a civil money penalty of $687, which is a permissible penalty for three violations of the regulations found at 21 C.F.R. pt. 1140 within a 24-month period.  21 C.F.R. § 17.2.  Therefore, I find that a civil money penalty of $687 is warranted and so order one imposed.