iOn February 22, 2023, the U.S. Food and Drug Administration (FDA) announced the filing of civil money penalty (CMP) complaints against four domestic e-liquid manufacturers, all of which appear to be small vape shops that were producing nicotine-containing e-liquids used in open-system electronic nicotine delivery systems (ENDS) devices.[1] The four named companies are:
In response to the complaints, the companies must now either pay the penalty, enter into a settlement agreement, request an extension of time to file an answer to the complaint, or file an answer and request a hearing by an Administrative Law Judge.[2] The companies risk a default order imposing the full penalty amount—statutorily set at $19,192 for a single violation relating to tobacco products—if no action is taken within 30 days of receiving the complaint.[3]
FDA’s press release also stated that this is “the first time the FDA has filed CMP complaints against tobacco product manufacturers to enforce the [Federal Food, Drug, and Cosmetic Act (FFDCA)] premarket review requirements for new tobacco products.”[4] It should be noted that this is not the first groundbreaking action FDA has taken against small vape shops within the last year. As reported on this blog on October 25, 2022, FDA filed permanent injunctions against six small vape shops for alleged premarket review violations.[5] FDA had noted at the time that “these cases represent the first time FDA has initiated injunction proceedings to enforce the [Federal Food, Drug, and Cosmetic Act (FFDCA)] premarket review requirements for new tobacco products.”[6]
In the CMP complaints, FDA alleges that it previously warned each of the companies between late 2021 and early 2022 that they were in violation of the premarket review requirements set forth in the FFDCA and that follow-up inspections confirmed that the companies were continuing to manufacture and sell unauthorized e-liquid products.[7] Both BAM Group and Great American Vapes had previously submitted Premarket Tobacco Product Applications (PMTAs). However, FDA issued marketing denial orders to both companies, presumably for their non-tobacco flavored e-liquids in September 2021.[8] The Vapor Corner Inc. and 13 Vapor Co. LLC allegedly did not submit PMTAs. FDA has previously indicated that it is prioritizing enforcement against companies that have either not submitted PMTAs, whose PMTAs have been refused acceptance or filing by FDA, or whose PMTAs are subject to marketing denial orders.[9]
FDA’s Center for Tobacco Products (CTP) Office of Compliance and Enforcement (OCE) has broad responsibility to (1) develop and provide compliance training and education; (2) monitor regulated industry’s compliance via surveillance, inspections, and investigations; and (3) initiate advisory and enforcement actions. With regards to the scope of permitted enforcement actions, CTP has the power to issue warnings, civil money penalties, no-tobacco-sale orders, seizures, and injunctions and to initiate criminal prosecution. Between January 2021 through February 17, 2023, FDA has issued more than 550 warning letters to firms, mostly small U.S. businesses, for manufacturing, selling, and/or distributing new tobacco products without FDA marketing authorization.
FOOTNOTES
[1] See FDA Files Civil Money Penalty Complaints Against Four E-Cigarette Product Manufacturers, available at: https://www.fda.gov/news-events/press-announcements/fda-files-civil-money-penalty-complaints-against-four-e-cigarette-product-manufacturers.
[2] See 21 C.F.R. Part 17 (setting forth the practices and procedures for hearings concerning the administrative imposition of civil money penalties by FDA).
[3] This maximum amount for this civil monetary penalty was most recently adjusted for inflation in March 2022. See 87 Fed. Reg. 15,103 (March 17, 2022). The maximum total CMP for all violations adjudicated in a single proceeding is $1,279,448.
[4] See FDA Files Civil Money Penalty Complaints Against Four E-Cigarette Product Manufacturers, available at: https://www.fda.gov/news-events/press-announcements/fda-files-civil-money-penalty-complaints-against-four-e-cigarette-product-manufacturers.
[5] See FDA Files Permanent Injunctions Against Six Small Vape Shops for Alleged Premarket Review Violations, available at: https://www.natlawreview.com/article/fda-files-permanent-injunctions-against-six-small-vape-shops-alleged-premarket.
[6] See FDA, DOJ Seek Permanent Injunctions Against Six E-cigarette Manufacturers, available at: https://www.fda.gov/news-events/press-announcements/fda-doj-seek-permanent-injunctions-against-six-e-cigarette-manufacturers?utm_medium=email&utm_source=govdelivery.
[7] See Complaint at 4-5, Center for Tobacco Products v. 13 Vapor Co., LLC (2023) (FDA Docket No. FDA-2023-U-0484); Complaint at 4-5, Center for Tobacco Products v. BAM Group, LLC (2023) (FDA Docket No. FDA-2023-U-0481); Complaint at 4-5, Center for Tobacco Products v. Great American Vapes LLC (2023) (FDA Docket No. FDA-2023-U-0483); Complaint at 4-5, Center for Tobacco Products v. Vapor Corner, Inc. (2023) (FDA Docket No. FDA-2023-U-0486).
[8] FDA keeps an updated listing of all companies that have received Marketing Denial Orders on its website. See Marketing Denial Orders, Food & Drug Admin. https://www.fda.gov/media/165602/download (last visited February 23, 2022).
[9] See https://www.fda.gov/news-events/press-announcements/fda-denies-authorization-market-juul-products (“As the FDA has stated in the past, unauthorized electronic nicotine delivery system (ENDS) products for which no application is pending, including for example, those with an MDO, are among our highest enforcement priorities.”)
