Juice Roll Upz, Inc. d/b/a Juice Roll Upz, DAB TB10389 (2026)

INITIAL DECISION

The Center for Tobacco Products (CTP or Complainant) seeks a $20,678 civil money penalty against Respondent, Juice Roll Upz, Inc. d/b/a Juice Roll Upz.  Specifically, CTP alleges that Respondent Juice Roll Upz 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 $15,678 is appropriate.

I. Background and Procedural History

CTP began this matter by serving a Complaint on Respondent at 9674 Hermosa Avenue, Rancho Cucamonga, California 91730 by United Parcel 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 (UPS Proof of Delivery).

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On August 21, 2024, Respondent registered for the Departmental Appeals Board (DAB) E-filing system and timely filed its Answer.  CRD Dkt. Entry No. 3 (Answer).  In its Answer, Respondent admits all of the allegations in the Complaint, requests a “settlement conference and/or hearing,” and disputes the appropriateness of the civil money penalty sought by CTP.  Id. at 1-2 (emphasis omitted).

On August 22, 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 an October 21, 2024, deadline for the parties to file a joint status report.  See CRD Dkt.  Entry No. 4.

On October 21, 2024, CTP filed a Status Report stating that “[t]he parties have been unable to reach a settlement,” that “CTP remains willing to engage in settlement discussions but, absent an executed settlement agreement, [CTP] intends to proceed to a hearing.”  CRD Dkt. Entry No. 5 at 1.

On October 24, 2024, I issued a Pre-Hearing Order establishing a schedule for discovery and the parties’ pre-hearing exchanges.  CRD Dkt. Entry No. 6 (Pre-Hearing Order).

On November 26, 2024, CTP filed a second Joint Status Report stating that “[t]he parties intend[ed] to engage in further settlement discussions” and that “CTP [would] notify the Departmental Appeals Board if the parties agree[d] to a settlement and Respondent fulfill[ed] the terms of the settlement agreement.”  CRD Dkt. Entry No. 7 at 1.

On January 15, 2025, CTP filed a Motion to Compel Discovery and two exhibits, asserting that Respondent had not responded to CTP’s Request for Production of Documents (RFP).  CRD Dkt. Entry Nos. 8, 8a, 8b.  On that same date, CTP also filed a Motion to Extend Deadlines, requesting an extension of the pre-hearing exchange deadlines.  CRD Dkt. Entry No. 9.  On January 17, 2025, I issued an Order advising Respondent that it had until January 31, 2025, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 10 at 1.  My Order also granted CTP’s Motion to Extend Deadlines.  Id. at 2.

On January 30, 2025, Respondent filed a response to CTP’s Motion to Compel Discovery and responses to CTP’s RFP, stating that “[Respondent] is in an active bankruptcy” and provided a purported bankruptcy number: “8:23 – BK – 12077 – TA” (Respondent’s January 30, 2025, Response and responses to CTP’s RFP).  CRD Dkt. Entry No. 12 at 1. Respondent did not provide any documents responsive to CTP’s RFP, responding “N/A” to all document requests, except for document request No. 1, in which Respondent admits it is the owner of the business that is subject of the Complaint, and document request No. 8, in which Respondent reiterates that it is purportedly in an active bankruptcy.  Id. at 1-2.

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On February 12, 2025, I issued an Order giving Respondent until February 28, 2025, to provide proof of its bankruptcy filing and the current status of those proceedings, and giving CTP until March 17, 2025, to file a response.  CRD Dkt. Entry No. 13.  In my February 12, 2025, Order, I stayed the parties’ pre-hearing exchange deadlines until resolution of the issue.  Id.

On February 28, 2025, Respondent filed a copy of a Voluntary Petition for Non-Individuals Filing for Bankruptcy for Juice Roll Upz, Inc. that identified the intended jurisdiction for filing as the United States Bankruptcy Court for the Central District of California, and indicated the matter was to proceed under Chapter 11 of the United States Bankruptcy Code (Respondent’s Bankruptcy Petition Forms).  See CRD Dkt. Entry No. 14.

On March 14, 2025, CTP filed a response to my February 12, 2025, Order and Respondent’s Bankruptcy Petition Forms.  CRD Dkt. Entry No. 15.

On March 24, 2025, I issued an Order Granting Complainant’s Motion to Compel Discovery and instructed Respondent to produce documents responsive to document requests Nos. 5 through 8 in CTP’s RFP by April 7, 2025.  CRD Dkt. Entry No. 16 at 2.  In addition, in my March 24, 2025, Order, I found that:

[Respondent’s Bankruptcy Petition Forms] indicate Respondent intended to file Chapter 11 bankruptcy in the United States Bankruptcy Court for the Central District of California, and show Respondent signed the documents on October 10, 2023.  Id. [However,] [Respondent’s Bankruptcy Petition Forms] do not indicate the case number of the bankruptcy proceeding nor the current status of those proceedings. See id.

Id.

My March 24, 2025, Order also lifted the stay previously imposed and reinstated the parties’ pre-hearing exchange deadlines.  Id. at 3.

On April 21, 2025, CTP filed a Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions), asserting that Respondent failed to produce documents responsive to document requests Nos. 5 through 8 in CTP’s RFP by April 7, 2025, as ordered in my March 24, 2025, Order Granting Complainant’s Motion to Compel Discovery.  CRD Dkt. Entry No. 17 at 1-2.  In its Motion to Impose Sanctions, CTP also requested that, pursuant to 21 C.F.R.§ 17.35(c)(3), I strike Respondent’s Answer as a sanction for its non-compliance and issue an initial decision and default judgment imposing the full proposed civil money penalty of $20,678 against Respondent.  Id.  On April 21, 2025, CTP also filed a Motion to Stay Deadlines pending resolution of CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 18.

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On April 25, 2025, I issued an Order Denying Complainant’s Motion to Impose Sanctions and [Motion to] Stay Deadlines (Order Denying Motion to Impose Sanctions).  CRD Dkt. Entry No. 19.  In the Order Denying Motion to Impose Sanctions, I found that, given Respondent’s February 28, 2025, filing in response to CTP’s Motion to Compel Discovery, “imposing sanctions on the basis CTP [had] requested would be improper.” Id. at 2.  My April 25, 2025, Order Denying Motion to Impose Sanctions also denied CTP’s Motion to Stay Deadlines and affirmed the parties’ reinstated pre-hearing exchange deadlines.  Id. at 3.

On May 6, 2025, CTP filed a Motion to Extend Deadlines, stating that “[o]n April 1, 2025, FDA experienced a significant reduction in force (RIF), including in FDA’s Center for Tobacco Product’s Office of Compliance and Enforcement, the office that supports all tobacco-related administrative cases” and that CTP “[was] still evaluating the impact the RIF may have on CTP’s immediate operations .  .  .  [and requests] a 30-calendar day extension of all pending deadlines in this matter.”  CRD Dkt. Entry No. 20 at 1.  On May 7, 2025, pursuant to 21 C.F.R. § 17.19(b)(17), I issued an Order granting CTP’s Motion to Extend Deadlines and extended the parties’ pre-hearing exchange deadlines by thirty (30) days.  CRD Dkt. Entry No. 21 at 1.

On June 6, 2025, CTP timely filed its pre-hearing exchange, consisting of its Informal Brief of Complainant, Complainant’s Proposed List of Witnesses and Exhibits, and seventeen proposed exhibits.  CRD Dkt. Entry Nos. 23, 23a-23r.  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 (DEM) in the Office of Compliance and Enforcement, CTP, FDA; Dawn E. Barkans, FDA Consumer Safety Officer (“CSO”) in the state of California; and Aliza Chalapong, FDA CSO in the state of California.  CRD Dkt. Entry Nos. 23b, 23c, 23d (CTP Exhibits (Exs.) 1, 2, 3).  Respondent did not file a pre-hearing exchange.

On August 20, 2025, I held a pre-hearing conference (PHC) with both parties participating.  See CRD Dkt. Entry No. 28 (Order Following PHC).  During the PHC, I explained the issues before me, 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 seventeen proposed exhibits into the record, and Respondent raised no objections.  Id. at 2.  Therefore, I admitted CTP’s seventeen proposed exhibits into the record.  Id.  Respondent’s January 30, 2025, responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms were not submitted as exhibits with Respondent’s pre-hearing exchange, in accordance with the provisions of my Pre-Hearing Order.  See CRD Dkt. Entry Nos. 12, 14; see also CRD Dkt. Entry No. 6 ¶¶ 4, 6.b.  However, given that Respondent is not represented by counsel, and CTP did not object, during the PHC, I advised the parties that I would allow Respondent to resubmit its responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms as proposed exhibits by September 4, 2025.  See CRD Dkt. Entry No. 28

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at 2.  I also advised the parties that I would allow CTP to file any objections or a motion to exclude Respondent’s proposed documentary evidence by September 11, 2025.  Id.  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. 28 at 2. Since Respondent did not submit any testimony or identify any 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 August 25, 2025, I issued an Order memorializing the issues discussed and the documentary evidence deadlines established at the PHC.  Id.  My August 25, 2025, Order also established a deadline of October 14, 2025, for the parties to file final written briefs and a deadline of October 29, 2025, for the parties to file responsive briefs.  Id.

Respondent did not resubmit its responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms as exhibits by September 4, 2025, nor did either party 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 1-17

During the PHC, CTP’s seventeen proposed exhibits were admitted into the record without objection as CTP Exs. 1-17.  See CRD Dkt. Entry No. 28 at 2.  Specifically, CTP submitted the following seventeen exhibits:

• CTP Ex. 1: Declaration of James Bowling;
• CTP Ex. 2: Declaration of Dawn E. Barkans;
• CTP Ex. 3: Declaration of Aliza Chalapong;
• CTP Ex. 4: February 2024 Establishment Inspection Report;
• CTP Ex. 5: February 2024 Photographs of E-Liquid Manufacturing Components;
• CTP Ex. 6: February 2024 Photographs of E-liquid Flavors Catalog;
• CTP Ex. 7: February 2024 Juice Roll Upz Invoices and Physical Labels for E-Liquids;
• CTP Ex. 8: February 2024 Juice Roll Upz E-Liquid Customer Order Sheet;
• CTP Ex. 9: Juice Roll Upz TRLM NG Establishment Registration Report;
• CTP Ex. 10: February 2024 Form FDA 463a;
• CTP Ex. 11: February 2024 FDA Form 482;
• CTP Ex. 12: September 2021 Marketing Denial Order;
• CTP Ex. 13: November 2022 Refuse to Accept Letter;

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• CTP Ex. 14: October 2023 Marketing Denial Order Appeal;
• CTP Ex. 15: October 2021 Warning Letter;
• CTP Ex. 16: October 2021 Warning Letter Response; and
• CTP Ex. 17: October 2021 Warning Letter Inadequate Response Letter.

CRD Dkt. Entry Nos. 23b - 23r.

B. Respondent’s January 30, 2025, Responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms

As discussed above, Respondent’s January 30, 2025, responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms were not properly submitted as exhibits with Respondent’s pre-hearing exchange, in accordance with the provisions of my Pre-Hearing Order.  See CRD Dkt. Entry Nos. 12, 14; see also CRD Dkt. Entry No. 6 ¶¶ 4, 6.b.  However, because Respondent is not represented by counsel and CTP did not object during the PHC, I provided Respondent with an opportunity to resubmit its responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms as proposed exhibits by September 4, 2025.  See CRD Dkt. Entry No. 28 at 2.  I also advised the parties that I would allow CTP to file any objections or a motion to exclude Respondent’s proposed evidentiary evidence by September 11, 2025.  Id.

Although Respondent did not properly resubmit its proposed documentary evidence by the September 4, 2025, deadline, because Respondent is not represented by counsel and Respondent’s January 30, 2025, responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms are in the administrative record, I will determine the admissibility of these documents.  CRD Dkt. Entry Nos. 12, 14; 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.

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21 C.F.R. § 17.39.

I find that Respondent’s January 30, 2025, responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms are admissible because they are relevant and material to the issue of whether the civil money penalty proposed by CTP is appropriate.  21 C.F.R. § 17.39(a), (c).  I further find that the probative value of Respondent’s documents is not substantially outweighed by any danger of unfair prejudice to CTP.  21 C.F.R. § 17.39(d).

Although Respondent did not properly and timely submit its proposed documentary evidence in accordance with my Pre-Hearing Order, CTP has not raised any objections and CTP has not filed a motion to exclude Respondent’s January 30, 2025, responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms.  Therefore, I ADMIT Respondent’s January 30, 2025, responses to CTP’s RFP and Respondent’s Bankruptcy Petition Forms into the administrative record as R. Ex. 1, Respondent’s January 30, 2025, responses to CTP’s RFP, and R. Ex. 2, Respondent’s Bankruptcy Petition Forms.  21 C.F.R. § 17.19(b)(11).

III. Issues

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

A. Whether Respondent introduced or delivered for introduction into interstate commerce an adulterated and misbranded tobacco product, specifically Respondent’s e-liquid products, in violation of 21 U.S.C. § 331(a);

B. Whether any affirmative defenses are meritorious and, if so,

C. Whether the $20,678 civil money penalty 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 bears the burden of proving Respondent’s liability and appropriateness of the penalty by a preponderance of the evidence.  21 C.F.R. § 17.33(b).  Respondent bears the burden of proving any affirmative defenses and any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).

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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 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

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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 e-liquid products that required FDA premarket authorization, in violation of 21 U.S.C. § 331(a), on February 12-13, 2024, and February 15-16, 2024.  CRD Dkt. Entry No. 1 ¶¶ 17, 23.

CTP’s case against Respondent relies on the written direct testimony of James Bowling, Deputy Division Director for DEM in the Office of Compliance and Enforcement, CTP, FDA; Dawn E. Barkans, FDA CSO in the state of California; and Aliza Chalapong, FDA CSO in the state of California.  CTP Exs. 1-3.

Inspector Barkans testified that during an inspection of Respondent’s establishment on February 12-13, 2024, and February 15-16, 2024, she observed that Respondent “had tobacco products and e-liquid components available for use in their manufacturing activities in the manufacturing area of the establishment[,]” and that she observed “evidence of e-liquid product manufacturing at the establishment, including nicotine, PG, VG, flavoring, bottles, labels, and equipment to manufacture e-liquid products.”  CTP Ex. 2 ¶¶ 4-5; see also CTP Exs. 4-8, 11 (Inspectors Barkans and Chalapong’s inspection report, photographs, invoices and physical labels for e-liquids, customer order sheet, and notices of inspection dated February 12, 2024).

Inspector Barkans further testified that “during the inspection, Joshua S. Tongco, the owner of Respondent’s establishment, admitted to manufacturing e-liquid products in its facilities, including Juice Roll Upz Strawberry e-liquid products .  .  . [,]” and that “Joshua S. Tongco confirmed that Respondent manufactured its e-liquid products, including its Juice Roll Upz Strawberry e-liquid products, for distribution in interstate commerce.”  CTP Ex. 2 ¶ 6.  Inspector Barkans also testified that “Joshua S. Tongco also stated that it was his decision on behalf of Respondent to continue manufacturing and distributing new e-liquid products after his PMTA had been denied[,]” and that Respondent’s “establishment manufactures e-liquid products which are sold in interstate commerce, including to Midwest Distribution IL, located in Illinois”  Id. ¶¶ 8-9; see also CTP Ex. 10 (affidavit signed by Joshua S. Tongco).  Inspector Chalapong testified that she co-conducted the inspection of Respondent’s establishment on February 12-13, 2024, and February 15-16, 2024.  CTP Ex. 3 ¶ 4; see also CTP Ex. 4 (Inspectors Barkans and Chalapong’s inspection report).

Deputy Division Director Bowling testified that Respondent’s e-liquid products are manufactured, sold, and/or distributed at Respondent’s establishment in California.  CTP Ex. 1 ¶ 7.  He testified that among the e-liquid products observed for sale during the

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February 12-13, 2024, and February 15-16, 2024, inspections at Respondent’s establishment, is Respondent’s Juice Roll Upz Strawberry e-liquid product.  Id. ¶ 8. Deputy Division Director Bowling further testified that, based on product labeling and Respondent’s documentation, Respondent’s Juice Roll Upz Strawberry e-liquid products are manufactured, produced, and/or fulfilled in Respondent’s establishment in Rancho Cucamonga, California before being introduced into interstate commerce by Respondent to states outside of California, such as Illinois.  Id. ¶ 9.

Deputy Division Director Bowling further testified that “no evidence was revealed that Respondent’s e-liquid products were commercially marketed in the United States as of February 15, 2007[,]” and that at the time of inspection on February 12-13, 2024, and February 15-16, 2024, there were no records of any of Respondent’s e-liquid products having an a FDA marketing granted order in effect under 21 U.S.C. § 387j(c)(1)(A)(i). Id. ¶¶ 10-11.  He further testified that there was no record of Respondent’s e-liquid products having a substantial equivalence order in effect under 21 U.S.C. § 387j(a)(2)(A)(i), Respondent had not submitted an abbreviated report requesting a Found-Exempt Order under 21 U.S.C. §387e(j)(1), nor did Respondent have a Found-Exempt Order in effect under 21 U.S.C. § 387e(j)(3)(A).  Id. ¶ 12.

In its Answer, Respondent admits all of the allegations in the Complaint.  CRD Dkt. Entry No. 3 at 1.  Because 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, Inspector Dawn E. Barkans, and Inspector Aliza Chalapong, together with the corroborating evidence submitted by CTP, establishes that Respondent introduced or delivered for introduction into interstate commerce, its e-liquid products, which were adulterated and misbranded tobacco products, as alleged in the Complaint, thereby violating the Act.  21 U.S.C.§ 331(a).  Specifically, I find that the evidence shows that on February 12-13, 2024, and February 15-16, 2024, Inspectors Barkans and Chalapong observed components used to make Respondent’s e-liquid products, as well as evidence that Respondent’s e-liquid products were recently distributed in interstate commerce.  See CTP Exs. 2-8, 10, 11.  I find that Respondent’s e-liquid products were adulterated because they lacked the FDA premarketing authorization and were not exempt from this requirement.  21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A); see CTP Exs. 1-2, 10.  I also find Respondent’s e-liquid products were 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.

Accordingly, I conclude that Respondent violated the Act by selling its unauthorized e-liquid products and introducing those unauthorized products into interstate commerce, and that the imposition of a civil money penalty against Respondent is warranted.

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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 $20,678 against Respondent.  CRD Dkt. Entry No. 1 ¶ 1.  In its Informal Brief of Complainant, CTP continues to assert that a $20,678 civil money penalty is appropriate.  CRD Dkt. Entry No. 23 at 8-12 (Informal Brief of Complainant).  With regard to the civil money penalty sought by CTP, in its Answer, Respondent states:

Our business has taken a tremendous downturn due to regulations and lack of control of illegal international business entering [the] United States[,] which affects our business tax dollars.

CRD Dkt. Entry No. 3 at 2 (emphasis omitted).

In determining whether a $20,678 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 $15,678 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 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 a warning letter to Respondent on October 22, 2021, citing Respondent for manufacturing and offered for sale e-liquid products that lacked the required marketing authorization.  CRD Dkt. Entry No. 23 at 9-11; see also CTP Ex. 15.  The October 22, 2021, warning letter notified Respondent that a review of Respondent’s website https://rollupz.com revealed that Respondent manufactured and offered for sale or distribution to customers in the United States e-liquid products, including Green Apple ICE and Red Razz SALT, without marketing authorization.  CTP Ex. 15 at 2.  The

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warning letter explained the sale of unauthorized new tobacco products is prohibited and warned Respondent to take action to correct the violations.  CRD Dkt. Entry No. 23 at 10; see also CTP Ex. 15 at 1-3.  CTP asserts that on November 4, 2021, Respondent responded to the October 22, 2021, warning letter but failed to adequately address the violations listed in the warning letter.  CRD Dkt. Entry No. 23 at 10; see CTP Ex. 16.  On December 21, 2023, CTP issued an Inadequate Response Letter to Respondent informing it of its deficiencies in its response to the October 22, 2021, warning letter.  See CTP Ex. 17.

In its Informal Brief of Complainant, CTP notes that the warning letter 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. 23 at 11.  CTP also notes the warning letter 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. at 10.  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 relating to the sale of tobacco products.”  Id. at 11.

The continued marketing and selling of unauthorized new tobacco products during the time period between the issuance of CTP’s October 22, 2021, warning letter and February 12-13, 2024, and February 15-16, 2024, the dates 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.

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

In its Answer, Respondent contends that the civil money penalty sought by CTP is too high and that Respondent’s “business has taken a tremendous downturn .  .  .  . ”  CRD Dkt. Entry No. 3 at 2.  In addition, during these proceedings, Respondent has purported that it is in an active bankruptcy proceeding, and also submitted its Bankruptcy Petition Forms, a Voluntary Petition for Non-Individuals Filing for Bankruptcy for Juice Roll Upz, Inc. that identified the intended jurisdiction for filing as the United States Bankruptcy Court for the Central District of California.  See CRD Dkt. Entry Nos. 12, 14. However, as discussed above, Respondent’s Bankruptcy Petition Forms do not indicate the case number of the bankruptcy proceeding, nor has Respondent provided evidence of the current status of those purported bankruptcy proceedings.  See id. generally.  In fact, Respondent has not provided any evidence that would substantiate its claim that it actually filed the Bankruptcy Petition Forms.

Although the Respondent’s Bankruptcy Petition Forms, standing alone, do not establish an inability to pay the proposed civil money penalty or to continue operating, I acknowledge and give them some weight when considered with Respondent’s assertions

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in its Answer and its response to CTP’s document request, that its business is having financial difficulty.  CRD Dkt. Entry Nos. 3, 12.  However, because the administrative record lacks persuasive or specific evidence that the proposed civil money penalty would cause financial hardship, there is no factual basis to conclude that Respondent is unable to pay the civil money penalty or that payment of the civil money penalty would adversely affect its ability to continue to do business to a degree warranting a reduction of the proposed civil money penalty by more than five thousand dollars.

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 civil money penalty.  However, CTP argues that Respondent “has a history of violating the Act’s requirements” based on the October 22, 2021, warning letter.  CRD Dkt. Entry No. 23 at 12.  CTP contends a civil money penalty of $20,678 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 letter helps to establish the nature, circumstances, extent, and gravity of the violation.  However, I do not agree with CTP that the warning letter also establishes a significant history of prior violations. Respondent did not have the opportunity to request a hearing or otherwise dispute the violations alleged in the October 22, 2021, warning letter.  In sum, this is Respondent’s first violation resulting in a civil money penalty.

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.  Therefore, I find that Respondent is fully culpable in violating the Act.

E. 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 Food, Drug and Cosmetic Act and its implementing regulations with the overarching goal of protecting the health of the American people.  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 $15,678 is appropriate.

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VII. Conclusion

For the reasons stated above, I impose a civil money penalty against Respondent, Juice Roll Upz, Inc. d/b/a Juice Roll Upz, in the amount of $15,678, 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.