Kazmi Enterprises Inc. d/b/a Gulf, DAB TB10968 (2026)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a $20,678 civil money penalty against Respondent Kazmi Enterprises Inc. d/b/a Gulf.  CTP alleges that Respondent received in interstate commerce an electronic nicotine delivery system (ENDS) product that lacks the premarketing authorization required under the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 331(c) and offered such product for sale.  For the reasons discussed below, I find that Respondent violated the provisions of 21 U.S.C. § 331(c) and conclude that a reduced civil money penalty in the amount of $12,500 is appropriate.

I. Background and Procedural History

CTP initiated this matter by serving an administrative complaint on Respondent at 469 South Delsea Drive, Vineland, New Jersey 08360, by United Parcel Service, and by filing a copy of the complaint with the FDA’s Division of Dockets Management.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 1, 1b.  On May 4, 2024,

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Respondent, timely filed an answer to the complaint.  CRD Dkt. Entry No. 3.1  In its answer, Respondent admitted2 the allegations in the Complaint, offered some defenses, and requested more time to settle the case due to financial trouble.  Id.

On May 29, 2024, I issued an Acknowledgment and Status Report Order (ASRO).  CRD Dkt. Entry No. 4.  The ASRO instructed parties to file a joint status report regarding the status of the case within 60 days of the issuance of the order.  Id. at 2.  On July 29, 2024, CTP filed a status report.  CRD Dkt. Entry No. 5.  The status report indicated that the parties were unable to reach a settlement in this case and CTP remained willing to engage in settlement discussions.  Id.

On August 2, 2024, I issued a Pre-Hearing Order (PHO).  CRD Dkt. Entry No. 6.  The PHO outlined the procedures governing the case and established deadlines for completing discovery and for the parties to file pre-hearing exchanges.  Id.

On October 9, 2024, CTP filed a Motion to Compel Discovery, stating that it served document requests on Respondent on September 4, 2024, but Respondent failed to respond.  CRD Dkt. Entry No. 7.  CTP also separately filed a Motion to Extend Deadlines, requesting that I extend the deadlines for the parties’ pre-hearing exchanges by thirty (30) days to allow time to resolve the discovery issue.  CRD Dkt. Entry No. 8.

On October 17, 2024, I issued an Order granting CTP’s Motion to Extend Deadlines and extended the pre-hearing exchange deadlines by an additional 30 days.  CRD Dkt. Entry No. 9.  I also advised Respondent that it had until October 30, 2024, to file a response to CTP’s Motion to Compel Discovery and warned Respondent that if it failed to file a response, “I may grant CTP’s motion in its entirety.”  Id. at 1.

On November 4, 2024, after Respondent failed to respond to CTP’s Motion to Compel Discovery, I granted the motion and ordered Respondent to produce all documents responsive to CTP’s document requests by November 19, 2024.  CRD Dkt. Entry No. 10. I also extended the pre-hearing exchange deadlines again to account for the discovery delay.  Id. at 2.

On November 20, 2024, CTP filed a Motion to Impose Sanctions stating that Respondent had not complied with my Order granting its Motion to Compel.  CRD Dkt. Entry No. 11. CTP also filed a motion to stay all pre-hearing deadlines pending resolution of the Motion to Impose Sanctions.  CRD Dkt. Entry No. 12.

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On December 4, 2024, I granted CTP’s request to stay all pre-hearing deadlines pending resolution of its Motion to Impose Sanctions.  CRD Dkt. Entry No. 13.  I also advised Respondent that it had until December 18, 2024, to file a response to CTP’s Motion to Impose Sanctions.  Id.

On December 17, 2024, counsel for Respondent filed a Notice of Appearance.3  CRD Dkt. Entry No. 14.  On that same day, Respondent also filed a Response to CTP’s Motion to Impose Sanctions and Request for Extension of Time and explained that he had not had an opportunity to review the Motion to Impose Sanctions.  CRD Dkt. Entry No. 16. Counsel for Respondent also explained that he received copious documents to utilize in responding to Complainant’s discovery requests and respectfully requested a brief extension of time of approximately thirty (30) days within which to review pleadings and respond to Complainant’s Motion and discovery requests.  Id.  On December 20, 2024, counsel for Respondent, after speaking with a paralegal specialist at FDA/CTP, submitted a letter requesting an extension of time to file a response to CTP’s Motion to Impose Sanctions and a 45-day extension of the Stay.  CRD Dkt Entry No. 17.  On December 23, 2024, I issued an order granting Respondent’s Motion for Extension of Time.  CRD Dkt. Entry No. 18.

On January 21, 2025, Respondent filed a Response to CTP’s Motion to Impose Sanctions and seven documents including its pre-hearing brief, its Federal Tax Returns from 2021-2023, Account Ledgers for 2022 and 2023, and Profit and Loss Statements for 2022 and 2023.  CRD Dkt. Entry Nos. 19, 19a-19h, 20, 20a.  On January 31, 2025, I issued an Order that gave CTP until February 14, 2025, to file a status report on whether Respondent satisfied its discovery request or if CTP still sought to compel additional discovery.  CRD Dkt. Entry No. 21.  I warned that if CTP did not respond by February 14, 2025, its motion will be considered moot.  Id.

On February 10, 2025, CTP filed a status report indicating that it received documents from the Respondent sufficient to satisfy its Request for Production of Documents and withdraws its Motion to Impose Sanctions, filed on November 20, 2024, as moot.  CRD Dkt. Entry No. 22.  On February 20, 2025, I issued an order denying CTP’s Motion to Impose Sanctions as moot.  CRD Dkt. Entry No. 23.  I also lifted the previously issued stay of the pre-hearing deadlines and established new deadlines for the parties to file their pre-hearing exchanges.  Id. at 2.

On April 4, 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 [CTP’s] Office of Compliance and Enforcement, the office that supports all tobacco-related administrative cases” and Complainant “is still evaluating the

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impact the RIF may have on CTP’s immediate operations .  .  .  [and] is requesting a 30-calendar day extension of all pending deadlines in this matter.”  CRD Dkt. Entry No. 24. On April 10, 2025, I issued an order granting CTP’s motion and extended all deadlines as requested.  CRD Dkt. Entry No. 25.

On May 21, 2025, CTP submitted its pre-hearing brief (CTP Br.) and seven proposed exhibits (CTP Exs. 1-7), including the written direct testimony of two witnesses, James Bowling, Deputy Division Director, Office of Compliance and Enforcement, CTP, FDA (CTP Ex. 1) and Scott Costello, FDA-commissioned officer with the state of New Jersey (CTP Ex. 2).  Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 26, 26a-26h.4  Respondent did not file any proposed exhibits or testimony other than the above-mentioned discovery responses that were filed on January 21, 2025.  CRD Dkt. Entry Nos. 19, 19a-19h, 20, 20a.

On June 11, 2025, CTP filed an Unopposed Motion to Extend Deadlines and Notice of Pending Settlement.  CRD Dkt. Entry No. 28.  In its motion, CTP asked that I extend all deadlines by 150 days, “so that Respondent can pay the agreed-upon civil money penalty, and CTP can process the payment.”  Id. at 1.  CTP advised that the parties have agreed to a settlement in this case, and that the agreed upon civil money penalty will be paid by October 10, 2025.  Id.  The Motion also stated that Respondent “concurred and indicated that the notice and motion may be identified as unopposed.”  Id.  On June 13, 2025, I issued an order granting CTP’s motion to extend deadlines.  CRD Dkt. Entry No. 29. Also in the order, I instructed the parties to file a joint status report every 60 days to advise of the status of settlement payments until settlement is satisfied by Respondent. Id. at 2.

On August 12, 2025, CTP filed a status report indicating that Respondent would submit the agreed-upon penalty amount on October 10, 2025.  CRD Dkt. Entry No. 30.  Subsequently, on October 14, 2025, CTP filed another status report indicating that parties engaged in an informal settlement conference and that Respondent would pay the penalty on October 30, 2025.  CRD Dkt. Entry No. 31.  However, a notice of settlement agreement was not filed on or after October 30, 2025, indicating that the civil money penalty was paid by Respondent.

On January 6, 2026, I held a pre-hearing conference (PHC) with the parties to discuss their pre-hearing submissions and determine whether an oral hearing would be necessary. See CRD Dkt. Entry No. 35 (Order Following PHC).  During the PHC, I went over the parties’ evidentiary submissions.  Id. at 2.  I explained that CTP had filed seven proposed exhibits and asked Respondent if it had any objections to admitting the exhibits into the

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record.  Id.  Respondent stated he had no specific objections but had difficulty understanding some of the documents.  Id.

During the PHC, I also noted that Respondent filed seven documents in response to CTP’s Motion to Impose Sanctions including its pre-hearing brief, Federal Tax Returns from 2021-2023, Account Ledgers for 2022 and 2023, and Profit and Loss Statements for 2022 and 2023.  CRD Dkt. Entry Nos. 19a-19g, 20, 20a.  Because the documents were filed prior to the pre-hearing exchange deadline and were potentially relevant to Respondent’s defenses, I asked CTP whether it had any objections to admitting the documents into the record as evidence.  CRD Dkt. Entry No. 35 at 2.  CTP stated it had no objections.  Id.  Accordingly, I admitted Respondent’s January 21, 2025, documents into the administrative record and subsequently marked the submissions as Respondent’s Exhibits (R. Exs.) 1-7 in the order in which they were filed.  Id.; see also CRD Dkt. Entry Nos. 19a-19g, 20.

After discussing the parties’ evidence, I explained that I could either conduct a hearing or decide this case based on the written record.  Id. at 2; see also 21 C.F.R. §§ 17.21(4) and 17.33.  I further explained that the sole purpose of a hearing would be to allow for the cross-examination of any witnesses that provided sworn direct testimony.  Id. Respondent stated that it did not intend to cross-examine CTP’s proposed witnesses and both parties agreed to proceed without an administrative hearing.  Id.  Accordingly, I stated that a hearing would not be necessary and I will issue a decision in this case based on the administrative record.  Id.; see also § 17.21(4). I also stated that the parties may, if they wish, submit a final brief asserting or expanding on any arguments they want me to consider in making my final decision.  Id.  The deadline for final briefs was set for February 17, 2026.  Id.  On February 17, 2026, CTP filed its Notice of Waiver of Final Brief.  CRD Dkt. Entry No. 36.  On the same date, Respondent filed its final brief.  CRD Dkt. Entry No. 37.

Accordingly, the administrative record is now closed, and this case is ready for a decision.  21 C.F.R. § 17.41; 21 C.F.R. § 17.45; 21 C.F.R. § 17.19(b)(11).

II. Issues

1. Whether the allegations in the complaint are true, and, if so, whether Respondent’s actions identified in the complaint violated the law;
2. Whether any affirmative defenses are meritorious; and
3. If Respondent is liable for penalties or assessments, the appropriate amount of any such penalties or assessments, considering any mitigating or aggravating factors that I find in this case.  21 C.F.R. § 17.45(b) (1) - (3).

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III. Applicable Law

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 Act prohibits the receipt in interstate commerce of any tobacco product that is adulterated or misbranded and the delivery or proffered delivery of any tobacco product that is adulterated or misbranded for pay or otherwise.  21 U.S.C. § 331(c); see also 21 U.S.C. § 321(b). Premarket authorization from the FDA is required for all “new tobacco products.”  21 U.S.C. § 387j(a)(2)(A).

A “new tobacco product” is defined as any tobacco product that was not commercially marketed in the United States as of February 15, 2007, or any modification of a tobacco product where the modified product was commercially marketed in the United States after February 15, 2007. 21 U.S.C. § 387j(a)(1).  A “new tobacco product” is required to have premarket review with a Marketing Granted Order (MGO) unless it has a substantial equivalence or substantial equivalence exemption order (found-exempt order) in effect for such product.  21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A).  A new tobacco product is adulterated if it has not obtained the required premarket authorization. 21 U.S.C. § 387b(6)(A).  A new tobacco product for which a “notice or other information respecting it was not provided as required” under the substantial equivalence or substantial equivalence pathway is misbranded.  21 U.S.C. § 387c(a)(6).

IV. Findings of Fact and Conclusions of Law

1. CTP has demonstrated by a preponderance of the evidence that Respondent received adulterated and misbranded ENDS products in interstate commerce and delivered or proffered those products for sale on December 4, 2023, in violation of the Act.

To prevail, CTP has the burden of proving the Respondent’s liability and the appropriateness of any civil money penalty, whereas the Respondent has the burden of proving any affirmative defenses and mitigating factors.  21 CFR § 17.33(b)-(c).  As the presiding officer, I do not have the authority to find Federal Statues or regulations invalid.  21 C.F.R. § 17.19(c).

CTP’s case against Respondent rests on the written direct testimony of James Bowling, Deputy Division Director, Office of Compliance and Enforcement, CTP, FDA, and Scott Costello, FDA-commissioned officer with the state of New Jersey.  CTP Exs. 1, 2. Inspector Costello testified that during the inspection on December 4, 2023, at approximately 4:34 PM, at Respondent’s establishment an Elfbar Blueberry Energize ENDS product was available for sale.  CTP. Ex. 2 ¶¶ 4, 6; see also CTP Exs. 3-6 (Inspector Costello’s narrative report, inspection details, photographs and notice of inspection dated December 4, 2023). 

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Deputy Director Bowling testified that the ENDS product observed for sale during the December 4, 2023, inspection was manufactured in China, which is outside of the state of New Jersey where Respondent operates.  CTP Ex. 1 ¶ 7.  Deputy Director Bowling further testified that he:

.  .  .  determined that the Elfbar Blueberry Energize ENDS products were not commercially marketed in the United States as of February 15, 2007 .  .  .  that on December 4, 2023, the day on which FDA observed the Elfbar Blueberry Energize ENDS products being offered for sale at Gulf, there were no records of this product having an authorized FDA marketing granted order in effect under 21 U.S.C. § 387jI(1)(A)(i) .  .  .  there was no record of the Elfbar Blueberry Energize ENDS product having a substantial equivalence order in effect under 21 U.S.C. § 387j(a)(2)(A)(i) .  .  .  the Elfbar Blueberry Energize ENDS product did not have found-exempt orders in effect under 21 U.S.C. § 387e(j)(3)(A) (the SE pathway under 21 U.S.C. § 387j(a)(2)(A)(ii)), and that the manufacturer of Elfbar Blueberry Energize ENDS products had not submitted abbreviated reports requesting a found-exempt order for such products under 21 U.S.C. § 387e(j)(1).

CTP Ex. 1 ¶¶ 12-14.

In its Answer, Respondent admitted the allegations in the Complaint and also confirmed at the pre-hearing conference that it was admitting to the allegations alleged in the Complaint.  CRD Dkt. Entry Nos. 3, 35 at 1-2.  Respondent has not disputed any of the statements made by CTP’s witnesses, Deputy Director Bowling and Inspector Costello.  Based on the uncontested testimony of Deputy Director Bowling and Inspector Costello, as well as the supporting evidence submitted by CTP, the ENDS product offered for sale at Respondent’s establishment on December 4, 2023, previously traveled in interstate commerce before the Respondent’s receipt and delivery or proffered delivery of such tobacco products for pay or otherwise.  See 21 U.S.C. § 331(c); see also United States v. Sullivan, 332 U.S. 689, 696 (1948), 92 L. Ed. 297, 303 (holding that the Act applies “to articles from the moment of their introduction into interstate commerce all the way to the moment of their delivery to the ultimate consumer”).  The ENDS product was adulterated because it lacked the required FDA marketing authorization and was not exempt from this requirement. 21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(3)(A).  Under 21 U.S.C. § 387c(a)(6), the products were also misbranded because there was no substantially equivalent determination as required by 21 U.S.C. § 387e(j).  I find that Respondent violated the prohibition against receiving and delivered or proffered delivery thereof for pay or otherwise, in violation of 21 U.S.C. § 331(c), a tobacco product that was adulterated and misbranded.  21 U.S.C. § 331(c).  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty.

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2. Respondent has demonstrated by a preponderance of the evidence mitigating circumstances to support a reduced civil money penalty.

Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a civil money penalty not to exceed the amounts listed in the 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, 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); 21 C.F.R. § 17.45(b)(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 $12,500 civil money penalty is appropriate based upon the evidence, applicable law, and aggravating and mitigating circumstances in this case.

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

The Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) was enacted for the purpose of authorizing regulation of tobacco products for the “protection of the public health.”  21 U.S.C. § 387f(d).  CTP contends that Respondent’s violations are serious in nature as they contravene the FDA’s efforts to protect the public health from the multitude of adverse health effects associated with tobacco use.  CRD Dkt. Entry No. 26 at 8.  CTP specifically refers to the September 22, 2023, Warning Letter it issued to Respondent, citing Respondent for offering for sale a new tobacco product to customers in the United States without a marketing authorization order on August 9, 2023.  CRD Dkt. Entry No. 26 at 8; CTP Ex. 7 at 1-2.  CTP states that the Warning Letter notified Respondent that future violations may lead to enforcement action, including, but not limited to, civil money penalties, seizure, and/or injunction by FDA.  CRD Dkt. Entry No. 26 at 9; CTP Ex. 7 at 3.  Finally, CTP states the Warning Letter referred the Respondent to an FDA website, which included information to help tobacco retailers understand and comply with FDA tobacco laws and regulations.  CRD Dkt. Entry No. 26 at 9; CTP Ex. 7 at 3-4.

In its Pre-Hearing Brief, Respondent asserts “that it was unaware of the relevant products’ questionable status at the time of their sale.”  CRD Dkt. Entry No. 20 at 4. Respondent also claims to have “ceased sale of the products in question.”  Id. Respondent further explains that it “understand[s] the seriousness of the violation [and] [t]he business has taken steps to ensure this never happens again.”  Id. at 6.

However, Respondent continued to sell other “new tobacco products” without the required marketing authorization order even after receiving a warning that it was in

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violation of federal law.  The inability of Respondent to comply with federal tobacco laws after being warned of its violations is serious in nature and demands a proportional civil money penalty.

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

In Respondent’s Answer, it asserts that [du]e to my financial trouble I am possibly filing for bankruptcy .   .  . my company will not be operating .  .  .  .”  CRD Dkt. Entry No. 3  In its informal brief, Respondent further asserts that “[t]his was a first time violation and shall never recur [sic]” and “[t]he business operates on a fine profit margin.  This will seriously hurt.”  CRD Dkt. Entry No. 20 at 6.  Also, Respondent’s final brief explains that it “is in an ongoing Chapter 7 Bankruptcy in the U.S. Bankruptcy Court for the District of New Jersey, Camden Vicinage, Case # 23-1114-ABA.”  CRD Dkt. Entry No. 37 at 1. Included in the record are Respondent’s Federal Tax Returns from 2021-2023, Account Ledgers for 2022 and 2023, and Profit and Loss Statements for 2022 and 2023. CRD Dkt. Entry Nos. 19a-19g.

Based on my review of the administrative record in this case, the civil money penalty that CTP seeks will most likely affect Respondent’s ability to pay the civil money penalty.  In Respondent’s most recent tax return, its 2023 tax return, its total income is reflected as $369,042, however its ordinary business income is -$77,086.  CRD Dkt. Entry No. 19c. It is my position that a $20,678 deduction from Respondent’s available total and ordinary business income paired with its ongoing bankruptcy proceedings is a significant deduction and is therefore a mitigating factor.  Accordingly, I find that Respondent’s assertions, regarding the difficulty to pay the sought after civil  money penalty due to its financial condition, to be sincere and credible, and the evidence is persuasive on this issue.

3. History of Prior Violations

There is no indication in the record of any prior violations of section 331(c) of the Act resulting in a civil money penalty.  CTP notes, however, that Respondent previously received a Warning Letter notifying it that it violated the law.  CTP further notes that notwithstanding this warning, Respondent continued to receive in interstate commerce e-liquid products that lacked the required premarket authorization, which shows an unwillingness or inability to comply with the law.  CRD Dkt. Entry No. 26 at 10-11. CTP, therefore, proffers Respondent’s repeated violations to support a penalty of $20,678.  Id. at 11.

I agree with CTP that the Warning Letter demonstrates an alleged prior violation and that Respondent was warned against providing e-liquid products at its establishment without a premarketing authorization order.  CTP Ex. 7.  Specifically, Respondent was warned about it offering for sale its Elfbar Lemon Mint and Elfbar Sakura Grape ENDS

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products.  Id.  However, I find that although Respondent was on notice of the need for a premarket authorization for its products and the possibility of future compliance inspections, this is its first violation that CTP has brought against Respondent proposing a civil money penalty.

4. Degree of Culpability

Based on my finding that Respondent committed the violation alleged in the Complaint, I hold the 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 retailers who choose to sell tobacco products because of their highly dangerous and addictive nature.  See 21 U.S.C. § 387 note (Findings and Purpose).  Although I find the Respondent took remedial action upon receipt of the warning letter, these actions do not absolve Respondent of its responsibility as a retailer of tobacco products.

5. Other Matters as Justice May Require

The Act gives me 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).  Based on the undisputed statements above, I find the proposed penalty amount of $20,678 will place a significant financial strain on the Respondent’s ability to continue its business.  However, having found the Respondent violated the law, to ensure that justice is served, the civil money penalty should ensure future compliance with the Act and tobacco regulations.

For these reasons, I impose a reduced civil money penalty against Respondent, Kazmi Enterprises Inc. d/b/a Gulf in the amount of $12,500 for receiving in interstate commerce an ENDS product that lacks the premarketing authorization required under the Act and offering such product for sale.  Pursuant to 21 C.F.R. §§ 17.11(b), 17.45(d), this decision becomes final and binding upon both parties after 30 days of the date of its issuance.