Document ID: FDA-2014-N-0113-0001
Agency: fda
Document Type: Proposed Rule
Title: Maximum Civil Money Penalty Amounts; Civil Money Penalty
Complaints
Posted Date: 2014-02-03T05:00Z

[Federal Register Volume 79, Number 22 (Monday, February 3, 2014)]
[Proposed Rules]
[Pages 6112-6116]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-02149]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 17

[Docket No. FDA-2014-N-0113]

Maximum Civil Money Penalty Amounts; Civil Money Penalty 
Complaints

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA) is publishing this 
companion proposed rule to the direct final rule, issuing a new 
regulation to adjust for inflation the maximum civil money penalty 
(CMP) amounts for the various CMP authorities within our jurisdiction 
and to amend the process for initiating certain CMP administrative 
actions. We are taking these actions to comply with the Federal Civil 
Penalties Inflation Adjustment Act of 1990

[[Page 6113]]

(FCPIAA), as amended, and to streamline our internal processes. The 
last CMP adjustment was published in the Federal Register of November 
12, 2008, and the FCPIAA requires Federal Agencies to adjust their CMPs 
at least once every 4 years. We are using direct final rulemaking for 
these actions because the Agency expects that there will be no 
significant adverse comment on the rule.

DATES: Submit either electronic or written comments on the proposed 
rule by April 21, 2014. If FDA receives any significant adverse 
comments, the Agency will publish a document in the Federal Register 
withdrawing the direct final rule within 30 days after the comment 
period ends. FDA will then proceed to respond to comments under this 
proposed rule using the usual notice and comment procedures.

ADDRESSES: You may submit comments, identified by Docket No. FDA-2014-
N-0113, by any of the following methods.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.

Written Submissions

    Submit written submissions in the following ways:
     Mail/Hand delivery/Courier (for paper submissions): 
Division of Dockets Management (HFA-305), Food and Drug Administration, 
5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
    Instructions: All submissions received must include the Agency name 
and Docket No. FDA-2014-N-0113 for this rulemaking. All comments 
received may be posted without change to http://www.regulations.gov, 
including any personal information provided. For additional information 
on submitting comments, see the ``Comments'' heading of the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov and insert the 
docket number, found in brackets in the heading of this document, into 
the ``Search'' box and follow the prompts and/or go to the Division of 
Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Jarilyn Dupont, Office of Policy, Food 
and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 
20903, 301-796-4830.

SUPPLEMENTARY INFORMATION: The last CMP adjustment was published in the 
Federal Register of November 12, 2008 (73 FR 66750).

I. Background

A. CMP Amounts

    FDA is amending Sec.  17.2 (21 CFR 17.2) to update the maximum CMP 
amounts. In general, FCPIAA requires Federal Agencies to issue 
regulations to adjust for inflation each CMP provided by law within 
their jurisdiction. (28 U.S.C. 2461 note, as amended by the Debt 
Collection Improvement Act of 1996 (31 U.S.C. 3701)). FCPIAA directs 
Agencies to adjust the CMP provided by law by October 23, 1996, and to 
make additional adjustments at least once every 4 years thereafter. The 
adjustments are based on changes in the cost of living, and the FCPIAA 
defines the cost of living adjustment as the percentage (if any) for 
each civil monetary penalty by which the Consumer Price Index for the 
month of June of the calendar year preceding the adjustment, exceeds 
the Consumer Price Index for the month of June of the calendar year in 
which the amount of such civil monetary penalty was last set or 
adjusted pursuant to law (28 U.S.C. 2461 note, section 5(b)).
    FCPIAA also prescribes a rounding method based on the size of the 
penalty after the calculated increase, but states that the adjustment 
of a CMP may not exceed 10 percent of the penalty. FCPIAA defines a CMP 
as any penalty, fine, or other sanction that is for a specific monetary 
amount as provided by Federal law, or has a maximum amount provided for 
by Federal law, and is assessed or enforced by an agency pursuant to 
Federal law, and is assessed or enforced pursuant to an administrative 
proceeding or a civil action in the Federal Courts (28 U.S.C. 2461 
note, section 3(2)).

B. CMP Complaints

    Currently, under Sec.  17.5(a) (21 CFR 17.5(a)), CMP complaints 
against retailers of tobacco products may only be signed by attorneys 
in FDA's Office of the Chief Counsel (OCC). Given the routine nature of 
many of these CMPs, FDA is amending this regulation to permit the Chief 
Counsel to designate other FDA staff, such as those in FDA's Center for 
Tobacco Products, to sign a tobacco retailer CMP complaint.
    Based on FDA's experience, the large majority of the tobacco 
retailer complaints to date have involved alleged violations of the 
requirement to not sell cigarettes and smokeless tobacco to any person 
younger than 18 years of age or to verify age in accordance with 21 CFR 
1140.14(b). These complaints have almost always been straightforward, 
they involve simple fact patterns, and they do not require a complex 
legal analysis. Over time, such CMP complaints have increased in 
volume, and we anticipate that the volume will continue to be 
relatively high.
    We have determined that, with certain limitations and controls, 
non-attorney staff outside OCC can carry out the function of reviewing 
the evidence and signing the tobacco retailer CMP complaints in 
appropriate circumstances. The proposed amendment to Sec.  17.5(a) 
would give this decisionmaking authority to the Chief Counsel, who 
could ensure the authority to sign complaints is only given to 
appropriate staff and under appropriate circumstances. Under the 
proposal, the Chief Counsel would have the authority to set and revise 
limitations and controls, and to broaden, limit, or rescind any 
authorizations to sign tobacco retailer CMP complaints.
    The limitations could include, for example, limiting the delegation 
to situations where the CMP amount is below a certain dollar value; the 
CMP involves specified tobacco retailer charges that OCC has determined 
are routine and predictable and do not require a complex legal 
analysis; and involve charges for which FDA has developed OCC-approved 
templates, parameters, and procedures. The controls could include, for 
example, an audit or other quality review.
    This proposed rule incorporates requirements specifically set forth 
in the FCPIAA requiring FDA to issue a regulation implementing 
inflation adjustments for all its CMP provisions. These technical 
changes, required by law, do not substantively alter the existing 
regulatory framework, nor do they in any way affect the terms under 
which CMPs are assessed by FDA. The formula for the amount of the 
penalty adjustment is prescribed by Congress in the FCPIAA, and these 
changes are not subject to the exercise of discretion by FDA. The 
amendment to Sec.  17.5(a) changes an internal process.
    This proposed rule is a companion to the direct final rule 
published elsewhere in this issue of the Federal Register. This 
companion proposed rule and the direct final rule are identical in 
substance. This companion proposed rule will provide the procedural 
framework to proceed with standard notice-and-comment rulemaking in the 
event the direct final rule receives significant adverse comment and is

[[Page 6114]]

withdrawn. The comment period for the companion proposed rule runs 
concurrently with the comment period of the direct final rule. Any 
comments received under the companion proposed rule will be treated as 
comments regarding the direct final rule and vice versa.
    A significant adverse comment is one that explains why the rule 
would be inappropriate, including challenges to the rule's underlying 
premise or approach, or would be ineffective or unacceptable without 
change. A comment recommending a rule change in addition to this rule 
will not be considered a significant adverse comment unless the comment 
states why this rule would be ineffective without the additional 
change.
    If no significant adverse comment is received in response to the 
direct final rule, no further action will be taken related to the 
companion proposed rule. Instead, we will publish a confirmation notice 
in the Federal Register within 30 days after the comment period ends. 
We intend the direct final rule to become effective 30 days after 
publication of the confirmation notice.
    If we receive significant adverse comments, we will withdraw the 
direct final rule. We will proceed to respond to all the comments 
received regarding the direct final rule, treating those comments as 
comments to this proposed rule. The Agency will address the comments in 
the subsequent final rule. We will not provide additional opportunity 
for comment. If we receive a significant adverse comment that applies 
to part of the rule and that part may be severed from the remainder of 
the rule, we may adopt as final those parts of the rule that are not 
the subject of significant adverse comment.
    For additional background information, see the corresponding direct 
final rule published elsewhere in this issue of the Federal Register.
    This proposed rule:
     Revises the table in Sec.  17.2 to adjust the maximum CMP 
amounts for inflation as prescribed by FCPIAA.
     Revises Sec.  17.5(a) to provide authority for the Chief 
Counsel to delegate the responsibility for initiating a CMP 
administrative action against a tobacco retailer.

II. Environmental Impact

    The Agency has determined under 21 CFR 25.33 that this action is of 
a type that does not individually or cumulatively have a significant 
effect on the human environment. Therefore, neither an environmental 
assessment nor an environmental impact statement is required.

III. Paperwork Reduction Act

    This proposed rule contains no collection of information. 
Therefore, clearance by the Office of Management and Budget under the 
Paperwork Reduction Act of 1995 is not required.

IV. Federalism

    FDA has analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13132. FDA has determined that 
the rule does not contain policies that have substantial direct effects 
on the States, on the relationship between the National Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government. Accordingly, the Agency has concluded 
that the rule does not contain policies that have federalism 
implications as defined in the Executive order and, consequently, a 
federalism summary impact statement is not required.

V. Analysis of Impacts

    FDA has examined the impacts of the proposed rule under Executive 
Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 
U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4). Executive Orders 12866 and 13563 direct Agencies to assess all 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety, and other advantages; distributive impacts; and 
equity). The Agency believes that this proposed rule is not a 
significant regulatory action under Executive Order 12866.
    The Regulatory Flexibility Act requires Agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. Because the proposed rule simply adjusts the maximum 
amount of CMPs administered by FDA, the adjustment is required by the 
FCPIAA, and the proposed rule makes a change to FDA's internal 
processes, the Agency certifies that the proposed rule will not have a 
significant economic impact on a substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that Agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $141 million, using the most current (2012) Implicit 
Price Deflator for the Gross Domestic Product. FDA does not expect this 
proposed rule, when finalized, to result in any 1-year expenditure that 
would meet or exceed this amount.

VI. Comments

    Interested persons may submit either electronic comments regarding 
this document to http://www.regulations.gov or written comments to the 
Division of Dockets Management (see ADDRESSES). It is only necessary to 
send one set of comments. Identify comments with the docket number 
found in brackets in the heading of this document. Received comments 
may be seen in the Division of Dockets Management between 9 a.m. and 4 
p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

List of Subjects in 21 CFR Part 17

    Administrative practice and procedure, Penalties.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and the 
Public Health Service Act, and under authority delegated to the 
Commissioner of Food and Drugs, FDA proposes that 21 CFR part 17 be 
amended as follows:

PART 17--CIVIL MONEY PENALTIES HEARINGS

0
1. The authority citation for 21 CFR part 17 continues to read as 
follows:

    Authority:  21 U.S.C. 331, 333, 337, 351, 352, 355, 360, 360c, 
360f, 360i, 360j, 371; 42 U.S.C. 262, 263b, 300aa-28; 5 U.S.C. 554, 
555, 556, 557.

0
2. Section 17.2 is revised to read as follows:

Sec.  17.2  Maximum penalty amounts.

    The following table shows maximum civil monetary penalties 
associated with the statutory provisions authorizing civil monetary 
penalties under the Federal Food, Drug, and Cosmetic Act or the Public 
Health Service Act.

[[Page 6115]]

                              Civil Monetary Penalties Authorities Administered by FDA and Adjusted Maximum Penalty Amounts
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                                              Former  maximum                                                                                Adjusted
                                                   penalty                                                               Date of  last       maximum
               U.S.C. section                   amount  (in                       Assessment method                     penalty  figure  penalty  amount
                                                  dollars)                                                               or  adjustment    (in dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        21 U.S.C.
--------------------------------------------------------------------------------------------------------------------------------------------------------
333(b)(2)(A)................................           60,000  For each of the first two violations in any 10-year                 2013           65,000
                                                                period.
333(b)(2)(B)................................        1,200,000  For each violation after the second conviction in any               2013        1,275,000
                                                                10-year period.
333(b)(3)...................................          120,000  Per violation..........................................             2013          130,000
333(f)(1)(A)................................           16,500  Per violation..........................................             2008           16,500
333(f)(1)(A)................................        1,200,000  For the aggregate of violations........................             2013        1,275,000
333(f)(2)(A)................................           55,000  Per individual.........................................             2013           60,000
333(f)(2)(A)................................          300,000  Per ``any other person''...............................             2013          325,000
333(f)(2)(A)................................          600,000  For all violations adjudicated in a single proceeding..             2013          650,000
333(f)(3)(A)................................           10,000  For all violations adjudicated in a single proceeding..             2013           11,000
333(f)(3)(B)................................           10,000  For each day the violation is not corrected after a 30-             2013           11,000
                                                                day period following notification until the violation
                                                                is corrected.
333(f)(4)(A)(i).............................          250,000  Per violation..........................................             2013          275,000
333(f)(4)(A)(i).............................        1,000,000  For all violations adjudicated in a single proceeding..             2013        1,075,000
333(f)(4)(A)(ii)............................          250,000  For the first 30-day period (or any portion thereof) of             2013          275,000
                                                                continued violation following notification.
333(f)(4)(A)(ii)............................        1,000,000  For any 30-day period, where the amount doubles for                 2013        1,075,000
                                                                every 30-day period of continued violation after the
                                                                first 30-day violation.
333(f)(4)(A)(ii)............................       10,000,000  For all violations adjudicated in a single proceeding..             2013       10,850,000
333(f)(9)(A)................................           15,000  Per violation..........................................             2009           15,000
333(f)(9)(A)................................        1,000,000  For all violations adjudicated in a single proceeding..             2013        1,050,000
333(f)(9)(B)(i)(I)..........................          250,000  Per violation..........................................             2013          275,000
333(f)(9)(B)(i)(I)..........................        1,000,000  For all violations adjudicated in a single proceeding..             2013        1,050,000
333(f)(9)(B)(i)(II).........................          250,000  For the first 30-day period (or any portion thereof) of             2013          275,000
                                                                continued violation following notification.
333(f)(9)(B)(i)(II).........................        1,000,000  For any 30-day period, where the amount doubles for                 2013        1,050,000
                                                                every 30-day period of continued violation after the
                                                                first 30-day violation.
333(f)(9)(B)(i)(II).........................       10,000,000  For all violations adjudicated in a single proceeding..             2013       10,525,000
333(f)(9)(B)(ii)(I).........................          250,000  Per violation..........................................             2013          275,000
333(f)(9)(B)(ii)(I).........................        1,000,000  For all violations adjudicated in a single proceeding..             2013        1,050,000
333(f)(9)(B)(ii)(II)........................          250,000  For the first 30-day period (or any portion thereof) of             2013          275,000
                                                                continued violation following notification.
333(f)(9)(B)(ii)(II)........................        1,000,000  For any 30-day period, where the amount doubles for                 2013        1,050,000
                                                                every 30-day period of continued violation after the
                                                                first 30-day violation.
333(f)(9)(B)(ii)(II)........................       10,000,000  For all violations adjudicated in a single proceeding..             2013       10,525,000
333(g)(1)...................................          250,000  For the first violation in any 3-year period...........             2013          275,000
333(g)(1)...................................          500,000  For each subsequent violation in any 3-year period.....             2013          550,000
333 note....................................              250  For the second violation (following a first violation               2009              250
                                                                with a warning) within a 12-month period by a retailer
                                                                with an approved training program.
333 note....................................              500  For the third violation within a 24-month period by a               2009              500
                                                                retailer with an approved training program.
333 note....................................            2,000  For the fourth violation within a 24-month period by a              2009            2,000
                                                                retailer with an approved training program.
333 note....................................            5,000  For the fifth violation within a 36-month period by a               2009            5,000
                                                                retailer with an approved training program.
333 note....................................           10,000  For the sixth or subsequent violation within a 48-month             2013           11,000
                                                                period by a retailer with an approved training program.
333 note....................................              250  For the first violation by a retailer without an                    2009              250
                                                                approved training program.
333 note....................................              500  For the second violation within a 12-month period by a              2009              500
                                                                retailer without an approved training program.
333 note....................................            1,000  For the third violation within a 24-month period by a               2013            1,100
                                                                retailer without an approved training program.
333 note....................................            2,000  For the fourth violation within a 24-month period by a              2009            2,000
                                                                retailer without an approved training program.
333 note....................................            5,000  For the fifth violation within a 36-month period by a               2009            5,000
                                                                retailer without an approved training program.
333 note....................................           10,000  For the sixth or subsequent violation within a 48-month             2013           11,000
                                                                period by a retailer without an approved training
                                                                program.
335b(a).....................................          300,000  Per violation for an individual........................             2013          325,000
335b(a).....................................        1,200,000  Per violation for ``any other person''.................             2013        1,275,000
360pp(b)(1).................................            1,100  Per violation per person...............................             2008            1,100

[[Page 6116]]

 
360pp(b)(1).................................          355,000  For any related series of violations...................             2013          375,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        42 U.S.C.
--------------------------------------------------------------------------------------------------------------------------------------------------------
263b(h)(3)..................................           11,000  Per violation..........................................             2008           11,000
300aa-28(b)(1)..............................          120,000  Per occurrence.........................................             2013          130,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Not adjusted.

0
3. In Sec.  17.5, revise paragraph (a) to read as follows:

Sec.  17.5  Complaint.

    (a) The Center with principal jurisdiction over the matter involved 
shall begin all administrative civil money penalty actions by serving 
on the respondent(s) a complaint signed by the Office of the Chief 
Counsel attorney for the Center and by filing a copy of the complaint 
with the Division of Dockets Management (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. For a 
civil money penalty action against retailers of tobacco products, the 
complaint may be signed by any Agency employee designated by the Chief 
Counsel.
* * * * *

    Dated: January 28, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-02149 Filed 1-31-14; 8:45 am]
BILLING CODE 4160-01-P