Jim's Smoke Shop at 7 LLC d/b/a Jim's Smoke Shop on 7th, DAB TB11087 (2026)

INITIAL DECISION

The Center for Tobacco Products (CTP or Complainant) seeks a $20,678 civil money penalty against Respondent, Jim’s Smoke Shop at 7 LLC d/b/a Jim’s Smoke Shop on 7th.  Specifically, CTP alleges that Respondent Jim’s Smoke Shop on 7th received in interstate commerce an electronic nicotine delivery system (ENDS) product that lacks the required premarketing authorization, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. §§ 301 et seq.  For the reasons discussed below, I find Respondent violated 21 U.S.C. §§ 331(c) and 387j of the Act and conclude that the $20,678 civil money penalty sought by CTP is appropriate.

I. Background and Procedural History

CTP began this matter by serving an Administrative Complaint (Complaint) on Respondent at 1025 North 7th Street, Phoenix, Arizona 85006 by United Parcel Service (UPS), and by filing a copy of the Complaint with the Food and Drug Administration’s

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(FDA) Division of Dockets Management.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 1 (Complaint), 1b (UPS Proof of Delivery).

On May 15, 2024, Respondent registered for the Departmental Appeals Board’s electronic filing system (DAB E-File) and timely filed its Answer.  CRD Dkt. Entry No. 3 (Answer).  In its Answer, Respondent denies “any and all wrongdoing pertaining to the EB Create Snoow Ice ENDS product observed for sale at [Respondent’s] establishment[,]” states that Respondent is “without sufficient information or knowledge with regard[] to Complainant’s statements on [the] marketing, adulteration and misbranding” of the EB Create Snoow Ice ENDS product, as alleged in the Complaint, and “denies fault in receiving products from wholesalers claiming to sell legal and lawful products to consumers.”  Id. at 2; see also CRD Dkt. Entry No. 1 ¶¶ 14-19.  Respondent also denies the civil money penalty of $20,678 proposed by CTP.  See CRD Dkt. Entry Nos. 1 ¶ 24, 3 ¶ 14.

On May 24, 2024, I issued an Acknowledgement and Pre-Hearing Order (APHO) establishing the discovery and pre-hearing exchange deadlines for this case.  CRD Dkt. Entry No. 4 (APHO) ¶¶ 4-6.

On June 27, 2024, CTP filed a 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. 5 at 1.

On August 2, 2024, CTP filed a Motion to Compel Discovery and two exhibits, CTP’s Request for Production of Documents (RFP) and the UPS delivery notification for CTP’s RFP.  CRD Dkt. Entry Nos. 6, 6a-6b.  In its Motion to Compel Discovery, CTP asserted that Respondent had not responded to CTP’s RFP.  See CRD Dkt. Entry No. 6 at 1-2.  On August 2, 2024, CTP also filed an Unopposed Motion to Extend Deadlines, requesting an extension of the parties’ pre-hearing exchange deadlines.  CRD Dkt. Entry No. 7.  On August 8, 2024, I issued an Order advising Respondent that it had until August 22, 2024, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 8 at 1-2.  In my Order, I also determined that, pursuant to 21 C.F.R. § 17.19(b)(17), holding the pre-hearing exchange deadlines in abeyance pending resolution of CTP’s Motion to Compel discovery would not prejudice either party.  Id. at 2.

On August 9, 2024, counsel for Respondent entered an appearance in this case.  CRD Dkt. Entry No. 9.  On August 22, 2024, Respondent, timely filed a response to CTP’s Motion to Compel Discovery and a Declaration from Hassan Jubran, the son of Jubran Fayez Jubran, the owner of Respondent’s establishment.  CRD Dkt. Entry Nos. 10, 10a.  In its response, Respondent argued that “CTP’s motion to compel responses to requests for production should be denied because Respondent was not served with the requests for production.”  CRD Dkt. Entry No. 10 at 1.  Respondent filed the Declaration of Hassan

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Jubran in support of its contention that CTP’s RFP was not served on Respondent.  See CRD Dkt. Entry Nos. 10 at 1-2, 10a.  On August 26, 2024, CTP filed its Reply in Support of Motion to Compel Discovery.  See CRD Dkt. Entry No. 11.

On September 13, 2024, after considering the parties’ pleadings and the evidence in the record, I issued an Order Granting Complainant’s Motion to Compel Discovery.  CRD Dkt. Entry No. 12.  In granting CTP’s motion, I concluded that CTP properly served its RFP on Respondent.  Id. at 4.  The record shows no issues with CTP’s service of the RFP, and since Respondent registered for DAB E-File on May 15, 2024 when filing its Answer, Respondent was at least electronically served CTP’s RFP by August 2, 2024.  See id. at 3-4; see also CRD Dkt. Entry No. 4 ¶ 2.  Accordingly, my September 13, 2024, Order instructed Respondent to produce any documents responsive to CTP’s RFP by September 23, 2024, or submit a written response to CTP stating that it does not have any documents to produce in response to CTP’s RFP by that same date.  See CRD Dkt. Entry No. 12 at 4.  My Order also reestablished the parties’ pre-hearing exchange deadlines.  Id. at 5.

On September 24, 2024, CTP filed a Motion to Impose Sanctions and one exhibit, claiming that Respondent’s response to the September 23, 2024, Order was insufficient.  CRD Dkt. Entry 13 at 3-4, 13a.  CTP argued this made it impossible for it to properly challenge any mitigation claims from Respondent and asked me to sanction Respondent by striking its Answer and issuing an initial decision and default judgment for a civil penalty of $20,678.  Id.  Alternatively, CTP requested Respondent be barred from submitting evidence about its ability to pay or mitigation regarding the penalty.  Id.  That same day, CTP also submitted a Motion to Stay Deadlines, asking for pre-hearing deadlines to be paused until the sanctions motion was resolved.  See CRD Dkt. Entry No. 14.

On September 26, 2024, Respondent filed a preliminary reply to CTP’s sanctions motion, stating it intended to update Respondent’s responses to CTP’s document requests.  Respondent asked me not to rule on the sanctions motion until the 15-day deadline for response expired, as Respondent might submit a fuller reply if issues remained.  See CRD Dkt. Entry No. 15 at 3.

On September 30, 2024, I issued an Order establishing an October 15, 2024, deadline for Respondent to file a complete response to CTP’s Motion to Impose Sanctions and staying the parties’ pre-hearing exchange deadlines.  CRD Dkt. Entry No. 16 at 2.  On October 15, 2024, Respondent timely filed its supplemental response to CTP’s Motion to Impose Sanctions, asserting that CTP’s motion should be denied given Respondent “served amended responses to the RFPs[,]” and arguing that “CTP has no authority to seek a civil money penalty in this forum.”  CRD Dkt. Entry No. 17 at 1-3.

On October 18, 2024, Respondent filed its Motion for Summary Decision Dismissing Complaint Or, Alternatively, Limiting Any Fine to $20 (Respondent’s Motion for Summary

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Decision), and a copy of the U.S. Supreme Court’s June 27, 2024, decision in Jarkesy v. SEC, 144 S. Ct. 2117 (2024), as an exhibit.  CRD Dkt. Entry Nos. 18, 18a.  In its Motion for Summary Decision, Respondent asserted that: this proceeding violates the Seventh Amendment of the Constitution and should not proceed; that, if not dismissed and Respondent is found liable for the alleged violation, any fine imposed may not exceed $20; and that allowing this case to proceed would conflict with, and be prohibited by, my oath of office.1  See CRD Dkt. Entry No. 18 at 1-2.

On October 22, 2024, CTP filed a Notice Withdrawing Motion to Impose Sanctions.  CRD Dkt. Entry No. 19.  On October 25, 2024, CTP filed its Memorandum In Opposition to Respondent’s Motion for Summary Decision Dismissing Complaint Or, Alternatively, Limiting Any Fine to $20 (CTP’s Opposition to Respondent’s Motion for Summary Decision), and two exhibits.  CRD Dkt. Entry Nos. 20, 20a-20b.  In CTP’s Opposition to Respondent’s Motion for Summary Decision, it argued that Respondent’s constitutional challenge is beyond my authority to resolve in an administrative civil money penalty proceeding.  See CRD Dkt. Entry No. 20 at 4-5.

On November 26, 2024, I denied Respondent’s Motion for Summary Decision, concluding that, pursuant to 21 C.F.R. § 17.19(c), I do not have the authority to find Federal statutes or regulations invalid, and that I am bound to make any determination in this tobacco case based on the applicable authority found in the Act and the Family Smoking Prevention and Tobacco Control Act (TCA).  See CRD Dkt. Entry No. 22 at 4-7; see also 21 C.F.R. § 17.19(c).  My November 26, 2024, Order also acknowledged CTP’s withdrawal of its Motion to Impose Sanctions and reestablished the parties’ pre-hearing exchange deadlines.  CRD Dkt. Entry No. 22 at 7.

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On January 2, 2025, CTP timely filed its pre-hearing exchange, consisting of the Informal Brief of Complainant (CTP’s pre-hearing brief), Complainant’s List of Proposed Witnesses and Exhibits, and seven proposed exhibits.  CRD Dkt. Entry Nos. 23, 23a-23h.  CTP’s exchange included the written direct testimony of two proposed witnesses: (1) James Bowling, Deputy Division Director for the Division of Enforcement and Manufacturing (DEM) in the Office of Compliance and Enforcement, CTP, FDA (CTP Ex. 1); and (2) Diane H. Burkett, FDA-commissioned officer with the state of Arizona (CTP Ex. 2).  CRD Dkt. Entry Nos. 23b-23c.

On January 23, 2025, Respondent timely filed its pre-hearing exchange, consisting of Respondent’s Prehearing Brief (Resp.’s pre-hearing brief), and a letter from Respondent’s counsel stating that “Respondent does not propose any witnesses or exhibits for the hearing . . .” in this case.  CRD Dkt. Entry Nos. 24, 24a.

On February 25, 2025, I held a pre-hearing conference (PHC) with both parties in attendance.  See CRD Dkt. Entry No. 28.  During the PHC, I explained the purpose and function of a hearing and discussed the parties’ pre-hearing exchange submissions.  Id.  Counsel for Respondent raised an objection to the written direct testimony contained in the Declaration of James Bowling, proposed CTP Exhibit (Ex.) 1.  See id. at 2.  At the PHC, I informed the parties that prior to ruling on Respondent’s objection, I would provide the parties with an opportunity to fully brief the issue.  Id.  Respondent’s counsel raised no objection to the admission of CTP’s remaining proffered Exhibits 2-7.  Id.  Therefore, I admitted CTP Exhibits 2-7 into the record.  Id.  Respondent’s counsel confirmed that he did not intend to cross-examine CTP’s proposed witness Inspector Diane H. Burkett.  Id.  At the PHC, I also explained that my ruling on Respondent’s objections to the direct testimony of Deputy Division Director James Bowling would provide guidance regarding the scheduling of a hearing, in the event that one is necessary.  Id.

February 27, 2025, I issued an Order memorializing the issues discussed during the PHC and establishing deadlines for the parties to file any written evidentiary objections and responses.  CRD Dkt. Entry No. 28.

On March 28, 2025, Respondent timely filed its Objection to Certain Proffered Testimony of James Bowling, asserting that “Mr. James Bowling’s proffered statement that the product that serves as the basis of this [C]omplaint was not commercially marketed in the United States as of February 15, 2007 lacks any factual foundation and should be struck from his declaration and disallowed . . . [,]” and that “if this factual allegation is not excluded outright, Respondent must be afforded the opportunity to probe the foundation for this allegation and Mr. Bowling’s personal knowledge of such fact(s) allegedly providing the foundation for the statement.”  CRD Dkt. Entry No. 29 (Respondent’s Objection to James Bowling’s Testimony).

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On April 8, 2025, CTP filed a Motion for Summary Decision and its Memorandum in Opposition to Respondent’s Objection to Certain Proffered Testimony of James Bowling and In Support of Complainant’s Motion for Summary Decision.  CRD Dkt. Entry Nos. 30 (CTP’s Motion for Summary Decision), 30a (CTP’s Memorandum).  In CTP’s Memorandum, regarding Respondent’s objection to the testimony of Deputy Division Director James Bowling, CTP argued that Respondent “fail[ed] to raise a colorable challenge to the sworn written testimony of James Bowling[,]” and that “CTP has met its burden of coming forward with reliable, credible evidence that provides the foundation on which Mr. Bowling’s testimony rests[.]”  CRD Dkt Entry No. 30a at 1, 5.  In support of its Motion for Summary Decision, CTP argued that, “[b]ased on the undisputed facts . . . [,]” summary decision against Respondent finding it liable for the allegation in the Complaint is warranted, and that “[h]aving no evidence to offer in mitigation, Respondent should be held liable for the full [$20,678] civil money penalty sought.”  CRD Dkt. Entry Nos. 30 at 1, 30a at 10.

On April 11, 2025, I issued an Order giving Respondent until May 8, 2025, to file a response to CTP’s Motion for Summary Decision.  CRD Dkt. Entry No. 31.  On May 8, 2025, Respondent timely filed its response to CTP’s Motion for Summary Decision, arguing that “[s]ummary decision cannot be granted for CTP when its evidence fails to prove [a] statutory prerequisite to its own jurisdiction[,]” and “fundamental constitutional defects” preclude summary decision in favor or CTP.  CRD Dkt. Entry No. 32.  On May 12, 2025, CTP filed a reply in support of its Motion for Summary Decision, asserting that “Respondent does not dispute that it lacks even a scintilla of evidence that its EB Create Snoow Ice ENDS product was commercially marketed in the United States as of February 15, 2007[,]” and asserting that Respondent’s constitutional challenges are both “beyond the [Administrative Law Judge]’s authority to decide.”  CRD Dkt. Entry No. 33.

On July 29, 2025, I issued an Order overruling Respondent’s objection to Deputy Division Director James Bowling’s written direct Testimony.  CRD Dkt. Entry No. 34.  In my Order, I found that the written direct testimony of Deputy Division Director James Bowling, including his statement regarding the commercial marketing of Respondent’s ENDS product, is both relevant and material to the issue of Respondent’s liability in this case, and that CTP established a solid foundation of personal knowledge on which Deputy Division Director James Bowling’s testimony rests.  See id. at 4-6.  I also found that the probative value of Deputy Division Director James Bowling’s testimony is not substantially outweighed by the danger of unfair prejudice or confusion of the issues.  Id. at 6.  Therefore, I admitted CTP Ex. 1, the Declaration of James Bowling, into the administrative record as evidence, overruling Respondent’s objection.  Id.  In my July 29, 2025, Order, I also found that, given Respondent’s request to cross-examine CTP’s witness Deputy Division Director James Bowling, and in drawing factual inferences in the light most favorable to the non-moving party, it is not unreasonable to infer that a genuine issue as to a material fact may arise from Respondent’s cross-examination of

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Deputy Division Director James Bowling at a hearing.  Id. at 13.  Therefore, I concluded that CTP’s Motion for Summary Decision should be denied.  Id.

On October 6, 2025, I issued a Notice of Hearing scheduling the hearing in this case for Thursday, October 30, 2025, at 11:00 AM Eastern Time.  CRD Dkt. Entry No. 37.

On October 30, 2025, I conducted a video hearing, which was recorded and transcribed for the record.  CRD Dkt. Entry No. 38a (Hearing Transcript).  During the hearing, I went over the procedural history of the case, the issues before me to decide, the purpose and the guidelines for the hearing.  Hearing Transcript (Hearing Tr.) at 5:19-11:14.  Deputy Division Director James Bowling was then sworn in and cross-examined by Respondent’s counsel.  Id. at 12:8-23:3.  After Respondent’s counsel’s cross-examination, CTP’s counsel conducted redirect examination of Deputy Division Director James Bowling.  Id. at 23:4-23:10.

On January 22, 2026, the transcript from the hearing was uploaded to the docket.  CRD Dkt. Entry Nos. 38a, 38b.  That same day, I issued an Order making certain non-substantive corrections to the hearing transcript, establishing deadlines for the parties to file additional proposed corrections to the hearing transcript, and establishing a deadline for the parties to file post-hearing briefs.  CRD Dkt. Entry No. 38.

On January 27, 2026, CTP timely filed its proposed list of additional transcript corrections.  CRD Dkt. Entry No. 39.  On that same date, CTP also filed an Unopposed Motion to Extend Deadlines, requesting an extension of the deadline for the parties to file objections to the opposing party’s proposed transcript corrections.  CRD Dkt. Entry No. 40.  On January 29, 2026, I issued an Order granting CTP’s Unopposed Motion to Extend Deadlines, extending the deadline for the parties to file proposed corrections to February 13, 2026, extending the deadline for the parties to file objections to the opposing party’s proposed transcript corrections to February 23, 2026, and extending the deadline for the parties to file post-hearing briefs to March 27, 2026.  CRD Dkt. Entry No. 41 at 2.

On March 27, 2026, CTP timely filed a post-hearing brief.  CRD Dkt. Entry No. 42 (CTP’s post hearing brief).  Respondent did not file any proposed corrections to the hearing transcript, nor did Respondent file any objections to CTP’s proposed corrections.  In addition, Respondent did not file a post hearing brief.

Both parties have had the opportunity to present evidence and testimony, cross-examine witnesses, and fully argue their respective positions.  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).

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II. Preliminary Matter

Given Respondent did not file any objections to CTP’s list of proposed additional transcript corrections, and I agree with the proposed corrections, I accept CTP’s additional transcript corrections.  See CRD Dkt. Entry No. 39.  Accordingly, those corrections are hereby incorporated into the Hearing Transcript.   

III. Evidence

1. CTP’s Exhibits 1-7

During the PHC, I admitted CTP Exhibits 2-7 into the record without objection.  See CRD Dkt. Entry No. 28 at 2.  In my July 29, 2025 Order, I ruled, over Respondent’s objection, that Deputy Division Director James Bowling’s testimony, including his statement regarding the commercial marketing of Respondent’s ENDS product, is both relevant and material to the issue of Respondent’s liability in this case, that CTP established a foundation of personal knowledge on which his testimony rests, and that that the probative value of Deputy Division Director James Bowling’s testimony is not substantially outweighed by the danger of unfair prejudice to Respondent or confusion of the issues.  See CRD Dkt. Entry No. 34 at 4-6.  Therefore, I admitted CTP Exhibit 1, the Declaration of James Bowling, into the record as evidence.  Id.  Thus, in total, the following seven CTP exhibits have been admitted in the administrative record as evidence:

• CTP Ex. 1: Declaration of James Bowling;
• CTP Ex. 2: Declaration of Diane H. Burkett;
• CTP Ex. 3: December 2023 Narrative Report;
• CTP Ex. 4: December 2023 Tobacco Inspection Management System (TIMS) Assignment Form;
• CTP Ex. 5: December 2023 Photographs of EB Create Snoow Ice ENDS Product;
• CTP Ex. 6: December 2023 Form FDA 482; and
• CTP Ex. 7: September 2023 Warning Letter

CRD Dkt. Entry Nos. 23b – 23h.

2. Respondent’s proposed witnesses and exhibits

Respondent did not submit any proposed evidence with its pre-hearing exchange.  Specifically, on January 23, 2025, when Respondent’s counsel filed Respondent’s pre-hearing brief, he also filed a letter stating that “Respondent does not propose any witnesses or exhibits for the hearing . . .” in this case.  CRD Dkt. Entry Nos. 24, 24a.

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IV. Issues

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

1. Whether Respondent received in interstate commerce an ENDS product, specifically an EB Create Snoow Ice ENDS product, that is adulterated or misbranded and offering such product for sale, in violation of 21 U.S.C. § 331(c);
2. Whether any affirmative defenses are meritorious and, if so,
3. 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.

V.       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).

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 premarket tobacco application (PMTA) to the FDA for approval to sell their products.  21 U.S.C. § 387j(b)(1).  Alternatively, the product manufacturer may submit a substantial equivalence report, in response to which the FDA may issue an order finding the product is substantially equivalent to a predicate tobacco

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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).

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 ENDS products violate the Act.  The Act prohibits the receipt in interstate commerce of a tobacco product that is adulterated or misbranded and offering for sale.  21 U.S.C. § 331(c).  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.

VI.       Analysis

CTP alleges that Respondent received in interstate commerce an ENDS product, specifically an EB Create Snoow Ice ENDS product, that is adulterated or misbranded and offered such product for sale, in violation of 21 U.S.C. § 331(c), on December 12, 2023.  CRD Dkt. Entry No. 1 ¶¶ 1, 15, 19, 24.

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; and Diane H. Burkett, FDA-commissioned officer with the state of Arizona.  CTP Exs. 1-2.

Inspector Burkett testified that during an inspection of Respondent’s establishment on December 12, 2023, she “observed that the establishment sold FDA-regulated tobacco products and had a sales display containing tobacco products, including an EB Create

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Snoow Ice ENDS product, available for sale.”  CTP Ex. 2 ¶¶ 4-6; see also CTP Exs. 3-6 (Inspector Burkett’s narrative report, TIMS inspection report, photographs, and notice of inspection dated December 12, 2023).

Deputy Division Director James Bowling testified that “[s]ince June 2023, [he] [has] been a Deputy Division Director for the Division of Enforcement and Manufacturing in the Office of Compliance and Enforcement” at CTP, that “[he] was previously a Regulatory Counsel for DEM from January 2014 to June 2023[,]” he has “personal knowledge regarding how CTP enforces certain provisions of the [Act], 21 U.S.C. § 301 et seq., and other laws enforced by FDA[,]” that he has “personal knowledge regarding the processes used by FDA and records maintained by the agency regarding the tobacco product establishment registration and product listing requirements in 21 U.S.C. § 387e and the new tobacco product marketing authorization requirements in 21 U.S.C. § 387j.”  CTP Ex. 1 ¶¶ 2, 3.  Deputy Division Director James Bowling testified that “[t]he Tobacco Registration and Product Listing Module Next Generation] [(] TRLM NG [)] database is regularly kept, maintained, and stored by FDA in the ordinary course of business[,]” that he “[has] access to TRLM NG, and in the ordinary course of business, [he] review[s] TRLM NG, retrieve[s] information from TRLM NG, and review[s] reports containing information stored and maintained in TRLM NG.”  Id. ¶ 5.  Deputy Division Director James Bowling testified that “[i]n addition to the TRLM NG database, [he] [is] familiar with the following FDA databases: Inventory Tracking Recording and Control (iTRAC/IMAGE), Product Management Service (PMS), Rhapsody, and Online Search and Retrieval System (OSAR).”  Id. ¶ 11.

Deputy Division Director James Bowling testified that, “[i]n reviewing TRLM NG, [he] did not find any registered establishments containing the name ‘EB Create,’ or any listed product containing the name ‘EB Create Snoow Ice,’ in Arizona or elsewhere in the United States[,]” and that “[a]n EB Create Snoow Ice electronic nicotine delivery system [] ENDS [] product is the tobacco product observed during the December 12, 2023[,] inspection” at Respondent’s establishment.  Id. ¶ 6.

Deputy Division Director James Bowling further testified that “according to the label, EB Create Snoow Ice ENDS products . . . are manufactured by Fewo Intelligent Manufacturing Limited, in China[,]” that “21 U.S.C. § 387e(h) authorizes FDA to promulgate regulations requiring ‘any establishment within any foreign country engaged in the manufacture, preparation, compounding, or processing of a tobacco product’ to register its establishment[,] that “foreign tobacco manufacturers are not currently required to register and list their tobacco products in TRLM NG[,]” that “Fewo Intelligent Manufacturing Limited does not have any registered tobacco production facilities in the state of Arizona,” and that after reviewing “the results of FDA’s searches in: TRLM NG, iTRAC/IMAGE,PMS, Rhapsody, and OSAR, [Deputy Division Director James Bowling] determined that EB Create Snoow Ice ENDS products were not commercially marketed in the United States as of February 15, 2007.”  Id. ¶¶ 7-12.

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In addition, Deputy Division Director James Bowling testified that he “reviewed FDA’s search of the following databases: iTRAC/IMAGE, PMS, Rhapsody, and OSAR, and [he] confirm[ed] that on December 12, 2023, . . . there was no record of [the EB Create Snoow Ice ENDS product] having an FDA marketing granted order in effect under 21 U.S.C. § 387j(c)(1)(A)(i)[,]” that “there was no record of the EB Create Snoow Ice ENDS product having a substantial equivalence order in effect under 21 U.S.C. § 387j(a)(2)(A)(i),” that “the manufacturer of the EB Create Snoow Ice ENDS product had not submitted reports requesting a substantial equivalence order under 21 U.S.C. §387e(j)[,]” Furthermore that [Deputy Division Director James Bowling] “confirm[ed] that on December 12, 2023, the EB Create Snoow Ice 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 EB Create Snoow Ice ENDS products had not submitted abbreviated reports requesting a found-exempt order for such products under 21 U.S.C. § 387e(j)(1).”  Id. ¶¶ 13-14.

In its Answer, Respondent admits that it received the EB Create Snoow Ice ENDS product in interstate commerce, and Respondent admits that on the date of the inspection Inspector Burkett observed the EB Create Snoow Ice ENDS product being offered for sale in Respondent’s establishment.  See CRD Dkt. Entry 3 ¶¶ 1, 8-9.

In its Answer and, more specifically, in its pre-hearing brief, Respondent argues that “Respondent bought the cited product from a wholesaler claiming to sell lawful products,” and, thus, Respondent should not be held liable for offering the EB Create Snoow Ice ENDS product for sale as a retailer.  CRD Dkt. Entry Nos. 3 ¶ 10, 24 at 2-3.  Respondent also “denies that the [EB Create Snoow Ice ENDS product] is a ‘new tobacco product’ because Respondent is without sufficient information to state that the product was not commercially marketed in the United States as of February 15, 2007.”  CRD Dkt. Entry No. 3 ¶ 10; see also CRD Dkt. Entry No. 24 at 2. In its pre-hearing brief, Respondent argues that “CTP provides no basis for its knowledge that would support any inference that it was or is in a position to know what was or was not marketed on or before February 15, 2007—nine years before ENDS products even were added under the jurisdiction of any federal agency.”  CRD Dkt. Entry No. 24 at 2.  In addition, citing Jarkesy v. SEC, 144 S. Ct. 2117 (2024), Respondent reiterates its constitutional arguments, specifically asserting that the government has no authority to seek the civil money penalty requested in this forum, and that this proceeding violates Respondent’s Seventh Amendment right to a jury trial.  See id. at 4-8; see also CRD Dkt. Entry No. 18 at 1-7, fn.1.

Respondent’s arguments against liability are unconvincing.  Ignorance of the law does not excuse liability; even if Respondent believed the EB Create Snoow Ice ENDS product was authorized, it lacked FDA marketing approval and Respondent is therefore liable.  CTP has shown that the product qualifies as a “new tobacco product” that was adulterated and misbranded under 21 U.S.C. §§ 387b(6)(A) and 387c(a)(6), since it

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lacked the required premarket authorization, Respondent received the new tobacco product, or a component thereof, in interstate commerce and offered such new tobacco product for sale, violating 21 U.S.C. § 331(c).  Deputy Division Director James Bowling’s testimony confirms Respondent’s e-liquid product was adulterated and not exempt from FDA requirements.  Respondent’s e-liquid product was also misbranded due to no substantially equivalent determination as required by statute.

Moreover, Respondent’s claim that CTP lacks knowledge about products marketed before February 15, 2007, is unconvincing, given Deputy Division Director James Bowling’s testimony and the absence of supporting evidence from Respondent.  At the hearing, Bowling stated that, except for one e-cigar, FDA research found no other ENDS products on the market as of that date.  Hearing Transcript 19:17-22.  He clarified that the product was a non-flavored e-cigarette marketed as an e-cigar.  Id. at 23:4-9.  Further, I reject Respondent’s attempt to conflate this case with Jarkesy.

In my November 26, 2024, Order, I denied Respondent’s Motion for Summary Decision regarding constitutional challenges.  See CRD Dkt. Entry No. 22.  As Respondent raises these arguments again in its pre-hearing brief, I address them here.  See CRD Dkt. Entry No. 24 at 4-9.  Respondent claims that CTP’s request for a civil money penalty violates its Seventh Amendment right to a jury trial, but 21 C.F.R. § 17.19(c) states that presiding officers cannot find statutes or regulations invalid.  The Departmental Appeals Board has affirmed that neither ALJs nor the Board can overturn applicable statutes or regulations. J. Peaceful, L.C., DAB No. 2742 at 15 (2016); Zoom Mini Mart, Inc., DAB No. 2894 at 15 (2018)).2  Thus, my determinations in tobacco cases must follow statutory authority.  As the Board explained:

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

The Oaks, DAB No. 3160 at 27 (2024): see also Vape NV LLC, DAB No. 3216 at 8-11 (2025)

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For these reasons, I conclude that Respondent violated the Act by receiving in interstate commerce an ENDS product, specifically an EB Create Snoow Ice ENDS product, that is adulterated and misbranded and offered such product for sale, in violation of 21 U.S.C. § 331(c).  I further conclude that Respondent’s affirmative defenses to liability are not meritorious, and that the imposition of a civil money penalty against Respondent is warranted.

VII.       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, 24.  In CTP’s pre-hearing brief and post hearing brief, CTP continues to assert that a $20,678 civil money penalty is appropriate.  CRD Dkt. Entry No. 23 at 8-11; CRD Dkt. Entry No. 42 at 4.  With regard to the civil money penalty sought by CTP, in its pre-hearing brief, Respondent states:

CTP has no authority to seek a civil money penalty, at least not a penalty in excess of $20, other than in an article III court where Respondent can exercise its right to a trial by jury.

CRD Dkt. Entry No. 24 at 3.

Respondent further states:

Respondent purchased the product from a wholesaler, and the package itself expressly suggests that it is legal for sale in the United States.  CTP does not dispute these facts; its own evidence proves them.  Respondent was not seeking out unlawful products surreptitiously, placing orders directly to foreign manufacturers.  Respondent instead purchased the products from a wholesaler active in the state of Arizona and reasonably relied on representations that the products were legal for sale.  Even if these facts are not sufficient to avoid liability, they should justify a reduction in the fine.

Id. at 3-4.

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

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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 $20,678 civil money penalty is appropriate based upon the record 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 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 September 22, 2023, citing Respondent for offering for sale a new tobacco product that lacked the required marketing authorization order on August 21, 2023.  See CRD Dkt. Entry No. 23 at 9; see also CTP Ex. 7 at 1-2.  In its pre-hearing brief, 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 9.  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.  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.

The continued marketing and selling of unauthorized new tobacco products during the time period between the issuance of CTP’s September 22, 2023, demonstrates that Respondent did not comply with federal tobacco law, which is serious in nature and demands a proportional civil money penalty amount.

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

Respondent has not submitted any evidence, nor asserted any argument, in support of a contention that Respondent does not have the ability to pay the proposed civil money penalty, or that the civil money penalty sought by CTP will disrupt Respondent’s ability to continue to do business.

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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.  However, CTP argues that Respondent “has a history of violating the Act’s requirements” based on the September 22, 2023, warning letter.  CRD Dkt. Entry No. 23 at 10.  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 September 22, 2023, warning letter.  In sum, this is Respondent’s first violation resulting in a civil money penalty.

4.      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. 

5. Other Matters as Justice May Require

I have discretion to consider any other evidence or arguments to mitigate the amount of the civil money penalty.  21 U.S.C. § 333(f)(5)(B).  The purpose of a civil money penalty is to ensure retailers and manufactures comply with the Food, Drug and Cosmetic Act and its implementing regulations with the overarching goal of protecting the health of the American people.  However, given Respondent has presented no mitigating evidence for me to consider in support of its claim that “Respondent was not seeking out unlawful products surreptitiously, placing orders directly to foreign manufacturers.  Respondent instead purchased the products from a wholesaler active in the state of Arizona and reasonably relied on representations that the products were legal for sale[,]” I do not agree with Respondent’s contention that “[e]ven if these facts are not sufficient to avoid liability, they should justify a reduction in the fine.”  CRD Dkt. Entry No. 24 at 3-4.  Therefore, after considering the circumstances that mitigate or aggravate Respondent’s violation, and the factors identified in 21 U.S.C. § 333(f)(5)(B), I conclude that the $20,678 civil money penalty sought by CTP is appropriate.

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VIII.   Conclusion

For the reasons stated above, I impose a civil money penalty against Respondent, Jim’s Smoke Shop at 7 LLC d/b/a Jim’s Smoke Shop on 7th, in the amount of $20,678, for receiving in interstate commerce an ENDS product that lacks the required premarketing authorization.  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.