Over the last several months, FDA and DOJ enforcement efforts have increasingly focused on manufacturers and distributors of vapor products covered by the Food, Drug, & Cosmetic Act and the PACT Act.
The Food & Drug Administration (FDA) and Department of Justice (DOJ) are increasingly focusing enforcement efforts on electronic nicotine delivery systems (ENDS). Such enforcement priorities have been reflected in six DOJ complaints for injunctions and four FDA complaints for civil monetary penalties (CMP) against businesses dealing in ENDS without marketing authorization under the Food, Drug, and Cosmetic Act (FD&C Act). In addition, ENDS businesses have been receiving communications from DOJ’s Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) alleging violations of the PACT Act, and FDA has issued a substantial number of warning letters alleging ENDS businesses’ FD&C Act violations. Federal prioritization of ENDS enforcement has also been reflected in FDA statements in connection with its CMP complaints and the Reagan-Udall Foundation’s operational evaluation of FDA’s Center for Tobacco Products (CTP), which we have discussed here, here, and here.
DOJ Complaints for Injunctive Relief
As previously reported by this blog, in October 2022 DOJ filed complaints for injunctive relief against six different businesses alleging their marketing of ENDS without authorization under the FD&C Act. Absent marketing authorization, “new tobacco products” subject to FDA jurisdiction are prohibited from introduction into interstate commerce under the FD&C Act. On DOJ’s application, a U.S. district court may enjoin a violation of this prohibition.
As previously reported, the court entered a consent decree on the parties’ joint motion in United States v. Vapor Craft LLC, et al., No. 4:22-cv-00160 (M.D. Ga. Dec. 7, 2022), and the parties proposed similar consent decrees in United States v. Seditious Vapours LLC, et al., No. 2:22-cv-01777 (D. Ariz.), and United States v. Morin Enterprises, Inc., et al., No. 0:22-cv-02592 (D. Minn.). Since the date of that blogpost, the proposed consent decrees have been entered in Seditious Vapours (Dec. 9, 2022) and Morin (Jan. 24, 2023), and similar consent decrees have been proposed and entered in United States v. Lucky’s Convenience & Tobacco, LLC, et al., No. 6:22-cv-01237 (D. Kan. Jan. 25, 2023), and United States v. Super Vape’z LLC, et al., No. 3:22-cv-05789 (W.D. Wash. Feb. 13, 2023).
However, in United States v. Soul Vapor, LLC, et al., No. 1:22-cv-00458 (S.D. W.Va.), the defendants have denied liability. The court’s decision is pending on DOJ’s motion for summary judgment, which the parties have fully briefed.
FDA CMP Complaints
In February 2023, FDA filed CMP complaints against four ENDS manufacturers (BAM Group, LLC, Great American Vapes LLC, The Vapor Corner, Inc., and 13 Vapor Co., LLC) alleging that they were dealing in ENDS without authorization under the FD&C Act. These proceedings are before the Department of Health and Human Services’ (HHS) Departmental Appeals Board, subject to further appeal within FDA and review in an appropriate U.S. district court.
According to an FDA news release, this was “the first time the FDA has filed CMP complaints against tobacco product manufacturers to enforce the … premarket review requirements for new tobacco products.” CTP Director Brian King marked the occasion by stating that “[h]olding manufacturers accountable for making or selling illegal tobacco products is a top priority for the FDA” and that FDA is “prepared to use the full scope of [its] authorities to enforce the law.” According to King, the CMP complaints were “part of a comprehensive approach to actively identify violations and to deter illegal conduct.” FDA has indicated that it “will continue to file CMP actions when appropriate against manufacturers that have failed to comply with the FD&C Act and applicable regulations.”
ATF’s PACT Act Enforcement
We are also aware that ATF has been asserting violations of the PACT Act involving ENDS.
As amended by the Preventing Online Sales of E-Cigarettes to Children Act, the PACT Act includes registration and reporting requirements related to interstate sales, transfers, or shipments of statutorily-defined ENDS for profit (or advertisements or offers for the same) into states, localities, or tribes taxing the sale or use of such products, as well as requirements and prohibitions related to delivery sales. Noncompliance can result in a business’s inclusion on an ATF list of entities whose covered products are prohibited from delivery, or various forms of civil or criminal relief in a U.S. district court. Judicial proceedings may be initiated by DOJ or, in cases for specific types of relief, by appropriate state, local, or tribal officials or by businesses holding manufacturing permits issued by the U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau.
Since late 2022, ATF appears to have increased the priority of its PACT Act enforcement with respect to ENDS, consistent with the prioritization apparent in other recent actions of DOJ and FDA.
There are increasingly unfavorable betting odds for operating as a noncompliant ENDS business. Although much work remains to be done, enforcement in this area has apparently become more of a priority for the federal government. In addition to the matters referenced above, federal prioritization in this area is evident in the December 2022 recommendations of the Reagan-Udall Foundation and in FDA’s February 2023 response. Among the action items listed in its report, FDA “will begin planning to convene a summit related to enforcement” with senior officials from HHS, FDA, and DOJ and “plans to continue activities with other government agencies and organizations to enhance enforcement and compliance activities,” including DOJ, ATF, and others.
Noncompliant ENDS businesses will be well-served to come into compliance before (and, ideally, without) having to defend against any enforcement actions brought by these agencies.