Center Point Vapes LLC d/b/a Center Point Vapes, DAB No. 3224 (2026)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Center Point Vapes LLC (Respondent) is a manufacturer and retailer of tobacco products.  The Center for Tobacco Products (CTP) filed an administrative complaint against Respondent, seeking a civil money penalty of $20,678 for manufacturing and holding for sale adulterated and misbranded tobacco products in violation of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 331(k).  During the ensuing proceedings before an Administrative Law Judge (ALJ), the parties submitted written evidence and argument, and Respondent waived its right to an in-person evidentiary hearing.  The ALJ concluded that:  (1) Respondent violated the FDCA by failing to obtain premarket authorization for e-liquid products it manufactured and held for sale; and (2) a civil money penalty of $15,678 is appropriate based on the record evidence, applicable law, and aggravating and mitigating circumstances.  Center Point Vapes LLC, DAB TB9917 (2025) (ALJ Decision).  Respondent appealed.  

Before the Board, Respondent does not challenge the ALJ’s determination that it violated the FDCA but argues that the civil money penalty amount is inappropriate.  Respondent, however, failed to identify any legal or factual error undermining the ALJ’s penalty determination.  For the reasons explained below, we affirm the ALJ Decision. 

Legal Background

In 2009, Congress amended the FDCA, 21 U.S.C. § 301, et seq., through the enactment of the Family Smoking Prevention and Tobacco Control Act (TCA).  See Pub. L. No. 111-31, 123 Stat. 1776 (2009).  The amendments provided the U.S. Food and Drug Administration (FDA) with primary regulatory authority over the manufacture, marketing, and distribution of tobacco products.  Id. § 3(1).  Accordingly, the FDCA empowers FDA to set standards for tobacco products (21 U.S.C. § 387g); restrict sales and distribution (id. § 387f(d)(1)); and regulate manufacturing (id. § 387f(e)).

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“Tobacco product” is defined to mean “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.”  21 U.S.C. § 321(rr)(1).  In 2016, FDA issued a final rule concluding that the statutory definition of “tobacco product” includes electronic nicotine delivery system (ENDS) products (such as e-cigarettes), as well as their components or parts (such as e-liquids with nicotine).  See Deeming Tobacco Products to be Subject to the Federal Food, Drug, and Cosmetic Act, 81 Fed. Reg. 28,974, 28,975, 28,982 (May 10, 2016).  As relevant here, the FDCA 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.  21 U.S.C. § 387j(a)(1) (defining “new tobacco product”).

A new tobacco product (including e-liquids with nicotine) may not be introduced into interstate commerce without FDA authorization.  See 21 U.S.C. § 387j(a)(2)(A).  FDA may grant such authorization in three ways.  First, based on FDA’s review of a premarket tobacco product application, FDA may issue an order finding that the marketing of the new tobacco product would be “appropriate for the protection of the public health.”  Id. § 387j(c)(1)(A)(i), (2)(A).1  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 a tobacco product commercially marketed in the United States as of February 15, 2007, or a tobacco product marketed after that date, but which FDA previously determined to be substantially equivalent.  Id. §§ 387j(a)(2)(A)(i), 387e(j).  Third, based on FDA’s review of an exemption request and “abbreviated report,” FDA may issue an order finding an exemption.  Id. §§ 387j(a)(2)(A)(ii), 387e(j)(1), (3)(A); 21 C.F.R. § 1107.1. 

A new tobacco product is “adulterated” if it is required to have, but does not have, a required premarket authorization order.  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).  It is a violation of the FDCA to cause a tobacco product to become adulterated or misbranded while it is held for sale after shipment of one or more of its components in interstate commerce.  Id. § 331(k).

The FDCA authorizes civil money penalties against any person who violates a requirement of the FDCA relating to tobacco products.  21 U.S.C. § 333(f)(9)(A).  At the time of the violation here (May 2024), manufacturers or retailers of tobacco products were subject to a civil money penalty of up to $20,678 for each FDCA violation, not to

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exceed $1,378,541 for all violations adjudicated in a single proceeding.  21 U.S.C. § 333(f)(9)(A); 21 C.F.R. § 17.2; 45 C.F.R. § 102.3 (eff. Oct. 6, 2023).

To impose a penalty against a tobacco manufacturer or retailer, CTP (the FDA component “with principal jurisdiction over the matter”) must serve an administrative complaint on the respondent and file a copy of the complaint with FDA’s Division of Dockets Management.  21 C.F.R. § 17.5.  The respondent may request a hearing by filing an answer.  Id. § 17.9(a).  Cases are assigned to an ALJ, who conducts the hearing and issues an “initial decision” with findings, conclusions, and any penalty based on the record developed before the ALJ.  Id. §§ 17.5(d), 17.19, 17.45(a). 

In determining the penalty amount, the ALJ “shall evaluate any circumstances that mitigate or aggravate the violation and shall articulate in their opinions the reasons that support the penalties and assessments imposed.”  21 C.F.R. § 17.34(a).  In addition, the ALJ must consider the factors identified in the statute under which the penalty is assessed.  Id. § 17.34(b).  The relevant statutory factors are found in 21 U.S.C. § 333(f)(5)(B), and include “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.” 

Either party may appeal an ALJ’s initial decision to the Board.  21 C.F.R. § 17.47(a).  The Board may decline review, affirm, or reverse the initial decision or decision granting summary decision, and may increase, reduce, reverse, or remand any civil money penalty determined by the ALJ.  Id. § 17.47(j).

Case Background

1. CTP’s administrative complaint

On September 19, 2024, CTP filed an administrative complaint against Respondent, seeking a civil money penalty of $20,678 for manufacturing and holding for sale new tobacco products that lack the premarket authorization required under the FDCA.  Compl. ¶¶ 1, 14, 19, 23, 26.  The complaint alleged that Respondent manufactures tobacco products, including e-liquids, and holds them for sale at its location in Texas; that at least one component used by Respondent to manufacture e-liquids comes from outside of Texas; and that Respondent’s e-liquid products are “new tobacco products” not commercially marketed before February 2007.  Id. ¶¶ 8, 14-15, 18.

The complaint further alleged that on January 18, 2024, CTP issued to Respondent a warning letter stating that e-liquids that Respondent manufactures, sells and/or distributes were adulterated and misbranded because they lacked the required FDA authorization.  Id. ¶ 16.  In addition, the complaint alleged that on May 10, 2024, an FDA-commissioned

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inspector performed an on-site inspection of Respondent’s establishment and discovered that Respondent was again holding for sale e-liquids that lacked the required FDA marketing authorization order, a substantial equivalence order, or a found-exempt order.  Id. ¶¶ 17, 19-22.  Thus, the complaint alleged, Respondent violated the FDCA, 21 U.S.C. § 331(k), by failing to obtain the required FDA authorization for its e-liquid product, causing it to become adulterated and misbranded while held for sale after shipment of one or more of its components in interstate commerce.  Id. ¶ 23.

2. Respondent’s answer

Respondent filed an answer to the complaint on October 19, 2024.  In paragraph one of the answer, Respondent appeared to deny the allegation that its e-liquid products lacked the required premarket authorization.  See Answer ¶ 1.  Paragraph one referenced two letters from FDA, dated September 27, 2017, and October 18, 2017, both of which Respondent attached to the answer.  Id.  The letters acknowledge receipt of submissions made by Respondent in order to comply with certain FDCA requirements (though not the premarket authorization requirement), and both letters state they did not constitute “review” or “approval” of the submissions.2  In paragraph two of the answer, Respondent alleged that its manager did not assume her role until October 2022 and was “unaware that any part of the business was not in compliance with FDA” requirements.  Id. ¶ 2.  Finally, Respondent asserted in paragraph three that the penalty proposed by CTP was too high because Respondent believed it was based on profits from “house juice” sales, which, it said, were the “lowest of all business sales.”  Id. ¶ 3.     

3. The ALJ proceedings

On October 25, 2024, the ALJ issued an Acknowledgement and Pre-Hearing Order (APHO) specifying a schedule and requirements for a pre-hearing exchange of evidence, written argument, and other material.  APHO ¶¶ 2, 4, 6-9.  The APHO required both parties to submit, as part of the pre-hearing exchange, a brief with answers to a questionnaire seeking information needed by the ALJ to decide the case, including the parties’ positions about whether the amount of the civil money penalty sought by CTP

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was appropriate (assuming Respondent was liable for a penalty).  APHO ¶¶ 6-7; see also Pre-Hr’g Br. of Resp. Template (CRD Dkt. 6a) at 1, 5.  The questionnaire directed Respondent to identify “any mitigating circumstances” it believed the ALJ “should consider to possibly reduce the amount of any penalty imposed.”  Id. at 5.  The questionnaire also directed Respondent to identify any exhibits supporting its position that the penalty amount is inappropriate and to “explain how” the exhibits support its position.  Id. at 5, 6.

On January 29, 2025, Respondent submitted seven documents that were not marked as proposed exhibits.  Respondent did not file a pre-hearing brief or identify proposed witnesses.     

On February 18, 2025, CTP filed a pre-hearing brief and nine proposed exhibits.  CTP’s exhibits included a copy of CTP’s January 18, 2024 warning letter (CTP Ex. 7); written direct testimony of the Deputy Division Director of CTP’s Division of Enforcement and Manufacturing (CTP Ex. 1); written direct testimony of the FDA-commissioned inspector who conducted the May 10, 2024 inspection of Respondent’s establishment (CTP Ex. 2); and a copy of the inspector’s written report (CTP Ex. 3). 

In the January 18, 2024 warning letter that CTP filed as evidence, CTP informed Respondent that:

• E-liquid products containing nicotine from any source “must be in compliance with” the FDCA;
• The FDCA requires that new tobacco products, including e-liquids, must have “a premarket authorization in effect” to be legally marketed in the United States;
• CTP determined that Respondent manufactures and sells or distributes e-liquid products (one of which, “French Vanilla 120ml 5mg,” is named in the letter) that do not have a FDA marketing authorization order in effect, are “not otherwise exempt from the marketing authorization requirement,” and are “adulterated” and “misbranded” within the meaning of the FDCA; and
• Failure to address the identified violations (or similar violations) could lead to “regulatory action,” including imposition of a civil money penalty.

CTP Ex. 7, at 1-2.  The warning letter informed Respondent that if it believed its products were not in violation of the FDCA, then it could submit a written response to CTP providing the information and reasons supporting its position.  Id. at 2. 

In the FDA-commissioned inspector’s declaration, he testified (and his written report reflects) that Respondent’s manager told him during the inspection that Respondent manufactures and sells e-liquid products to consumers and uses Tobacco Free Nicotine (TFN) in its manufacturing process.  CTP Ex. 2, ¶¶ 9, 10; CTP Ex. 3, ¶ 48.  The inspector further stated that when asked if Respondent had submitted a Premarket Tobacco Product

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Application (PMTA) for any tobacco product it manufactures, the manager stated that she believed Respondent had submitted PMTAs for e-liquids made using TFN.  CTP Ex. 2, ¶ 11; see also CTP Ex. 3, ¶ 29.  The inspector’s written report documents the manager’s acknowledgment that Respondent had not received FDA authorization for any product that it was manufacturing and holding for sale or distributing.  CTP Ex. 3, ¶ 29.1.3

CTP’s Deputy Division Director testified in his declaration that searches of FDA’s tobacco-product, application, and compliance databases revealed no evidence that Respondent’s e-liquid products were commercially marketed in the United States as of February 15, 2007.  CTP Ex. 1, ¶ 11.  The searches also revealed no record of Respondent’s e-liquid products having a marketing-granted order, substantial-equivalence order, or a found-exempt order in effect on the date of the inspection, and no record of Respondent having filed applications or requests for such orders.  Id., ¶¶ 12-13.

On July 10, 2025, the ALJ conducted a pre-hearing conference with the parties.  Pre-Hr’g Conf. Summary at 1.  The ALJ admitted CTP’s exhibits without objection and found that an in-person hearing was unnecessary because Respondent did not wish to cross-examine CTP’s witnesses.  Id. at 2.  The ALJ advised Respondent that it had not filed its documents in accordance with the APHO’s instructions but allowed Respondent additional time to “properly mark and refile” the documents.  Id.  The ALJ also “confirmed with Respondent that, although it denied [CTP’s] allegations in its Answer, it now admits the allegations in the complaint and the only issue remaining is to determine the appropriate penalty.”  ALJ Decision at 3 (citing Pre-Hr’g Conf. Summary at 1).  Regarding the penalty amount, the ALJ advised the parties that “CTP must demonstrate the appropriateness of the civil money penalty” and reminded Respondent that it could “offer any mitigating factors challenging CTP’s recommended civil money penalty.”  Pre-Hr’g Conf. Summary at 1.  Finally, the ALJ advised the parties that they could submit simultaneous “final briefs” addressing the “remaining issue” in the case no later than August 25, 2025.  Id. at 2.

On July 30, 2025, Respondent refiled the documents it submitted in January 2025, identifying them as proposed exhibits one through six.  The ALJ admitted Respondent’s proposed exhibits without objection.  See ALJ Decision at 4.  Respondent’s Exhibit 5 consists of two FDA letters (dated September 10, 2018, and December 27, 2019) acknowledging receipt of a submission by Respondent titled “Listing of Ingredients in Tobacco Products.”4  Respondent’s Exhibit 6 is a typed unsigned statement, apparently

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written by Respondent’s manager, who asserts that Respondent “ceased manufacturing and sale on all house juice” (e-liquids) on May 10, 2024.  The manager further asserts that she was “waiting to obtain[ ] POS [point of sale] transaction logs” and “tax returns” from 2022 and 2023, and that as an “employee” of Respondent, she lacked “access to banking or tax information.”  Resp. Ex. 6.  Respondent did not subsequently provide any business, financial, or tax records, or ask the ALJ for additional time to obtain such material.5 

Neither party filed a final brief, and the record shows no answers by Respondent to the ALJ’s pre-hearing questionnaire.    

4. The ALJ Decision

On November 10, 2025, the ALJ issued a decision finding that Respondent admitted violating the FDCA “as alleged by CTP.”  ALJ Decision at 4-5.  The ALJ concluded that Respondent had violated 21 U.S.C. § 331(k) by failing “to obtain the required premarket authorization for its new tobacco products, causing them to become adulterated and misbranded while they were held for sale after interstate shipment of one or more of their components,” and that Respondent was therefore liable for a civil money penalty not to exceed the applicable regulatory limit of $20,678.  Id.  

The ALJ then determined the amount of the civil money penalty, taking into account “‘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.’”  ALJ Decision at 5 (citing 21 U.S.C. § 333(f)(5)(B); 21 C.F.R. § 17.34).  Upon consideration of the relevant factors and arguments relating to the civil money penalty, the ALJ determined that a reduced penalty of $15,678 is appropriate.  Id. at 5-7 (analyzing the relevant regulatory factors and Respondent’s arguments).  Respondent appealed the ALJ Decision to the Board.

Standard of Review

The standard of review on a disputed issue of fact is whether the ALJ’s 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.

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Analysis

1. Respondent violated the FDCA by manufacturing and holding for sale adulterated and misbranded e-liquids.

In its notice of appeal (NA), Respondent does not challenge the ALJ’s conclusion that it violated the FDCA.  See ALJ Decision at 4-5.  We therefore summarily affirm the ALJ’s conclusion that it violated 21 U.S.C. § 331(k) by failing to obtain FDA premarket authorization for new tobacco products (e-liquids) that it manufactured, causing them to be adulterated and misbranded while being held for sale after shipment of one or more of their components in interstate commerce.  See Vape NV LLC, DAB No. 3216, at 6-7 (2025) (summarily affirming ALJ’s findings and conclusions concerning FDCA violation absent specific exceptions in notice of appeal); Sana Ventures LLC, DAB No. 3169, at 7 (2025) (same); Smokers Haven 3 LLC, DAB No. 3164, at 5 (2024) (same).

2. There is no basis to disturb the reduced penalty imposed by the ALJ.

Respondent’s appeal challenges only the amount of the civil money penalty.  NA at 1-2 (requesting reconsideration of the penalty amount based on various “factors”).  In concluding that $15,678 is an appropriate penalty, the ALJ found that Respondent’s FDCA violation in May 2024 was “particularly serious because [it] occurred despite earlier warnings” to Respondent as set forth in CTP’s January 2024 warning letter.  ALJ Decision at 5-6.  The ALJ further found Respondent “fully culpable” for the violation, noting that the FDCA “places a heavy burden on manufacturers who choose to manufacture or sell tobacco products because of their highly dangerous and addictive nature.”  Id. at 7.  In addition, the ALJ found that Respondent had “offered no argument” that the penalty would adversely affect its ability to continue to do business.  Id. at 6.  The ALJ noted that the record showed no violations of 21 U.S.C. § 331(k) resulting in a civil money penalty before May 2024 and apparently regarded that circumstance as a mitigating factor.  Id.  However, the ALJ found that Respondent was “on notice” from the January 2024 warning letter that one or more of Respondent’s e-liquid products were being sold without authorization in violation of the FDCA, and that the violation cited in the warning letter was not an “exhaustive” list.  Id.  Finally, while acknowledging that Respondent had made some efforts to comply with FDCA requirements, the ALJ emphasized that “the relevant inquiry is whether Respondent [had] obtained” (italics added) required premarket authorization for its new tobacco products as of May 2024, and that Respondent had not done so and instead “simply continued to manufacture and sell” them without that authorization.  Id. at 6-7. 

In this appeal, Respondent does not contend that the ALJ committed a legal or factual error in determining the civil money penalty.  Respondent merely asks the Board to “reconsider” (or to direct the ALJ to reconsider) the penalty amount in view of certain “factors” or circumstances that it characterizes as “appropriate mitigation.”  NA at 1-2.

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We consider each of the alleged factors and circumstances but conclude that none warrants a further reduction in the penalty amount, and that the ALJ’s penalty determination is supported by substantial evidence and not legally erroneous.

1. Pre-inspection compliance efforts

As noted above, Respondent provided the ALJ with copies of FDA letters acknowledging receipt of certain material that Respondent had submitted to CTP in 2017 and 2018.  Resp. Ex. 5; see also Answer (attachments).  Alluding to those letters, Respondent contends that its “efforts toward compliance” with the FDCA “were not fully considered” by the ALJ in deciding the appropriate penalty, and that those efforts demonstrate that its violation in May 2024 “was not intentional.”  NA ¶ 1.  

The ALJ considered Respondent’s compliance efforts in determining the penalty, finding them to be “sincere.”  ALJ Decision at 7.  The problem is that Respondent’s submissions in 2017 and 2018, as described in the FDA acknowledgment letters, did not pertain to the premarket authorization requirement that Respondent violated.  See supra at pp. 4 n.2, 6 n.4.  Respondent did not submit a PMTA for any tobacco product it manufactured and did not obtain the FDA’s authorization to market and sell any e-liquid product it manufactured.  The ALJ found that Respondent failed to act on CTP’s January 2024 warning letter and “simply continued to manufacture and sell” e-liquids without the required authorization, demonstrating “an inability” or “at worst . . . an unwillingness to comply” with the law.  ALJ Decision at 6-7.  That finding is supported by substantial evidence, including the May 2024 inspection findings that Respondent was continuing to sell e-liquid products that it had manufactured, despite knowing that it had not received premarket authorization for those products.  See CTP Ex. 2, ¶ 10; CTP Ex. 3, ¶ 29.1 (indicating that Respondent’s manager replied “no” to inspector’s question about whether Respondent had received “any authorizations . . . for any products that it manufactures and currently sells/distributes”). 

The ALJ’s findings regarding the nature, circumstances, and gravity of Respondent’s violation support the penalty imposed.  Indeed, evidence that a tobacco retailer or manufacturer failed to correct violations in response to a warning letter is an aggravating factor that may warrant the imposition of a substantial civil money penalty.  See, e.g., Drive Thru Vapors, LLC, DAB No. 3168, at 12 (2025) (affirming ALJ’s unchallenged finding that retailer’s receipt of a warning letter showed history and culpability in support of a maximum penalty); D and A Bus. Invs. LLC, DAB No. 3166, at 11-12 (2024) (affirming maximum penalty where retailer, among other things, continued selling adulterated and misbranded ENDS products despite prior receipt of warning letter); Smokers Haven at 7 (“[T]he ALJ appropriately considered, as an aggravating factor, [retailer’s] failure to change its business practices after the warning letter.”).

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Respondent asserts that it acted “in good faith” and believed it was compliant with all FDCA requirements based on “FDA’s correspondence,” NA ¶ 1, but that subjective belief is inconsistent with the objective evidence.  None of the FDA letters, all of which predate the January 2024 warning letter by several years, suggest that Respondent was compliant with the FDCA.  As the ALJ noted, the letters all state that they did not constitute “review” or “approval” of any submission or request by Respondent.  See, e.g., Resp. Ex. 5.  Furthermore, none of the letters mentions the FDCA’s marketing authorization requirement or suggests that FDA had granted such authorization for Respondent’s e-liquids (or had found the products exempt).  Under the circumstances, Respondent could not have reasonably thought it was fully compliant with the FDCA in May 2024 based on FDA letters from 2017, 2018, and 2019.

2. Change in management

Respondent contends that a change in its management in October 2022 “reduced [its] ability to identify compliance gaps,” and that the “incoming manager reasonably believed the business remained compliant based on existing records.”  NA ¶ 2.  The ALJ rejected the suggestion that Respondent was unable to determine its compliance status, finding it was “well-within Respondent’s ability and its responsibility to determine” that it was operating in compliance with applicable legal requirements.  ALJ Decision at 6. 

We see no error in the ALJ’s finding.  A tobacco products manufacturer or retailer has an obligation to understand and conduct its business in accordance with the legal requirements governing its highly addictive products.  See Trees Vape Supply, LLC, DAB No. 3187, at 8 (2025) (sustaining a similar holding by the ALJ and citing authorities); see also 1701 Express, Inc., DAB No. 2979, at 12 (2019) (“The onus is on Respondent to comply with the provisions of the [FDCA] and regulations,” and “[t]o that end, Respondent is responsible for ensuring that its employees follow steps as necessary for compliance with those authorities.”), aff’d, 836 F. App’x 366 (6th Cir. 2020). 

Moreover, it is immaterial what the “incoming manager” believed or understood about Respondent’s compliance in 2022 (or even in 2023) because CTP subsequently warned Respondent in January 2024 that it was not in compliance with the FDCA by selling e-liquids in violation of FDA premarket authorization requirements.  That warning came almost five months before the on-site inspection that led to the civil money penalty in this case.  The manager acknowledged receiving the warning letter in January 2024.  See CTP Ex. 3, ¶ 48.  Thus, her purported “reasonable beliefs” about Respondent’s compliance in 2022 cannot mitigate the penalty in this case.    

3. Relation of penalty amount to revenue from noncompliant products

Respondent contends that the penalty imposed by the ALJ “does not align with the minimal revenue” it earns from the sale of “house juice” (manufactured e-liquids).

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NA ¶ 3.  As an initial matter, the applicable law does not require the ALJ to ensure that the penalty relates only to the amount of revenue derived from all offending products sold by Respondent.  See 21 U.S.C. § 333(f)(5)(B).  We further note that CTP did not cite the violation in this case based on the sale of adulterated and misbranded e-liquid products, but instead because Respondent manufactures e-liquid products “and holds them for sale” even though they are  “adulterated and misbranded.”  Compl. ¶¶ 14, 23; see also CTP Ex. 1, ¶¶ 11-13.  Even if the revenue Respondent earned from such products were a relevant consideration, Respondent provided no evidence of the amount of revenue it generated from “house juice” sales and, therefore, Respondent provided no basis for a further reduction of the penalty amount.       

4. Respondent’s ability to continue to do business

Respondent further asserts that “the $15,678 penalty has a significant financial impact on our ability to continue operating,” but offered no evidence to support that assertion.  NA ¶ 3.  In accordance with the applicable statute and regulations, the ALJ considered whether the penalty imposed would affect Respondent’s ability to continue to do business but found that Respondent had made “no argument” about the matter, and that there was “no apparent reason why Respondent could not continue to do business.”  ALJ Decision at 6.  Indeed, Respondent did not claim before the ALJ that the penalty would impact its ability to continue to do business.  We find no error in the ALJ’s assessment of this factor and the record contains no financial evidence that would warrant a further reduction of the penalty amount.  See Smokers Haven at 6 (declining to reduce penalty amount where respondent presented no financial data showing an inability to continue its business).

5. Respondent’s ability to pay the penalty

Respondent asserts that the penalty has caused or will cause “substantial financial strain.”  NA ¶ 5.  We construe that assertion as a claim that Respondent is unable to pay the penalty.  There is no basis in the record to find that factor to be mitigating.  Respondent had the burden to show any inability to pay the penalty but failed, despite ample opportunity, to proffer evidence of its financial condition (such as income and profit-and-loss statements).  See 21 C.F.R. § 17.33(c) (stating that the respondent must prove any mitigating factor by a preponderance of the evidence); Smokers Haven at 6 (declining to reduce penalty amount where respondent presented no financial data showing an inability to pay the penalty).  We decline to further reduce the penalty based on Respondent’s unsubstantiated assertions regarding its financial condition.

6. Post-warning corrective action

Respondent alleges that “[u]pon receiving the January 2024 warning letter, [it] undertook corrective steps to identify problematic products and adjust our operations,” and that such “efforts indicate a willingness to comply and should be weighed as mitigating factors.”

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NA ¶ 4.  However, Respondent did not identify the products it allegedly found “problematic,” explain how it adjusted its operations, or show what, if any, offending products it removed from its shelves.  The record shows that Respondent stopped making only the vanilla-flavored e-liquid that had been identified in the warning letter, but continued holding for sale other similarly unauthorized products.6   Respondent’s response to the warning letter was plainly ineffective because as of May 10, 2024, Respondent was continuing to hold for sale e-liquid products lacking the required premarket authorization.  See CTP Ex. 2, ¶¶ 9-10; CMS Ex. 1, ¶¶ 12-13.  We therefore reject Respondent’s suggestion that it acted promptly and in good faith to address the violations outlined in the warning letter.  Cf. Zoom Mini Mart, Inc., DAB No. 2894, at 17 (2018) (finding that steps taken by tobacco retailer to prevent unlawful sales to minors were not mitigating for purposes of determining the appropriateness of a no-tobacco-sale-order “because the steps were not effective” in preventing the unlawful sale at issue in the case).

7. Interests of justice

Finally, Respondent contends that the “interests of justice support a further reduction” in the penalty amount given Respondent’s “sincere compliance efforts” and the “lack of a prior civil money penalty history.”  NA ¶ 5.  Neither of those circumstances warrants a further reduction of the penalty.  Although Respondent may have made good-faith efforts to comply with certain FDCA requirements over the years, it failed to comply with all FDCA requirements or respond effectively to CTP’s warning letter in January 2024.  Respondent had ample opportunity to remove all offending products from its store after the warning letter, yet it failed to change its business practices when no penalty was imposed.  Still further, the ALJ considered the lack of a prior civil money penalty in determining the penalty amount, ALJ Decision at 6, but that circumstance does not warrant any further reduction.  ALJs are not limited to considering only prior violations that result in a penalty.  See Smokers Haven at 7; see also 21 U.S.C. § 333(f)(5)(B) (relevant factors include “any history” of such prior violations).  Here, Respondent received an explicit warning in January 2024 that a civil money penalty could be imposed if Respondent continued to market e-liquid products lacking the required FDA premarket authorization.  CTP Ex. 7, at 2.  The ALJ appropriately considered, as an aggravating factor, Respondent’s failure to change its business practices after receiving the warning

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letter.  ALJ Decision at 6-7.  For all these reasons, we find no error in the ALJ’s evaluation of the relevant aggravating and mitigating factors and in assessing a civil money penalty in the amount of $15,678.

Conclusion

We affirm the ALJ Decision.