Vape Gallery Stores Inc. d/b/a Top Choice Smoke Shop, DAB TB9239 (2025)

ORDER IMPOSING SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, Vape Gallery Stores Inc. d/b/a Top Choice Smoke Shop, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $2,757. The Complaint alleges that Respondent impermissibly sold regulated tobacco products to underage purchasers and failed to verify that the purchasers were 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, 21 C.F.R. pt. 1140, four times within a 24-month period.  CTP seeks a civil money penalty of $2,757.

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During the course of these administrative proceedings, Respondent failed to comply with judicial orders and procedures governing this proceeding and failed to defend its actions, 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(c)(3), I strike Respondent’s Answer and issue this decision of default judgment.

I. Procedural History

On September 10, 2024, CTP served the Complaint on Respondent by United States Postal 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 October 9, 2024, Respondent timely filed its Answer to CTP’s Complaint and separately filed a copy of FDA documents, including a Notification of Update to Federal Law for Tobacco Products Containing Nicotine Not Derived from Tobacco and a Notice of Inspection, dated April 26, 2024.  CRD Dkt. Entry Nos. 3, 3a.  In its Answer, Respondent formally requested a hearing to contest the civil money penalty and denied it committed the alleged violation.  CRD Dkt. Entry No. 3.

On October 11, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO) establishing procedural deadlines for this case.  CRD Dkt. Entry No. 4.  The APHO ordered the parties to serve requests for documents no later than November 20, 2024, and ordered the parties receiving the request to provide the requested documents no later than 30 days after the request was made.  Id. at 3 ¶ 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. at 10 ¶ 21, citing 21 C.F.R. § 17.35.

On November 13, 2024, CTP filed a Notice of Entry of Appearance and a Status Report, stating that parties were unable to reach a settlement and that “CTP attempted to contact Respondent to discuss the filing of a Joint Status Report but was unable to reach Respondent.”  CRD Dkt. Entry Nos. 5, 6 at 1.  On December 10, 2024, CTP filed another Notice of Entry of Appearance, changing its attorney of record.  CRD Dkt. Entry No. 7.

On December 20, 2024, CTP filed a Motion to Compel Discovery and an Unopposed Motion to Extend Deadlines.  CRD Dkt. Entry Nos. 8, 9.  CTP stated that it served its Request for Production of Documents on Respondent on November 13, 2024, but CTP had not received a response.  CRD Dkt. Entry No. 8 at 1.  On December 26, 2024, I issued an Order instructing Respondent to file a response to CTP’s Motion to Compel Discovery by January 7, 2025.  CRD Dkt. Entry No. 10 at 1.  In the Order, I warned Respondent “that if it fail[ed] to respond, I may grant CTP’s motion in its entirety.” Id. at 1; see also 21 C.F.R. § 17.32(c); CRD Dkt. Entry No. 4 at 10, APHO ¶ 21. Respondent did not respond to CTP’s Motion to Compel Discovery.

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On January 27, 2025, I issued an Order granting CTP’s Motion to Compel Discovery and gave Respondent until February 10, 2025, to comply with CTP’s Request for Production of Documents.  CRD Dkt. Entry No. 11 at 1-2.  I instructed Respondent:

[It] shall comply with CTP’s Request for Production of Documents.  Failure to do so may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

Id.

On February 18, 2025, CTP filed Complainant’s Status Report and Motion to Impose Sanctions and a Motion to Stay Deadlines.  CRD Dkt. Entry Nos. 12, 13.  In its Status Report and Motion to Impose Sanctions, CTP advised that Respondent did not produce responsive documents in compliance with the Order Granting Complainant’s Motion to Compel Discovery.  CRD Dkt. Entry No. 12 at 1-2.  On February 25, 2025, I issued an Order giving Respondent until March 11, 2025, to respond to CTP’s Motion to Impose Sanctions and stayed all deadlines as requested.  CRD Dkt. Entry No. 14.  My February 25, 2025 Order also warned Respondent that if it failed to file a response, “I may grant CTP’s Motion to Impose Sanctions and impose the requested civil money penalty amount of $2,757, pursuant to 21 C.F.R. § 17.35.”  Id. at 2.  To date, Respondent has not responded.

II. 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 the following orders and procedures governing this proceeding:

• Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 4 of my APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with my January 27, 2025 Order Granting Motion to Compel Discovery when it failed to submit the documents responsive to CTP’s Request for Production of Documents by February 10, 2025.

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Respondent also failed to defend its action despite my December 26, 2024 and February 25, 2025 Orders informing Respondent of such opportunities and warning Respondent of the consequences of not defending its action.  CRD Dkt. Entry Nos. 10, 14; see also 21 C.F.R. § 17.35(a)(2).  Accordingly, I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly, or fair conduct of this proceeding.  I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

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).  Here, Respondent failed to comply with a regulation governing this proceeding.  Respondent also failed to comply with two of my orders, despite my explicit warnings that its failure could result in sanctions.  CRD Dkt. Entry No. 4 at 3, APHO ¶ 4; CRD Dkt. Entry No. 11.  I specified that those sanctions may include “the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.”  CRD Dkt. Entry No. 11 at 1-2; CRD Dkt. Entry No. 4 at 10, APHO ¶ 21.  Respondent also failed to defend its actions, despite my orders expressly reminding Respondent of the opportunity.  See CRD Dkt. Entry Nos. 10, 14. Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding.

I find that Respondent’s actions are sufficient to warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3). Accordingly, I strike Respondent’s Answer, and issue this Initial Decision and Default Judgment, assuming the facts alleged in CTP’s Complaint to be true.  21 C.F.R. §§ 17.35(c)(3), 17.11(a).

III. 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:

• Respondent owns Top Choice Smoke Shop, an establishment that sells tobacco products and is located at 14366 Memorial Drive, Suite C, Houston, Texas 77079. Complaint ¶¶ 11-12.

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• On July 10, 2023, CTP initiated a prior civil money penalty action, CRD Docket T-23-2838, FDA Docket FDA-2023-H-2788, against Respondent for violations of the Act, two1 of which occurred during the 24-month period relevant in the current Complaint.  Complaint ¶ 15.
• The previous action concluded when Respondent admitted all of the allegations in the Complaint and paid the agreed upon monetary penalty.  Further, “Respondent expressly waived its right to contest such violations in subsequent actions.” Complaint ¶ 16.
• An FDA-commissioned inspector conducted a subsequent inspection of Respondent’s establishment on April 25, 2024, at approximately 4:35 PM, during which “a person younger than 21 years of age was able to purchase a Juicy Bar JB5000 Black & Blue Berry Ice electronic nicotine delivery system (ENDS) product . . . .”  Additionally, “the underage purchaser’s age was not verified before the sale . . . .”  Complaint ¶ 13.

These facts establish that Respondent is liable under the Act.  The Act prohibits misbranding of a 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. pt. 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 13, 2022, April 10, 2023, and April 25, 2024.  Act § 906(d)(5).  On August 13, 2022, and April 25, 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.  Id.  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty.

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CTP requested a civil money penalty of $2,757, which is a permissible penalty for four violations of the Act and 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 $2,757 is warranted and so order one imposed.