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                              Faiza Enterprises Inc. d/b/a 7-Eleven 38049, DAB TB5485 (2022)
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Faiza Enterprises Inc. d/b/a 7-Eleven 38049, DAB TB5485 (2022)








  
  
    

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





Center for Tobacco Products,
Complainant,

v.

Faiza Enterprises Inc.
d/b/a 7-Eleven 38049,
Respondent.
Docket No. T-22-43FDA Docket No. FDA-2022-H-0196Decision No. TB5485September 21, 2022

        
              
    

      ORDER GRANTING CTP’S MOTION TO IMPOSE SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an Administrative Complaint (Complaint) on Respondent, Faiza Enterprises Inc. d/b/a 7-Eleven 38049, at 1626 Meadow Road, Lehigh Acres, Florida 33976, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  CTP seeks to impose a $5,952 civil money penalty against Respondent for five violations of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 *et seq.*, and its implementing regulations, 21 C.F.R. part 1140,1 within a 36-month period.

**Page 2**

The Complaint alleges CTP previously initiated a civil money penalty action against Respondent 7-Eleven 38049.  The prior action concluded after an Initial Decision and Default Judgment was entered against Respondent 7-Eleven 38049 for at least three violations of the Act.  Specifically, Respondent was found to have sold regulated tobacco products to minors and failed to verify, by means of photo identification containing a date of birth, that the purchasers were 18 years of age or older.  The Complaint further alleges that Respondent 7-Eleven 38049 subsequently committed two additional violations of the Act.  Specifically, that Respondent sold regulated tobacco products to a person under 21 years of age and failed to verify, by means of photo identification containing a date of birth, that the purchaser was of sufficient age, thereby violating the Act.  Therefore, CTP seeks a $5,952 civil money penalty against Respondent 7-Eleven 38049 for a total of five violations within a 36-month period.

During the course of this administrative proceeding, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend this action, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).  Currently, CTP’s Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions) is pending before me.  CTP’s Motion to Impose Sanctions requests that I strike Respondent’s Answer as a sanction for failing to respond to CTP’s discovery requests and issue a default judgment against Respondent.  Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I strike Respondent’s Answer and issue this decision of default judgment.

I. Procedural History

On April 19, 2022, CTP served the Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  CRD Docket (Dkt.) Entry 1b (Proof of Service).  On May 12, 2022, Respondent’s attorney, Michael J. Rich, registered for DAB E-File on Respondent’s behalf.  On that same date, Respondent’s counsel filed a timely answer to CTP’s Complaint.  On May 13, 2022, I issued an Acknowledgment and Pre-Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery.  I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  APHO ¶ 4; *see also* 21 C.F.R. § 17.23(a).  I warned:

I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its

**Page 3**

case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.  21 C.F.R . § 17.35.

APHO ¶ 21.

On June 30, 2022, CTP filed a Motion to Compel Discovery, asserting that Respondent had not responded to its discovery request as required by my APHO and the regulations.  CRD Dkt. Entry 8 (Motion to Compel Discovery).  On that same date, CTP also filed an Unopposed Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the August 2, 2022 due date for CTP’s pre-hearing exchange, . . . .”  CRD Dkt. Entry 7 at 2 (Motion to Extend Deadlines).  On June 30, 2022, I issued an Order advising Respondent that it had until July 15, 2022, to file a response to CTP’s Motion to Compel Discovery.  I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  CRD Dkt. Entry 9; *see also*APHO ¶ 20-21; 21 C.F.R. § 17.32(c).  In my Order, I also extended the pre-hearing exchange deadlines.  CRD Dkt. Entry 9 at 2.  Respondent failed to respond to CTP’s Motion to Compel Discovery or my June 30, 2022 Order, or otherwise comply with CTP’s Request for Production of Documents.

On July 20, 2022, I issued an Order granting CTP’s Motion to Compel Discovery and ordered Respondent to produce responsive documents to CTP’s Request for Production of Documents by August 1, 2022.  I warned:

Failure to comply may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint . . . .

CRD Dkt. Entry 10 at 1-2.  In the same Order, I also extended the parties’ pre-hearing exchange deadlines.  *Id.*at 2.

On August 4, 2022, CTP filed a Status Report and Motion to Impose Sanctions.  CTP advised that Respondent had not complied with the APHO or my July 20, 2022 Order Granting CTP’s Motion to Compel.  CRD Dkt. Entry 11 at 1-2.  CTP argued that sanctions against Respondent for its repeated non-compliance are an appropriate remedy.  Specifically, CTP asked that I strike Respondent’s Answer as a sanction and issue an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a $5,952 civil money penalty.  *Id.*at 2.  On August 4, 2022, CTP also filed a Motion to Extend Deadlines.  CRD Dkt. Entry 12.

On August 4, 2022, I issued an Order giving Respondent until August 19, 2022 to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry 13.  The August 4, 2022 Order also extended the parties’ pre-hearing exchange deadlines.  *Id.*

**Page 4**

To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or the August 4, 2022 Order.

II. Striking Respondent’s Answer

I may sanction a party for:

(1)      Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;

(2)      Failing to prosecute or defend an action; or

(3)      Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.

21 C.F.R. § 17.35(a).

Respondent failed to comply with multiple judicial orders and directives.  Specifically, Respondent has not complied with:

the regulation at 21 C.F.R. § 17.23(a) and paragraph 4 of my APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days;
	my June 30, 2022 Order, when it failed to file a response to CTP’s Motion to Compel Discovery by July 15, 2022;
	my July 20, 2022 Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by August 1, 2022; and
	my August 4, 2022 Order, when it failed to file a response to CTP’s Motion to Impose Sanctions by August 19, 2022.I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend this action, and, as a result, interfered with the speedy, orderly, and fair conduct of this proceeding.  I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the nature and severity of the misconduct or failure to comply.  21 C.F.R. § 17.35(b).  Here, Respondent failed to comply with four of my orders, despite my explicit warnings that its failure could result in sanctions.  CRD Dkt. Entry 10 at 1-2; APHO ¶ 21.  Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding.  I find that Respondent’s actions are sufficiently egregious to warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3).

**Page 5**

III. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered.  Therefore, I am required to issue an initial decision by default, provided that the Complaint is sufficient to justify a penalty.  21 C.F.R. § 17.11(a).  Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act.

For the purposes of this decision, I assume the facts alleged in the Complaint to be true.  Specifically:

On January 30, 2020, CTP initiated a previous civil money penalty action, CRD Docket Number T-20-1629, FDA Docket Number FDA-2020-H-0440, against Respondent for three violations2 of the Act.  CTP alleged those violations to have occurred at Respondent’s business establishment, 1626 Meadow Road, Lehigh Acres, Florida 33976, on February 2, 2019, and November 10, 2019;
	The previous action concluded when an Initial Decision and Default Judgment was entered by an Administrative Law Judge, “finding that all of the violations alleged in the Complaint occurred”;
	An FDA-commissioned inspector conducted a subsequent inspection on November 5, 2021, at approximately 9:49 AM at Respondent’s business establishment located at 1626 Meadow Road, Lehigh Acres, Florida 33976.  During this inspection, a person younger than 21 years of age was able to purchase an HQD Cuvie Plus Black Ice electronic nicotine delivery system (ENDS) product.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was of sufficient age.These facts establish Respondent 7-Eleven 38049’s liability under the Act.  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 issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; *see*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); 21 U.S.C. § 387f (note) (directing the Secretary to change references to persons younger

**Page 6**

than 18 to younger than 21, and to change the age verification requirements from individuals under the age of 26 to under the age of 30, in 21 C.F.R. subpart B of part 1140).  Under section 906(d)(5) of the Act, no retailer may sell regulated tobacco products to any person younger than 21 years of age and retailers must verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age.3 For violations prior to December 20, 2019, regulated tobacco products may not be sold to any person younger than 18 years of age, 21 C.F.R. § 1140.14(b)(1), and retailers must verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 18 years of age.  21 C.F.R. § 1140.14(b)(2)(i).

A $5,952 civil money penalty is permissible under 21 C.F.R. § 17.2.

ORDER

For these reasons, I enter default judgment in the amount of $5,952 against Respondent Faiza Enterprises Inc. d/b/a 7-Eleven 38049.  Pursuant to 21 C.F.R. § 17.11(b), this order becomes final and binding upon both parties after 30 days of the date of its issuance.

Endnotes

1  On December 20, 2019, the Act was amended by the Further Consolidated Appropriations Act, 2020,  (Pub. L. No. 116–94, § 603(a)-(b)), to raise the federal minimum age for sale of tobacco products to 21, and directed the Secretary of the U.S. Department of Health and Human Services (Secretary) to “update all references to persons younger than 18 years of age in subpart B of part 1140 of title 21, Code of Federal Regulations, and to update the relevant age verification requirements under such part 1140 to require age verification for individuals under the age of 30.”  21 U.S.C. § 387f (note).

2  The Complaint alleges two violations were committed on February 2, 2019, and two on November 10, 2019.  In accordance with customary practice, CTP counted the violations at the initial inspection as a single violation, and all subsequent violations as separate individual violations.  *See Orton Motor, Inc. d/b/a Orton’s Bagley v. U.S. Dep’t of Health & Human Serv*., 884 F.3d 1205 (D.C. Cir. 2018).

3  I note that, for the identification violation on November 5, 2021, CTP cites 21 C.F.R.
§ 1140.14(b)(2)(i), which has not been updated to reflect the age change governed by section 906(d) of the Act, which went into effect as of December 20, 2019.  *See*Complaint ¶ 13(b); *see also supra*n.1.
  
          /s/
        Margaret G. Brakebusch

                      Administrative Law Judge Back to top
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