Walker Trading Company Inc. d/b/a Vape Dojo, DAB TB9502 (2025)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks a $19,192 civil money penalty (CMP) against Respondent, Walker Trading Company Inc. d/b/a Vape Dojo.  Specifically, CTP alleges that Respondent Vape Dojo introduced or delivered for introduction into interstate commerce an adulterated and misbranded tobacco product, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 331(a).  For the reasons discussed below, I find Respondent violated the provisions of 21 U.S.C. § 331(a) and conclude that a reduced civil money penalty in the amount of $15,192 is appropriate.

I. Background and Procedural History

CTP began this matter by serving a Complaint on Respondent at 9501 Harford Road, Suite 3, Parkville, Maryland 21234 by United States Postal Service, and by filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 1 (Complaint), 1b (USPS Tracking Proof of Service).

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On April 29, 2024, Respondent registered for the Departmental Appeals Board (DAB) E-filing system and timely filed its Answer.  CRD Dkt. Entry No. 3 (Answer).  As an attachment to its Answer, Respondent submitted a copy of the sales “[i]nvoice for #VD270962” and a document titled Terms of Service.  See id. at 4-11 (Respondent’s Invoice and Terms of Service).  In its Answer, Respondent admits all of the allegations in the Complaint, asserts affirmative defenses, and disputes the appropriateness of the CMP sought by CTP.  Id. at 1-2.

On May 3, 2024, given that Respondent admits all of the allegations in the Complaint, I issued an Acknowledgment and Status Report Order, providing the parties with an opportunity to pursue settlement negotiations and establishing a July 2, 2024, deadline for the parties to file a joint status report.  See CRD Dkt.  Entry No. 4.

On July 1, 2024, Respondent filed a Motion to Dismiss or in the Alternative, Stay of Enforcement.  CRD Dkt. Entry No. 5 (Respondent’s Motion to Dismiss).  In its Motion to Dismiss, Respondent asserted challenges to FDA’s premarket tobacco product application (PMTA) process and the FDA’s statutory authority with regard to implementing the PMTA process.  See id.

On July 2, 2024, CTP filed a Joint Status Report stating that the “parties have been unable to reach a settlement,” that it “intends to proceed to a hearing[,]” and that “Respondent authorized CTP to file th[e] report.”  CRD Dkt. Entry No. 6 at 1.

On July 11, 2024, I issued a Pre-Hearing Order establishing a schedule for discovery and the parties’ pre-hearing exchanges.  CRD Dkt. Entry No. 7 (Pre-Hearing Order).  On that same date, I also issued an Order establishing a deadline for CTP to file a response to Respondent’s Motion to Dismiss.  CRD Dkt. Entry No. 8 at 2 (July 11, 2024, Order).  My July 11, 2024, Order also stayed all deadlines established by the Pre-Hearing Order pending resolution of Respondent’s Motion to Dismiss.  Id.

On July 26, 2024, CTP timely filed its Memorandum in Opposition to Respondent’s Motion to Dismiss and one exhibit.  CRD Dkt. Entry Nos. 9 (CTP’s Opposition), 9a (Exhibit to Opposition).

On August 13, 2024, I issued an Order Denying Respondent’s Motion to Dismiss, and Lifting Stay of Proceedings.  CRD Dkt. Entry No. 10 (Order Denying Respondent’s Motion to Dismiss).  In denying Respondent’s motion, pursuant to 21 U.S.C. § 17.19(c), I concluded that Respondent’s Motion to Dismiss:

[A]sserts statutory and jurisdictional claims that are beyond the scope of this proceeding and beyond my authority as the presiding officer.

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Id. at 6.

My Order Denying Respondent’s Motion to Dismiss also lifted the stay of proceedings previously imposed and re-established a schedule for discovery and the parties’ pre-hearing exchanges.  Id.

On October 23, 2024, CTP filed an Unopposed Motion to Extend Deadlines Pending Settlement, requesting a 120-day extension of all deadlines.  CRD Dkt. Entry No. 11 at 1 (Unopposed Motion to Extend Deadlines).  In its motion, CTP stated that the parties “agreed to settle this matter” and that “CTP understands that Respondent will pay the agreed-upon civil money penalty by January 3, 2025.”  Id. at 1.  On October 28, 2024, I issued an Order granting CTP’s Unopposed Motion to Extend Deadlines.  CRD Dkt. Entry No. 12.

On February 27, 2025, CTP timely filed its pre-hearing exchange, consisting of its Informal Brief of Complainant, Complainant’s Proposed List of Witnesses and Exhibits, and ten proposed exhibits.  CRD Dkt. Entry Nos. 13, 13a-13k.  CTP’s pre-hearing exchange included the written direct testimony of three proposed witnesses: James Bowling, Deputy Division Director for the Division of Enforcement and Manufacturing in the Office of Compliance and Enforcement, CTP, FDA; Eric Harvey, Regulatory Counsel for the Division of Promotion, Advertising, and Labeling (DPAL) in the Office of Compliance and Enforcement, CTP, FDA;1  and Dara D. Hackett, Regulatory Counsel for DPAL in the Office of Compliance and Enforcement, CTP, FDA.  CRD Dkt. Entry Nos. 13b, 13c, 13d (CTP Exhibits (Exs.) 1, 2, 3).  Respondent did not file a pre-hearing exchange.

On April 23, 2025, I held a pre-hearing conference (PHC) with both parties participating.  See CRD Dkt. Entry No. 17 (Order Following PHC).  During the PHC, I explained the issues before me and the parties’ respective burdens of proof, discussed the parties’ pre-hearing exchange submissions and explained the purpose of a hearing.  Id. at 1-2.  I asked Respondent’s authorized representative if Respondent objected to the admission of CTP’s ten proposed exhibits into the record, and Respondent raised no objections.  Id. at 1.  Therefore, I admitted CTP’s ten proposed exhibits into the record.  Id. at 2.  I also asked Respondent’s representative if he had any documentary evidence that he wished to submit, and Respondent’s representative said that he did not.  See id.  We did not discuss Respondent’s Invoice and Terms of Service that were submitted with Respondent’s Answer.  See CRD Dkt. Entry No. 3 at 4-11.

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At the PHC, Respondent’s representative stated that Respondent did not wish to cross-examine any of CTP’s proposed witnesses.  See CRD Dkt. Entry No. 17 at 2. Since Respondent did not submit any testimony or identify witnesses that could be cross-examined by CTP, I advised the parties that no hearing would be held and that I would decide the case based on the administrative record.  Id.  I also stated that the parties would have an opportunity to file final briefs before I made my decision.  Id.

On April 29, 2025, I issued an Order memorializing the issues discussed at the PHC and establishing deadlines for final briefs.  Id.  The parties were given until May 28, 2025, to file final written briefs.  Id.

On May 28, 2025, CTP filed its Notice of Waiver of Final Brief.  CRD Dkt. Entry No. 18.  Respondent did not file a final brief.

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

II. Evidence

A. CTP’s Exhibits 1-10

During the PHC, CTP’s ten proposed exhibits were admitted into the record without objection as CTP Exs. 1-10.  See CRD Dkt. Entry No. 17 at 2.  Specifically, CTP submitted the following ten exhibits:

• CTP Ex. 1: Declaration of James Bowling (CRD Dkt. Entry No. 13b);
• CTP Ex. 2: Declaration of Eric Harvey (CRD Dkt. Entry No. 13c);
• CTP Ex. 3: Declaration of Dara D. Hackett (CRD Dkt. Entry No. 13d);
• CTP Ex. 4: October 2023 Investigator Controlled Purchase Redacted Narrative Report (CRD Dkt. Entry No. 13e);
• CTP Ex. 5: October 2023 Redacted Screenshot of Vape Dojo Purchase Confirmation and Receipt (CRD Dkt. Entry No. 13f);
• CTP Ex. 6: October 2023 Photographs of the Charlie Noble Salts - Pistachio RY4, 30mL, 25mg, (2.5%) e-liquid product (CRD Dkt. Entry No. 13g);
• CTP Ex. 7: February 2022 Warning Letter (CRD Dkt. Entry No. 13h);
• CTP Ex. 8: August 2022 Warning Letter (CRD Dkt. Entry No. 13i);
• CTP Ex. 9: Charlie Noble Salts - Pistachio RY4, 30mL, 25mg, (2.5%) e-liquid product details (CRD Dkt. Entry No. 13j); and
• CTP Ex. 10: October 2023 Investigator Controlled Purchase Redacted Narrative Report (CRD Dkt. Entry No. 13k).

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B. Respondent’s Invoice and Terms of Service

On April 29, 2024, included as part of its Answer, Respondent submitted Respondent’s Invoice and Terms of Service.  See CRD Dkt. Entry No. 3 at 4-11.  The Invoice appears to be a sales invoice for Respondent’s e-liquid product, “Charlie Noble Salts - PistachioRY4 Flavored Synthetic Nicotine Solution - 25mg.”  See id. at 4.  In its Answer, Respondent asserts that the Terms of Service were agreed to by the undercover purchaser upon purchase of Respondent’s e-liquid product on October 16, 2023.  See id. at 2, 5-11.  As mentioned above, given that during the PHC Respondent’s representative stated that he did not have any documentary evidence to submit, Respondent’s Invoice and Terms of Service were not discussed during the PHC.  See CRD Dkt. Entry No. 17 at 2.  I have considered that Respondent’s representative is not an attorney and that Respondent’s Invoice and Terms of Service were submitted with its April 29, 2024, Answer and are in the administrative record; thus, I will determine the admissibility of these documents.  CRD Dkt. Entry No. 3 at 4-11; 21 C.F.R. §§ 17.19(b)(11), (19).

Under 21 C.F.R. Part 17, Administrative Law Judges (ALJs) determine the admissibility of evidence and have the discretion to apply the Federal Rules of Evidence when deemed appropriate.  Specifically, the regulation at 21 C.F.R. § 17.39 provides, in part:

(a) The presiding officer shall determine the admissibility of evidence.

(b) 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.

(c) The presiding officer shall exclude evidence that is not relevant or material.

(d) 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.

I find that Respondent’s Invoice and Terms of Service are admissible, given that they are relevant and material to the issues of whether Respondent introduced or delivered for introduction into interstate commerce an adulterated and misbranded tobacco product on October 16, 2023, in violation of 21 U.S.C. § 331(a), and whether the CMP proposed by CTP is appropriate.  21 C.F.R. § 17.39(a), (c).  In addition, I also find that the probative value of Respondent’s Invoice and Terms of Service is not substantially outweighed by the danger of unfair prejudice to CTP.  21 C.F.R. § 17.39(d).  Lastly, at no point during these proceedings did counsel for CTP raise an objection to Respondent’s Invoice and Terms of Service.  Thus, I ADMIT Respondent’s Invoice and Terms of Service into the

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administrative record as R. Ex. 1 (Respondent’s Invoice) and R. Ex. 2 (Respondent’s Terms of Service).  21 C.F.R. § 17.19(b)(11).

III. Issues

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

1. Whether Respondent introduced or delivered for introduction into interstate commerce an adulterated and misbranded tobacco product, specifically Respondent’s Charlie Noble Salts - Pistachio RY4, 30mL, 25mg, (2.5%) e‑liquid product, in violation of 21 U.S.C. § 331(a);
2. Whether any affirmative defenses are meritorious and, if so,
3. Whether the $19,192 CMP proposed by CTP is appropriate, considering any mitigating or aggravating factors I find in this case.  21 C.F.R. § 17.45.

IV. Applicable Law

To prevail, CTP must prove Respondent’s liability by a preponderance of the evidence.  The United States Supreme Court has described the preponderance of the evidence standard as requiring that the trier-of-fact believe that the existence of a fact is more probable than not before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  In re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe and Prods. of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993).  CTP has the burden to prove Respondent’s liability and appropriateness of the penalty by a preponderance of the evidence.  21 C.F.R. § 17.33(b).  Respondent has the burden to prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).

In 2009, Congress enacted the Family Smoking Prevention and Tobacco Control Act (TCA) to regulate tobacco products.  21 U.S.C. §§ 387 et seq.  The TCA 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).

The TCA requires new tobacco products to have a 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 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

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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).

The TCA directs FDA to 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).

Under the Act, a tobacco product is adulterated if it has not obtained the required premarket authorization.  21 U.S.C. § 387b(6)(A).  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.  Id.

Under the Act, “[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).

Adulterated and misbranded e-liquid products violate the Act.  The Act prohibits the introduction or delivery for introduction into interstate commerce of any tobacco product that is adulterated or misbranded.  21 U.S.C. § 331(a).  FDA may seek a civil money penalty from “any person who violates a requirement of this chapter which relates to tobacco products.”  21 U.S.C. § 333(f)(9)(A) (2012).  Penalties are set by 21 U.S.C. § 333 and 21 C.F.R. § 17.2.

V. Analysis

CTP alleges that Respondent introduced or delivered for introduction into interstate commerce, its Charlie Noble Salts - Pistachio RY4, 30mL, 25mg, (2.5%) e-liquid product that required FDA premarket authorization, in violation of 21 U.S.C. § 331(a), on October 16, 2023.  CRD Dkt. Entry No. 1 ¶¶ 16, 23.

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 the Office of Compliance and Enforcement, CTP, FDA; Eric Harvey, Regulatory Counsel for

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the DPAL in the Office of Compliance and Enforcement, CTP, FDA; and Dara D. Hackett, Regulatory Counsel for the DPAL in the Office of Compliance and Enforcement, CTP, FDA.  CTP Exs. 1, 2, 3.

Regarding Respondent’s e-liquid product, CTP submitted the sworn declaration of Deputy Division Director James Bowling.  CTP Ex. 1.  In his official capacity, Deputy Division Director Bowling has personal knowledge of FDA’s tobacco record keeping, registration process, and new tobacco product premarket authorization requirements.  Id. ¶ 3.  Deputy Division Director Bowling confirmed that, according to the label, the Charlie Noble Salts - Pistachio RY4, 30mL, 25mg, (2.5%) e-liquid product, the tobacco product observed and being offered for sale during the October 16, 2023, investigation of Vape Dojo at URL: https://vapedojo.com, is manufactured and distributed by Vapes Wholesale in Maryland.  Id. ¶ 7.  Additionally, Deputy Division Director Bowling confirmed that Vape Dojo does not have any registered tobacco production facilities in the state of Alabama.  Id. ¶ 8.  Further, Deputy Division Director Bowling confirmed that the Charlie Noble Salts - Pistachio RY4, 30mL, 25mg, (2.5%) e-liquid product was not commercially marketed in the United States as of February 15, 2007.  Id. ¶ 10.  FDA did not have any record of an FDA marketing granted order in effect for the Charlie Noble Salts - Pistachio RY4, 30mL, 25mg, (2.5%) e-liquid product, a Substantial Equivalence Order, or an abbreviated report requesting a Found-Exempt Order.  Id. ¶¶ 11, 12.

Regarding the purchasing of Respondent’s e-liquid product by FDA, CTP relies on the sworn declaration of Regulatory Counsel Eric Harvey.  CTP Ex. 2.  In his declaration, Regulatory Counsel Harvey testifies that on October 16, 2023, at approximately 10:32 AM, he conducted a controlled online purchase investigation of Vape Dojo at URL: https://vapedojo.com.  Id. ¶ 5.  Regulatory Counsel Harvey testified that he directly observed and supervised Undercover Purchaser (UP) A during the controlled online purchase investigation.  Id. ¶ 6.  Regulatory Counsel Harvey testified that he observed UP A purchase a Charlie Noble Salts – Pistachio RY4, 30mL, 25mg, (2.5%) e-liquid product directly from the establishment’s website and that the website generated an order confirmation and a receipt after the purchase.  Id. ¶ 6.  Regulatory Counsel Harvey and UP A recorded the investigation and created Controlled Purchase Narrative Reports.  Id. ¶ 7; see CTP Exs. 4, 5, 10.

Regarding FDA’s processing of Respondent’s e-liquid product at FDA’s Headquarters in Silver Spring, Maryland, after the product was shipped by Respondent to Alabama, CTP relies on the sworn declaration of Regulatory Counsel Dara D. Hackett.  CTP Ex. 3.  In her declaration, Regulatory Counsel Hackett testifies that, on October 31, 2023, she processed evidence from a controlled online purchase from Vape Dojo at URL: https://vapedojo.com.  Id. ¶ 5.  Regulatory Counsel Hackett testified that she opened the package from the controlled online purchase investigation and observed that the tobacco product inside the package was a Charlie Noble Salts - Pistachio RY4, 30mL 25mg, (2.5%) e-liquid product.  Id. ¶ 6.  Regulatory Counsel Hackett testified that she labeled

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the Charlie Noble Salts - Pistachio RY4, 30mL 25mg, (2.5%) e-liquid product as evidence, photographed the e-liquid product, then placed the e-liquid product, a signed copy of the CTP Inventory Sheet of Evidence and the outer mail packaging, into an FDA evidence bag and sealed the evidence bag.  Id.  Regulatory Counsel Hackett testified that the evidence bag was then placed into a locked cabinet, which is designated for controlled online purchase investigation evidence storage at FDA Headquarters in Silver Spring, Maryland, where it remained as of the date of Regulatory Counsel Hackett’s declaration.  Id. Regulatory Counsel Hackett took photographs during the evidence collection process for the controlled online purchase investigation of Vape Dojo.  Id. ¶ 7; see CTP Ex. 6.

Notably, none of the testimony in the declarations submitted by CTP explain how the e-liquid product shipped by Respondent to Alabama was eventually received by the FDA’s Office of Compliance and Enforcement in Silver Spring, Maryland for processing by Regulatory Counsel Hackett.  See generally CTP Exs. 1-3.  CTP also does not explain that aspect within the chain of custody of evidence in its Informal Brief of Complainant.  See generally CRD Dkt. Entry No. 13.  In the Declaration of Regulatory Counsel Hackett, she testifies that “[she] process[es] evidence that is collected from controlled online purchase investigations” at the OCE’s Silver Spring office.  CTP Ex. 3 ¶ 4.  Specifically,“[o]n October 31, 2023, [she] processed evidence from a controlled online purchase from Vape Dojo at the URL: https://vapedojo.com,” but does not testify as to how she initially received the evidence.  CTP Ex. 3 ¶ 5.

In its Answer, Respondent admits all of the allegations in the Complaint stating “[w]e unfortunately did not catch our error and have implemented corrective action.”  CRD Dkt. Entry No. 3 at 1.

Respondent admits paragraph 17 in the Complaint, which states “Respondent shipped the product from Maryland to FDA in Alabama.”  CRD Dkt. Entry Nos. 1 ¶ 17, 3 at 1.  In addition, with its Answer, Respondent submitted an invoice showing that the e-liquid product was shipped by Respondent from its establishment in Maryland to Birmingham, Alabama using USPS Priority Mail Express.  See CRD Dkt. Entry No. 3 at 4.

With regard to the chain of custody of Respondent’s e-liquid product, the evidence in the administrative record shows that Respondent mailed the e-liquid product to FDA in Birmingham, Alabama using USPS Priority Mail Express and the USPS Priority Mail package, containing Respondent’s e-liquid product, was subsequently mailed to FDA in “MD” using United Parcel Service Next Day Air.  See CTP Ex. 6; see also CTP Ex. 5 at 2.  Therefore, I find that after Respondent shipped its e-liquid product to Birmingham, Alabama, Respondent’s e-liquid product was then shipped to FDA’s Office of Compliance and Enforcement in Silver Spring, Maryland for processing.

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Given Respondent admits the allegations in the Complaint, does not dispute the evidence and testimony submitted by CTP with regard to liability, and did not wish to cross-examine CTP’s witnesses; I find that the uncontroverted testimony of Deputy Division Director James Bowling, Regulatory Counsel Eric Harvey, and Regulatory Counsel Hackett, as well as the corroborating evidence submitted by CTP, establishes that Respondent introduced or delivered for introduction into interstate commerce, an adulterated and misbranded tobacco product, thereby violating the Act.  21 U.S.C. § 331(a).  Specifically, the evidence shows that Respondent, which operated an online establishment on October 16, 2023, in Maryland at URL: https://vapedojo.com, introduced or delivered for introduction into interstate commerce its Charlie Noble Salts - Pistachio RY4, 30mL 25mg, (2.5%) e-liquid product when Respondent processed FDA’s undercover inspection purchase and shipped the e-liquid product from Maryland to Alabama on October 16, 2023.  21 U.S.C. § 331(a); see CTP Exs. 2-6, 10.  I find that the Charlie Noble Salts - Pistachio RY4, 30mL 25mg, (2.5%) e-liquid product was adulterated because it lacked the FDA premarketing authorization and was not exempt from this requirement.  21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A); see CTP Ex. 1.  I also find Respondent’s e-liquid product was 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).  See CTP Ex. 1.

In its Answer, Respondent asserts some affirmative defenses.  CRD Dkt. Entry No. 3 at 2.  Specifically, Respondent states:

We maintain a website to service international customers and customers within Maryland, according to the law.  Our employee looked at the billing address (located in Maryland) and did not notice the shipping address (in Alabama).  We have since retrained and implemented corrective action.  The agent violated our terms of service (attached).  Also attached is a copy of the order details that show confusion with the billing and shipping address.  The agent ordered Express shipping which caused us to worry about speed and not pay attention.

Id.

I find Respondent’s affirmative defenses unpersuasive.  CTP alleges that Respondent violated 21 U.S.C. § 331(a) by introducing an adulterated and misbranded tobacco product into interstate commerce.  CRD Dkt. Entry No. 1 ¶¶ 16, 23.  Respondent’s business policy and requirement that customers purchasing e-liquid products from its website agree to its Terms of Service does not absolve Respondent of the liability resulting from violating federal law.  As explained above, Respondent has not challenged the testimony of Regulatory Counsel Harvey and Regulatory Counsel Hackett, nor has

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Respondent presented evidence that would indicate any foul play on the part of CTP while conducting the controlled online purchase investigation.  Further, both Respondent’s Invoice and CTP Ex. 5 clearly show that the shipping address for the controlled online purchase investigation was in Alabama.  See CRD Dkt. Entry Nos. 3 at 4, 13f at 1.  Therefore, I conclude that Respondent violated the Act by selling its unauthorized e-liquid product and shipping it to Alabama from Maryland, that Respondent’s arguments do not present a meritorious defense to its liability, and that the imposition of a civil money penalty against Respondent is warranted.

VI. Civil Money Penalty

Having determined that Respondent is liable under the Act, I conclude that I have the authority to impose a civil money penalty under 21 U.S.C. 333(f)(9)(A).  In its Complaint, CTP seeks to impose a penalty amount of $19,192 against Respondent.  CRD Dkt. Entry No. 1 ¶ 1.  In its Informal Brief of Complainant, CTP continues to assert that a $19,192 civil money penalty is appropriate.  CRD Dkt. Entry No. 13 at 9-13 (Informal Brief of Complainant).  With regard to the CMP sought by CTP, in its Answer, Respondent states:

[The proposed CMP] is disproportionate.  We are a small company and this large fine will cripple our small business.  This fine is a month’s payroll for our company.  We also do not have the ability to pay.  We have implemented corrective action.

CRD Dkt. Entry No. 3 at 2.

In determining whether a $19,192 civil money penalty is appropriate, 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 violation or 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).  Respondent must prove any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  For the following reasons, I conclude that a $15,192 civil money penalty is appropriate based upon the record evidence, applicable law, and aggravating and mitigating circumstances in this case.

A. 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

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U.S.C. § 387f(d).  There is no dispute that Respondent was in the business of selling a highly regulated and dangerous product.  See generally 21 U.S.C. § 387 note (Findings and Purpose).

CTP argues Respondent’s violation is particularly serious because CTP previously issued two warning letters to Respondent on February 4, 2022, and August 1, 2022, citing Respondent for offering for sale new tobacco products that lacked the required marketing authorization.  CRD Dkt. Entry No. 13 at 9-11; see also CTP Exs. 7, 8.  The February 4, 2022, warning letter notified Respondent that a review of the website https://vapedojo.com revealed that Respondent manufactured and offered for sale or distribution to customers in the United States e-liquid products, including Vape Dojo Poseidon’s Punch and Charlie Noble Coconut Lime, without marketing authorization.  CTP Ex. 7 at 2.  The August 1, 2022, warning letter notified Respondent that a review of the website https://vapedojo.com revealed that Respondent manufactured and offered for sale or distribution to customers in the United States e-liquid products, including Vape Dojo – Eden’s Beach Flavored Synthetic Nicotine Solution; Charlie Noble - Spiced Mango Slush Flavored Synthetic Nicotine Solution; and Charlie Noble - Blue Razz Slush Flavored Synthetic Nicotine Solution, without marketing authorization.  CTP Ex. 8 at 2.  The warning letters explained the sale of unauthorized new tobacco products is prohibited and warned Respondent to take action to correct the violations.  CRD Dkt. Entry No. 13 at 9-11; see also CTP Exs. 7 at 1-3, 8 at 1-3.

In its Informal Brief of Complainant, CTP notes that the warning letters specifically advised Respondent that future violations could result in enforcement action, “including, but not limited to, civil money penalties, seizure, and/or injunction by FDA.”  CRD Dkt. Entry No. 13 at 10.  CTP also notes the warning letters stated that “all 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.”  Id.  CTP contends that based on Respondent’s “unwillingness or inability to correct the violations, a penalty is necessary in order for Respondent to grasp the seriousness and importance of the requirements governing the sale of tobacco products.”  Id. at 11.

In its Answer, Respondent asserts that it has “retrained and implemented corrective action.”  CRD Dkt. Entry No. 3 at 2.  In addition, although provided the opportunity to do so, Respondent did not submit any evidence in support of its claim of implementing corrective action.  Further, the continued marketing and selling of unauthorized new tobacco products during the time period between the issuance of CTP’s August 1, 2022, warning letter and October 16, 2023, the date of the allegation in the Complaint, demonstrates that Respondent did not comply with federal tobacco law, which is serious in nature and demands a proportional civil money penalty amount.  Given that Respondent continued to sell unauthorized new tobacco products on its website after receiving two warning letters, one on February 4, 2022, and a subsequent warning letter on August 1, 2022, I find Respondent’s argument unpersuasive.

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B. Ability to Pay and Effect on Ability to Continue to Do Business

In its Answer, Respondent contends that the CMP sought by CTP is too high, “will cripple [Respondent’s] small business, and that Respondent “[does] not have the ability to pay [the proposed CMP].”  CRD Dkt. Entry No. 3 at 2.  However, CTP states in its Informal Brief of Complainant that Respondent has not provided sufficient evidence to support its inability to pay the penalty amount and that Respondent can continue to “sell authorized tobacco products and other products at the establishment.”  CRD Dkt. Entry No. 13 at 11-12.

I agree with CTP that Respondent has failed to substantiate its claims that the penalty will have a negative impact on its business by not providing evidence regarding its financial hardship, despite being provided multiple opportunities to do so.  Accordingly, in the absence of evidence in the administrative record to substantiate the potential financial hardship the proposed CMP would cause Respondent, I have no basis to support a determination that Respondent’s ability to pay and effect on ability to continue to do business are mitigating factors.

C. History of Prior Violations

There is no indication in the record of any prior violations of section 331(a) of the Act resulting in a CMP.  However, CTP argues that Respondent “has a history of violating the Act’s requirements” based on the February 4, 2022, warning letter and the August 1, 2022, warning letter.  CRD Dkt. Entry No. 13 at 12.  CTP contends a CMP of $19,192 is appropriate in this case because Respondent’s history demonstrates an “unwillingness or inability” to comply with the law.  Id.

As discussed above, I have already found that the warning letters helps to establish the nature, circumstances, extent, and gravity of the violation.  However, I do not agree with CTP that the warning letters also establish a significant history of prior violations.  Respondent did not have the opportunity to request a hearing or otherwise dispute the violations alleged in either the February 4, 2022, warning letter or the August 1, 2022, warning letter.  In sum, this is Respondent’s first violation resulting in a CMP.

D. Degree of Culpability

Based on my finding that Respondent committed the violation alleged in the Complaint, I find Respondent fully culpable for offering for sale new tobacco products that were adulterated and misbranded, in violation of the Act.  The Act places a heavy burden on manufacturers and retailers who choose to sell prohibited tobacco products because of their highly dangerous and addictive nature.  See 21 U.S.C. § 387 note.  As explained above, although Respondent asserts that “[t]he agent violated our terms of service,” I find that Respondent is fully culpable in violating the Act.  CRD Dkt. Entry No. 3 at 2.

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E. 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.  See 21 U.S.C. § 333(f)(5)(B).  As noted above, CTP is requesting the maximum penalty amount permitted by the regulations.  See 45 C.F.R.§ 102.3 (2022); 87 Fed. Reg. 15,100, 15,103 (March 17, 2022).  In assessing the appropriateness of CTP’s request, I find that justice requires me to consider the full range of available penalties in light of the specific facts and circumstances of the case, separate and apart from the factors discussed above.  In doing so, 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.

Here, Respondent has respectfully participated in these proceedings and appears to be taking this matter very seriously.  In its Answer, in addition to admitting the violations, Respondent takes responsibility for its actions and states “[w]e ask for the [C]ourt’s mercy and apologize.”  CRD Dkt. Entry No. 3 at 1.  However, as a manufacturer and retailer engaged in the sale of tobacco products, Respondent should have fully complied with FDA’s December 7, 2021, Refuse to Accept letter.  See CRD Dkt. Entry No. 1 ¶ 20.  Further, CTP previously warned Respondent, on two occasions, about the potential consequences of continuing to offer unauthorized new tobacco products.  See CTP Exs.7, 8.

After weighing these factors and evaluating the entire administrative record, 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 imposing a substantial CMP of $15,192 is appropriate in this case under 21 U.S.C. §§ 333(f)(5)(B), (f)(5)(C), and (f)(9).

VII. Conclusion

For the reasons stated above, I impose a civil money penalty against Respondent, Walker Trading Company Inc. d/b/a Vape Dojo, in the amount of $15,192, for introducing or delivering for introduction into interstate commerce an adulterated and misbranded tobacco product.  Pursuant to 21 C.F.R. § 17.45(d), this Initial Decision becomes final and binding upon both parties after 30 days of the date of its issuance.