OnTop Distribution Inc. d/b/a Vapemarkdown, DAB TB10978 (2026)

ORDER GRANTING COMPLAINANT’S MOTION TO IMPOSE SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Food and Drug Administration (FDA), Center for Tobacco Products’ (CTP or Complainant) Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions) is pending before me.  CTP’s Motion to Impose Sanctions requests that I strike OnTop Distribution Inc. d/b/a Vapemarkdown’s (Respondent) Answer as a sanction for failing to comply with CTP’s discovery request and issue a default judgment against Respondent.  During the course of this administrative proceeding, Respondent failed to comply with multiple judicial orders and procedures governing this proceeding and failed to defend its actions, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).  Therefore, pursuant to 21 C.F.R. § 17.35(c)(3), I grant CTP’s Motion to Impose Sanctions, strike Respondent’s Answer, and issue an Initial Decision and Default Judgment imposing a civil money penalty of $21,348.

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I. Procedural History

On January 16, 2025, CTP served an Administrative Complaint for Civil Money Penalty (Complaint) and supporting documents on Respondent, at its address located at 2051 Southwest 31st Avenue Hallandale Beach, Florida, 33009, by United Parcel Service (UPS).  Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 1, 1a-1b.  In the Complaint, CTP alleges that Respondent introduced into interstate commerce electronic nicotine delivery system (ENDS) products that lack the premarketing authorization required under the Federal Food, Drug, and Cosmetic Act (Act).  Complaint at 1.

On January 23, 2025, Respondent filed a timely motion seeking an extension of time to file an Answer.  CRD Dkt. Entry No. 3.  On January 29, 2025, I issued an order granting Respondent’s motion.  CRD Dkt. Entry No. 4.  In the order, I gave Respondent until March 20, 2025, to file an answer.  Id.

On March 19, 2025, Respondent filed a timely Answer to CTP’s Complaint denying the allegations and arguing that the penalty is unreasonably excessive and disproportionate to the alleged violation.  CRD Dkt. Entry No. 6 at 1.  On March 24, 2025, I issued an Acknowledgement and Pre‑Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery.  CRD Dkt. Entry No. 7.  In the APHO, I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  APHO ¶ 4; see also 21 C.F.R. § 17.23(a).  The APHO warned:

I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.  21 C.F.R. § 17.35.

APHO ¶ 21.

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 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. 8.  On April 11, 2025, I issued an order granting CTP’s motion and extended all deadlines by 30 days.  CRD Dkt. Entry No. 9.

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On May 21, 2025, in compliance with paragraph 3 of my APHO ¶ 3, CTP timely filed a joint status report.  CRD Dkt. Entry No. 10.  The status report indicated that the parties intended to engage in further settlement discussions and that CTP will notify the Departmental Appeals Board (DAB) if parties agree to a settlement and Respondent fulfils the terms of the settlement agreement.  Id.

On June 23, 2025, CTP filed an Unopposed Motion to Extend Deadlines, explaining that there was a delay in Respondent receiving CTP’s discovery request and asking that I extend the Pre-Hearing Exchange deadlines by 30 days, “so that CTP can receive Respondent’s response to the RFP [Request for Production of Documents] prior to filing its Pre-Hearing Exchange.”  CRD Dkt. Entry No. 11 at 2.  On July 2, 2025, I granted the unopposed motion, giving Respondent until July 11, 2025, to respond to CTP’s discovery request and extending the pre-hearing exchange deadlines by 30 days.

On July 16, 2025, CTP timely filed a Motion to Compel Discovery, asserting that Respondent did not respond to its discovery request as required by my APHO and regulations.  CRD Dkt. Entry No. 13.  On the same date, CTP also filed a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the August 11, 2025[,] due date for CTP’s pre-hearing exchange . . . .”  CRD Dkt. Entry No. 14 at 2.

On July 18, 2025, I issued an Order advising Respondent that it had until August 4, 2025, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 15.  I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  Id. at 2; see also APHO ¶¶ 20-21; 21 C.F.R. § 17.32(c).  In my Order, I also extended the pre-hearing exchange deadlines by 30 days.  Id.

On August 4, 2025, Respondent filed a timely response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 16.  In its response, Respondent’s counsel did not challenge CTP’s Motion to Compel Discovery and requested a 60-day extension of time to respond to CTP’s discovery request because “[t]he parties [were] engaged in productive settlement discussions and [were] optimistic about reaching a resolution by that time.”  CRD Dkt. Entry No. 16 at 1.

On August 14, 2025, I issued an order granting CTP’s Motion to Compel Discovery because Respondent did not contest the motion and ordered Respondent to produce all documents responsive to CTP’s discovery request by October 3, 2025.  CRD Dkt. Entry No. 17 at 2.  I also extended the pre-hearing exchange deadlines by 60 days.  Id.  I warned Respondent that:

. . . failure to comply with this Order may result in sanctions, which may include striking its answer and issuing an Initial Decision and Default

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Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.  21 C.F.R. § 17.35.

Id. at 2.

On October 3, 2025, Respondent filed another unopposed request for an extension of time to produce documents in response to CTP’s Request for Production of Documents.  CRD Dkt. Entry No. 18.  In its motion, Respondent requested an additional 60 days to finalize settlement and, if necessary, respond to CTP’s Request for Production of Documents.  Id.  Respondent repeated that the parties were engaged in productive settlement discussions and were optimistic about reaching a resolution by that time.  Id.

On October 20, 2025, I issued an order granting Respondent’s extension request,  establishing a December 2, 2025, deadline for Respondent to produce documents, and extending the pre-hearing exchange deadlines by 60 days.  CRD Dkt. Entry No. 19 at 2.  Also in the order, I indicated that no further extensions will be granted.  Id.

On December 2, 2025, counsel for Respondent filed an out of order, second response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 20 (Respondent’s submission, titled “Request for Hearing Via Answer” was filed under the Description “Response to Motion to Compel”).  Although Respondent failed to challenge the motion when it was given an opportunity to do so in its first, timely response to CTP’s Motion to Compel Discovery filed on August 4, 2025, Respondent attempted to relitigate the August 14, 2025, ruling that granted CTP’s Motion to Compel Discovery nearly four months after the fact.  Id.; see also CRD Dkt. Entry No. 16.  Indeed, Respondent requested and received two extensions to produce discovery documents in response to CTP’s Motion to Compel.  CRD Dkt. Entry Nos. 16-19.  Yet, Respondent stated in its December 2, 2025, submission that it respectfully opposed CTP’s Motion to Compel and the parties were engaged in good-faith settlement negotiations.  CRD Dkt. Entry No. 20. Respondent also indicated that, in light of the ongoing settlement discussions and the strong likelihood of an imminent resolution, the motion to compel was unnecessary as the parties anticipated an imminent resolution on this matter within the coming week.  Id.

On December 22, 2025, I issued a Status Report Order overruling Respondent’s objection to CTP’s Motion to Compel Discovery and directing CTP to file a status report.  CRD Dkt. Entry No. 21 at 2-3.  I explained that Respondent previously had an opportunity to oppose CTP’s Motion, but did not oppose the Motion by the prescribed deadline and instead requested an extension of the production deadline until October 3, 2025.  Id. at 2. Therefore, on August 14, 2025, I granted CTP’s Motion to Compel Discovery and Respondent’s extension request, requiring Respondent to produce documents by October 3, 2025.  Id.  Subsequently, I granted Respondent’s request for another extension and extended the production deadline to December 2, 2025, in which I indicated that no further extensions would be granted.  Id.  Respondent’s December 2, 2025, filing

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suggested that Respondent may not have responded to CTP’s Request for Production of Documents.  Id. at 3.  Therefore, CTP was given until January 5, 2026, to file a status report on whether Respondent satisfied its discovery request or if CTP still seeks to compel additional discovery.  Id.

On January 5, 2026, CTP filed a status report stating that Respondent did not provide sufficient documents to satisfy CTP’s request for production of documents, and “CTP still seeks to compel documents responsive to its request for production of documents.”  CRD Dkt. Entry No. 22 at 1.  On January 6, 2026, CTP filed a Motion to Impose Sanctions and a Motion to Stay Deadlines.  CRD Dkt. Entry Nos. 23, 24.  CTP stated that Respondent failed to produce documents in compliance with the August 14, 2025, Order Granting Complainant’s Motion to Compel Discovery.  CRD Dkt. Entry No. 23 at 1.  CTP argued that sanctions against Respondent are an appropriate remedy because “it is unlikely that more time or additional orders . . . will change the status quo.”  Id at 3.  Specifically, CTP asked that I strike Respondent’s Answer as a reasonable sanction for Respondent’s non-compliance and issue an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a $21,348 civil money penalty.  Id.

By Order dated January 16, 2026, I informed Respondent of its February 2, 2026, deadline to file a response to CTP’s Motion to Impose Sanctions and warned Respondent that if it failed to file a response, “I may grant CTP’s Motion to Impose Sanctions and impose the requested civil money penalty amount . . . .”1  CRD Dkt. Entry No. 25 at 1-2.  Finding that staying the pre-hearing exchange deadlines pending resolution of CTP’s Motion to Impose Sanctions would not prejudice either party, I also granted CTP’s Motion to Stay Deadlines pending resolution of CTP’s Motion to Impose Sanctions.  Id. at 2.  To date, Respondent has not responded to CTP’s Motion to Impose Sanctions or my January 16, 2026, Order.

II. Striking Respondent’s Answer

I may sanction a party for:

(1) Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;

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(2) Failing to prosecute or defend an action; or

(3) (3) Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.

21 C.F.R. § 17.35(a).  Further, when a party “fails to comply with a discovery order,” I may draw an inference in favor of the opposing party, may prohibit the non-complying party from introducing or relying on evidence related to the discovery request, and may “[s]trike any part of the pleadings or other submissions of the party failing to comply with [the discovery] request.”  21 C.F.R. § 17.35(c).  Any sanction “shall reasonably relate to the severity and nature of the failure or misconduct.”  21 C.F.R. § 17.35(b).

I conclude that sanctions against Respondent are warranted.  During the course of this administrative proceeding, Respondent failed to comply with multiple orders and procedures governing this proceeding, failed to defend the action, and engaged in misconduct that interfered with the speedy, orderly, or fair conduct of the hearing.

Specifically, Respondent failed to comply with multiple judicial orders and procedures governing this proceeding.  21 C.F.R. § 17.35(a)(1).  Particularly:

• Respondent failed to comply with 21 C.F.R. § 17.23(a), paragraph 4 of my APHO, and the July 2, 2025, Order Granting Complainant’s Unopposed Motion to Extend Deadlines when Respondent failed to provide documents in response to CTP’s RFP by July 11, 2025;
• Respondent failed to comply with my August 14, 2025, Order Granting Respondent’s Extension Request and CTP’s Motion to Compel Discovery and my October 20, 2025, Order granting Respondent’s second extension request when it failed to produce documents responsive to CTP’s RFP by December 2, 2025; and
• Respondent failed to comply with the procedures at 21 C.F.R. § 17.32, when it filed an out of order, second response attempting to relitigate CTP’s Motion to Compel Discovery on December 2, 2025.

I also find that Respondent failed to defend this action.  21 C.F.R. § 17.35(a)(2).  Specifically:

• Respondent failed to produce documents in response to CTP’s discovery request, even after requesting and receiving two, 60-day extensions; and
• Respondent failed to respond to CTP’s Motion to Impose Sanctions, as permitted by the regulations and directed my January 16, 2026, Order.

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Respondent’s failure to fulfill its discovery obligations and respond to CTP’s Motion to Impose Sanctions suggests that Respondent has abandoned its defense of this case.

Further, I find that Respondent’s failure to comply with multiple judicial orders, the regulations governing discovery and motions, and other procedures in this case constitutes misconduct that has interfered with the speedy, orderly, or fair conduct of the hearing.  See 21 C.F.R. § 17.35(a)(3).  To provide ample opportunity for Respondent to respond to CTP’s motions and for the parties to prepare their respective pre-hearing exchanges, the July 18, 2025, August 14, 2025, October 20, 2025, and January 16, 2026, Orders, each extended or stayed the pre-hearing exchange deadlines.  Additionally, Respondent requested (and received) two 60-day extensions to respond to CTP’s discovery request, which delayed the progression of the case and prejudiced CTP by impeding its ability to file a pre-hearing exchange.  Although Respondent’s extension requests were granted at the time under the guise of ongoing “settlement discussions” and “imminent resolution” of the case, it now appears that Respondent’s extension requests and second response opposing CTP’s Motion to Compel Discovery were simply delay tactics.  See CRD Dkt. Entry No. 16 at 1; CRD Dkt. Entry No. 18 at 1; CRD Dkt. Entry No. 20 at 1.

In the absence of any explanation from Respondent, I find that Respondent failed to comply with multiple judicial orders and directives governing this proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly, or fair conduct of this proceeding.  I find no basis to excuse Respondent’s delay tactics and repeated failure to comply with the various orders and regulations in this administrative proceeding.  Therefore, I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the nature and severity of the misconduct or failure to comply.  21 C.F.R. § 17.35(b).  Here, Respondent failed to comply with multiple orders, including:  the APHO; July 2, 2025, Order; August 14, 2025, Order; and October 20, 2025, Order, and the discovery regulations governing this proceeding when it failed to respond to CTP’s RFP within 30 days of receipt and again failed to respond by the December 2, 2025, extended deadline set by my October 20, 2025, Order.  APHO ¶ 4; CRD Dkt. Entry No. 12 at 1; CRD Dkt. Entry No. 17 at 2; CRD Dkt. Entry No. 19 at 2; 21 C.F.R. § 17.23(a).  Moreover, Respondent failed to defend this action by failing to fulfill its discovery obligations and failing to respond to CTP’s Motion to Impose Sanctions, despite several Orders reminding Respondent of the opportunity to do so.  Notably, Respondent failed to comply with two Orders, despite my explicit warnings that its failure could result in sanctions.  See CRD Dkt. Entry Nos. 17 at 2, 25 at 1-2.  I specified in my August 14, 2025, and January 16, 2026, Orders that those sanctions may include “striking its answer and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.”  CRD Dkt. Entry No. 17 at 2; see also CRD Dkt. Entry

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No. 25 at 1-2.  Respondent’s repeated misconduct protracted the discovery process, delayed the pre-hearing exchange schedule, hindered CTP’s ability to prosecute its case, and, therefore, interfered with the speedy, orderly, or fair conduct of this proceeding.

Upon consideration of the totality of facts and circumstances, I find that Respondent’s actions are sufficiently egregious to warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3).  Although striking an answer is a harsh sanction, the Departmental Appeals Board has repeatedly held in similar circumstances involving a respondent’s repeated failure to comply with discovery and procedural orders that “the ALJ determination to impose sanctions was not an abuse of discretion, and the sanction imposed was reasonably related to the nature and severity of Respondent’s noncompliance.”  Carolina Cigar of Delray, LLC d/b/a Carolina Cigar, DAB No. 3134, at 11 (2024) (citing Joshua Ranjit, Inc. d/b/a 7-Eleven 10326, DAB No. 2758, at 1, 8-11 (2017); KKNJ, Inc. d/b/a Tobacco Hut 12, DAB No. 2678, at 8-11 (2016); and Retail LLC d/b/a Super Buy Rite, DAB No. 2660, at 10-14 (2015), among others).  Accordingly, I grant CTP’s Motion to Impose Sanctions and strike Respondent’s Answer from the administrative record.  21 C.F.R. §§ 17.35(a)(1)-(3), (b), (c)(3).

III. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered.  Therefore, I am required to issue an initial decision by default, provided that the Complaint is sufficient to justify a penalty.  21 C.F.R. § 17.11(a).  Pursuant to 21 C.F.R. § 17.11(a), I am required to “assume the facts alleged in the [C]omplaint to be true” and, if those facts establish liability under the Act, issue a default judgment and impose a civil money penalty.

Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

• Respondent owns Vapemarkdown and sells and/or distributes tobacco products through its online establishment at the URL: https://www.vapemarkdown.com/.  Complaint ¶ 13.
• In a Warning Letter dated February 27, 2024, CTP informed Respondent that the new tobacco products that Respondent sells and/or distributes are adulterated and misbranded because they lack the required FDA marketing authorization.  Complaint ¶ 14.
• On May 30, 2024, an FDA-commissioned inspector conducted an inspection of Respondent’s online establishment.  During this inspection, FDA purchased

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Respondent’s Funky Republic Ti7000 Pomelo Pearl Grape ENDS products.  Complaint ¶ 15.

• In response to FDA’s order and purchase, Respondent shipped the Funky Republic Ti7000 Pomelo Pearl Grape ENDS products from Florida to FDA in Maryland.  Complaint ¶ 16.
• Respondent’s ENDS products are “new tobacco products” because they were not commercially marketed in the United States as of February 15, 2007.  Complaint ¶ 17.
• Respondent’s ENDS products are adulterated because they do not have a Marketing Granted Order (MGO) in effect.  Complaint ¶ 18.
• Respondent’s ENDS products are misbranded because neither a substantially equivalent report nor an abbreviated report has been submitted for Respondent’s ENDS products.  Complaint ¶ 19.
• Respondent introduced or delivered for introduction into interstate commerce or caused the introduction or delivery for introduction into interstate commerce of, the adulterated and misbranded ENDS product.  Complaint ¶ 20.

These facts establish Respondent’s liability under 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); see also 21 U.S.C. § 321(b) (defining “interstate commerce”).

A tobacco product is adulterated if it has not undergone the required premarket tobacco application (PMTA) review process and received a Marketing Granted Order (MGO).  21 U.S.C. § 387b(6)(A).  Under 21 U.S.C. § 387j(a)(2)(A), premarket authorization is required for a “new tobacco product.”  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 exempt from the PMTA review process if:

• FDA reviews a premarket “substantial equivalence report” and determines that the new tobacco product is substantially equivalent to a

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legally marketed predicate tobacco product (Substantial Equivalence Order); or

• FDA reviews a premarket “abbreviated report” and determines that the new tobacco product has minor modifications for which a substantial equivalence report is not necessary and an exemption is otherwise appropriate (Found-Exempt Order).

21 U.S.C. § 387j(a)(2)(A); see also 21 U.S.C. § 387e(j)(1), (3)(A).  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 review processes.  21 U.S.C. § 387c(a)(6).

Taking the above alleged facts as true, Respondent violated the prohibition against introducing or delivering for introduction into interstate commerce a new tobacco product that was adulterated and misbranded.  21 U.S.C. § 331(a).  On May 30, 2024, Respondent sold (and subsequently shipped from Florida to Maryland) a new tobacco ENDS product that was adulterated because it lacked the required FDA premarketing authorization and was not exempt from this requirement.  21 U.S.C. §§ 387j(a)(2)(A), 387e(j)(1), (3)(A).  Under 21 U.S.C. § 387c(a)(6), Respondent’s new tobacco ENDS product is also misbranded because it has not received a substantially equivalent determination, as required by 21 U.S.C. § 387e(j).  Therefore, Respondent’s actions constitute violations of the Act that merit a civil money penalty.

As explained above, if I find Respondent liable, I must impose the “maximum amount of penalties provided for by law for the violations alleged” or the civil money penalty “amount asked for in the complaint, whichever is smaller.”  21 C.F.R. § 17.11(a)(1)-(2).  The maximum amount of penalties for violations of the Act’s tobacco product requirements are set by 21 U.S.C. § 333(f)(9)(A), which are adjusted annually for inflation.  Effective August 8, 2024,2  the maximum civil money penalty was $21,348 for each violation and not to exceed $1,423,220 for all violations adjudicated in a single proceeding.  89 Fed. Reg. 64,815, 64,817 (setting the annual civil money penalty inflation adjustment for violations of 21 U.S.C. § 333(f)(9)(A)).  CTP has requested a civil money penalty of $21,348, which is permissible under the Act and regulations.  21 U.S.C. § 333(f)(9)(A); 21 C.F.R. § 17.2; see also 45 C.F.R. § 102.3.  Therefore, I impose the requested civil money penalty of $21,348.

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IV. Conclusion

Pursuant to 21 C.F.R. § 17.35(a)(1)-(3), (b) and (c)(3), I grant Complainant’s Motion to Impose Sanctions, strike Respondent’s Answer, and enter a default judgment and initial decision imposing a civil money penalty of $21,348 against Respondent for introducing or delivering into interstate commerce ENDS products that lack the premarketing authorization required under the Act.  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.