Baba Jawahardas Inc. d/b/a Texaco / Toledo Short Stop Grocery, DAB TB9225 (2025)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a $19,192 civil money penalty (CMP) against Baba Jawahardas Inc. d/b/a Texaco / Toledo Short Stop Grocery (Respondent) for impermissibly receiving in interstate commerce an electronic nicotine delivery system (ENDS) product that lacked the required premarketing authorization, thereby violating 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 that a CMP in the amount $3,838 is appropriate.

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I.    Background and Procedural History

CTP began this matter by serving an Administrative Complaint on Respondent at 560 North 5th Street, Toledo, Washington 98591 by United Postal Service and by filing a copy of the Complaint with the Food and Drug Administration’s (FDA’s) Division of Dockets Management.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 1 (Complaint), 1b (Proof of Delivery).

On January 23, 2024, Respondent timely filed an Answer.  CRD Dkt. Entry No. 6 (Answer).  In its Answer, Respondent denies all of the allegations of liability made in CTP’s Complaint and states, as a defense, that Respondent:

called the Center for Tobacco Products (CTP) after receiving the Warning Letter date[d] May 25, 2023.  I provided the CTP representative with the case number and was advised that the Pomegranate Puff Bars were not FDA approved and should be removed from the counter.  I provided the names of all the other e-cigarettes in the store and was advised by the representative that none of the other e-cigarettes needed to be removed from the counter.  I immediately disposed of the remaining samples of Pomegranate Puff Bars.

Answer at 2, ¶ 1.b.

Respondent further states:

The Complaint referenced an Elfbar Grape Honeydew ENDS product that was in the store on August 16, 2023.  The same product was also in the store at the time of the initial CTP visit in February 2023; however, the product was not included in the Warning Letter .  .  .   I relied on the CTP representative’s advice and took appropriate action to remove what I was advised was the offending product .  .  .  . 

Id. ¶¶ 1.e)-1.f).

In its Answer, Respondent also states that the CMP sought by CTP “is too high because it may force me to close my business.”  Answer at 3, ¶ 1.

On January 24, 2024, I issued an Acknowledgment and Pre-Hearing Order establishing procedural deadlines for this case.  CRD Dkt. Entry No. 7 (APHO).  On February 22, 2024, CTP filed a Joint Status Report indicating that the parties were unable to reach a settlement.  CRD Dkt. Entry No. 8.

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On April 16, 2024, CTP timely filed its pre-hearing exchange consisting of an informal brief (Informal Brief of Complainant), a proposed witness and exhibit list, and eight proposed exhibits.  CRD Dkt. Entry Nos. 12, 12a-i.  CTP’s exchange included the written testimony of two witnesses: 1) James Bowling, Deputy Division Director, Office of Compliance and Enforcement, FDA, CTP (CTP Ex. 1); and 2) Kerri L. Brown, FDA-commissioned officer with the Washington State Liquor and Canvas Board (CTP Ex. 2). Id. at 12b-12c.

On May 7, 2024, Respondent timely filed its prehearing exchange consisting of a pre-hearing brief (Informal Brief of Respondent), a proposed witness and exhibit list, and three exhibits.  CRD Dkt. Entry Nos. 13, 13a-13d.  Respondent’s exchange included the written testimony of one witness: Charanjit Singh, Owner of Baba Jawahardas Inc. d/b/a Texaco / Toledo Short Stop Grocery (R. Ex. 1).  Id. at 13b.

On June 11, 2024, I conducted a pre-hearing conference (PHC).  See CRD Dkt. Entry No. 19.  During the PHC, we discussed the issues to be decided, the purpose of a conducting a hearing, procedural history, the parties’ pre-hearing exchanges and proposed witnesses, and my ruling on CTP’s Motion for a Protective Order.  Id. at 1.  Respondent confirmed that it did not file a response to CTP’s Motion for a Protective Order and did not object to CTP’s eight proposed exhibits and two proposed witnesses and declined to cross examine any of CTP’s witnesses.  Id. at 2.  CTP objected to the admission of R. Exs. 2a and 2b.  I advised CTP to file written objections to Respondent’s exhibits.  Id.  CTP requested to cross-examine Respondent’s proposed witness, Charanjit Singh, Owner of Baba Jawahardas, Inc.  Id.  A hearing date was set for August 15, 2024.  Id.

On June 28, 2024, CTP filed a Motion to Exclude Evidence requesting that R. Exs. 2a-2b be excluded for lack of proper authentication and relevance.  See CRD Dkt. Entry No. 21 referring to CRD Dkt. Entry Nos. 13c-13d.  CTP argues that Respondent did not follow the guidance for exhibits outlined in the APHO ¶ 6 and that Respondent’s exhibits have not been properly authenticated stating that “Respondent has not provided sworn direct testimony of any witness to authenticate Respondent’s Exhibits and they do not contain any identifying information that could reasonably authenticate them.”  CRD Dkt. Entry No. 21 at 3-4.  CTP further argues that Respondent’s exhibits are not relevant or material to this case stating that Respondent relies on these exhibits to argue that Respondent is the target of selective CTP enforcement action.  Id. at 4-7.  On July 8, 2024, Respondent filed a Reply to Complainant’s Motion to Exclude Evidence.  CRD Dkt. Entry No. 22. Respondent challenged CTP’s arguments and argued that the issue of selective enforcement goes to the fairness of the civil money penalty and that the source data for the documents submitted as exhibits was obtained from FDA’s website which is a public record.  CTP Dkt. Entry No. 22 at 1-2.  Respondent further argued that because the documents were public records, they did not require additional authentication pursuant to

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Federal Rules of Evidence (FRE) Rule 8.  Id.  On July 16, 2024, I issued an order advising the parties that I reviewed their arguments and that I would not exclude R. Exs. 2a-2b from the administrative record, but I would consider both parties’ arguments when assessing the weight given to these exhibits in my decision.  CRD Dkt. Entry No. 23.

On August 15, 2024, I conducted a hearing in this case.  During the hearing, I admitted all exhibits into the administrative recording, including CTP Exs. 1-8 (CRD Dkt. Entry Nos. 12b-12i), and Respondent’s Exs. 1, 2a-2b (CRD Dkt. Entry Nos. 13b-13d).  Hearing Transcript (Tr.) at 5.

CTP’s counsel conducted cross-examination of Charanjit Singh.  Hearing Tr. at 6-12.  Respondent’s counsel then conducted re-direct examination of Charanjit Singh.  Id. at 13-17.

On October 3, 2024, the hearing transcript was uploaded to the DAB E-File system and I issued an Order establishing deadlines for the parties’ post-hearing brief submissions and transcript corrections.  CRD Docket Entry Nos. 26 and 27, respectively.  On November 25, 2024, CTP filed its final brief (CTP’s Post-Hearing Br.) and three exhibits.  CRD Dkt. Entry Nos. 28, 28a-28c.  On December 19, 2024, Respondent filed a Reply to Complainant’s Final Brief (R’s Post-Hearing Br.).  CRD Dkt. Entry No. 29.

Accordingly, the record is now closed, and I will decide this case based on the evidence in the administrative record.  21 C.F.R. §§ 17.41, 17.45(c).

I will consider the full administrative record in deciding this case.  The administrative record contains a transcript of testimony, exhibits, and other evidence admitted as well as all documents and requests filed in this proceeding.  21 C.F.R. § 17.41(b).

II.    Issues

There are two issues for me to decide in this case:

• Whether Respondent received an adulterated and misbranded Elfbar Grape Honeydew ENDS product in interstate commerce and delivered or proffered delivery thereof for pay or otherwise, in violation of 21 U.S.C. § 331(c) on August 16, 2023; and, if so,
• Whether the $19,192 civil money penalty is appropriate, considering any mitigating or aggravating factors that I find in this case.

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III.    Analysis

1. CTP has demonstrated by a preponderance of the evidence that Respondent received the adulterated and misbranded Elfbar Grape Honeydew ENDS product in interstate commerce and delivered or proffered delivery thereof for pay or otherwise on August 16, 2023, in violation of the Act.

The Act prohibits the receipt in interstate commerce of any tobacco product that is adulterated or misbranded and the delivery or proffered delivery thereof 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 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 permitting marketing of the new tobacco product 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 James Bowling, Deputy Division Director for the Division of Enforcement and Manufacturing, in CTP’s Office of Compliance and Enforcement; and Kerri L. Brown, FDA-commissioned officer with the Washington State Liquor and Canvas Board.  CTP Exs. 1-2.  Inspector Brown testified that she conducted a compliance inspection of Respondent’s establishment Texaco / Toledo Short Stop Grocery, located at 560 North 5th Street, Toledo, Washington, 98591, on August 16, 2023, at approximately 5:25 PM.  CTP. Ex. 2 at 2, ¶¶ 4-6; see also CTP Exs. 3-6 (Inspector Brown’s August 2023 narrative report; the August 2023 TIMS Assignment Form; the August 2023 Photographs of Elfbar Grape Honeydew ENDS Product; and the August 2023 Form FDA 482).  Inspector Brown testified that during the August 16, 2023 inspection, she observed that Respondent’s establishment sold FDA-regulated tobacco products and the establishment had a sales display containing tobacco products, including Elfbar Grape Honeydew electronic nicotine delivery system (“ENDS”) products available for sale.  CTP. Ex. 2 at 2, ¶ 6.

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Inspector Brown recorded the inspection in the FDA’s Tobacco Inspection Management System (TIMS) and created a Narrative Report.  Id. at 2, ¶ 7.  Inspector Brown further testified that CTP Exhibits 3 and 4 are true and accurate copies of the Narrative Report and TIMS Form regarding the inspection.  Id.

James Bowling testified that the product “Elfbar Grape Honeydew,” being offered for sale at Respondent’s establishment during the August 16, 2023 inspection, does not have any registered tobacco production facilities in the state of Washington or elsewhere in the United States.  CTP Ex. 1 ¶ 6.  Deputy Division Director Bowling further testified that:

.  .  .   the Elfbar Grape Honeydew ENDS products are manufactured in China .  .  .   [he] can confirm that Elfbar Grape Honeydew ENDS products were not commercially marketed in the United States as of February 15, 2007 .  .  .  that on August 16, 2023, the day on which FDA observed Elfbar Grape Honeydew ENDS products being offered for sale at Respondent’s establishment, there was no record of this product having an authorized FDA marketing granted order in effect under 21 U.S.C. § 387j(c)(1)(A)(i) .  .  .  there was no record of this product having a substantial equivalence order in effect under 21 U.S.C. § 387j(a)(2)(A)(i), and the manufacturer of the Elfbar Grape Honeydew ENDS product had not submitted a report requesting a substantial equivalence order under 21 U.S.C. § 387e(j) .  .  .  the Elfbar Grape Honeydew ENDS product did not have a found-exempt order in effect under 21 U.S.C. § 387e(j)(3)(A) (SE pathway under 21 U.S.C. § 387j(a)(2)(A)(ii)), and that the manufacturer of the Elfbar Grape Honeydew ENDS products had not submitted an abbreviated report requesting a found-exempt order for such product under 21 U.S.C. § 387e(j)(1).

CTP Ex. 1 ¶¶ 9, 11-13.

Respondent has not disputed any of the statements made in the written direct testimony of CTP’s two witnesses.  Based on the uncontested testimony of James Bowling and Inspector Brown, as well as the supporting evidence submitted by CTP, I find that the Elfbar Grape Honeydew ENDS product observed during the August 16, 2023 inspection traveled in interstate commerce and was manufactured in China.  I also find that the Elfbar Grape Honeydew ENDS product was adulterated because it lacked the required FDA marketing authorization and was not exempt from this requirement.  21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A).  Finally, under 21 U.S.C. § 387c(a)(6), the Elfbar Grape Honeydew ENDS product was misbranded because there was no substantially equivalent determination as required by 21 U.S.C. § 387e(j).

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2. Respondent has demonstrated, by a preponderance of the evidence, the existence of mitigating circumstances to support a reduced CMP.

I determined that Respondent violated the prohibition against receiving in interstate commerce an adulterated and misbranded tobacco product and the delivery or proffered delivery thereof for pay or otherwise.  21 U.S.C. § 331(c).  Pursuant to 21 U.S.C. § 333(f)(9)(A) and 21 C.F.R. § 17.2, a CMP of up to $19,192 is permissible for a violation of 21 U.S.C. § 331(c).  See also 45 C.F.R. § 102.3.

In its Complaint, CTP seeks to impose the maximum CMP amount of $19,192 against Respondent.  Complaint ¶ 
 1.  In its Answer, Respondent contends that the CMP sought by CTP is too high because it may force Respondent to close its business.  Answer at 3. In its Answer, Informal Brief of Respondent, and the testimony of its witness Charanjit Singh, Respondent offered defenses, including that the Warning Letter was difficult to read or understand, that Respondent called CTP after receiving the Warning Letter and provided the CTP representative with the names of all e-cigarettes in its establishment and was advised that only the Pomegranate Puff Bars were not FDA approved and should be removed, and that Respondent relied on the Warning Letter and the advice given by the CTP representative. Id. at 2; Informal Brief of Respondent at 5; R. Ex. 1; Hearing Tr. at 8-12.

When determining the appropriate amount of a CMP, I must consider any aggravating or mitigating circumstances and the factors listed in the Act.  21 C.F.R. § 17.34(a)-(b). Specifically, I am required to 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); 21 C.F.R. § 17.45(b)(1)-(3).

1. Nature, Circumstances, Extent and Gravity of the Violations

The Family Smoking Prevention and Tobacco Control Act (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).  Respondent is in the business of receiving and selling highly regulated and dangerous products.  Respondent received a written warning dated May 25, 2023, that stated, “[t]he establishment offered for sale tobacco products that are required to have, but lack, premarket authorization.  Specifically, on February 27, 2023, the establishment offered for sale a Puff Bar Pomegranate ENDS product.”  CTP Ex. 7 at 1.

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Respondent claims that after receiving this Warning Letter, he called CTP to discuss the guidance provided.  CTP disputes Respondent’s claim that a CTP representative advised Respondent that none of the other ENDS products displayed needed to be removed and states that CTP has no record of this phone call from Respondent.  CTP’s Post-Hearing Br. at 5, fn.1.  However, CTP has not provided any evidence that contradicts Respondent’s statements.  Id.  CTP cites 21 C.F.R. § 10.85(k), Holistic Candlers & Consumers Ass’n v. FDA, 664 F.3d 940, 945 46 (D.C. Cir. 2012), and Mallinckrodt Inc. v. FDA, 2015 WL 13091366, at *10 (D. Md. 2015) in support of its argument that statements made by FDA officials in meetings or during teleconferences do not bind the agency.  Id.  While any statements made by a CTP representative in response to an inquiry from Respondent would not bind the agency, the circumstances here involve the information Respondent received in CTP’s Warning Letter and the actions Respondent claims to have taken to confirm and understand the Warning Letter CTP provided to him. I find the testimony of Respondent’s owner, that he attempted to comply with information provided in CTP’s Warning Letter and that he took the additional step to seek verification of his authorization to sell the other products in his establishment, to be credible.

While Respondent is responsible for complying with the laws governing the products it sells, I find Respondent’s assertions and testimony that it sought guidance from CTP after receiving the May 25, 2023 Warning Letter to be persuasive.  According to the testimony of Charanjit Singh, Owner of Baba Jawahardas, Inc., Respondent removed the ENDS product specifically identified in the Warning Letter, sought guidance regarding the other e-cigarettes in its store, and believed no other action was necessary.  R. Ex. 1; Hearing Tr. at 8-12.

Respondent argues that the unauthorized Elfbar Grape Honeydew ENDS product found during the August 16, 2023 inspection was also available in Respondent’s establishment during CTP’s February 27, 2023 inspection, after which Respondent received the May 25, 2023 Warning Letter and this contributed to Respondent’s confusion.  R. Ex. 1 ¶¶ 9-10; Informal Brief of Respondent at 6.  CTP does not address this argument.  While Respondent is not absolved of its responsibility to follow the laws governing the products it sells and CTP has no legal duty to provide retailers with notice of violations, CTP chose to provide a warning letter to Respondent requesting that Respondent “take prompt action to address the violation.”  CTP Ex. 7.  CTP should therefore ensure the warning and information it provides to retailers in order to take such prompt action to address a violation is clear and actionable.

Thus, after consideration of the complete administrative record including Respondent’s testimony, I find that the nature circumstances, extent, and gravity of the violation constitutes a mitigating factor.

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

Respondent has not produced any evidence to show its inability to pay the CMP sought in this case.   Although Respondent states that paying the full CMP “may force me to close my business” (see Answer at 3, ¶ 1), Respondent offers no evidence to support the position that paying the CMP would affect its ability to do business.

Respondent acknowledges liability in this case by admitting it made a mistake and stated that it would agree to pay a civil money penalty but asks for the penalty to be reduced. Informal Brief of Complainant at 10; Hearing Tr. at 16-17.  However, having no documentation of Respondent’s financial situation in the record, I cannot find Respondent has established an inability to pay as a mitigating factor.

3. History of Prior Violations

There is no indication in the record of any prior violations of 21 U.S.C. § 331(c) resulting in a CMP.  However, CTP argues that there is a history of prior violations because Respondent was notified in the Warning Letter that it was in violation of the Act by offering for sale tobacco products that lacked the required premarketing authorization. Informal Brief of Complainant at 10 (citing CTP Ex. 7).  CTP also argues that Respondent continued to offer for sale new tobacco products that lacked the required premarket authorization or exemption and thus demonstrated an unwillingness or inability to comply with federal tobacco laws and regulations.  Id.

I disagree with CTP’s contentions that Respondent’s repeated violations in this case were based on an unwillingness or inability to comply with the law.  As stated above, the new tobacco product that Respondent offered for sale on August 16, 2023 was also offered for sale at the February 27, 2023 inspection, after which Respondent received a Warning Letter referencing a different tobacco product.  The warning 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.  Id.  Therefore, I disagree with CTP that the warning letter, on its own, demonstrates a history of prior violations.

According to the testimony of Charanjit Singh, Owner of Baba Jawahardas, Inc., Respondent removed the ENDS products specifically identified in the Warning Letter; sought guidance regarding the other e-cigarettes in its store; and believed no other action was necessary.  R. Ex. 1; Hearing Tr. at 8-12.  Therefore, contrary to CTP’s arguments, I find the record does not demonstrate Respondent’s unwillingness or inability to comply with tobacco laws and regulations based on its history of prior violations.

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Instead, I find that this is Respondent’s first violation resulting in a CMP and it is a mitigating factor and, thus, the CMP should be reduced accordingly.

4. Degree of Culpability

Based on my finding that Respondent committed the violation alleged in the Complaint, I hold the Respondent fully culpable for receiving an adulterated and misbranded ENDS product in interstate commerce and delivering or proffering delivery thereof for pay or otherwise, in violation of 21 U.S.C. § 331(c).  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 (Findings and Purpose).  Although I find Respondent attempted to take some remedial action after receiving a warning letter, Respondent is not absolved of its responsibility as a retailer of tobacco products and is culpable for the violation on August 16, 2023.

5. Other Such Matters as Justice May Require

Respondent also made several other arguments during the course of these proceedings, including that CTP’s enforcement efforts are targeted at one to two sellers in Washington State, that Respondent is not being afforded the equal protection of the law because there are no other retailers in Washington State receiving CMPs, and that Respondent is not receiving due process under the Fifth Amendment because he would be unconstitutionally deprived of property in the form of sales revenue if a CMP is assessed. See Informal Brief of Respondent at 7-9.

Although I have considered all Respondent’s arguments, my decision must be based only on the administrative record and include findings on whether Respondent’s actions identified in the Complaint violated the law; whether any affirmative defenses are meritorious; and the appropriate amount of the penalty considering any mitigating or aggravating factors.  21 C.F.R. § 17.45(a).  I do not have the authority to find federal statutes or regulations invalid.  21 C.F.R. § 17.19(c).

However, the Act gives me discretion to consider any other evidence or arguments to mitigate the amount of the CMP and I find that CTP’s proposed penalty amount of $19,192 does not consider the mitigating factors that Respondent has demonstrated.  21 U.S.C. § 333(f)(5)(B).  Having found that Respondent violated the law, to ensure that justice is served, the amount of the CMP imposed should ensure future compliance with the Act and tobacco regulations.  Yet, 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.

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Here, the record shows Respondent is a small retailer with no history of prior violations resulting in a CMP.  Further, Respondent did not manufacture or commercially distribute the ENDS product at issue in this case.  In addition, Respondent has actively participated in these proceedings and appears to be taking this matter very seriously.

After weighing the relevant  factors, 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 conclude that a reduced, but still substantial, CMP is appropriate.

For these reasons, after considering the record evidence, applicable law, and mitigating circumstances in this case, and after full evaluation of the relevant factors, I find reducing the CMP that CTP seeks by eighty percent is appropriate and impose a $3,838 penalty. 21 U.S.C. § 333(f)(5)(B); 21 C.F.R. § 17.45(b)(1)-(3).

IV.    Conclusion

For these reasons set forth above, I impose a civil money penalty against Respondent Baba Jawahardas Inc. d/b/a Texaco / Toledo Short Stop Grocery in the amount of $3,838 for receiving an adulterated and misbranded ENDS product in interstate commerce and delivered or proffered delivery thereof for pay or otherwise.  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.