Texas Tobacco Barn LLC d/b/a TXVapeBarn, DAB No. 3178 (2025)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Texas Tobacco Barn LLC d/b/a TXVapeBarn (Respondent) appeals the initial decision of the Administrative Law Judge (ALJ) imposing a civil money penalty (CMP) of $19,192 against Respondent for violating the Federal Food, Drug, and Cosmetic Act (FDCA) in Texas Tobacco Barn LLC d/b/a TXVapeBarn, DAB TB8759 (2024) (Initial Decision).  Following a hearing on an administrative complaint filed by the Center for Tobacco Products (CTP) of the U.S. Food & Drug Administration (FDA), the ALJ determined that Respondent offered for sale an e-liquid tobacco product without obtaining the required FDA authorization, in violation of 21 U.S.C. § 331(k).  For the reasons explained below, the Departmental Appeals Board (Board) affirms the Initial Decision because it is supported by substantial evidence and free of legal error.

Legal Background

To protect public health, the FDCA, 21 U.S.C. §§ 301-399i, as amended by the Family Smoking Prevention and Tobacco Control Act (TCA), Pub. L. No. 111–31, 123 Stat. 1776 (2009), imposes restrictions on the sale, distribution, and use of tobacco products.  See 21 U.S.C. §§ 331(a)-(c), 331(k), 387a(a)-(b), 387c(a)(7)(B), 387f(d).  The FDCA prohibits, in relevant part, the “the doing of any . . . act with respect to, a . . . tobacco product, . . . if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded.”  Id. § 331(k).

The FDCA defines a “tobacco product” as “any product made or derived from tobacco, or containing nicotine from any source, that is intended for human consumption, including any component, part, or accessory of a tobacco product.”  Id. § 321(rr)(1).  In 2016, the FDA exercised its new authority under the TCA in 21 U.S.C. § 387a(b) to deem electronic nicotine delivery systems (ENDS) (including e-cigarettes and e-liquids) and other products to be “tobacco products” subject to the FDCA.  See Final Deeming Rule, 81 Fed. Reg. 28,974, 28,976 (May 10, 2016) (codified at 21 C.F.R. pts. 1100, 1140,

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1143) (“Products that meet the statutory definition of ‘tobacco products’ include . . . ENDS (including e-cigarettes, e-hookah, e‑cigars, vape pens, advanced refillable personal vaporizers, and electronic pipes) . . . .”).  The term “component or part” includes any “assembly of materials intended or reasonably expected: (1) [t]o alter or affect the tobacco product’s performance, composition, constituents, or characteristics; or (2) [t]o be used with or for the human consumption of a tobacco product,” but excludes any “accessory of a tobacco product.”  21 C.F.R. §§ 1100.3, 1107.12, 1114.3, 1140.3.  The FDCA, as amended by the TCA, extends to and imposes additional requirements for “new tobacco products,” that is, tobacco products that were not commercially marketed in the United States as of February 15, 2007.  See 21 U.S.C. § 387j(a)(1) (defining “new tobacco product”).

A new tobacco product may not be introduced into interstate commerce without premarket authorization from FDA.  See id. § 387j(a)(2)(A).  A new tobacco product may receive FDA marketing authorization in three different ways.  First, based on FDA’s review of a premarket tobacco product application, FDA may issue a marketing granted order finding that the marketing of the new tobacco product would be “appropriate for the protection of the public health.”  See id. § 387j(c)(1)(A)(i), (c)(2)(A); see also 21 C.F.R. Part 1114 (providing FDA’s procedures for reviewing applications and issuing marketing granted orders).  Second, based on FDA’s review of a substantial equivalence report (SE Report), FDA may issue an order determining that the new tobacco product is “substantially equivalent” to either (a) a tobacco product that was marketed on or before February 15, 2007, or (b) a tobacco product marketed after that date, but which FDA previously determined to be substantially equivalent.  See 21 U.S.C. §§ 387j(a)(2)(A)(i), 387e(j);¹ see also 21 C.F.R. Part 1107 (providing the requirements for SE Reports and FDA’s review procedures).  Third, based on FDA’s review of an exemption request and a report (abbreviated report), FDA may issue an order exempting the product from the requirement of demonstrating substantial equivalence.  See 21 U.S.C. §§ 387j(a)(2)(A)(ii), 387e(j)(1), (j)(3); 21 C.F.R. §§ 1107.1, 1107.3.

A new tobacco product is “adulterated” if it is required by 21 U.S.C. § 387j(a) to have a premarket review and does not have a marketing granted order permitting marketing of the new tobacco product in effect under 21 U.S.C. § 387j(c)(1)(A)(i).  21 U.S.C. § 387b(6)(A).  A new tobacco product is “misbranded” if a report required under section 387e(j) (i.e., an SE Report or abbreviated report) for that product was not submitted to FDA.  Id. § 387c(a)(6).

The FDCA defines “interstate commerce,” in relevant part, as “commerce between any State or Territory and any place outside thereof.”  Id. § 321(b); see also id. §§ 321(a) (defining “State”), 372(a), 387(19), (22).  The “shipment in interstate commerce” element

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of 21 U.S.C. § 331(k) is satisfied if at least one component or ingredient used in the finished tobacco product traveled in interstate commerce.  See Drive Thru Vapors, LLC, DAB No. 3168, at 7-10 (2025);² see also Baker v. United States, 932 F.2d 813, 814 (9th Cir. 1991) (holding that 21 U.S.C. § 331(k)’s “‘shipment in interstate commerce’ requirement is satisfied even when only an ingredient is transported interstate”); United States v. Regenerative Scis., LLC, 741 F.3d 1314, 1320‑21 (D.C. Cir. 2014) (explaining that the “interstate commerce” element of 21 U.S.C. § 331(k) is met even if a single ingredient or component is shipped interstate).  The FDCA provides that “[i]n any action to enforce the requirements of [the FDCA] respecting a . . . tobacco product . . . the connection with interstate commerce required for jurisdiction in such action shall be presumed to exist.”  21 U.S.C. § 379a. 

The FDCA authorizes the imposition of CMPs against “any person who violates a requirement of [the FDCA] which relates to tobacco products.”  21 U.S.C. § 333(f)(9)(A).  The term “person” includes an “individual, partnership, corporation, and association.”  Id. § 321(e); see also 21 C.F.R. § 17.3(b).  The implementing regulations concerning CMPs, 21 C.F.R. Part 17 and 45 C.F.R. § 102.3, establish a schedule of maximum CMP amounts.  See 21 C.F.R. § 17.2 (citing 45 C.F.R. § 102.3 (table)).  The schedule that applied in this case provided for a maximum CMP of $19,192 for each violation.  See 45 C.F.R. § 102.3 (as amended effective Mar. 17, 2022); 87 Fed. Reg. 15,100, 15,103 (Mar. 17, 2022).

To impose a CMP, CTP serves an administrative complaint on the “respondent” (the person or entity alleged to have committed the pertinent violation(s)), and files a copy of the complaint with FDA’s Dockets Management Staff.  See 21 C.F.R. §§ 17.3(b), 17.5, 17.7.  The respondent may then request a hearing before an ALJ by filing an answer to the complaint.  Id. § 17.9(a).  The ALJ “shall conduct a hearing on the record to determine whether the respondent is liable for a [CMP] and, if so, the appropriate amount of any such [CMP] considering any aggravating or mitigating factors.”  Id. § 17.33(a).  CTP must prove the respondent’s liability and the appropriateness of the CMP, and the respondent must prove any affirmative defenses and mitigating factors, by a preponderance of the evidence.  Id. § 17.33(b), (c).  The ALJ issues a decision (which the regulations refer to as the “initial decision”) based only on the administrative record.  Id. § 17.45(a).

Either CTP or the respondent “may appeal an initial decision” by filing a notice of appeal with the Board.  Id. § 17.47(a).  The notice of appeal “must identify specific exceptions to the initial decision, must support each exception with citations to the record, and must explain the basis for each exception.”  Id. § 17.47(c).  The notice of appeal also “shall be accompanied by a written brief.”  Id.  The Board “may decline to review the case, affirm .

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. . or reverse the initial decision . . . , or increase, reduce, reverse, or remand any [CMP] determined by the [ALJ] in the initial decision.”  Id. § 17.47(j).

Case Background³

1. The Complaint

On September 4, 2020, Respondent, a manufacturer and retailer of new tobacco products in Lubbock, Texas, submitted a premarket tobacco product application requesting FDA authorization for over 2,200 ENDS products, which included multiple “Barn Brewed” “Beetle Juice” e-liquid ENDS products in multiple sizes by volume, nicotine content levels, and flavors.  CTP Complaint (Compl.) ¶¶ 1, 20; CTP Ex. 7, at 1, 4, 12, 29, 30, 33.  Respondent’s ENDS products included the “Barn Brewed 30ML Beetle Juice 12mg” e‑liquid product.  See CTP Ex. 7, at 12 (identifying “Barn Brewed 30ML Beetle Juice 12mg” e-liquid product in Blue Raspberry Mango flavor with “Additional property” of “Nicotine” of “12mg/mL,” “PGVG: 35/65,” and “E-liquid volume: 30mL” as one such product).  On September 8, 2021, FDA denied authorization for all the ENDS products, stating that Respondent’s application “lack[ed] sufficient evidence to demonstrate that the marketing of these products is appropriate for the protection of the public health.”  Id. at 1, 4-35 (emphasis omitted); see Compl. ¶ 20; CTP Ex. 8, at 2.  FDA notified Respondent that its products are “misbranded” and “adulterated.”  CTP Ex. 7, at 2.  FDA warned Respondent that it “cannot introduce or deliver for introduction these products into interstate commerce in the United States.  Doing so is a prohibited act under [the FDCA], the violation of which could result in enforcement action by FDA,” which could include the imposition of “civil money penalties, seizure, and/or injunction.”  Id. at 1 (emphasis omitted), 2.

On January 27, 2022, CTP issued Respondent a warning letter, stating that the “FDA has determined that you manufacture, sell, and/or distribute to customers in the United States” the e-liquid product “without a marketing authorization order,” which was a prohibited act under 21 U.S.C. § 331(k).⁴   CTP Ex. 8, at 1-2.  CTP warned Respondent “[it] should take prompt action to address [these] violations,” as well as any other similar violations, and the failure to do so “may lead to regulatory action, including, but not limited to, civil money penalties, seizure, and/or injunction.”  Id. at 2.  CTP asked Respondent to submit a response within 15 days “describing [its] actions to address any violations and bring [its] products into compliance” with the FDCA.  Id.  In its February

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14, 2022 letter to CTP, Respondent stated that it “no longer manufactures” the e-liquid product and that it “will continue to monitor [and] ensure that any manufactured tobacco products continue to comply with” the FDCA.  CTP Ex. 9, at 1. 

On August 14, 2023, CTP served on Respondent a complaint seeking to impose a CMP of $19,192 for allegedly violating 21 U.S.C. § 331(k) by failing to obtain the required premarket authorization for the e-liquid product, which caused the product to become adulterated and misbranded while it was held for sale after shipment of one or more of its components in interstate commerce.  Compl. ¶¶ 1, 17-23; CRD Dkt. No. T-23-3200, DAB E-File No. 1b (U.S. Postal Service delivery confirmation).  CTP alleged that on May 13, 2023, an FDA-commissioned inspector conducted an inspection of Respondent’s establishment and observed the e-liquid product available for sale at Respondent’s establishment.  Id. ¶ 17.  CTP alleged that “Respondent receives at least one component that it uses to manufacture its tobacco products from outside of Texas.”  Id. ¶ 15.  CTP alleged that the e-liquid product is “a ‘new tobacco product’ because it was not commercially marketed in the United States as of February 15, 2007.”  Id. ¶ 18.  CTP further alleged that the e-liquid product is “adulterated” under 21 U.S.C. § 387b(6)(A) because it did not have a marketing granted order in effect, and that the product is “misbranded” under 21 U.S.C. § 387c(a)(6) because Respondent did not submit an SE Report or an abbreviated report for the product.  Id. ¶¶ 21-22.

Respondent (through counsel) answered the complaint, denying most of the allegations.  Notably, Respondent acknowledged that an FDA-commissioned inspector performed an inspection of its establishment in May 2023, and expressly admitted “that its e-liquid products do not have [a marketing granted order] in effect”; “that its e-liquid product does not have an SE order or found-exempt order in effect”; and “that neither an SE [R]eport nor an abbreviated report has been submitted for its e-liquid products.”  Answer at 4-5.  However, Respondent denied the allegation that the inspector observed the e-liquid product available for sale at its establishment and that it receives at least one component outside of Texas, stating that “the term ‘component’ is not defined.”  See id. at 3-4.    

Respondent raised constitutional challenges, arguing that FDA could not lawfully impose a CMP on Respondent for an alleged violation of the FDCA.  See id. at 6-7.  Respondent first asserted that Congress violated “the Separation of Powers principle embodied in the United States Constitution” when it delegated to FDA the “deeming authority” because the identification and regulation of tobacco products was “a major question” under Supreme Court precedent that only Congress could determine.  Id. at 2-3, 6-7.  Respondent also asserted that “FDA’s decision to proceed in this administrative forum versus an[] Article III court violates the Separation of Powers principle,” and Respondent’s “fundamental right to a trial by jury.”  Id. at 6.  Respondent further asserted the complaint “does not identify the factors which support its determination of the amount of the proposed [CMP],” which violated Respondent’s right to due process.  Id.

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2. ALJ Proceedings
   1. Pre-Hearing Discovery Motions and Related Developments

On October 17, 2023, the ALJ issued an Acknowledgment and Pre-Hearing Order acknowledging receipt of Respondent’s Answer and establishing the issues to be addressed, the burdens of proof on the parties, and the procedural deadlines for the case.  Initial Decision at 2. 

In early November 2023, Respondent served written discovery requests on CTP.  On November 17, 2023, CTP filed a motion for a protective order, seeking to limit the scope of discovery of information and documents as irrelevant, protected by privilege, or otherwise exempt from disclosure.  Id.  On December 4, 2023, Respondent filed an opposition to CTP’s motion, reasserting its constitutional claims and arguing that the information and documents it seeks are relevant because they are directly related to its constitutional arguments, and “a protective order would hamstring [Respondent] from presenting its intended defenses.”  Resp. in Opp’n to CTP’s Mot. for Protective Order at 3.  On December 7, 2023, CTP filed its Memorandum of Law in Support of its Motion for a Protective Order, a copy of Respondent’s discovery requests (including interrogatories, production of documents, and requests for admissions), and CTP’s Privileged Document Log.  Initial Decision at 2.

On December 7, 2023, CTP also filed a Motion to Compel Discovery, asserting that Respondent had not responded to CTP’s Request for Production of Documents.  Id.  On that same date, CTP also requested an extension of the pre-hearing exchange deadlines.  Id.  On December 8, 2023, the ALJ issued an Order, which extended the pre-hearing deadlines and advised Respondent that it had until December 27, 2023, to file a response to CTP’s motion for a protective order.  Id.

On December 29, 2023, Respondent filed its Objections and Responses to CTP’s Request for Production of Documents (objecting to CTP’s requests for documents on various grounds and/or asserting that it does not have possession or custody of, or control over, the requested documents, and reasserting its constitutional defenses); Response in Opposition of CTP’s Motion to Compel Discovery (arguing that CTP’s motion to compel is moot because Respondent “submitted its responses and objections to” CTP’s discovery requests on that same day); and Motion to Hold in Abeyance (arguing that the case should be stayed “pending the opinion of the Supreme Court of the United States” in SEC v. Jarkesy, 34 F.4th 446 (5th Cir. 2022)), cert. granted, 143 S. Ct. 2688 (June 30, 2023).  See CRD Dkt. No. T-23-3200, DAB E-File Nos. 15, 16, 17.  On January 12, 2024, CTP filed its Opposition to Respondent’s Motion to Hold in Abeyance.  Initial Decision at 2.

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On January 17, 2024, the ALJ issued an Order Granting in Part and Denying in Part CTP’s Motion for a Protective Order (Discovery Order).  Initial Decision at 3; Discovery Order.  In the Discovery Order, the ALJ denied Respondent’s motion to hold the case in abeyance “because one of [the ALJ’s] regulatory obligations is to avoid delay.”  Initial Decision at 3 (citing 21 C.F.R. § 17.19(a); Discovery Order at 8).⁵  The ALJ also reserved ruling on CTP’s motion to compel until after the pre-hearing conference.  See Discovery Order at 8.

In the ALJ’s Post Pre-Hearing Conference Order dated January 26, 2024, the ALJ set the pre-hearing exchange deadlines and ordered the parties to “indicate in writing whether they have any objections to the other parties’ proposed exhibits, whether they have any objections to the other parties’ proposed witnesses, or whether they agree to a decision based on the written record.”  Jan. 26, 2024 Order at 3.

2. Pre-Hearing Exchanges

On January 29, 2024, Respondent filed its pre-hearing brief and motion for summary disposition, reiterating the constitutional arguments raised in its Answer.  Resp’t Hr’g Br. and Mot. for Summ. Disposition.  Specifically, Respondent argued that under FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), Congress, in enacting the TCA, “impermissibly delegated authority to FDA in 21 U.S.C. § 387a(b) to identify and determine which additional tobacco products (including ENDS products) would be subject to its regulatory control,” which “violates the Constitution’s separation of powers doctrine” and “bar[s] FDA from further litigating this case.”  Id. at 6, 8-9; see id. at 2-9.  Respondent also argued that under the Fifth Circuit’s decision in Jarkesy v. SEC, 34 F.4th 446 (5th Cir. 2022), CTP’s decision to pursue enforcement action and impose a CMP through an administrative forum, rather than in an Article III court, violates Respondent’s Seventh Amendment right to a jury trial.  See id. at 9-12.  Respondent did not submit any proposed exhibits or identify any proposed witnesses.

On February 16, 2024, CTP filed a pre-hearing exchange (Informal Brief, List of Proposed Witnesses and Exhibits, and 13 proposed exhibits).  CTP’s exhibits included the sworn declarations from two proposed witnesses:  L.C., Senior Regulatory Counsel, Office of Compliance and Enforcement, CTP, FDA (CTP Ex. 1); and G.C., FDA-commissioned officer with the state of Texas, who performed the compliance check inspection of Respondent’s establishment on May 13, 2023 (CTP Ex. 2). 

L.C. attested that she reviewed FDA’s databases, which “revealed” “no evidence . . . that Respondent’s e-liquid products were commercially marketed in the United States as of February 15, 2007.”  CTP Ex. 1, at 4.  L.C. also attested that she confirmed that the FDA

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had “no record” of a marketing granted order for the Respondent’s e-liquid products, or the submission of an SE Report requesting a substantial equivalence order or an abbreviated report requesting a found-exempt order, or a found-exempt order in effect.  Id. at 5. 

In his declaration, G.C. described the May 13, 2023 compliance check inspection and attested that he observed and photographed items including nicotine, flavoring, drums of Vegetable Glycerin and Propylene Glycol, bottles, and other equipment in a separate lab area in the back of the establishment.  CTP Ex. 2 ¶¶ 5-7, 10; see CTP Ex. 5 (photographs).  G.C. attested that Respondent’s staff told him that e‑liquid products are manufactured in the separate lab area, and the finished e-liquid product is then sold in the retail area of the establishment.  Id. 4, 6-8.  G.C. further attested that he observed and photographed a “TXV Barn Brewed Beetle Juice‑flavored 12 mg finished e-liquid product on the shelf available for purchase by customers in the retail area of the establishment” and that the label on the product read “[m]anufactured for TX Vape Barn Lubbock, TX.”  Id. ¶ 8 (alteration in original); see also CTP Ex. 3 (inspection report); CTP Ex. 6, at 4-11 (photographs of the e-liquid product). 

In reliance on its evidence that included the above-described testimony, CTP argued that the e-liquid product at issue was a new tobacco product, and Respondent violated 21 U.S.C. § 331(k) “by failing to obtain the required marketing authorization or exemption for” the product Respondent “holds for sale after shipment of at least one component in interstate commerce.”  Informal Brief of CTP at 5-11.  

Respondent did not object to CTP’s proposed exhibits or witnesses; however, Respondent did request to cross-examine CTP’s two witnesses, so the ALJ proceeded to a hearing.  Initial Decision at 3, 4.

3. ALJ Hearing and Post-Hearing Briefs

On June 24, 2024, the ALJ held a hearing via video conference.  See Hearing Transcript, CRD Dkt. No. T-23-3200, DAB E-File No. 37 (Tr.); Initial Decision at 4.  At the hearing, the ALJ decided four procedural matters before proceeding to cross-examination.  See Tr. at 6-7.  First, the ALJ denied as moot CTP’s motion to compel discovery because, under 21 C.F.R. § 17.35(c), the ALJ would “draw an inference in favor of [CTP] with regard to the information sought . . . [because of] the failure on the part of [R]espondent to provide any evidence with respect to mitigating factors or the reasonableness of any penalty.”  Tr. at 6:12-21.  Next, the ALJ made clear that the ALJ had denied Respondent’s motion to hold the case in abeyance earlier “for the . . . reasons [the ALJ] stated in the January 17th, 2024 order.”  Id. at 6-7.  Next, the ALJ denied as moot Respondent’s motion for summary disposition filed in conjunction with its pre-hearing brief because Respondent “requested to cross examine [CTP’s] witnesses at a hearing.”  Id. at 7:7-12.  The ALJ also

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admitted all 13 CTP exhibits into the record, noting no objection by Respondent.  Id. at 7:13-20.  Respondent then cross-examined L.C. and G.C.  Id. at 10-33.  

CTP filed a post-hearing brief, arguing that CTP had met its burden of proving “that Respondent violated 21 U.S.C. § 331(k) by failing to obtain the required premarket authorization for its e-liquid product, causing it to become adulterated and misbranded while it is held for sale after shipment of one or more components in interstate commerce.”  CTP’s Post-Hr’g Br. at 2.  CTP also argued that Respondent’s constitutional arguments “are beyond the authority of the ALJ to resolve in this administrative [CMP] proceeding and are therefore, unavailing.”  Id. at 1.

Respondent filed a post-hearing brief and renewed motion for summary disposition, reasserting the constitutional arguments raised in its pre-hearing brief and Answer.  See Resp’t Post-Hr’g Br. & Renewed Mot. for Summ. Disposition (R. Post-Hr’g Br.) at 1-12.  Respondent also argued that CTP failed to meet its burden of proving the allegations set forth in its complaint.  See id. at 12-19.  Specifically, Respondent argued that CTP did not satisfy the “shipped in interstate commerce” element of 21 U.S.C. § 331(k).  Id. at 12.  Respondent also argued that the e-liquid product displayed for sale, as shown in CTP Exhibit 6 and which was the subject of CTP’s complaint, could not be the product made using the ingredients identified in the list in CTP Exhibit 11 because the nicotine percentage of the product shown in Exhibit 6 differs from the nicotine percentage of the product shown in CTP Exhibit 11.  See id. at 12-15.  Further, Respondent argued “CTP had to show the ingredients shown in Exhibit 11 were contained in the specimen product identified in Exhibit 6” “to prove it was being ‘held for sale after shipment of one or more of its components in interstate commerce’” as alleged in the complaint, which CTP failed to prove.  Id. at 13-14.  Respondent alleged that “CTP failed to prove that [Respondent] was offering a misbranded and adulte[rate]d product for sale” because there were no prices listed for any of the e-liquid products.  Id. at 17-19 (emphasis omitted).

3. The Initial Decision

On November 26, 2024, the ALJ issued the Initial Decision, concluding that Respondent violated 21 U.S.C. § 331(k) “by manufacturing a tobacco product while such product was held for sale after shipment in interstate commerce, resulting in such product being adulterated and misbranded” and that the imposition of “a $19,192 [CMP] against Respondent is appropriate.”  Initial Decision at 1, 10.  The ALJ also denied Respondent’s renewed motion for summary disposition in its favor in its post‑hearing brief, explaining that Respondent requested to cross-examine CTP’s witnesses, “the purpose of which can only be to challenge the facts alleged by CTP.”  Id. at 3-4.  The ALJ stated, “[t]herefore, it is clear that there are genuine issues as to material facts in this case.”  Id. at 4. 

Regarding the allegations in the complaint, the ALJ noted “CTP ha[d] the burden to prove Respondent’s liability and appropriateness of the penalty by a preponderance of the

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evidence.”  Id. at 5 (citing 21 C.F.R. § 17.33(b)).  The ALJ determined that CTP satisfied its burden of showing that Respondent violated 21 U.S.C. § 331(k) of the FDCA.  See id. at 6-10.  The ALJ found that the e-liquid product observed during the inspection on May 13, 2023, was a “new tobacco product,” which Respondent admitted did not have a marketing grant order in effect, nor had an SE Report or an abbreviated report been submitted for it.  See id. at 6-7.  Thus, the ALJ found that “Respondent’s e-liquid product is adulterated and misbranded.”  Id. at 6 (emphasis omitted). 

The ALJ further found that Respondent held the adulterated and misbranded e-liquid product “for sale after shipment in interstate commerce” in violation of 21 U.S.C. § 331(k).  Id. at 6-7 (emphasis omitted).  In doing so, the ALJ noted that “[t]here is no dispute on” Respondent’s “point that the nicotine content of the product listed in CTP Ex. 11 was different from the nicotine content of the product photographed in CTP Ex. 6,” but also noted CTP never “assert[ed] that the products pictured in CTP Ex. 6 are the same as that described by Respondent in CTP Ex. 11.”  Id. at 7 (citing CTP Ex. 1 (L.C. Decl.), at 2, and noting that L.C. stated that CTP Ex. 11 was a form Respondent filed on October 2, 2018 to register as a tobacco product manufacturer).  The ALJ noted CTP’s allegation “that Respondent received at least one component from outside Texas that it used to manufacture its tobacco products.”  Id. at 7 (citing Compl. at 4).  The ALJ noted Respondent never challenged “the statements from [L.C.] that the products depicted in CTP Ex. 5 traveled in interstate commerce,” as The Flavor Apprentice flavoring was made in California, the Capella flavoring was from a production and fulfillment center in New Jersey, and the Nicotine River nicotine was made in California, and that all of these products were shipped to Respondent in Texas.  Id. at 7-8 (citing CTP Ex. 1, at 3-4).  The ALJ thus found “it is clear that the products photographed during the inspection on May 13, 2023, as seen in CTP Ex. 5, did travel in interstate commerce.”  Id. at 8.

The ALJ then considered the issue of whether CTP satisfied its “burden of establishing that the products depicted in CTP Ex. 5 were used in the manufacture of Respondent’s e‑liquid product pictured in CTP Ex. 6” and which were offered for sale.  Id. at 8.  In resolving this issue, the ALJ considered the testimony of G.C., who testified that, although he himself did not observe the e-liquid products being manufactured or a sale or transaction of any such product at the time of the inspection, two individuals present at the facility at the time of the inspection—the Compliance Officer⁶ and the Most Responsible Person (MRP)—told him that Respondent’s e-liquid products are manufactured in the lab area of the establishment and are then sold in the retail area of the establishment, and that he, the inspector, saw the products displayed for sale on the retail floor.  See id. at 8-10 (citing Tr. at 27-28, 31, 32; CTP Ex. 2, at 3; CTP Ex. 3, at 3, 7).  The ALJ noted that the Compliance Officer’s and MRP’s statements to G.C., though hearsay, were “relevant and material to the issues before” the ALJ.  Id. at 9 (citing 21

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C.F.R. § 17.39(b), (c)).⁷  The ALJ also found the Compliance Officer’s and MRP’s statements to G.C. reliable, noting that Respondent “had every opportunity to have those individuals appear as witnesses but declined to do so.”  Id.; see id. at 10 (noting, similarly, that “Respondent did not provide any evidence to counter [the] statements from its own employees and did not elect to have them testify if [Respondent] disputed their statements”).  The ALJ further found the Compliance Officer’s and MRP’s statements “consistent with the physical evidence,” noting that the “bulk ingredients photographed in CTP Ex. 5 included Beetle Juice flavoring, E-liquid Nicotine, and several large containers of vegetable glycerin and propylene glycol, the ingredients listed on the Beetle Juice e-liquid product [shown] in CTP Ex. 6 at 9-10.”  Id. at 9.  The ALJ thus found that “the weight of the evidence establishes that the bulk ingredients photographed in CTP Ex. 5, which traveled in interstate commerce, were used in the manufacture of the products photographed in CTP Ex. 6.”  Id.  Further, noting evidence of the e-liquid products displayed for sale in the retail area, the ALJ found that “the weight of the record establishes that Respondent ‘held for sale’” the e‑liquid product “observed during the inspection on May 13, 2023” in violation of 21 U.S.C. § 331(k).  Id. at 10 (citing CTP Ex. 6, at 1, 2; CTP Ex. 5, at 17).

As to Respondent’s constitutional arguments, the ALJ concluded that she had no “authority to find federal statutes or regulations invalid” and was therefore “unable to grant the relief sought by Respondent.”  Id. (citing C.F.R. § 17.19(c)).  

Addressing the CMP, the ALJ considered whether “any aggravating or mitigating circumstances and the factors listed in the [FDCA]” apply to determine whether the imposed CMP is appropriate.  Id. at 10-11 (citing 21 U.S.C. § 333(f)(5)(B); 21 C.F.R. §§ 17.34(a)-(b), 17.45(b)(1)-(3)).  The ALJ found that the maximum allowable CMP of $19,192 was appropriate because Respondent was warned and yet it “continued to manufacture and sell” the e-liquid product at issue and other new tobacco products, and because Respondent never “provided any evidence establishing any mitigating factors.”  Id. at 11-12.  The ALJ stated that Respondent’s “degree of culpability does not merit a reduction in the [CMP].”  Id. at 12.

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Standard of Review

The Board’s standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record.  21 C.F.R. § 17.47(k).  The standard of review on a disputed issue of law is whether the initial decision is erroneous.  Id.

Analysis

Before the Board, Respondent reasserts the constitutional arguments raised before the ALJ, namely that Congress violated the “Separation of Powers principle” when it delegated to FDA in 21 U.S.C. § 387a(b) the authority to deem additional tobacco products—which the FDA deemed ENDS products—to be subject to the FDCA; that CTP violated Respondent’s Seventh Amendment right to a jury trial by seeking to impose a CMP against Respondent in this administrative proceeding, contrary to SEC v. Jarkesy, 603 U.S. 109 (2024); and that under Jarkesy, CTP is barred from pursuing a CMP against Respondent because of “Congress’s failure to articulate an intelligible principle” in its delegation to FDA.  See Opening Br. on Appeal of Resp’t Texas Tobacco Barn LLC (R. Board Br.) at 3-10;⁸ see also Reply Br. on Appeal of Resp’t/Appellant Texas Tobacco Barn LLC (R. Reply Br.) at 2 (“Plain and simple, the Board is bound by rulings of the United States Supreme Court and is obligated to uphold those rulings in the context of interpreting the statutes and regulations over which it has responsibility.”). 

Respondent also argues that “a reversal is mandated because the Initial Decision is contrary to the substantial evidence adduced at trial.”  R. Board Br. at 10.  Respondent does not dispute the ALJ’s finding that the e‑liquid product is a new tobacco product under the FDCA but argues the ALJ erred in finding the product to be adulterated and misbranded.  R. Reply Br. at 5, 7.  Respondent further argues CTP failed to satisfy the “shipped in interstate commerce” element of 21 U.S.C. § 331(k) because “CTP failed to prove the bulk ingredients shown in [CTP] Exhibit 5 and listed in [CTP] Exhibit 11 were contained in the specimen product depicted in [CTP] Exhibit 6,” the e‑liquid product that was the basis of CTP’s complaint.  R. Board. Br. at 12-13; see also R. Reply Br. at 7.  Respondent also argues that this failure on the part of CTP “negates any finding in the Initial Decision that [Respondent] sold a tobacco product in violation of 21 U.S.C. § 331(k).”  R. Board Br. at 18.

As discussed below in Section A, to prevail on its claim that Respondent violated 21 U.S.C. § 331(k), CTP had to prove by a preponderance of the evidence that the e-liquid

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product is a new tobacco product that lacked the required marketing granted order (thus causing it to become adulterated) and the required SE Report or abbreviated report (thus causing it to become misbranded), and that Respondent held the e‑liquid product for sale after shipment of its components in interstate commerce.  We conclude that the ALJ’s findings for CTP on these elements are supported by substantial evidence in the record and free of legal error.  Accordingly, we explain why we uphold the ALJ’s determination that Respondent violated 21 U.S.C. § 331(k) and why we find Respondent’s arguments challenging its liability unpersuasive and unavailing. 

In Section B, we uphold the ALJ’s determination that the $19,192 CMP was appropriate because CTP, having established a violation of 21 U.S.C. § 331(k), was authorized to impose a CMP and Respondent has not alleged or shown any ALJ error in this regard.

Finally, in Section C, we explain why Respondent’s constitutional arguments, including those in reliance on Jarkesy, provide no basis to disturb the Initial Decision.

1. The ALJ’s determination that Respondent violated 21 U.S.C. § 331(k) is supported by substantial evidence in the record and free of legal error.
   1. Respondent does not dispute that the e-liquid product at issue is a “tobacco product” subject to the FDCA and a “new tobacco product” requiring FDA premarket authorization.

The first issue of whether the e-liquid product is a “tobacco product” and, as well, a “new tobacco product” is not in dispute.  While Respondent has continued to argue that FDA’s deeming authority over ENDS products was the result of an unconstitutional delegation of authority by Congress, Respondent does not dispute that the e-liquid product is a tobacco product and, specifically, that it is a new tobacco product subject to the FDCA as written.  See R. Board Br. at 3-6; R. Reply Br. at 5; Initial Decision at 6.  Respondent also does not dispute the ALJ’s finding that the e‑liquid product is a new tobacco product requiring FDA premarket authorization.  See Initial Decision at 6; R. Reply Br. at 5 (stating that there is no “material dispute . . . [Respondent] manufactured ‘new tobacco products’ at its Lubbock, Texas facility”).  Accordingly, we summarily affirm the ALJ’s findings on this issue as they are supported by substantial evidence in the record.  See 21 C.F.R. § 17.47(c) (“The notice [of appeal] must identify specific exceptions to the initial decision, must support each exception with citations to the record, and must explain the basis for each exception.”); Duffy & Assocs., Inc., DAB No. 3114, at 9-10 (2023) (summarily affirming certain findings and conclusions by the ALJ in the absence of any allegation of factual or legal error).

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2. Substantial evidence supports the ALJ’s finding that the e-liquid product is “adulterated” because it lacked the required marketing granted order and is “misbranded” because it lacked the required SE Report or abbreviated report.

The next issue is whether the e-liquid product is adulterated and misbranded.  Before the Board, Respondent asserts that the ALJ erred in finding that the e-liquid product is adulterated and misbranded.  R. Reply Br. at 7.

As the ALJ noted, Respondent admitted in its Answer “that its e-liquid products do not have [a marketing granted order] in effect”; “that its e-liquid product does not have an SE order or found-exempt order in effect”; and “that neither an SE [R]eport nor an abbreviated report has been submitted for its e-liquid products.”  Answer at 4-5; see Initial Decision at 6.  Thus, early in the appeal proceedings, Respondent admitted to the predicate facts necessary to establish that its e-liquid product, a new tobacco product, does not have FDA premarket authorization and is adulterated and misbranded.  Nowhere in its Answer did Respondent represent or assert that the specific product that was the subject of the May 13, 2023 inspection had FDA premarket authorization.  As noted earlier, FDA denied premarket authorization for all of the Respondent’s ENDS products.  See supra at 4; CTP Ex. 7.  Respondent thus admitted to certain facts material to the ultimate question of whether CTP has a lawful basis to impose a CMP on Respondent.  See 21 C.F.R. § 17.9(b)(1) (stating that a respondent “[s]hall admit or deny each of the allegations of liability made in the complaint; allegations not specifically denied in an answer are deemed admitted”).  We note, moreover, that Respondent could have moved, but did not later move, to “amend its answer” in accordance with 21 C.F.R. § 17.9(d), if it wished to disavow its earlier admissions and take the position that the e-liquid product is not in fact adulterated and misbranded.  Having admitted to certain facts and foregoing any opportunity earlier in the proceedings to challenge CTP’s allegation that the e-liquid product in question is adulterated and misbranded, Respondent may not now seek to challenge it before the Board. 

Furthermore, on appeal, the Board is required to “consider only those issues raised before the [ALJ].”  See 21 C.F.R. § 17.47(g); Cape Tobacco Inc., DAB No. 3091, at 8 (2023) (“The Board is not required to consider an issue Respondent could have raised, but failed to raise, before the ALJ.” (citing 21 C.F.R. § 17.47(g))).  If Respondent wished to assert that its e-liquid product is not adulterated and misbranded, Respondent should have done so during the ALJ proceedings, as Respondent had notice, through section 17.47(g), that on appeal, the Board would confine its analysis to those issues raised before the ALJ.  For these reasons, we reject Respondent’s attempt to raise, belatedly, the factual issue of whether Respondent’s e-liquid product was adulterated and misbranded in current proceedings before the Board.

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Respondent’s late attempt to raise the issue aside, the evidence in the record of the ALJ proceedings supports the ALJ’s finding that the e-liquid product was “adulterated under 21 U.S.C. § 387b(6)(A)” because it did not have a marketing granted order in effect and was “misbranded” under 21 U.S.C. § 387c(a)(6) because neither an SE Report nor an abbreviated report was submitted for the e-liquid product.  See Initial Decision at 6‑7.  Notably, the ALJ relied on CTP’s evidence “indicating that Respondent did submit an application for an FDA premarket authorization for its e-liquid products on September 8, 2021, which was denied.”  Id. at 6 (citing CTP Ex. 1 (L.C. Decl.), at 5) (testifying that FDA had “no record” of a marketing granted order for the Respondent’s e-liquid products, nor any submission of an SE Report requesting a substantial equivalence order, nor an abbreviated report requesting an exemption by the Respondent)).  We find no evidence in the record that causes us to question the soundness of the ALJ’s finding that the e-liquid product was adulterated and misbranded. 

In sum, the ALJ’s finding that the e-liquid product is adulterated and misbranded is supported by substantial evidence and free of legal error.  We therefore sustain the ALJ’s finding.

3. Substantial evidence supports the ALJ’s determination that CTP met its burden to establish, by a preponderance of the evidence, Respondent’s liability as Respondent manufactured the e-liquid product, a new tobacco product that did not have FDA premarket authorization, and held it for sale after shipment in interstate commerce.

Whether Respondent is a manufacturer and retailer of tobacco products has never been the point of dispute in this case.  Moreover, we and the ALJ have determined that the e‑liquid product is a new tobacco product without FDA premarket authorization.  The main factual issue relevant to the question of liability for alleged violation of 21 U.S.C. § 331(k) is whether the e-liquid product Respondent held out for sale was shipped in interstate commerce.  More specifically, the question is whether the e-liquid product held out for sale was made using at least one ingredient or component Respondent, located in Texas, obtained from outside Texas.  Before the ALJ, CTP alleged that Respondent received at least one ingredient or component used to make its e‑liquid product from outside Texas.  Initial Decision at 7.  Respondent agreed that CTP must prove that Respondent offered for sale the e-liquid product manufactured using ingredients obtained through interstate commerce.  Id. at 8. 

In her October 17, 2023 Acknowledgment and Pre-Hearing Order, the ALJ correctly stated that under 21 C.F.R. § 17.33(b), “[a]s the petitioning party, CTP has the burden of proof.  CTP must prove, by a preponderance of the evidence Respondent’s liability and the appropriateness of the civil money penalty under the applicable statute.”  Oct. 17, 2023 Order at 4; see Initial Decision at 5 (stating the same burden for CTP).  The ALJ also correctly noted that “Respondent ‘must prove any affirmative defenses and any

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mitigating factors by a preponderance of the evidence.’”  Oct. 17, 2023 Order at 4 (quoting 21 C.F.R. § 17.33(c)); see Initial Decision at 5 (stating the same burden for Respondent). 

“Preponderance of the evidence” means that “it is more likely than not” that the appellant (Respondent here) complied with applicable requirements.  Claiborne-Hughes Health Ctr., DAB No. 2223, at 4 (2008), aff’d, 609 F.3d 839 (6th Cir. 2010).  “The preponderance of the evidence standard ‘simply requires the trier of fact to believe that the existence of a fact is more probable than its nonexistence before she may find in favor of the party who has the burden to persuade the judge of the fact’s existence.’”  Stuart Alan Rockwell, D.D.S., DAB No. 3022, at 5 n.5 (2020) (quoting Concrete Pipe & Prods., Inc. v. Constr. Laborers Pension Tr., 508 U.S. 602, 622 (1993)). 

Therefore, CTP had the burden of proving by a preponderance of the evidence that Respondent held its e-liquid product for sale after shipment of its components in interstate commerce.  If CTP meets this burden, Respondent then has the burden to prove its case, that is, to rebut the basis for the violation by a preponderance of the evidence, by submitting rebuttal evidence to explain, counteract, or disprove CTP’s claim.  See, e.g., B. Bliss, LLC, DAB No. 3155, at 11-13 (2024).

The ALJ found that CTP met its burden to prove by a preponderance of the evidence that Respondent held its e-liquid product for sale after shipment of its components in interstate commerce.  See Initial Decision at 7-10.  Among the evidence the ALJ considered were the photographs G.C. took during the inspection, which were admitted as CTP Exhibits 5 and 6, as well as the ingredient list admitted as CTP Exhibit 11.  We describe these exhibits below:

• CTP Ex. 5 consists of several photographs showing, in relevant part, different ingredients or components in the lab area of Respondent’s establishment.  The photographs show:
  • a propylene glycol USP drum, manufactured by SK picglobal Co., Ltd. in South Korea (CTP Ex. 5, at 7);
  • a vegetable glycerin USP drum from Acme Hardesty Co. located in Pennsylvania, with the words “Product of Malaysia” on the label (CTP Ex. 5, at 8);
  • a bottle of e-liquid nicotine made by Nicotine River, LLC in California (CTP Ex. 5, at 9-12; CTP Ex. 13);
  • bottles of e-liquid flavorings (including strawberry and spearmint) made by The Flavor Apprentice in California (CTP Ex. 5, at 13-15);
  • bottles of e-liquid flavoring made by Cappella in New Jersey (CTP Ex. 5, at 16; CTP Ex. 12); and

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• a photograph of metal shelves with various flavor labels on each shelf, one of which reads “Beetle Juice”; with multiple bottles for each flavor on each shelf (CTP Ex. 5, at 1).
• CTP Ex. 6 consists of several photographs of Respondent’s retail area.  They show a packaged e-liquid product with the label reading “TXV BARN BREWED Beetle Juice 12mg/ml Nicotine,” “30ML 1.01 fl oz,” “65VG/35PG,” “Manufactured for TX Vape Barn Lubbock, Tx 79413,” and “Ingredients: USP Vegetable Glycerin, USP Propylene Glycol, Natural and Artificial Flavoring, [and] Nicotine” (CTP Ex. 6, at 4-11).
• CTP Ex. 11 is a listing of ingredients for an e-liquid product named “Beetle Juice,” which Respondent submitted to FDA in 2018, in connection with registration as a tobacco product manufacturer.  CTP Ex. 11, at 1; Initial Decision at 7 (citing CTP Ex. 1, at 2).  The listed ingredients and percentages include⁹:
  • five additive flavoring ingredients manufactured by The Flavor Apprentice (including “Raspberry,” “Strawberry (Ripe),” “Pineapple,” “Mango,” and “Blueberry (Wild)” flavors) totaling 21.5% (CTP Ex. 11, at 2-3); raw vegetable glycerin manufactured by Nicotine River totaling 65% (Id.) raw propylene glycol manufactured by Nicotine River totaling 11.1% (Id.); raw nicotine manufactured by Nicotine River totaling 2.4% (Id.).

The ALJ found credible the testimony of G.C., who testified that the Compliance Officer and the MRP told him that Respondent manufactures tobacco products in the separate lab area, and sells the finished products in the retail area, which is the same area G.C. observed the e-liquid product at issue for sale.  See Initial Decision at 8-10 (citing Tr. at 32-33; CTP Ex. 2, at 3; CTP Ex. 3 at 3).  The ALJ found that Respondent could have called the two individuals to appear as witnesses “if it disputed their statements,” but it did not, and Respondent failed to offer any evidence to “lessen the reliability of those statements.”  Id. at 9, 10.

The ALJ also found the statements of the Compliance Officer and the MRP as reported by G.C. “consistent with the physical evidence,” which included “photographs of the Beetle Juice e-liquid product [that] indicate the ingredients included 12mg/ml Nicotine, 65VG/35PG,” and the “ingredients photographed in CTP Ex. 5 [that] included Beetle Juice flavoring, E-liquid Nicotine, and several large containers of vegetable glycerin and propylene glycol, the ingredients listed on the Beetle Juice e‑liquid product in CTP Ex. 6 at 9-10.”  Id. at 9 (citing CTP Ex. 5, at 1, 4, 6-9).  The ALJ also found the statements that the finished products are sold in the retail area to be consistent with the photographs of

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the e-liquid product “in a space with other products for sale, such as vaping kits, Elf Bar products and Kratom.”  Id. at 10 (citing CTP Ex. 6, at 1, 2; CTP Ex. 5, at 17).  The ALJ noted Respondent did not object or otherwise challenge this evidence.  Based on G.C.’s testimony and the physical evidence, the ALJ found that “the weight of the evidence establishes that the bulk ingredients photographed in CTP Ex. 5, which traveled in interstate commerce, were used in the manufacture of the [Beetle Juice] products photographed in CTP Ex. 6,” and Respondent held for sale the finished e-liquid products.  Id. at 9, 10.  In other words, based on the unrefuted testimony and evidence, the ALJ found that it is more probable than not that the e-liquid product photographed in CTP Ex. 6 was made with the ingredients photographed in CTP Ex. 5 that traveled in interstate commerce and was then held for sale. 

As noted, the Board reviews the ALJ’s assessment of the evidence to determine “whether the initial decision is supported by substantial evidence on the whole record.”  21 C.F.R. § 17.47(k).  “Substantial evidence” means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

“The ‘substantial evidence’ standard is deferential.”  Glenoaks Nursing Ctr., DAB No. 2522, at 6 (2013).  “Under the substantial evidence standard, the Board does not re-weigh the evidence or overturn an ALJ’s choice between two fairly conflicting views of the evidence; instead, the Board determines whether the contested finding could have been made by a reasonable fact-finder taking into account whatever in the record fairly detracts from the weight of the evidence that the ALJ relied upon.”  Douglas Bradley, M.D., DAB No. 2663, at 5 (2015) (citations and internal quotation marks omitted), appeal dismissed per stipulation, No. 2:15-CV-08835 (D.N.J. June 2, 2017).  Consistent with that standard, “[t]he Board defers to an ALJ’s findings regarding witness credibility and the weight assigned to a party’s evidence unless there is compelling reason to do otherwise.”  Duffy, DAB No. 3114, at 7 (quoting Madison‑Food-Mart-Inc., DAB No. 3058, at 7 (2022)).

We find the ALJ’s assessment of the evidence supported by substantial evidence in the record.  We find no reason to disagree with the ALJ’s determination that CTP met its burden to prove, by a preponderance of the evidence, that Respondent manufactured the e-liquid product and held it for sale after shipment in interstate commerce.

4. We reject Respondent’s arguments that CTP did not meet its burden to establish liability by a preponderance of the evidence, as Respondent offers no compelling reason not to defer to the ALJ’s sound assessment of the evidence.

Respondent argues that the Initial Decision is not supported by substantial evidence, meaning that the ALJ erred in concluding that CTP met its burden to establish liability

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based on a violation of 21 U.S.C. § 331(k).  R. Board Br. at 10.  Respondent maintains that CTP failed to establish that Respondent “received at least one of [the e-liquid product’s] components through interstate commerce.”  Id.  In so doing, Respondent asserts that CTP “did not relate” the product in question “to the ingredient list [CTP Ex. 11] offered to prove shipping in interstate commerce.”  Id. at 11 (emphasis omitted).  Respondent further asserts that CTP failed to prove that the “bulk ingredients” shown in the photographs in CTP Ex. 5 and identified in the ingredient list in CTP Ex. 11 were “contained” in the “specimen product depicted in” CTP Ex. 6 (meaning the finished e‑liquid product G.C. found was displayed for sale).  Id. at 13; see id. at 15 (asserting that “CTP’s entire case hinged on proving the specimen vaping product shown in [CTP] Exhibit 6 contained ingredients shipped in interstate commerce”).

Respondent also takes exception to the ALJ’s assessment of witness testimony.  According to Respondent, the ALJ erred because “CTP failed to prove definitely that the specimen product shown in [CTP] Exhibit 6 contained the bulk ingredients depicted in both [CTP] Exhibit 5 and listed in [CTP] Exhibit 11 based upon [L.C.’s] testimony.”  R. Board Br. at 15.  Respondent further argues the ALJ’s finding lacked evidentiary support because G.C. “did not testify that [Respondent’s] representatives acknowledged using the bulk materials shown in [CTP] Exhibit 5 or the ingredients listed in [CTP] Exhibit 11 to manufacture the [e-liquid] product,” and L.C. “could not establish [this] evidentiary link” through her testimony either.¹⁰  Id. at 15, 17; see also R. Reply Br. at 6 (arguing that while Respondent’s staff acknowledged that the tobacco products are manufactured at Respondent’s facility, G.C. did not testify that any “representative admitted to manufacturing” the e-liquid product).  Respondent thus argues “CTP presented no evidence which established the bulk ingredients depicted in [CTP] Exhibit 5 were used in manufacturing” the e-liquid product shown in CTP Ex. 6.  R. Board Br. at 15.

Respondent further argues the ALJ wrongly disregarded “the relationship between the product shown in [CTP] Exhibit 6 and the ingredients shown in [CTP] Exhibit 11” because CTP used the ingredient list in Exhibit 11 to determine what ingredients were in the finished e-liquid product.  See R. Board. Br. at 15-17.  Respondent asserts that without any evidence linking the bulk ingredients depicted in CTP Exhibit 5 to the finished e-liquid product shown in CTP Exhibit 6, CTP needed Exhibit 11 to determine the ingredients in the e-liquid product and to prove those ingredients were shipped in interstate commerce.  See id.  As before the ALJ, Respondent argues that CTP Exhibit 11 pertains to a “different product” (“bottle sizes” of “10 ml, 30 ml, and 100 ml” and including 2.4% nicotine concentration by volume), so CTP cannot determine the actual

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ingredients in the finished e-liquid product or whether those ingredients had crossed state lines.¹¹  See id.  Respondent thus argues CTP failed to prove Respondent “was offering [for sale] a product manufactured with ingredients supplied via interstate commerce,” and the ALJ erred in finding otherwise.  Id. at 17.¹²

The ALJ committed no error.  The gravamen of Respondent’s arguments (which are, essentially, repetitive of those raised earlier and addressed by the ALJ) is that the ALJ must have held CTP to a burden of proof higher than the preponderance of the evidence standard.  See R. Board Br. at 15 (asserting that CTP was required “to prove definitely” that the bulk ingredients photographed in CTP Ex. 5 were the same ingredients used to manufacture the e-liquid product depicted in CTP Ex. 6 (emphasis added)).  The ALJ correctly held CTP to establish a violation of 21 U.S.C. § 331(k) by a preponderance of the evidence in accordance with 21 C.F.R. § 17.33(b) (see Initial Decision at 5), i.e., that it is more probable than not, that Respondent violated 21 U.S.C. § 331(k).  We agree with the ALJ that CTP proved that it is more probable than not that the e-liquid product displayed for sale, as photographed in CTP Ex. 6, was made with at least one of the ingredients, to include, notably, nicotine, that traveled in interstate commerce, and photographed in CTP Ex. 5.

Notably, as the ALJ found, Respondent did not challenge the testimony of G.C., who testified that both the Compliance Officer and the MRP told him that Respondent’s tobacco products are manufactured in the lab area of the establishment (which is where G.C. observed and photographed the bulk ingredients shown in the photographs in CTP Ex. 5), and that the finished e‑liquid products are then sold in the retail area of the establishment, which is where G.C. observed and photographed the e-liquid product with a label that read “[m]anufactured for TX Vape Barn Lubbock, TX” for sale.  See Initial Decision at 8-10; Tr. at 32-33; CTP Ex. ¶¶ 2, 5‑10 (alteration in original).  As the ALJ also noted, Respondent could have called the Compliance Officer and the MRP to appear as witnesses “if it disputed their statements,” but it did not, and Respondent failed to offer any evidence to “lessen the reliability of those statements.”  Initial Decision at 9, 10.  Further, Respondent is a manufacturer and retailer of new tobacco products and admits to maintaining the bulk ingredients in CTP Ex. 5 to make e‑liquid products.  See R. Board

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Br. at 12 n.3; R. Reply Br. at 5.

The ALJ also relied upon the label on the e-liquid product shown in CTP Ex. 6, which reads in relevant part, “12mg/ml Nicotine,” “65VG/35PG,” and lists the ingredients as “USP Vegetable Glycerin, USP Propylene Glycol, Natural and Artificial Flavoring, [and] Nicotine.”  CTP Ex. 6, at 4-11; see Initial Decision at 9.  As the ALJ found, these same ingredients were seen and photographed in Respondent’s lab area (CTP Ex. 5).  The photographed ingredients included two large vegetable glycerin and propylene glycol USP drums (from South Korea and Pennsylvania, respectively); several bottles of The Flavor Apprentice flavoring (from California) and Capella flavoring (from New Jersey); and a bottle of Nicotine River raw e-liquid nicotine (from California).  See CTP Ex. 5, at 7-16; Initial Decision at 9.  We quote the ALJ’s apt words:

There is no reason to believe that Respondent purchased those items for any reason other than to manufacture an e-liquid product by using smaller portions of those components in a finished product.  It is difficult to imagine why a for-profit business would purchase bulk containers of ingredients if it did not intend to use them in the manufacture of a product. 

Initial Decision at 9.  Notably, Respondent never affirmatively disputed or offered proof that it did not in fact use or combine any of the ingredients photographed in the lab area (CTP Ex. 5), which were sourced from a state other than Texas or from outside the United States, to manufacture the e-liquid product displayed for sale as shown in CTP Ex. 6.  It was entirely reasonable for the ALJ to have inferred that such ingredients were used to manufacture the e-liquid product held out for sale in the absence of any offer of proof to the contrary.  If Respondent did not in fact use any of the ingredients shown in the photographs in CTP Ex. 5 to make the finished e-liquid products shown in CTP Ex. 6, then it could have produced relevant evidence (such as testimonial evidence from an employee of personal knowledge of that fact) but did not do so.  If Respondent used only ingredients that were manufactured, distributed, or otherwise sourced within the state of Texas to prove that no ingredient traveled in interstate commerce, it could have produced relevant proof, but did not do so.  Indeed, as noted, Respondent did not offer the ALJ any evidence in the form of exhibits.  A reasonable fact-finder could find, as the ALJ here found, that, based on the evidence viewed as a whole, it is more probable than not that Respondent manufactured its e-liquid product using the ingredients photographed in CTP Ex. 5 and then displayed that finished e-liquid product for sale. 

Respondent’s repetitive arguments about the ingredient list (CTP Ex. 11) are diversionary, and we, like the ALJ, question the materiality of CTP Ex. 11.  As the ALJ correctly noted, the issue is whether CTP satisfied its “burden of establishing that the products depicted in CTP Ex. 5 were used in the manufacture of Respondent’s e-liquid product pictured in CTP Ex. 6.”  Initial Decision at 8; see also id. at 7 n.3.  Moreover, as the ALJ also noted, and Respondent does not now dispute, CTP Ex. 11 is a form

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Respondent filed to register as a tobacco product manufacturer years before the May 2023 inspection, and CTP did not assert in these proceedings that “the products pictured in CTP Ex. 6 are the same as that described by Respondent in CTP Ex. 11.”  Initial Decision at 7 (citing CTP Ex. 1, at 2).  Still further, notably, the label on the finished e-liquid product displayed for sale itself lists its ingredients as “USP Vegetable Glycerin, USP Propylene Glycol, Natural and Artificial Flavoring, [and] Nicotine.”  CTP Ex. 6, at 4-11.  Since there is no evidence that the ingredients identified on the label of the finished e-liquid product itself did not in fact travel in interstate commerce, we fail to see why CTP needed to prove that the ingredients identified in CTP Ex. 11 were in fact used to make the finished product held out for sale on the inspection date.  Nor do we see why CTP needed to otherwise reconcile to Respondent’s satisfaction the variations or differences, if any, in volume or concentration of ingredients on the ingredient list as compared to the volume or concentration of ingredients in the finished e-liquid products displayed for sale.¹³

Thus, we agree with the ALJ that CTP proved by a preponderance of the evidence that Respondent held its e-liquid product for sale after shipment of its components or ingredients in interstate commerce.  Accordingly, we affirm the ALJ’s determination that Respondent violated 21 U.S.C. § 331(k), which is supported by substantial evidence and free of legal error.

2. We summarily affirm the ALJ’s determination that the CMP of $19,192 is appropriate in the absence of any allegation of ALJ error as to that determination.

Having concluded that the ALJ’s determination that Respondent violated 21 U.S.C. § 331(k) is supported by substantial evidence in the record and free of legal error, thus establishing a basis for imposition of a CMP on Respondent, we next consider whether the CMP imposed was appropriate.  On appeal, the Board may “increase, reduce, reverse, or remand any civil money penalty determined by the [ALJ] in the initial decision.”  21 C.F.R. § 17.47(j).

In concluding that the imposition of a $19,192 CMP is appropriate, the ALJ considered “any aggravating or mitigating circumstances and the factors listed in the [FDCA].”  Initial Decision at 10-11 (citing 21 C.F.R. § 17.34(a)-(b)); see 21 C.F.R. § 17.45(b)(3) (“If the respondent is liable for penalties or assessments,” the ALJ determines “the appropriate amount of any such penalties or assessments, considering any mitigating or

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aggravating factors that he or she finds in the case”).  Those factors are “the nature, circumstances, extent, and gravity of the violation or violations and, with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require.”  21 U.S.C. § 333(f)(5)(B).

Addressing those factors, the ALJ found the gravity of the violation and Respondent’s degree of culpability to be high because Respondent received a warning letter from CTP, and yet “it continued to manufacture and sell [the e-liquid product] and other ‘new tobacco products.’”  Initial Decision at 11, 12.  The ALJ also found that Respondent had not documented an inability to pay the CMP or provided any evidence relating to its ability to continue to do business, nor had Respondent “provided any evidence establishing any mitigating factors.”  Id.  The ALJ concluded that the $19,192 CMP that CTP sought “against Respondent is appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).”  Id. at 12.

Respondent does not allege or “identify specific exceptions” to the ALJ’s findings and assessment of the CMP.  21 C.F.R. § 17.47(c).  Absent any exceptions to the ALJ’s analysis, we summarily affirm the ALJ’s determination that the $19,192 CMP CTP sought against Respondent is appropriate.¹⁴  See Cape Tobacco, DAB No. 3091, at 6 (“In the absence of any argument challenging the ALJ’s findings and conclusion, we summarily affirm them . . . .”); Leung’s, Inc., DAB No. 3025, at 9 (2020) (summarily affirming the ALJ’s factual finding concerning violations when the respondent did not provide any dispute or objection).   

3. We cannot overturn the Initial Decision on Respondent’s constitutional and Jarkesy arguments.

Respondent argues that Congress’s delegation of authority to FDA in 21 U.S.C. § 387a(b) to deem additional tobacco products—which the FDA deemed ENDS products—to be subject to the FDCA violated the “Separation of Powers principle.”  See R. Board Br. at 3-6.  Respondent argues that because “[t]he TCA’s deeming provision, 21 U.S.C. § 387a(b), and by extension FDA’s Deeming Rule, are thus unconstitutional,” CTP in this case has “proceeded in an extra-constitutional manner and a reversal of the Initial Decision is thus mandated.”  Id. at 6.  Respondent appears to acknowledge that the Board has no authority to decide the constitutionality of any provision of the FDCA, TCA, and the FDA’s deeming regulations, as Respondent states “that 21 C.F.R. § 17.19(c) constrains the Board’s authority to pass on the constitutionality of the deeming provision set forth in 21 U.S.C. § 387a(b).”  R. Reply Br. at 2.  Respondent states that it

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nevertheless raised earlier, and continues to raise, its “constitutional claim . . . for preservation purposes,” as it intends to seek judicial review of “constitutional or other underlying issues.”  Id.

The ALJ correctly noted that the regulation in 21 C.F.R. § 17.19(c) provides that the ALJ does not have the authority to find federal statutes or regulations invalid, and that the ALJ is limited to determining whether Respondent violated 21 U.S.C. § 331(k) and, if so, the appropriate amount of the penalty to be imposed for that violation.  See Initial Decision at 10.  The Board likewise must follow the applicable statutes and regulations; we cannot find them invalid.  J. Peaceful, L.C., DAB No. 2742, at 15 (2016) (“Neither the ALJs nor this Board are empowered to ignore or overturn applicable statutes or regulations.”); see also Zoom Mini Mart, Inc., DAB No. 2894, at 17 (2018) (holding that “we are not allowed to ignore or overturn” the conclusion the ALJ reached “by following the applicable authority found” in the FDCA); Fady Fayad, M.D., DAB No. 2266, at 14 (2009) (“The Board has consistently held that ALJs may not declare a statute or regulation to be unconstitutional and refuse to apply or follow the statute or regulation on that basis.”), aff’d, 803 F. Supp. 2d 699 (E.D. Mich. 2011).

Furthermore, the Board reviews the ALJ’s decision to determine whether the ALJ’s determinations that Respondent violated 21 U.S.C. § 331(k) and that the $19,192 CMP imposed for that violation is appropriate are supported by substantial evidence in the record.  21 C.F.R. §  7.47(k).  Having determined that they are supported by substantial evidence in the record, we affirm the Initial Decision, and cannot overturn the Initial Decision on constitutional grounds.  Put differently, were the Board to overturn the Initial Decision in reliance on Respondent’s constitutionality arguments, such an action would amount to a determination that the statutory and regulatory provisions at issue are not constitutional or an outright refusal to apply those provisions, which we cannot do.

Nevertheless, we discuss SEC v. Jarkesy, 603 U.S. 109 (2024) separately since Respondent has devoted earlier, and continues to do so before the Board, a significant portion of its briefing to a discussion of Jarkesy.  Respondent argues that CTP violated Respondent’s Seventh Amendment right to a jury trial by seeking to impose a CMP against Respondent in this administrative proceeding, and CTP has “proceeded in an extra-constitutional manner and a reversal of the Initial Decision is thus mandated.”  See R. Board Br. at 7-9; see also R. Reply Br. at 2 (“Plain and simple, the Board is bound by rulings of the United States Supreme Court and is obligated to uphold those rulings in the context of interpreting the statutes and regulations over which it has responsibility.”). According to Respondent, “the Supreme Court did not limit its application to a singular agency (the Security and Exchange Commission [(SEC)]) and did not cabin its application to a limited array of offending conduct,” but instead applies to whenever an agency’s “remedy is ‘designed to punish or deter the wrongdoer,’” which Respondent argues applies here because the CMP sought by CTP was “to punish [Respondent] for

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violating the [FDCA].”  R. Reply Br. at 3-5 (quoting Jarkesy, 603 U.S. at 123); see R. Board Br. at 7-9.

We agree with Respondent that the Board cannot disregard Supreme Court decisions.  However, we reject Respondent’s attempt to equate this case with Jarkesy.  We disagree with Respondent’s argument, which, essentially, is that Jarkesy demands that an entity manufacturing and/or selling tobacco products, such as Respondent, must have been afforded a jury trial in accordance with the Seventh Amendment and that the fact that one was not afforded here renders CTP’s enforcement action against Respondent in this case altogether invalid or void ab initio.  In contrast to Jarkesy, the case before us concerns a separate, distinct statutory and regulatory scheme (the FDCA as amended and its implementing regulations) as administered by the FDA, within the United States Department of Health and Human Services. 

Jarkesy arose from “an enforcement action” by the SEC pursuant to the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.  Jarkesy, 603 U.S. at 115-18.  The SEC brought the enforcement action seeking CMPs from an investment advisor company and its individual manager for alleged securities fraud, and the SEC elected to proceed before an ALJ, rather than by jury trial, which the Securities and Exchange Act of 1934 also permitted.  Id. at 115, 138-40.  The Supreme Court heard the case to address the question of “whether the Seventh Amendment permits the SEC to compel respondents to defend themselves before the agency rather than before a jury in federal court,” and concluded that “[t]he Seventh Amendment . . . applies and a jury is required.”  Id. at 115, 120-21. 

In Jarkesy, the Court held that the “SEC’s antifraud provisions replicate common law fraud, and it is well established that common law claims must be heard by a jury.”  Id. at 120.  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.”  Id. at 136.  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.  Id. at 127-32.  We recognize, but do not decide—as the Supreme Court did not decide—the potential applicability of that exception to the FDCA and its implementing regulations concerning imposition and enforcement of CMPs for violations of the FDCA’s restriction on the sale of tobacco products including new tobacco products such as the e‑liquid product at issue here.  We cannot anticipate how federal courts may apply the reasoning of Jarkesy in different circumstances.¹⁵

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In any event, as CTP argues, we see no authority for the Board to ignore or decline to apply any part of the FDCA or its implementing regulations by extrapolation from the Jarkesy decision.  CTP Mem. in Opp’n to Resp’t Appeal at 3-5.  As stated earlier, the regulations do not permit an ALJ to find federal statutes or regulations invalid and grant an ALJ no authority to decline to apply them, so the ALJ did not err legally in applying the statute and regulations to find Respondent liable for violating 21 U.S.C. § 331(k) by holding for sale new tobacco products that lacked FDA authorization or approval, which was not rendered erroneous by Jarkesy.

Accordingly, we deny Respondent’s request to reverse the Initial Decision based on the raised constitutional and Jarkesy arguments.

Conclusion

For the foregoing reasons, we affirm the Initial Decision.

Endnotes

¹   The SE Report must show that the new tobacco product either has the “same characteristics”—that is, “materials, ingredients, design, composition, heating source, or other features”—as the predicate product, or has “different characteristics” but “does not raise different questions of public health.”  21 U.S.C. § 387j(a)(3)(A), (B).

²   CTP submitted a copy of the Board’s decision in Drive Thru Vapors, LLC, DAB No. 3168 (2025) as an attachment to its response brief.  A copy of DAB No. 3168 is appended to this decision as Attachment A.

³   The facts stated here are taken from the Initial Decision and the record of the ALJ proceedings.

⁴   As we discuss in more detail later, CTP imposed a CMP on Respondent following a May 13, 2023 inspection of Respondent’s facility, during which an FDA-commissioned inspector observed the “TXV BARN BREWED Beetle Juice 12mg 30ML” e-liquid product, for which no FDA premarket authorization was in effect, displayed for sale.  We will refer to the “TXV BARN BREWED Beetle Juice 12mg 30ML” e-liquid product at issue as the “e-liquid product” (or “e-liquid products”) from this point forward rather than identify the product by full name unless we quote language from the record materials that includes the full name of the product.

⁵   On January 23, 2024, after the ALJ denied Respondent’s motion to hold the case in abeyance, Respondent filed its Reply to CTP’s Response to Motion to Hold in Abeyance, repeating its request for “an Order which holds this matter in abeyance pending the Supreme Court’s ruling in Jarkesy.”  Initial Decision at 3.

⁶   We note that CTP’s correspondence to Respondent referred to this individual (Compliance Officer) as Respondent’s “Vice President” or “Owner.”  See CTP Ex. 7, at 1; CTP Ex. 8, at 1.

⁷   The Federal Rules of Evidence include rules that define hearsay, and address the rules against, and exclusions from and exceptions to, hearsay.  See generally Fed. R. Evid. 801-807.  As the ALJ correctly noted, in accordance with 21 C.F.R. § 17.39(b), the ALJ is not bound by the Federal Rules of Evidence but may apply them as appropriate.  See Initial Decision at 9; Stowers Enters., Inc., DAB No. 2969, at 7 n.5 (2019).  The ALJ “shall determine the admissibility of evidence” and “shall exclude evidence that is not relevant or material.”  21 C.F.R. § 17.39(a), (c).  Hearsay, moreover, is admissible in proceedings governed by the regulations in 21 C.F.R. Part 17, such as this case.  See Monroe Mobil, Inc., DAB No. 2918, at 8 n.6 (2018); Deli-Icious Catering, Inc., DAB No. 2812, at 13 n.10 (2017).  Respondent does not assert that the ALJ erred in admitting and considering G.C.’s written testimony that included discussion of the Compliance Officer’s and the MRP’s hearsay statements, and we find no ALJ error in doing so.   

⁸   Attached to Respondent’s brief to the Board are the ALJ’s decision and documents which duplicate some of the documents the ALJ admitted into the record.  Respondent need not have submitted duplicate copies of documents the ALJ admitted into the record.  We rely on and cite to the exhibits in the record of the ALJ proceedings, but we will retain Respondent’s duplicate submissions to the Board as a part of the administrative record of this case.

⁹   There are three different sizes (by volume) listed for the “Beetle Juice” product (“100ML,” “10ML,” and “30ML”), but the percentages of the additive ingredients are the same for all three sizes.  See CTP Ex. 11, at 3.

¹⁰   During the hearing, Respondent questioned L.C. about whether she had proof that the e-liquid product shown in CTP Ex. 6 was the same as the product named on the ingredient list in CTP Ex. 11.  See Tr. at 14‑22.  L.C. stated, “No, I have no proof at all. . . . That’s not my role.”  Id. at 18:9-11.  Respondent also asked L.C. if she could “tell the Court with absolute certainty that” the materials photographed in CTP Ex. 5 “were used to manufacture the specimen product shown in [CTP] Exhibit 6,” to which she stated, “[t]he inspection report states that they were, and therefore, I relied on the inspection report.”  Id. at 22:3-9.

¹¹   Respondent argues that “basic mathematics and science tells us that” the “12 mg/ml nicotine concentration” in the e-liquid product in CTP Ex. 6 equals “1.2% total volume” of nicotine, but the ingredient list in CTP Ex. 11 pertains to a “2.4% nicotine Beetle Juice e-liquid product,” so they are “different product[s].”  R. Board Br. at 16.  We need not decide whether Respondent’s calculations and arguments regarding CTP Ex. 11 are correct and, in any event, the arguments concerning CTP Ex. 11 are diversionary, as we explain later.

¹²   Before the ALJ, Respondent argued that CTP failed to prove that it was offering the e-liquid product “for sale” because there were no prices listed for any of the e-liquid products.  See R. Post-Hr’g Br. at 17-19 (emphasis omitted).  Respondent never explained why the price of the finished product must be displayed for the product to have been considered held out for sale to and available for purchase by the consumer, for purposes of determining compliance with the FDCA and, specifically, 21 U.S.C. § 331(k).  Respondent, moreover, does not make this argument before the Board, so we need not address it.  See 21 C.F.R. § 17.47(c).

¹³   We note that an inspection photograph of the lab area shows multiple documents (taped to the wall) identifying various amounts of the nicotine additive required to obtain various concentration levels of nicotine in the finished e-liquid products of varying sizes, by volume.  See CTP Ex. 5, at 4.  This suggests an interrelationship between or among the amounts of ingredients that are compounded together to achieve a certain nicotine level, depending on the desired size of the product.  In any event, we need not delve further into this issue.  As we and the ALJ have explained, at bottom, the preponderance of the evidence supports a determination that at least one ingredient, including, namely, nicotine, traveled through interstate commerce to Respondent’s Texas facility.

¹⁴   In its Answer, Respondent argued that CTP’s complaint “does not identify the factors which support its determination of the amount of the proposed [CMP],” which was a violation of Respondent’s right to due process.  Answer at 6.  Respondent, however, did not raise this issue in subsequent filings before the ALJ and the Board.  Accordingly, we do not address it.  See 21 C.F.R. § 17.47(c).

¹⁵   Respondent also argued “[t]he Fifth Circuit’s Jarkesy ruling upheld by the Supreme Court required that Congress must give an agency ‘an intelligible principle by which to exercise’ its power to choose between pursuing relief in an Article III court or an administrative forum,” and “Congress’s failure to articulate an intelligible principle” bars CTP from pursuing a CMP here.  R. Board Br. at 9-10 (quoting Jarkesy v. SEC, 34 F.4th 446, 451 (5th Cir. 2022), aff’d and remanded, 603 U.S. 109 (2024)).  For the reasons we have given, we cannot and do not address Respondent’s “Fifth Circuit’s Jarkesy ruling” argument.