VAPE NV LLC D/B/A VAPE NV, DAB TB9399 (2025)

SUMMARY DECISION IN FAVOR OF COMPLAINANT

Complainant the Center for Tobacco Products (CTP) seeks a $20,678 civil money penalty (CMP) against Respondent Vape NV LLC d/b/a Vape NV (Respondent).  CTP alleges that Respondent, a manufacturer and retailer of tobacco products, failed to obtain the required premarket authorization for its new tobacco products causing them to become adulterated and misbranded while held for sale after shipment of one or more of their components in interstate commerce, in violation of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 331(k).  CTP now moves for summary decision and asserts that no genuine issues of material fact exist as to Respondent’s violation of the Act and Respondent is liable for a civil money penalty as a matter of law.  I grant summary decision in favor of CTP and find a civil money penalty in the amount of $20,678 is appropriate.

I. Background and Procedural History

CTP began this matter by serving a Complaint on Respondent.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Nos. (Numbers) 1 (Complaint), 1b (Proof of Delivery).  CTP alleges that Respondent manufactured tobacco products and held them for sale at its

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establishment in North Las Vegas, Nevada that does business under the name Vape NV, and received at least one component that it used to manufacture its tobacco products from outside of Nevada.  CRD Dkt. Entry No. 1 ¶¶ 1, 14-15.  CTP further alleges that Respondent held e-liquid tobacco products for sale after shipment of one or more of their components in interstate commerce and Respondent’s e-liquid products were adulterated and misbranded because they were new tobacco products that lacked the required FDA premarket authorization, in violation of federal law.  CRD Dkt. Entry No. 1 ¶¶ ¶ 1, 4, 17‑23.

On September 25, 2024, Respondent timely filed an Answer, which admitted many of the allegations in CTP’s Complaint, asserted that “CTP’s understanding of .  .  .  its enforcement authority is erroneous” and that this proceeding is unconstitutional, and also argued that the amount of the proposed CMP is excessive. CRD Dkt. Entry No. 5 (Answer).

On October 25, 2024, the Administrative Law Judge (ALJ) assigned to this case issued an Acknowledgment and Pre‑Hearing Order (APHO) establishing procedural deadlines for this case.  CRD Dkt. Entry No. 6.

On March 14, 2025, CTP timely filed 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. 12, 12a-12k.  CTP’s pre-hearing exchange included the written direct testimony of two proposed witnesses: James Bowling, Deputy Division Director for the Office of Compliance and Enforcement, CTP, FDA; and Renee Sutton, FDA‑commissioned officer with the state of Nevada.  CRD Dkt. Entry Nos. 12b, 12c (CTP Exhibits (Exs.) 1, 2).  CTP also filed Complainant’s Motion for Summary Decision, a Memorandum in Support of Complainant’s Motion for Summary Decision, and five exhibits.  CRD Dkt. Entry Nos. 13, 13a-13g.

On March 21, 2025, this case was reassigned to me and I issued an Order giving Respondent until April 14, 2025 to file a response to CTP’s Motion for Summary Decision.  CRD Dkt. Entry No. 14.

On April 4, 2025, Respondent timely filed its pre-hearing exchange, consisting only of a pre-hearing brief and an addendum.  CRD Dkt. Entry No. 15.  Respondent did not submit any proposed exhibits or the written direct testimony of proposed witnesses.  Respondent also timely filed Respondent’s Response to CTP’s Motion for Summary Decision.  CRD Dkt. Entry No. 15a.

CTP’s Motion for Summary Decision is now ripe for adjudication.

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II. Admission of Exhibits

Under 21 C.F.R. § 17.19(b)(11), “[t]he presiding officer has the authority to[] .  .  .  [r]eceive, rule on, exclude, or limit evidence[.]”  Specifically, the regulation at 21 C.F.R. § 17.39 provides, in part:

1. The presiding officer shall determine the admissibility of evidence.
2. Except as provided in this part, the presiding officer shall not be bound by the “Federal Rules of Evidence.”  However, the presiding officer may apply the “Federal Rules of Evidence” when appropriate, e.g., to exclude unreliable evidence.
3. The presiding officer shall exclude evidence that is not relevant or material.
4. Relevant evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative.

21 C.F.R. § 17.39.

CTP submitted ten proposed exhibits, including the written direct testimony of two proposed witnesses.  CRD Dkt. Entry Nos. 12a-12k.  Respondent did not submit any exhibits or direct testimony of any proposed witnesses with its pre-hearing exchange. Also, in support of its Motion for Summary Decision, CTP submitted several supporting documents as exhibits including a copy of Respondent’s Request for Production (RFP) Response.  See CTP Ex. A, CRD Dkt. Entry No. 13c.  Respondent did not submit any documentary evidence or affidavits in support of its Response to Motion for Summary Decision.  Respondent has not filed any objections to CTP’s proposed exhibits, nor has Respondent filed a motion to exclude any of CTP’s proposed exhibits.

As Respondent has not objected to any of CTP’s proposed exhibits or the written direct testimony of CTP’s proposed witnesses, I admit CTP Exhibits 1-10 into the administrative record.  Additionally, regarding CTP Ex. A – Respondent’s RFP Response, although the document was not filed in the administrative record by Respondent, the exhibit bears the digital signature of Respondent’s counsel, along with a certificate of service, dated January 26, 2025, also signed by Respondent’s counsel.  See CRD Dkt. Entry No. 13c at 3.  Pursuant to 21 C.F.R. § 17.39, I find CTP Ex. A relevant to the issues of whether Respondent violated 21 U.S.C. § 331(k) of the Act, and whether the undisputed material facts establish that the $20,678 civil money penalty sought by CTP is appropriate.  21 C.F.R. § 17.39(a), (c).  I also find that CTP Ex. A’s probative value is not substantially outweighed by the danger of unfair prejudice to Respondent.  21 C.F.R. § 17.39(d).  For purposes of CTP’s Motion for Summary Decision, I will consider the full administrative record, and analyze the evidence presented in this case in the light

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most favorable to the nonmoving party.  See Norris v. Wash. Metro. Area Transit Auth., 342 F. Supp. 3d 97, 108 (D.D.C. 2018); 21 C.F.R. §§ 17.17; 17.19(b)(11); 17.39.  The administrative record contains the exhibits as well as all documents and requests filed in this proceeding.  21 C.F.R. § 17.41(b).

III. Issues

There are two issues for me to decide in considering CTP’s Motion for Summary Decision:

A. Whether the undisputed material facts establish that Respondent violated 21 U.S.C. § 331(k) of the Act, as alleged in the Complaint; and, if so,

B. Whether the $20,678 civil money penalty sought by CTP is appropriate, considering any aggravating and mitigating factors.

IV. Applicable Law

In 2009, Congress enacted the Family Smoking Prevention and Tobacco Control Act to regulate tobacco products.  21 U.S.C. §§ 387 et seq.  The law prohibits selling any “new tobacco product” without authorization from the Food and Drug Administration (FDA). 21 U.S.C. § 387j(a); 21 U.S.C. § 387a(b) (delegating to 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).

New tobacco products are required to have an FDA 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).

FDA must 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).

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Thus, when a manufacturer does not submit a PMTA for its e-liquid products, or when a manufacturer submits a PMTA for its e-liquid products and receives a denial order or a Refuse to Accept letter, the products are adulterated.  21 U.S.C. § 387b(6)(A). Additionally, “[a] tobacco product shall be deemed to be misbranded .  .  .  if, in the case of any tobacco product distributed or offered for sale in any State .  .  .  it is sold or distributed” in violation of regulations prescribed under section 387f(d).  See 21 U.S.C. §§ 387c(a), c(a)(7), c(a)(7)(B).  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); see also 21 U.S.C. § 387e(j).

Manufacturing, selling and/or distributing adulterated and misbranded e-liquid products violates the Act.  The Act prohibits “.  .  .  the doing of any other act with respect to [] a .  .  .  tobacco product .  .  .  if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded.”  21 U.S.C. § 331(k).  The FDA has the authority to seek civil money penalties from any person who violates any Act requirement that relates to tobacco products.  21 U.S.C. § 333(f)(9).  The term “person” is defined to include individuals, partnerships, corporations, and associations.  21 U.S.C. § 321(e). Manufacturers and retailers who violate a requirement of the Act that relates to tobacco products shall be liable for a civil money penalty up to the maximum amounts provided for by law, which was $20,678 during the relevant period, for each such violation, not to exceed $1,378,541 for all violations adjudicated in a single proceeding.  21 U.S.C. § 333(f)(9)(A); 21 C.F.R. § 17.2; 45 C.F.R. § 102.3.

I may grant summary decision “if the pleadings, affidavits, and other materials filed in the record, or matters officially noticed, show that there is no genuine issue as to any material fact and that the party is entitled to summary decision as a matter of law.”  21 C.F.R. § 17.17(b).  When a motion for summary decision is properly submitted, the “party opposing the motion may not rest on mere allegations or denials or general descriptions of positions and contentions; affidavits or other responses must set forth specific facts showing that there is a genuine issue of material fact for a hearing.”  21 C.F.R. § 17.17 (c).  “[C]onclusory assertions offered without any evidentiary support at the summary judgment stage do not establish a genuine issue for trial.”  See Norris, 342 F. Supp. 3d 97 at 108 (citing Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999)). Further, in examining the evidence for purposes of deciding whether summary decision is appropriate, I must draw all inferences in the light that is most favorable to the party that opposes the motion.  See The Oaks, DAB No. 3160 at 9 (2024).

“To defeat an adequately supported summary judgment motion, the nonmoving party may not rely on the denials in its pleadings or briefs, but must furnish evidence of a dispute concerning a material fact – a fact that, if proven, would affect the outcome of the

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case under governing law.”  Morris View Healthcare Center, DAB No. 3149 at 3-4 (2024)(citing Senior Rehab & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010), aff’d, 405 F. App’s 820 (5th Cir. 2010)); see also APHO ¶ 15 (“A party opposing a motion for summary decision must come forward with evidence of specific facts showing that a dispute exists.  It is never sufficient for a party opposing a motion to aver only that it ‘disputes’ alleged facts or that it demands an in-person hearing.”).

V. Findings of Undisputed Fact

I find that the following facts are undisputed based on the admissions contained in the pleadings, as well as the evidence contained in the administrative record:

• Respondent manufactures tobacco products and holds them for sale at its establishment that does business under the name Vape NV located at 3155 West Craig Road, Suite 110, North Las Vegas, NV 89032.  CRD Dkt. Entry No. 5 ¶ 3 (Respondent’s Answer)1  ;CRD Dkt. Entry No. 15 at 2 (Respondent’s Pre-hearing Brief).
• On August 16, 2022, CTP issued a Warning Letter to Respondent alleging that the new tobacco products that Respondent manufactures, sells, and/or distributes were adulterated and misbranded because they lacked the required FDA marketing authorization order.  CRD Dkt. Entry No. 1 ¶ 16 (Complaint); CRD Dkt. Entry No. 5 ¶ 5 (Respondent’s Answer); CRD Dkt. Entry No. 12h (CTP Warning Letter).  The letter stated that the manufacture, sale, or distribution of such products is prohibited, directed Respondent to come into compliance with the law, and warned that failure to address any violations may lead to other regulatory actions by CTP including civil money penalties.  CRD Dkt. Entry No. 12h at 2.
• On April 27, 2024, an FDA-commissioned inspector conducted an inspection of Respondent and observed components used to make e-liquid products that Respondent sells at its establishment.  CRD Dkt. Entry No. 1 ¶ 17 (Complaint); CRD Dkt. Entry No. 5 ¶ 6 (Respondent’s Answer); CRD Dkt. Entry No. 12c ¶¶ 5‑8 (Declaration of Renee Sutton);CRD Dkt. Entry No. 12d (Inspection Report).  The inspector “observed Flavor West Carmel Candy and several other flavorings, identified as flavors used in the manufacture of e-liquids listed for customers to order on the establishment’s menu.”  CRD Dkt. Entry No. 12c ¶ 9.

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• The Flavor West flavoring, observed in Respondent’s establishment during the April 27, 2024 inspection, is used in the manufacture of Respondent’s e-liquid products and sourced from a business in California and shipped to Respondent’s establishment in Nevada.  CRD Dkt. Entry No. 12b ¶¶ 8-9 (Declaration of James Bowling); CRD Dkt. Entry No. 12e at 9-12 (Photograph of Product); CRD Dkt. Entry No. 12d at 4 (Inspection Report); CRD Dkt. Entry No. 12j (Flavor West Manufacturing LLC online screenshot).
• Respondent’s e-liquid products were new tobacco products because they were not commercially marketed in the United States as of February 15, 2007, they did not have a Marketing Granted Order in effect under 21 U.S.C. § 387j(c)(1)(A)(i), and neither a substantial equivalence nor an abbreviated report was submitted for Respondent’s e-liquid products.  CRD Dkt. Entry No. 1 ¶¶ 18-22 (Complaint); CRD Dkt. Entry No. 5 ¶¶ 6-8 (Answer); see also CRD Dkt. Entry No. 15 ¶¶ 4-5.

VI. Analysis

In its Memorandum in Support of Summary Decision, CTP asserts that it is entitled to summary decision as a matter of law regarding Respondent’s liability for the allegations in the Complaint.  CRD Dkt. Entry No. 13a at 5-6.  Regarding the proposed civil money penalty, CTP asserts that “[a]lthough the parties may disagree on the appropriate penalty amount, there is no factual dispute between the parties necessitating a hearing or resolution by a factfinder” and “the penalty amount, too, is appropriate for resolution on summary decision.”  CRD Dkt. Entry No. 13a at 9.

A. The undisputed material facts establish that Respondent manufactured and held for sale adulterated and misbranded tobacco products in violation of federal law.

Respondent has not provided any arguments or evidence establishing any dispute concerning the facts discussed above.  To defeat CTP’s Motion for Summary Decision, Respondent must present affidavits or other evidence showing that there is a genuine issue of material fact to be decided at a hearing.  21 C.F.R. § 17.17 (c); see also Morris View Healthcare Center, DAB No. 3149 at 3-4, Norris, 342 F. Supp. 3d 97 at 108. Respondent failed to provide affidavits or evidentiary support denying the factual allegation in CTP’s Complaint and has not shown that there is any material fact in dispute which would preclude summary decision in CTP’s favor.

Even considering the facts and all possible inferences in the light most favorable to Respondent, I find that the record demonstrates that Respondent manufactures adulterated and misbranded tobacco products and holds them for sale after shipment of at least one component that it uses to manufacture its tobacco products from outside of Nevada.  The evidence plainly shows that Respondent manufactured tobacco products

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and held them for sale, at least one component that it used to manufacture its tobacco products is from California, Respondent did not obtain FDA premarket authorization prior to the inspection of Respondent’s establishment, and neither a substantial equivalence order nor an exemption order has been issued regarding Respondent’s e-liquid products.  Therefore, I conclude that as a matter of law and undisputed fact, Respondent committed a violation of 21 U.S.C. § 331(k) for which it is liable.

Moreover, the defenses Respondent raised do not create any dispute of fact that needs to be resolved at a hearing.  Specifically, Respondent argues that:

[] CTP’s understanding of the definitions of the terms misbranded and adulterated and the scope of its enforcement authority is erroneous.  CTP’s enforcement authority does not extend to transactions done in person within the state.

CRD Dkt. Entry No. 5 ¶ 9.

In its pre-hearing brief, Respondent further contends that “[t]he products were sold only to customers in store, and not to anyone across state lines, after they were manufactured.” CRD Dkt. Entry No. 15 ¶¶ 4, 5.

However, there is no genuine issue as to any material fact regarding Respondent’s liability under 21 U.S.C. § 331(k).  For Respondent to be held liable, Respondent’s e‑liquid products must satisfy the “shipped in interstate commerce” requirement of 21 U.S.C. § 331(k).  See Baker v. United States, 932 F. 2d 813, 816 (9th Cir. 1991) (holding that wholly intrastate manufactures and sales of products are covered by 21 U.S.C. § 331(k) as long as an ingredient used in the final product travelled in interstate commerce”); United States v. Regenerative Scis., LLC, 741 F. 3d 1314, 1320-21 (D.C. Cir. 2014) (same) (citing Baker, with approval).

In its Answer, Respondent admits that it received at least one component that it used to manufacture its tobacco products from outside of Nevada, the state in which Respondent’s establishment is located.  See CRD Dkt. Entry No. 5 ¶ 4; see also CRD Dkt. Entry No. 1 ¶¶ 14-15.  In its Answer, Respondent also admits that it holds its tobacco products for sale at its establishment in North Las Vegas, Nevada.  See CRD Dkt. Entry No. 5 ¶ 3; see also CRD Dkt. Entry No. 1 ¶ 14.

In considering a motion for summary decision, I am required to “draw [] factual inferences in the light most favorable to the non-moving party .  .  .  .”  Morris View at 4. Thus, I accept Respondent’s assertion that it “only sold the products to customers in in‑person transactions in the retail store.”  CRD Dkt. Entry No. 5 ¶¶ 7, 8.  However, the language of 21 U.S.C. § 331(k) is clear and I find Respondent’s interpretation of the statute incorrect.  The Complaint alleges that Respondent violated 21 U.S.C. § 331(k) by

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causing the misbranding and adulteration of new tobacco products—i.e., manufacturing unauthorized e-liquid products, while such new tobacco products are held for sale after shipment of one or more of their components in interstate commerce.  A new tobacco product may receive FDA marketing authorization through one of three pathways: (1) the PMTA pathway under 21 U.S.C. § 387j; (2) the substantial equivalence pathway through 21 U.S.C. § 387j(a)(2)(A)(i); or (3) the substantial equivalence exemption pathway under 21 U.S.C. § 387j(a)(2)(A)(ii).  Respondent admits that its e-liquid products lacked the required FDA authorization during the April 27, 2024 inspection.  See CRD Dkt. Entry Nos. 5 ¶¶ 6-8, 13c at 2.  Given that Respondent’s e-liquid products were “new tobacco products” that lacked the required FDA authorization, once Respondent’s e-liquid products, or a component thereof, were “held for sale (whether or not the first sale) after shipment in interstate commerce and result[ed] in such [e-liquid products] being adulterated or misbranded[,]” Respondent was in violation of the statute.  21 U.S.C. § 331(k) (emphasis added); see also 21 U.S.C. § 321(rr)(1), 21 C.F.R. §§ 1100.3, 1107.12, 1114.3, 1140.3; Baker v. United States, 932 F. 2d 813, 816 (9th Cir. 1991); United States v. Regenerative Scis., LLC, 741 F. 3d 1314, 1320-21 (D.C. Cir. 2014).

Thus, after considering Respondent’s arguments, the admissions in the pleadings, and all the evidence of record, I conclude that as a matter of law and undisputed fact, Respondent violated 21 U.S.C. § 331(k).  As a result, I find that Respondent is liable for a civil money penalty under 21 U.S.C. § 333(f)(9).

B. A $20,678 civil money penalty is appropriate, considering any aggravating and mitigating factors.

I found no genuine dispute of material facts and determined that Respondent manufactured and held for sale adulterated and misbranded tobacco products.  21 U.S.C. § 331(k).  The remaining issue in this case is whether the undisputed material facts establish that the civil money penalty sought by CTP is appropriate, considering any aggravating and mitigating factors.

Here, CTP is proposing a civil money penalty in the amount of $20,678, which is the maximum penalty permitted by 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). Respondent objects to the proposed $20,678 penalty amount, asserting: “Respondent has undertaken substantial expense to prepare and submit a PMTA for its e-liquid products[;]” that FDA “never explained the way it expects [FDA Form 4057b] to be filled out” during the PMTA process; and “that the proposed fine is excessive in light of Respondent’s status as a (very) small business with slim profits overall.  The fine exceeding $20,000 would be a crippling burden.”  CRD Dkt. Entry No. 5 ¶¶ 12-13.  In its pre-hearing brief, Respondent maintained that the proposed civil money penalty is not appropriate.  See CRD Dkt. Entry No. 15 ¶ 6.  However, Respondent has not submitted any materials in support of its contention that the civil money penalty proposed by CTP is

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excessive and did not submit any evidence of mitigating circumstances with its Answer, pre-hearing exchange, response to CTP’s Motion for Summary Decision, or at any time during this proceeding.

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; see also 45 C.F.R. § 102.3.  When determining the appropriate amount of a civil money penalty, 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).

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).  There is no dispute that Respondent was in the business of manufacturing and selling a highly regulated and dangerous product.  See generally 21 U.S.C. § 387 note (Findings and Purpose).  Also, Respondent received a written warning letter dated August 16, 2022, that stated, “FDA has determined that you manufacture, sell, and/or distribute to customers in the United States .  .  .  e-liquid products without a marketing authorization order” and “[a]ll 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.”  CRD Dkt. Entry No. 12h at 2.  Although Respondent claims the civil money penalty is excessive, Respondent has not presented any materials demonstrating that there is a genuine issue as to any material fact regarding the serious nature of its violation.

Respondent has admitted that the e-liquid products it manufacturers and holds for sale are new tobacco products that are adulterated and misbranded and that CTP sent Respondent a Warning Letter alleging that Respondent manufactured, sold, or distributed a new tobacco product that did not have premarket authorization prior to seeking a civil money penalty from Respondent.  See CRD Dkt. Entry No.5 ¶ 5.  Respondent is responsible for complying with the laws governing the products it manufactures and holds for sale. Thus, I find that the nature circumstances, extent, and gravity of the violation in this case are serious and warrant a substantial civil money penalty.

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

In drawing factual inferences in the light most favorable to the non-moving, I am not required to “draw unreasonable inferences or accept the non-moving party’s legal conclusions .  .  .  Inferences based on speculation are not reasonable.”  Morris View at 4 (internal citations omitted).  Accordingly, I accept the inferences that Respondent “has undertaken substantial expense to prepare and submit a PMTA for its e-liquid products” and that Respondent is a “very small business with slim profits overall.”  CRD Dkt. Entry No. 5 ¶¶ 12-13.  However, Respondent has not submitted any evidence in support of its assertion that the proposed civil money penalty will “be a crippling burden.”  Id. at 13.  In fact, in its RFP Response, Respondent stated that it “will not seek to admit any tax returns or other mitigation evidence in this proceeding.”  CRD Dkt. Entry No. 13c ¶ 7.  Given Respondent did not wish to submit any mitigating evidence to support its claim that the proposed civil money penalty would be crippling to Respondent’s business, nor did Respondent submit any other evidence in support of its assertion, I find that accepting the inference that the proposed civil money penalty will cripple Respondent’s business is unreasonable.

Respondent has not provided any evidence to show its inability to pay the civil money penalty CTP seeks or relating to Respondent’s inability to continue to do business. Additionally, Respondent did not submit any mitigating evidence to support its claim that the amount of the proposed civil money penalty is inappropriate.  Therefore, I find that Respondent’s ability to pay the proposed civil money penalty and its ability to continue to do business is not a mitigating factor.

3. History of Prior Violations

Respondent has not asserted any argument nor submitted any evidence pertaining to Respondent’s history of prior violations, or lack thereof, in relation to the appropriateness of the proposed civil money penalty and any aggravating or mitigating factors.  As previously discussed, CTP issued Respondent a Warning Letter on August 16, 2022, stating “FDA has determined that you manufacture, sell, and/or distribute to customers in the United States .  .  .  e-liquid products without a marketing authorization order” and “[a]ll 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.”  CRD Dkt. Entry No. 12h at 2.  Thus, I find that given Respondent’s history of prior violations, a civil money penalty of $20,678 is appropriate.

4. Degree of Culpability

Based on my finding that Respondent committed the violation alleged in the Complaint, I hold Respondent fully culpable for failing to obtain FDA premarket authorization for its

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e-liquid products, causing them to become adulterated and misbranded while they were held for sale after shipment of one or more components in interstate commerce, in violation of 21 U.S.C. § 331(k).  The Act places a heavy burden on retailers who choose to manufacture or sell prohibited tobacco products because of their highly dangerous and addictive nature.  See 21 U.S.C. § 387 note (Findings and Purpose).

5. Other Matters as Justice May Require

I have discretion to consider any other evidence or arguments to mitigate the amount of the civil money penalty.  21 U.S.C. § 333(f)(5)(B).  The purpose of a civil money penalty is to ensure retailers and manufactures comply with the Act and its implementing regulations with the overarching goal of protecting the health of the American people.

Although given the opportunity to do so, Respondent did not submit affidavits or other evidence supporting any mitigating factors in this case, or otherwise attempt to establish any dispute of fact during this proceeding.  21 C.F.R. § 17.17(c).  Instead, Respondent relies on general descriptions regarding expenses Respondent incurred in submitting its PMTA, and unsupported contentions regarding the impact of the proposed civil money penalty.  Respondent failed to submit supporting materials demonstrating a factual dispute between the parties on the issue of the appropriateness of the civil money penalty and there are no questions of fact for me to resolve on this issue.

Therefore, after considering the circumstances that mitigate or aggravate Respondent’s violation and the factors identified in 21 U.S.C. § 333(f)(5)(B), I conclude that a civil money penalty in the amount of $20,678 is appropriate.

C. Respondent’s Constitutional Arguments

Throughout these proceedings, Respondent asserted multiple constitutional arguments. Specifically, in its Answer, Respondent argues:

Complainant cannot seek a civil money penalty in this proceeding before an ALJ but is required to seek such penalty in an Article III court. This proceeding is unconstitutional and should be stayed immediately.

CRD Dkt. Entry No. 5 ¶ 11.

In the addendum to its pre-hearing brief, Respondent argues that “FDA has no authority to seek or impose a civil monetary penalty in excess of $20 unless before an [A]rticle III judge.”  CRD Dkt. Entry No. 15 at 9 (citing Jarkesy v. SEC, 144 S.Ct. 2117 (2024)). Respondent further argues “the administrative law judge framework violates the appointments clause of the Constitution, as recently acknowledged by the Department of Justice.  The ALJ is impermissibly insulated from removal by the President, and therefore

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the appointment is unconstitutional.  This matter may not proceed.”  Id.  In its Response to Motion for Summary Decision, Respondent argues:

CTP’s motion for summary decision should be denied because two constitutional infirmities preclude the maintenance of this action in this venue.  The administrative law judge appointment statute violates the appointments clause of the Constitution due to the excessive limitations on the President’s removal power.  Also, Respondent demands a jury trial in accordance with her Seventh Amendment right, unless this court is going to limit any fine to $20.

CRD Dkt. Entry No. 15a.

Regarding all Respondent’s constitutional arguments, I refer to the regulation at 21 C.F.R. § 17.19(c).  The regulation expressly provides that presiding officers “do not have the authority to find Federal statutes or regulations invalid.”  Further, an appellate panel of the Departmental Appeals Board (the Board) held “[n]either the ALJs nor this Board are empowered to ignore or overturn applicable statutes or regulations.”  J. Peaceful, L.C. d/b/a Town Market, DAB No. 2742 at 15 (2016) (quoting 21 C.F.R. § 17.19(c)); see also Zoom Mini Mart, Inc., DAB No. 2894 at 15 (2018) (“In sum, the ALJ came to his conclusion that a 30-day NTSO was appropriate by following the applicable authority found in the Act and Tobacco Control Act (TCA) authority which we are not allowed to ignore or overturn .  .  .  .”).  Therefore, I am bound to make any determination in these tobacco cases based on the applicable authority found in the Act and the TCA.  Further, I reject Respondent’s attempts to conflate this case with Jarkesy.  In a recent case, the Board held that:

The Court did not hold that every agency’s attempt to impose and enforce CMPs necessarily is, like the SEC’s action, “a common law suit in all but name” that “must be adjudicated in Article III courts.”  Jarkesy, 144 S. Ct. at 2136.  On the contrary, the Court acknowledged the long-established
“public rights exception,” under which “Congress may assign [a] matter for decision to an agency without a jury, consistent with the Seventh Amendment,” and extensively discussed the Court’s precedents applying that exception.  Id. at 2131-34.

The Oaks, DAB No. 3160, at 27 (2024).

Although it is outside of the scope of my authority to determine the validity of statutes or regulations, I note that no court has declared the Act’s civil money penalty provisions unconstitutional, nor has a court declared unconstitutional the execution of an Administrative Law Judge’s duties pursuant to the Act, TCA, and the applicable federal regulations in tobacco proceedings where the imposition of a civil money penalty is at

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issue.  See Vape Cent. Grp., LLC v. FDA, No. CV 24-3354 (RDM), 2025 WL 637416 (D.D.C. Feb. 27, 2025).

VII. Conclusion

For the reasons discussed above, no genuine issue of material fact exists as to Respondent’s liability for allegations in CTP’s Complaint and Respondent is liable for a civil money penalty as a matter of law.  CTP’s Motion for Summary Decision is hereby GRANTED and I impose a $20,678 civil money penalty on Respondent Vape NV LLC d/b/a Vape NV for impermissibly manufacturing, selling, and/or distributing new tobacco products that lacked the required premarketing authorization.

IT IS SO ORDERED.