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                              Joe Eideh d/b/a 7-Eleven 34428, DAB TB4511 (2019)
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Joe Eideh d/b/a 7-Eleven 34428, DAB TB4511 (2019)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





Center for Tobacco Products,
	Complainant,
v.
Joe Eideh
	d/b/a 7-Eleven 34428,
	Respondent.
Docket No. T-19-956FDA Docket No. FDA-2018-H-4871Decision No. TB4511November 15, 2019

        
              
    

      INITIAL DECISION
I hereby impose a civil money penalty in the amount of $17,115 against Respondent, Joe Eideh d/b/a 7-Eleven 34428 (Respondent or 7-Eleven 34428), for violating a No-Tobacco-Sale Order (NTSO).
I. Background
The Center for Tobacco Products (CTP) began this matter by serving a Complaint on Respondent at 73 Storey Avenue, Newburyport, Massachusetts 01950, and by filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The Complaint seeks a $17,115 civil money penalty from Respondent 7-Eleven 34428, for violating an NTSO issued pursuant to 21 U.S.C. § 333(f)(8) of the Federal Food, Drug, and Cosmetic Act (Act).  Complaint ¶ 1.  CTP alleges that Respondent impermissibly sold a regulated tobacco product while the NTSO was in effect, thereby violating the Act, 21 U.S.C. § 331(oo).  *Id*. ¶ 3.
Page 2
The Complaint alleges that CTP previously initiated an NTSO action, CRD Docket Number T-17-6603, FDA Docket Number FDA-2017-R-5759, against Respondent 7‐Eleven 34428.  Complaint ¶ 4.  The prior action concluded when an Administrative Law Judge (ALJ) issued an Initial Decision and Default Judgment in the form of an NTSO, finding Respondent liable for six repeated violations of the regulations found at 21 C.F.R. Part 1140.  *Id*.  The NTSO ordered Respondent to stop selling cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and covered tobacco products regulated under the Act, for a period of 30 consecutive calendar days.  *Id*.  Respondent appealed the Initial Decision to the Appellate Division of the Departmental Appeals Board (Board).  *Id*. ¶ 5.  The Board declined to review the ALJ Decision, making the June 5, 2018 Initial Decision and Default Judgment final and binding.  *Id*.  “On August 7, 2018, CTP sent to Respondent via UPS [United Parcel Service] a copy of the ALJ’s order denying Respondent’s motion, along with a letter explaining that the NTSO period would begin at midnight on August 14, 2018, and remain in effect through 11:59 PM on September 12, 2018 . . . .”  *Id*. ¶ 6.
II. Procedural History
On January 28, 2019, Respondent timely answered the Complaint.  In the Answer, Respondent checked the box indicating: “I deny the following allegations in the Complaint[,]” but noted, “[t]he person that sold the cigarettes does not work for my store . . . .”  Answer ¶ 1.  As a defense, Respondent stated, “[m]y employee[’s] son was in the store and my employee went to the bathroom and her son sold the pack of cigarettes not knowing that we were in a t[o]bacco band[sic].  *Id*. ¶ 2.  Additionally, Respondent contested the civil money penalty.  *Id*. ¶ 3.  On January 31, 2019, I issued an Acknowledgment and Pre-Hearing Order (APHO) in which, among other things, I established a schedule for pre-hearing exchanges and submissions deadlines.  APHO ¶¶ 1, 3-4, 12.
On February 21, 2019, CTP filed a Motion for Leave to File Amended Complaint (Motion to Amend).  In its Motion to Amend, CTP sought to clarify that $17,115 is the maximum civil money penalty authorized for the alleged violation.  Motion to Amend ¶ 6.  Additionally, CTP sought to submit “attache[d] as exhibits a copy of the letter to Respondent setting forth the specific dates of the NTSO and a copy of the UPS delivery notice showing Respondent received the letter on August 8, 2018.”  *Id.*  On February 22, 2019, a letter issued by my direction advised both parties that Respondent had until March 12, 2019, to file a response to CTP’s Motion to Amend.
On March 13, 2019, CTP forwarded Respondent’s informal pre-hearing brief (Respondent’s Br.) by e-mail to the Civil Remedies Division.  While Respondent timely filed its informal brief, it failed to file a list of proposed witnesses and exhibits.  Respondent did not object to CTP’s Motion to Amend by the March 12, 2019, deadline.  Accordingly, on March 19, 2019, I granted CTP’s Motion to Amend.
Page 3
On March 21, 2019, CTP filed its Amended Complaint and two attachments.  All references to information contained within the Complaint refer to the Amended Complaint (hereinafter Complaint).
On March 21, 2019, CTP also filed two additional motions: 1) an Unopposed Motion to Extend Deadlines (Unopposed Motion); and 2) a Motion to Compel Discovery (Motion to Compel).  The Unopposed Motion requested that I extend all pre-hearing deadlines for thirty (30) days.  Unopposed Motion at 2.  The Motion to Compel requested that I order Respondent “to produce all documents responsive to CTP’s Request for Production of Documents (“RFP”).”  Motion to Compel at 1.  On March 22, 2019, I issued an Order extending all deadlines as requested in the Unopposed Motion.  I extended CTP’s pre-hearing exchange to Respondent to May 29, 2019, and Respondent’s pre-hearing exchange to CTP to June 19, 2019.  By letter filed March 22, 2019, I directed both parties that Respondent had until April 9, 2019, to file a response to CTP’s Motion to Compel Discovery.
Respondent failed to file any response to CTP’s Motion to Compel Discovery or otherwise respond to my March 22, 2019 letter.  Therefore, on April 16, 2019, I issued an Order granting CTP’s Motion to Compel Discovery, and directed Respondent  to “comply with CTP’s Request for Production of Documents” by April 30, 2019.
On May 8, 2019, CTP filed two motions; Complainant’s Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions); and a second Motion to Extend Deadlines (Motion to Extend).  The Motion to Impose Sanctions stated:  “Respondent has not produced documents to CTP in response to its RFP[,]” and CTP requested striking Respondent’s Answer as a “reasonable sanction for Respondent’s non-compliance.”  Motion to Impose Sanctions at 2.  The Motion to Extend requested that I extend all deadlines for an additional thirty (30) days.  Motion to Extend, at 1.  On May 13, 2019, a letter issued by my direction advised both parties that Respondent had until May 29, 2019, to file a response to CTP’s Motion to Impose Sanctions.  Further, since extending the pre-hearing exchange deadlines did not prejudice either party, on May 13, 2019, I issued a second Order extending all deadlines as requested in the Motion to Extend.  I extended CTP’s pre-hearing exchange to Respondent to June 28, 2019, and Respondent’s pre-hearing exchange to CTP to July 19, 2019.
On May 14, 2019, CTP filed a Notice of Withdrawal of Complainant’s Motion to Impose Sanctions (Notice of Withdrawal), asserting that:  “[t]he CTP mailroom received Respondent’s response to CTP’s Request for Production of Documents.  However, due to an administrative error, counsel for CTP did not receive the response until May 13, 2019.”  Notice of Withdrawal at 1.
Page 4
On May 28, 2019, CTP timely filed its pre-hearing exchange, consisting of its informal brief (CTP Br.), list of proposed witnesses and exhibits, and twenty-one (21) numbered proposed exhibits (CTP Exs. 1-21).  CTP’s exhibits included the written direct testimony of Mr. Christopher Morin, an FDA-commissioned inspector (CTP Ex. 13).
***Pre-Hearing Conference and Waiver of Hearing***
On August 9, 2019, I held a telephone pre-hearing conference.  At the pre-hearing conference, we discussed Respondent’s Answer and CTP’s pre-hearing exchange, including its proposed witness testimony.  I explained that the purpose of a hearing is to allow for the cross-examination and re-direct examination of any witnesses who have provided sworn testimony.  I asked Respondent whether he wished to cross-examine CTP’s proposed witness, Inspector Christopher Morin.  Respondent declined to cross-examine Inspector Morin.  The parties then waived a formal hearing and agreed to a decision based on the documents entered into the record.  In the absence of any objection from Respondent, I admitted CTP’s Exs. 1-21 into the record.  On August 12, 2019, I issued a Briefing Order Admitting Evidence and Waiving Hearing (Briefing Order).  I stated, “[t]he parties may file supplemental briefs by no later than September 3, 2019.”  Briefing Order at 2.  On October 28, 2019, over six weeks after the final briefing deadline, the Civil Remedies Division received an additional, unsworn statement from Respondent.
I hereby render my decision on the record.
III. Issues
Whether Respondent sold a regulated tobacco product on August 22, 2018, while under an NTSO imposed pursuant to 21 U.S.C. § 333(f)(8), and in violation of 21 U.S.C. § 331(oo); and if so,
	Whether the civil money penalty amount of $17,115 that CTP seeks is appropriate.IV. Applicable Regulations
The Act prohibits misbranding of a regulated tobacco product.  21 U.S.C. § 331(k).  A regulated tobacco product is misbranded if sold or distributed in violation of regulations issued under section 906(d) of the Act.  21 U.S.C. § 387f(d); *see also* 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  The Secretary of the U.S. Department of Health and Human Services issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; *see also* 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016).
Page 5
An NTSO may be imposed for repeated violations of the regulations found at 21 C.F.R. pt. 1140.  21 U.S.C. § 333(f)(8); see 21 U.S.C. § 387f(d).  *See also* Food & Drug Admin., Civil Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers at 5-6, available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/civil-money-penalties-and-no-tobacco-sale-orders-tobacco-retailers-revised (last updated Dec. 2016); Determination of the Period Covered by a No-Tobacco-Sale Order and Compliance with Order at 3-5, available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/determination-period-covered-no-tobacco-sale-order-and-compliance-order (last updated August 2015).
The Act prohibits the sale of tobacco products in violation of an NTSO, 21 U.S.C. § 331(oo).  *See also*Determination of the Period Covered by a No-Tobacco-Sale Order and Compliance with Order at 6.  The Act further provides that any person who violates this requirement is subject to a civil money penalty.  21 U.S.C. § 333(f)(9)(A); 21 C.F.R. § 17.2; *see* 45 C.F.R. § 102.3.  In determining the amount of a civil money penalty, the presiding officer “shall take 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.”  21 U.S.C. § 333(f)(5)(B).  Currently, the maximum CMP amount for violations under 21 U.S.C. § 333(f)(9)(A) is $17,115.  *See*45 C.F.R. § 102.3.
V. Analysis
***A. Allegations, Parties’ Contentions, and Findings of Fact***
After a thorough review of the evidence submitted by the parties, I find that Respondent violated an NTSO issued pursuant to 21 U.S.C. § 333(f)(8) of the Act, as alleged in the Complaint.  *See generally* Complaint; CTP Br.; CTP Ex. 13.  The Act prohibits the sale of tobacco products in violation of an NTSO issued under 21 U.S.C. § 333(f).  21 U.S.C. § 331(oo).
***CTP’s Position***
CTP alleges that Respondent impermissibly sold cigarettes while an NTSO was in effect, thereby violating the Act.  Complaint ¶ 1; CTP Br. at 4-7; CTP Ex. 13.  CTP seeks a civil money penalty of $17,115.  Complaint ¶ 1.  Specifically, CTP alleges that on August 22, 2018, at approximately 9:54 AM, at Respondent’s business establishment, 73 Storey Avenue, Newburyport, Massachusetts 01950, Inspector Morin conducted an inspection to determine whether Respondent was complying with the NTSO.  *Id*. ¶¶ 7-8.  During this inspection, “Respondent sold a package of Marlboro Gold Pack cigarettes to the Inspector.”  *Id.* ¶ 8; CTP Br. at 6; CTP Ex. 13 ¶ 6.  As corroborating evidence, CTP submitted copies of the following documents:  NTSO Follow-up Inspection Form (CTP
Page 6
Ex. 14); NTSO Narrative Report (CTP Ex. 15); NTSO Tobacco Inspection Management System (TIMS) Assignment Form (CTP Ex. 16); tobacco product sales receipt (CTP Ex. 17); six (6) photographs of the tobacco product (CTP Ex. 18); and photographs of the evidence bag (CTP Ex. 19).  *See generally* Complainant’s List of Proposed Witnesses and Exhibits.
***Respondent’s Positon***
In its Answer, Respondent checked the box indicating:  “I deny the following allegations in the Complaint.”  *See*Answer ¶ 1.  However, Respondent concedes to the sale of cigarettes, stating, “[t]he person that sold the cigarettes does not work for my store . . . .  It was an honest mistake.”  *Id*.  As a defense, Respondent explains, “[m]y employee[’s] son was in the store and my employee went to the bathroom and her son sold the pack of cigarettes not knowing that we were in a t[o]bacco band[sic].  *Id*. ¶ 2.  Respondent contests the civil money penalty, stating, “[w]e served the 30 day suspension and it was an honest mistake and I [cannot] afford the fine.”  *Id*. ¶ 3.
In its informal brief, Respondent further states, “I do not agree with the penalty.  It is not an appropriate amount.  I [cannot] afford it and it will impact my business.”  Respondent’s Br. ¶ 5.  Subsequently, more than six weeks after the final briefing deadline, Respondent submitted an additional, unsworn statement.  A review of the statement indicates it does not contain any new information.  Instead, it merely repeats statements contained within Respondent’s Answer and other communication submitted by Respondent throughout the proceeding.
***Findings***
Accordingly, based on the evidence in the record, there is no dispute that Respondent violated the Act by selling a regulated tobacco product in violation of the NTSO.  *See generally* Complaint; CTP Br.; CTP Exs. 13-19.  Further, since Respondent has conceded to the sale of cigarettes while an NTSO was in effect, there is no dispute as to the material facts of the case before me.  *See generally* Answer; Respondent’s Br.  Accordingly, the only issue before me is whether the civil money penalty of $17,115 that CTP seeks to impose is a reasonable remedy.
*B. Civil Money Penalty*
CTP may seek civil money penalties from any person who violates the Act’s requirements as they relate to the sale of tobacco products.  21 U.S.C. § 333(f)(9).  The sale tobacco products in violation of an NTSO violates the Act.  21 U.S.C. § 331(oo).  *See als*o 21 C.F.R. § 17.2, referencing 45 C.F.R. § 102.3 (setting the current maximum CMP amount).  In its Complaint, CTP seeks to impose a $17,115 civil money penalty
Page 7
against Respondent for violating an NTSO.  Complaint ¶ 1.  Therefore, I must now determine whether a $17,115 civil money penalty is appropriate.
When determining an appropriate penalty, the presiding officer shall evaluate any circumstances that mitigate or aggravate the violation, and refer to the factors identified in the applicable statute.  21 C.F.R. § 17.34.  Under the applicable statute, I must “take 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.”  21 U.S.C. § 333(f)(5)(B).
**1. Nature, Circumstances, Extent, and Gravity of the Violations**
Respondent denies that it sold a tobacco product in violation of an NTSO.  Instead, Respondent submits that while an employee was in the bathroom, an employee’s son sold the pack of cigarettes.  Respondent submits that the employee’s son was unaware that the store was under an NTSO.  *See* Answer ¶¶ 1-2; Respondent’s Br. ¶ 4.  However, on August 22, 2018, someone (or as Respondent alleges, an employee’s son) at Respondent’s establishment provided Inspector Morin with a receipt in conjunction with his cigarette purchase.  The receipt indicates that whoever printed it out was sufficiently familiar with the store to operate the cash register, and trusted enough to conduct a sale.  Furthermore, Respondent was under a thirty (30) day NTSO, and tobacco products should not have been in stock or accessible to anyone within the store premises.  Respondent did not submit evidence, including written direct testimony, to support the allegations in Respondent’s Answer.  Finally, Respondent admitted to the sale of a tobacco product while under an NTSO, and Respondent is liable for all sales in the store, regardless of the clerk.  I find Respondent’s repeated inability to comply with federal tobacco regulations to be serious in nature.  Accordingly, I find that the civil money penalty of $17,115 is reasonable under these circumstances.
**2. Respondent’s Ability to Pay, and Effect on Ability to do Business**
While Respondent submits that he cannot afford to pay the $17,115 civil money penalty, Respondent has failed to provide any evidence to support that assertion.  Answer ¶ 3; Respondent’s Br. ¶ 5.  As a result, there is no evidence in the written record to establish an inability to pay the penalty.  Similarly, Respondent has not presented any documentary evidence to corroborate the civil money penalty’s effect on its ability to do business.  Since the NTSO period has concluded, Respondent may continue to sell tobacco products, provided it complies with the Act’s prohibition against selling tobacco products to minors.  Absent evidence in the record to the contrary, I find that the $17,115 penalty will not have a substantial effect on Respondent’s ability to do business.
Page 8
**3. History of Prior Violations**
Respondent has repeatedly violated federal tobacco regulations.  This is the fourth action CTP has brought against Respondent for violations of the Act.  *See* CTP Br. at 1-4.  Most recently, CTP initiated an NTSO against Respondent for six repeated violations of the regulations found at 21 C.F.R. Part 1140.  Complaint ¶¶ 4, 6; CTP Br. at 3.  The NTSO ordered Respondent to stop selling cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and covered tobacco products regulated under the Federal Food, Drug, and Cosmetic Act, for a period of 30 consecutive calendar days, beginning at midnight on August 14, 2018, through 11:59 PM on September 12, 2018.  *Id.*  Prior to the NTSO action, CTP filed its first civil money penalty complaint against Respondent on December 2, 2014, and a second civil money penalty complaint on July 17, 2015.  CTP Br. at 2.  Respondent’s continued unwillingness or inability to comply with federal tobacco regulations is disconcerting, and supports the imposition of a higher penalty.
**4. Degree of Culpability**
The record shows that on August 22, 2018, Respondent sold a package of Marlboro Gold Pack cigarettes to an FDA-commissioned inspector, while an NTSO was in effect, in violation of 21 U.S.C. § 331(oo).  Based on Respondent’s admission regarding the NTSO violation, and the evidence on the record, I find Respondent fully culpable for violating Act.
**5. Matters as Justice May Require and Additional Mitigating Factors**
Mitigation is an affirmative defense for which Respondent bears the burden of proof.  Respondent must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  After reviewing the evidence, I do not find any mitigating factors.  In requesting a lower civil money penalty, Respondent relies mainly on the fact that the sale was allegedly performed by an employee’s son, stating, “[i]t was an honest mistake . . . .”  Answer ¶ 3.  Respondent implies that it should not be responsible for a mistake by a non-employee.  However, Respondent failed to provide a sworn statement from the employee whose son was allegedly in the store on that day.  Additionally, Respondent did not submit any video evidence to support the allegation that an employee’s son conducted the sale of a tobacco product.  CTP submitted Inspector Morin’s sworn testimony, where he states that he purchased a package of Marlboro Gold cigarettes.  CTP Ex. 13 ¶ 6.  CTP further provided a copy of the purchase receipt, and a photo of the tobacco product Inspector Morin purchased from Respondent during the NTSO period.  CTP Exs. 17-19.  Based on the gravity of Respondent’s violation, ability to pay, ability to continue business, history of prior violations, culpability, and lack of mitigating factors, I find that the full penalty of $17,115 is appropriate and supported by the evidence in the record.
Page 9
VI. Penalty
Based on the foregoing reasoning, I find a civil money penalty of $17,115 to be appropriate under the provisions of 21 U.S.C. § 333(f)(5)(B) and 21 U.S.C. § 333(f)(9).
VII. Conclusion
For these reasons, and pursuant to 21 C.F.R. § 17.45, I impose a civil money penalty in the amount of $17,115 against Respondent, Joe Eideh d/b/a 7-Eleven 34428, for the violation of an NTSO issued pursuant to 21 U.S.C. § 333(f)(8) of the Federal Food, Drug, and Cosmetic Act (Act).  Pursuant to 21 C.F.R. § 17.45(d), this decision becomes final and binding upon both parties after 30 days of the date of its issuance.
  
          /s/
        Wallace Hubbard

                      Administrative Law Judge Back to top
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