Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,

Complainant,
v.

SSSAH123 Inc.
d/b/a Austintown Beverage Center,

Respondent.

Docket No. T-19-409
FDA No. FDA-2018-H-4200

Decision No. TB3955

Date: June 7, 2019

ORDER GRANTING COMPLAINANT’S MOTION FOR SANCTIONS
AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this case by serving the Complaint on
Respondent, SSSAH123 Inc. d/b/a Austintown Beverage Center, and filing a copy of the
Complaint with the Civil Remedies Division (CRD). The Complaint alleges that
Respondent impermissibly sold cigarettes and a covered tobacco product to minors and
failed to verify that the covered tobacco product purchaser was 18 years of age or older,
thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et
seq., and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R.
pt. 1140. CTP seeks a civil money penalty of $559 against the Respondent for three
violations of the tobacco regulations within a 24-month period. Respondent requested a
hearing by filing an Answer, which denied all allegations of liability and the
appropriateness of the civil money penalty.
Currently, Complainant’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 comply with CTP’s
discovery requests and issue a default judgment against Respondent. For the reasons
stated below, I grant CTP’s Motion to Impose Sanctions, strike the Respondent’s
Answer, and issue an initial decision and default judgment imposing a civil money
penalty in the amount of $559 against Respondent. 21 C.F.R. § 17.35(c)(3).

I. Background and Procedural History

As provided in 21 C.F.R. §§ 17.5 and 17.7, CTP served the complaint on Respondent
Austintown Beverage Center by United Parcel Service on November 6, 2018.! On
November 25, 2018, Respondent filed the first page of the Complaint twice via the
Departmental Appeals Board Electronic Case Filing (DAB E-File) system. On December
7, 2018, Respondent’s owner indicated that she had difficulty uploading the Answer to
DAB E-File and had sent the Answer by United States Postal Service. By letter dated
December 11, 2018, I granted a 3-week extension for Respondent to file an answer that
complied with the regulations. See 21 C.F.R. § 17.9. Respondent timely filed its
Answer, which the CRD received on December 12, 2018.

On December 21, 2018, I issued an Acknowledgment and Pre-Hearing Order (APHO)
acknowledging receipt of Respondent’s Answer and establishing procedural deadlines for
this case. The APHO set a deadline of January 22, 2019, for the parties to request
documents from the opposing party and explained that a party must provide the requested
documents no later than 30 days after the request has been made, pursuant to 21 C.F.R.

§ 17.23(a). APHO ¥ 12. The APHO also stated that a party may file a motion for a
protective order within 10 days of receiving a request for the production of documents.
Id.; 21 C.F.R. §§ 17.23(d), 17.28. Additionally, the APHO ordered the parties to file a
joint status report within 30 days, ordered CTP to file its pre-hearing exchange by March
12, 2019, and ordered Respondent to file its pre-hearing exchange by April 2, 2019.
APHO 4§ 3-4. Further, the APHO warned the parties that “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 case, or

1 The UPS Delivery Notification indicates that the Complaint was delivered to “4903
Mahoning Ave, Youngstown, OH 44515,” while the Complaint states that Respondent’s
address is “4903 Mahoning Avenue, Austintown, OH 44515.” CTP did not amend its
Complaint to conform with the proof of service. Nevertheless, I find that the Respondent
has received proper service of the Complaint as evidenced by the filing of its Answer. I
note that this decision has been delivered to both addresses listed in the Complaint and
the UPS Delivery Notification with instructions on how to file a motion to reopen if the
Respondent believes this decision was entered in error.

engages in misconduct that interferes with the speedy, orderly, or fair conduct of the
hearing.” APHO 4 16; see also 21 C.F.R. § 17.35.

On January 22, 2019, CTP served a timely Request for Production of Documents on
Respondent. On February 28, 2019, CTP filed a Motion to Compel Discovery stating
that it had not received a response to its Request for Production of Documents and
requesting “an order be entered compelling Respondent to respond to CTP’s Request for
Production of Documents in its entirety.”

Ina March 1, 2019 letter issued by my direction, Respondent was given until March 15,
2019, to file a response to CTP’s Motion to Compel Discovery. Also, the pre-hearing
exchange deadlines were extended by 30 days in a March 1, 2019 Order. Respondent did
not file a response to CTP’s Motion to Compel Discovery or otherwise respond to the
letter or Order issued on March 1, 2019. Therefore, in a March 20, 2019 Order, I granted
CTP’s motion and ordered Respondent to comply with CTP’s Request for Production of
Documents by April 5, 2019. I also further extended the parties’ pre-hearing exchange
deadlines by 30 days. I warned Respondent that a failure to comply might result in
sanctions, including the issuance of an Initial Decision and Default Judgment finding
Respondent liable for the violations listed in the Complaint and imposing a civil money
penalty.

On April 11, 2019, CTP filed a Motion to Impose Sanctions stating, “Respondent has not
produced documents to CTP in response to its [Request for Production of Documents].”
CTP requested I strike Respondent’s Answer and issue a default judgment imposing a
civil money penalty in the amount of $559 against Respondent. In an April 15, 2019
Order, I gave Respondent until April 26, 2019, to file a response to CTP’s Motion to
Impose Sanctions and extended the pre-hearing exchange deadlines by 30 days. To date,
Respondent has not filed a response to CTP’s Motion to Impose Sanctions or the April
15, 2019 Order. CTP’s Motion to Impose Sanctions is now ripe for a ruling.

IL. Sanctions
The regulations authorize me to impose sanctions on any party or counsel 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). When a party “fails to comply with a discovery order,” I may draw
an inference in favor of the opposing party, may prohibit the non-complying party from
introducing or relying on evidence related to the discovery request, and may “[s]trike any
part of the pleadings or other submissions of the party failing to comply with [the
discovery] request.” 21 C.F.R. § 17.35(c). Any sanction “shall reasonably relate to the
severity and nature of the failure or misconduct.” 21 C.F.R. § 17.35(b).

I conclude that sanctions against Respondent are warranted. During the course of this
administrative proceeding, Respondent repeatedly failed to comply with multiple orders,
letters containing judicial directives, and procedures governing this proceeding. As such,
Respondent has failed to defend this action, which has interfered with the speedy,
orderly, and fair conduct of this proceeding. 21 C.F.R. § 17.35(a). Specifically,
Respondent failed to comply with the discovery requirements of the applicable
regulations and my December 21, 2018 APHO, both of which require the parties to
produce documents within 30 days of a discovery request or to seek a protective order.”
21 C.F.R. § 17.23(a); APHO § 12. Respondent has not provided the requested documents
or requested a protective order. Additionally, Respondent did not file a response to
CTP’s Motion to Compel Discovery, as required by the regulations, my March 1, 2019
Order, and a March 1, 2019 letter issued by my direction. 21 C.F.R. § 17.32(c).
Respondent also failed to comply with the March 20, 2019 Order granting CTP’s Motion
to Compel Discovery, which required Respondent to produce documents by April 5,
2019. Furthermore, Respondent did not respond to CTP’s Motion to Impose Sanctions,
again in contravention of the regulations and the April 15, 2019 Order.

In the absence of any explanation from Respondent, I find no basis to excuse
Respondent’s repeated failure to comply with the various orders, judicial directives, and
regulations in this proceeding. Despite explicit warnings that its failure to comply with
the orders could result in sanctions, Respondent did not comply with four orders that I
issued in this case. Likewise, Respondent did not comply with the directives in the
March 1, 2019 letter issued by my direction. Further, Respondent did not respond to any
of CTP’s motions. Accordingly, I find that Respondent failed to comply with orders and
procedures governing this proceeding, failed to defend its case, and, as a result, engaged
in a pattern of misconduct that interfered with the speedy, orderly, and fair conduct of the
hearing. Notably, Respondent’s failure to comply with orders and regulations governing
discovery and other procedures in this case necessitated extending the pre-hearing
exchange deadlines three times, which delayed the hearing. See March 1, 2019 Order;
March 20, 2019 Order; and April 15, 2019 Order. As the Departmental Appeals Board
has recognized in a similar case involving a party’s failure to comply with discovery
orders, this conduct is sufficiently egregious to warrant striking Respondent’s Answer
and issuing an initial decision by default. See, e.g., KKNJ, Inc. d/b/a Tobacco Hut 12,

2 Respondent also failed to comply with the status report requirements of the APHO,
which required the parties to submit a joint status report regarding the status of settlement
negotiations. APHO 4 3. According to CTP’s Status Report, filed on January 22, 2019,
CTP was unable to reach Respondent to finalize a settlement and Respondent did not join
in the Status Report.
DAB No. 2678, at 10 (2016) (concluding that “the ALJ did not abuse her discretion in
sanctioning Respondent’s ongoing failure to comply with the ALJ’s directions by striking
Respondent’s answer to the Complaint”). Therefore, pursuant to 21 C.F.R. §§ 17.35(a)
and (c)(3), I grant CTP’s Motion to Impose Sanctions, and strike Respondent’s Answer
for failing to comply with numerous orders, judicial directives, and procedures governing
this proceeding, failing to defend this action, and engaging in a pattern of misconduct that
has interfered with the speedy, orderly, and fair conduct of the hearing.

Til. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered. Pursuant to 21 C.F.R.

§ 17.11(a), 1 am required to “assume the facts alleged in the [C]omplaint to be true” and,

if those facts establish liability under the Act, issue a default judgment and impose a civil
money penalty. Accordingly, I must determine whether the allegations in the Complaint

establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Austintown Beverage Center, an establishment that sells
tobacco products and is located at 4903 Mahoning Avenue, Austintown, Ohio
44515. Complaint {J 7-8.

e During an inspection of Respondent’s establishment on April 15, 2017, at
approximately 2:24 PM, an FDA-commissioned inspector documented that “a
person younger than 18 years of age was able to purchase a package of Marlboro
Gold Pack cigarettes ....” Complaint §§ 11-12.

© On April 27, 2017, CTP issued a Warning Letter to Respondent regarding the
documented violation from April 15, 2017. The letter explained that the named
violation was not necessarily intended to be an exhaustive list of all violations at
the establishment. The Warning Letter also stated that if Respondent failed to
correct the violation, regulatory action by the FDA or a civil money penalty action
could occur and that Respondent is responsible for complying with the law.
Complaint § 12.

e During a subsequent inspection of Respondent’s establishment on August 16,
2018, at approximately 10:35 PM, “a person younger than 18 years of age was
able to purchase a Black & Mild cigar. . .” and “the minor’s identification was not
verified before the sale...” Complaint 4 9.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded
if distributed or offered for sale in any state in violation of regulations issued under

section 906(d) of the Act. 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. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974,
28,975-76 (May 10, 2016). The regulations prohibit the sale of cigarettes and covered
tobacco products to any person younger than 18 years of age. 21 C.F.R. § 1140.14(a)(1)
and 21 C.F.R. § 1140.14(b)(1). The regulations also require retailers to verify, by means
of photo identification containing a purchaser’s date of birth, that no covered tobacco
product purchasers are younger than 18 years of age. 21 C.F.R. § 1140.14(b)(2)(i).

Taking the above alleged facts as true, Respondent violated the prohibition against selling
cigarettes and covered tobacco products to persons younger than 18 years of age, 21
C.F.R. § 1140.14(a)(1) and 21 C.F.R. § 1140.14(b)(1), on April 15, 2017, and August 16,
2018. On August 16, 2018, Respondent also violated the requirement that retailers
verify, by means of photo identification containing a purchaser’s date of birth, that no
covered tobacco product purchasers are younger than 18 years of age. 21 C.F.R.

§ 1140.14(b)(2)(i). All violations observed during the initial failed inspection are
counted as a single violation, and each separate violation observed during subsequent
failed inspections count as a discrete violation. 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). Therefore,
Respondent’s actions constitute three violations of law within a 24-month period that
merit a civil money penalty.

CTP has requested a civil money penalty of $559, which is a permissible penalty under
the regulations. 21 C.F.R. §§ 17.2, 17.11; see also 45 C.F.R. § 102.3. Therefore, I find
that a civil money penalty of $559 is warranted and so order one imposed.

/s/
Karen R. Robinson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.

Jesse Foods, Inc.
d/b/a Express Food Mart,

Respondent.

Docket No. T-19-282
FDA No. FDA-2018-H-4046

Decision No. TB3945

Date: June 7, 2019

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an Administrative
Complaint on Respondent, Jesse Foods, Inc. d/b/a Express Food Mart, at 10134 Madison
Avenue, Cleveland, Ohio 44102, and by filing a copy of the complaint with the Food and
Drug Administration’s (FDA) Division of Dockets Management. The complaint alleges
that Express Food Mart impermissibly sold cigarettes or smokeless tobacco to a minor
and failed to verify, by means of photo identification containing a date of birth, that the
purchaser was 18 years of age or older, thereby violating the Federal Food, Drug, and
Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R.
pt. 1140. The complaint also alleges that Respondent previously sold cigarettes or
smokeless tobacco to minors and failed to verify, by means of photo identification
containing a date of birth, that one of the purchasers was 18 years of age or older. The
complaint further alleges that Respondent Express Food Mart previously admitted to at
least three violations of regulations found at 21 C.F.R. pt. 1140 and, therefore, CTP seeks
a $5,591 civil money penalty against Respondent Express Food Mart for at least five
violations within a 36-month period.
During the course of these administrative proceedings, Respondent, through counsel,
failed to comply with orders and procedures governing this proceeding and failed to
defend its actions, which interfered with the speedy, orderly, or fair conduct of this
proceeding. 21 C.F.R. § 17.35(a). 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 October 29, 2018, CTP served the complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. Respondent, through counsel, timely
answered CTP’s complaint.! On December 19, 2018, I issued an Acknowledgement 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 § 12;

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

APHO 16.

On January 16, 2019, CTP filed a Status Report which stated it had “attempted to contact
Respondent to discuss the filing of a Joint Status Report, but was unable to reach
Respondent.” In accordance with the deadlines set forth in the APHO, CTP served
Respondent with its Request for Production of Documents on January 3, 2019, via United
Parcel Service at Respondent’s counsel’s office, located at the address listed on the
Answer, 12910 Taft Avenue, Floor 2, Cleveland, Ohio 44108.

On February 7, 2019, CTP filed a Motion to Compel Discovery asserting that Respondent
had not responded to its discovery request. By letter issued at my direction,
Respondent’s counsel was informed that Respondent had until March 8, 2019, to file a
response to CTP’s Motion to Compel Discovery. See also 21 C.F.R. § 17.32(c); APHO

4] 19. Respondent’s counsel did not respond.

Additionally, on February 7, 2019, CTP also filed a Motion to Extend Deadlines,
requesting “that any deadlines, including the March 11, 2019 due date for CTP’s pre-

' After timely filing the Answer, Respondent’s counsel failed to take any further action.
Respondent, acting alone or through counsel, repeatedly failed to respond to orders I
issued, and comply with letters issued at my direction.
hearing exchange, be extended thirty (30) days... .” I issued an Order extending CTP’s
pre-hearing exchange to Respondent until April 10, 2019, and Respondent’s pre-hearing
exchange to CTP until May 1, 2019.

On April 4, 2019, I issued an Order to Compel Discovery in which I granted CTP’s
motion and ordered Respondent to produce responsive documents to CTP’s Request for
Production of Documents by April 11, 2019. The order also extended the parties’ pre-
hearing exchange deadlines. I stated:

I warn Respondent that failure to comply may result in
sanctions which may include striking its filings and issuing an
Initial Decision and Default Judgment finding Respondent
liable for the violations listed in the Complaint and imposing a
civil money penalty. 21 C.F.R. § 17.35.

April 4, 2019 Order to Compel Discovery (emphasis in original).

On April 16, 2019, CTP filed a Motion to Impose Sanctions. CTP advised that
Respondent had not complied with my Order to Compel Discovery, and asked that I
strike Respondent’s Answer as a sanction and issue an Initial Decision and Default
Judgment. By letter issued at my direction on April 17, 2019, I informed both parties that
Respondent had until May 2, 2019, to file a response to CTP’s Motion to Impose
Sanctions. Respondent’s counsel did not respond.

Il. 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. § 17.35(a).

Respondent failed to comply with the following orders and procedures governing this
proceeding:

e Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 12 of my
APHO, when Respondent failed to respond to CTP’s Request for Production of
Documents within 30 days; and
e Respondent failed to comply with my April 4, 2019 Order to Compel Discovery,
when it failed to submit the documents responsive to CTP’s Request for
Production of Documents by April 11, 2019.

Respondent failed to defend its action despite the following opportunities:

e By letter issued at my direction on March 1, 2019, Respondent was informed that
it had until March 8, 2019, to file a response to CTP's Motion to Compel
Discovery. Respondent did not defend its action; and

e By letter issued at my direction on April 17, 2019, Respondent was informed that
it had until May 2, 2019, to file a response to CTP's Motion to Impose Sanctions.
Respondent did not defend its action.

I find that Respondent, through counsel, failed to comply with orders and procedures
governing this proceeding, failed to defend its case, 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 two of my orders, despite my explicit and repeated warnings that its failure
could result in sanctions. I specified that those sanctions may include striking its Answer
and “issuing an Initial Decision and Default Judgment finding Respondent liable for the
violations listed in the Complaint and imposing a civil money penalty.” April 4, 2019
Order to Compel Discovery. Respondent, through counsel, also failed to defend its
actions, despite my express reminders of the opportunity. Respondent’s repeated
misconduct interfered with the speedy, orderly, or fair conduct of this proceeding. I find
that Respondent’s actions are sufficient to warrant striking its Answer and issuing a
decision by default, without further proceedings. 21 C.F.R. § 17.35(b), (c)(3).
Accordingly, I strike Respondent’s Answer. 21 C.F.R. § 17.35(c)(3).

Ill. 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). Pursuant to 21 C.F.R. § 17.11(a), lam required
to “assume the facts alleged in the complaint to be true” and, if those facts establish
liability under the Act, issue a default judgment and impose a civil money penalty.
Accordingly, I must determine whether the allegations in the complaint establish
violations of the Act.
Specifically, CTP alleges the following facts in its complaint:

¢ On August 8, 2018, CTP initiated a previous civil money penalty action, CRD
Docket Number T-18-3210, FDA Docket Number FDA-2018-H-3093, against
Respondent for violations of 21 C.F.R. pt. 1140, three? of which occurred within
the 36-month period relevant here. CTP alleged those violations to have occurred
at Respondent’s business establishment located at 10134 Madison Avenue,
Cleveland, Ohio 44102, on October 13, 2017, and June 8, 2018;

e The previous action concluded when Respondent admitted the allegations
contained in the Complaint issued by CTP, and paid the agreed upon monetary
penalty in settlement of that claim. Further, “Respondent expressly waived its
right to contest such violations in subsequent actions”;

e At approximately 7:50 PM on October 2, 2018, at Respondent’s business
establishment located at 10134 Madison Avenue, Cleveland, Ohio 44102, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
Newport Box 100s cigarettes to a person younger than 18 years of age. The
inspector also documented that staff failed to verify, by means of photographic
identification containing a date of birth, that the purchaser was 18 years of age or
older.

These facts establish Respondent Express Food Mart’s liability under the Act. The Act
prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A 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 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). Under 21 C.F.R. § 1140.14(a)(1), no retailer
may sell cigarettes or smokeless tobacco to any person younger than 18 years of age.
Under 21 C.F.R. § 1140.14(a)(2)(i), retailers must verify, by means of photographic
identification containing a purchaser’s date of birth, that no cigarette or smokeless
tobacco purchasers are younger than 18 years of age.

Under 21 C.F.R. § 17.2, a $5,591 civil money penalty is permissible for at least five
violations of the regulations found at 21 C.F.R. pt. 1140 within a 36-month period.

2 One violation was documented on October 13, 2017, and two on June 8, 2018.
Order

For these reasons, | enter default judgment in the amount of $5,591 against Respondent
Jesse Foods, Inc. d/b/a Express Food Mart. 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.

/s/
Margaret G. Brakebusch
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

D and P Operations Inc.
d/b/a Marathon,

Respondent.

Docket No. T-18-1716
FDA Docket No. FDA-2018-H-1236

Decision No. TB3871
Date: June 6, 2019
INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a civil money penalty (CMP)
against Respondent, D and P Operations Inc. d/b/a Marathon, located at 7390 Southwest
8th Street, Miami, Florida 33144, 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.
pt. 1140, within a 36-month period.' Specifically, in this instance, CTP alleges that
Respondent violated the Act by impermissibly selling cigarettes to a minor and failing to
verify, by means of photo identification containing a date of birth, that the purchaser was
18 years of age or older.

' Previously, on February 5, 2018, CTP initiated its first CMP action for three violations,
which was resolved after Respondent admitted all of the allegations in the complaint and
paid the agreed upon penalty. In acknowledging that the alleged violations occurred,
Respondent expressly waived its right to contest such violations in subsequent actions.
CTP Exs. 1-2. See Notice of Settlement Agreement, FDA Docket FDA-2018-H-0520,
CRD Docket T-18-1160.
Procedural History

CTP began this case by serving an administrative complaint on March 27, 2018, seeking
a $5,591 civil money penalty on Respondent, at 7390 Southwest 8th Street, Miami,
Florida 33144, and by filing a copy of the complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management. On April 25, 2018,
Respondent timely answered CTP’s Complaint. In its answer, Respondent, through its
counsel, denied the allegations. Respondent’s Answer (Answer) at 2.

On April 27, 2018, I issued an Acknowledgment and Pre-Hearing Order, which
established the procedure and deadlines in this case. On June 14, 2018, CTP filed a
Motion for a Protective Order. On June 22, 2018, Respondent filed its response. CTP
filed its Memorandum of Law in Support of the Motion for Protective Order on July 5,
2018. On July 24, 2018, Respondent filed its revised response to CTP’s motion. On
August 16, 2018, I issued an order granting in part and denying in part CTP’s Motion for
a Protective Order. I ordered CTP to provide the redacted identification of the minor. I
denied the request for a non-redacted copy of the minor’s identification and the request
for CTP Guidelines Regarding Use of Minors.

On September 18, 2018, CTP filed its pre-hearing exchange. CTP’s pre-hearing
exchange included 18-numbered exhibits (CTP Exs. 1-18) which contained declarations
of two witnesses, including Inspector Elie Joseph. On October 9, 2018, Respondent filed
its pre-hearing exchange including 6 exhibits (R. Exs. 1-6).

On December 13, 2018, I held a prehearing conference call in this case. During the
prehearing conference call, we discussed the parties’ witnesses and exhibits list. CTP
proposed two witnesses, a senior regulatory counsel and an inspector, and CTP’s exhibits
1-18. Respondent proposed Respondent’s exhibits 1-6. Respondent was instructed to
mail its exhibit 4, the store surveillance video for the court to review. Respondent also
requested to cross-examine Inspector Joseph, CTP’s proposed witness.

On January 24, 2019, I held a telephone hearing in this case. On the same date,
Respondent also filed its exhibits 7 and 8. During the hearing, I admitted CTP Exs. 1-18
and R. Exs. 1-8. Transcript (T.) 7-8. Respondent cross-examined Inspector Joseph, who
stated that he did not review the video recordings Respondent submitted as evidence, and
therefore, was unable to testify to the line of questioning pertaining to the recordings. A
supplemental hearing was proposed in order for Inspector Joseph to review the video
recordings. T. 9-10.

On February 19, 2019, Respondent moved to cancel the supplemental hearing and
establish post-hearing procedures. On February 20, 2019, I granted the motion and
allowed the parties until March 22, 2019, to simultaneously file post-hearing briefs. On
March 22, 2019, both parties filed post-hearing briefs.
Issues

1. Whether Respondent sold cigarettes to a minor on March 10, 2018, and failed to
verify, by means of photo identification containing a date of birth, that the
purchaser was 18 years of age or older, in violation of 21 C.F.R. § 1140.14(a)(1)
and 21 C.F.R. § 1140.14(a)(2)(i).

2. Whether the civil money penalty of $5,591 that CTP seeks is an appropriate
amount, pursuant to the provisions of 21 C.F.R. § 17.33(a).

Analysis

In order to prevail, CTP must prove Respondent’s liability by a preponderance of the
evidence. The U.S. Supreme Court has described the preponderance of the evidence
standard as requiring that the trier-of-fact believe that the existence of a fact is more
probable than not before finding in favor of the party that had the burden to persuade the
judge of the fact’s existence. Jn re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe
and Products of California, Inc. v. Construction Laborers, 508 U.S. 602, 622 (1993).

CTP has the burden to prove Respondent’s liability and appropriateness of the penalty by
a preponderance of the evidence. 21 C.F.R. § 17.33(b). Respondent has the burden to
prove any affirmative defenses and any mitigating factors likewise by a preponderance of
the evidence. 21 C.F.R. § 17.33(c).

I. Violations

CTP determined to impose a CMP against Respondent pursuant to the authority conferred
by the Act and implementing regulations at Part 21 of the Code of Federal Regulations.
The Act prohibits the misbranding of tobacco products while they are held for sale after
shipment in interstate commerce. 21 U.S.C. § 331(k). A tobacco product is misbranded
if distributed or offered for sale in any state in violation of regulations issued under
section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). FDA and
its agency, 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. § 331(f)(9).

The sale of cigarettes to an individual who is under the age of 18 years is a violation of
implementing regulations. 21 C.F.R. § 1140.14(a)(1). The failure to verify, by means of
photo identification containing the bearer’s date of birth, that no cigarette purchaser is
younger than 18 years of age is also a violation of implementing regulations. 21 C.F.R.

§ 1140.14(a)(2)(i).

In the instant case, at approximately 1:16 pm on March 10, 2018, an FDA-commissioned
inspector conducted an inspection of Marathon, located at 7390 Southwest 8th Street,
Miami, Florida 33144. CTP alleged that during the inspection, Respondent committed
violations of selling cigarettes to a minor, in violation of 21 C.F.R.§ 1140.14(a)(1), and
failing to verify the age of the purchaser by means of photographic identification
containing the bearer’s date of birth, in violation of 21 C.F.R. § 1140.14(a)(2)(i).
Specifically, a person younger than 18 years of age was able to purchase a package of
Newport Box cigarettes. Complaint at 3.

To support the March 10, 2018 allegations, CTP submitted evidence including the
declaration of Inspector Elie Joseph, the inspector at the time of the incident, Inspector
Joseph’s narrative report of the alleged incident, and photographs of the package of
Newport Box cigarettes allegedly purchased on March 10, 2018. CTP Exs. 4-5, 8-9.

In his declaration, Inspector Joseph stated that on March 10, 2018, at approximately 1:16
pm, he conducted a follow-up compliance check inspection at Respondent’s location at
7390 Southwest 8th Street, Miami, Florida 33144. CTP Ex. 4 at 2. Inspector Joseph
further stated:

During the inspection, I parked my car near the Marathon and Minor A and
lexited the vehicle. I watched Minor A enter Marathon. I did not accompany
Minor A into the establishment because I felt my presence would
compromise the undercover nature of the inspection. From my location
outside the door, I had a clear, unobstructed view through the establishment
window of the sales counter and Minor A. During the inspection, I observed
Minor A purchase a package of cigarettes from an employee at the
establishment. Prior to the purchase, I observed that Minor A did not present
any identification to the employee. The employee did not provide Minor A
with a receipt after the purchase.

Id. at 3. After the inspection, Inspector Joseph retrieved the cigarette package from
Minor A, which he observed were Newport Box cigarettes. Inspector Joseph stated that
he then labeled the cigarettes as evidence, photographed all of the panels of the package,
and processed the evidence in accordance with standard procedures at the time of the
inspection. Jd.

Respondent contests the allegations and argues: (1) that CTP failed to submit evidence
that Inspector Joseph was employed as a health officer or employee as required by the
regulations; (2) that Inspector Joseph was without authority to conduct compliance
inspections at the establishment as the FDA and Florida do not have a contract to perform
compliance inspections; (3) that Minor A was not representative of the racial/ethnic
composition of the area; (4) that CTP failed to submit evidence of compliance with the
requirements that the minor be provided with immunity; and (5) that the inspection was
tainted, alleging that the inspector gained access to behind-the-counter area.
I find Respondent’s arguments are without merit as Respondent attempts to invalidate the
inspection, but fails to rebut that the actual sale took place. However, I will address why
the aforementioned arguments are without merit and irrelevant to the issue at hand.

To Respondent’s point that “[t]here is no evidence that Mr. Joseph was employed as a
health officer or employee, a food officer or employee, or a drug officer or employee of
any state or local jurisdiction.” R. Post-Hearing Br. at 4; T. 18. However, Inspector
Joseph was duly commissioned by the FDA to perform such inspections. Further, it is
noted, as Respondent has also conceded, that Inspector Joseph is employed by the state as
a daytime school teacher. The pertinent statute permits the Secretary to conduct
examinations and investigations through officers and employees of the Department or
through any health, food, or drug officer or employee of any State. 21 U.S.C.

§ 372(a)(1)(A). Here, Inspector Joseph, as a teacher for the State of Florida, is an
employee of the state, therefore the applicable statute authorized him to conduct said
investigation.

Respondent further argues that as an FDA-commissioned officer, Inspector Joseph’s
employment through Information Systems and Networks Corporation (ISN), a private
company, did not authorize him to conduct the inspection because there was no contract
between the FDA and State of Florida to perform compliance inspections. R. Pre-
Hearing Brief at 3. Respondent also argues that the applicable statute, 21 U.S.C.

§ 372(a)(1)(A), does not authorize the Secretary to contract with a private contractor to
conduct compliance inspections. /d. Respondent contends that the Florida Department
of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco,
is responsible for conducting inspections. Jd. However, the FDA issues contracts to
assist with compliance check inspections of retail establishments. R. Ex. 8 at 9. Contrary
to Respondent’s argument, it is public knowledge that ISN is a contractor for Florida and
is authorized to conduct compliance inspections.” Additionally, Inspector Joseph testified
that he was an FDA-commissioned inspector at the time of the inspection. CTP Ex. 4 at
1;T.5.

Respondent also argued that Inspector Joseph did not comply with FDA’s contract
policy, as the policy requires that the minor reflect the racial/ethnic composition of the
population where the undercover buy is conducted. R. Post-Hearing Br. at 4.

Respondent contends that because the minor was Black, the minor was not representative
of the racial/ethnic composition of the area. /d. In support of this position, Respondent
has submitted a partial copy of an agency manual received from the FDA in response to a
discovery request. R. Ex. 7. Section C.1.5. A of that document contains information
regarding compliance check inspections. It states “a representative mix of 16 and 17 year

2 U.S. Food & Drug Admin., FDA Tobacco Retail Inspection Contracts (Jul. 24, 2018),
https://www.fda.gov/TobaccoProducts/GuidanceComplianceRegulatoryInformation/Retai
l/ucm228914.htm (last visited Apr. 30, 2019).

old Minors who look their age should be used. The Minor group should also reflect a
representative mix of male and female Minors and should reflect the racial/ethnic
composition of the population where the undercover buy is conducted.” Jd. at 20. The
use of the word “should” is in contrast to the word “shall” that is used for mandatory
provisions elsewhere in that manual for guidance in inspection program and contracts for
compliance checks. According to the manual:

Section C.1 indicates the number of FDA directed undercover buy
inspections and the number of contractor directed undercover buy
inspections for each jurisdiction. The Contractor shall ensure that FDA
protocol for conducting compliance check inspections is followed.
Generally, undercover buy inspections shall be conducted by teams
comprised of an Inspector and a Minor. The Minor must be supervised at all
times, with limited exceptions .... A representative mix of 16 and 17 year
old Minors who look their age should be used. The Minor group should also
reflect a representative mix of male and female Minors and should reflect the
racial/ethnic composition of the population where the undercover buy is
conducted.

R. Ex. 7 at 20 (emphasis added). It recommends that the Minor group used in the
undercover buy inspections should reflect a representative mix of males and females and
the racial/ethnic composition of the population, however the manual does not require the
contractor approximate the racial/ethnic mix of every locality. Moreover, the manual
references only the “Minor group” and does not require that the individual minor
assisting the FDA and contractor in performing an undercover buy inspection must reflect
the racial/ethnic composition of the population of the location where the inspection
occurred. Further, whether the FDA followed its internal policies is not relevant to the
issue of the improper sale. This argument is without merit and is not relevant to the
improper sale.

Respondent contends that CTP failed to submit evidence of compliance with the
requirements that the minor was provided with immunity from the proper authorities
prior to using the minor in any jurisdiction where the minor’s possession of tobacco
products is illegal. R. Post-Hearing Br. at 5; R. Ex. 8 at 12. Respondent argues that the
letter received from CTP during discovery “does not address any authorization for the
contractor to conduct compliance inspections; does not address non-criminal liability for
the minor under section 569.11, Florida Statutes; and is issued by a State Attorney, not
the Division of Alcoholic and Tobacco Products ....” R. Post-Hearing Br. at 8.
Respondent’s conclusion that there is no immunity agreement is unsupported as it solely
relies on the letter provided during discovery, which is an inquiry from Miami-Dade
County State Attorney to a FDA contractor as to whether immunity is needed. This does
not support the contention that there is no immunity agreement for the minor.
Furthermore, an immunity agreement would not negate evidence of an improper sale to
the minor and is not relevant in finding that the sale occurred.

Respondent’s final argument is that the inspection was tainted because Inspector Joseph
accessed the behind-the-counter area of the store where the tobacco products were
secured without consent is without merit for the undercover buy inspection. R. Pre-
Hearing Br. at 3. While Respondent notes that acceptance of a retail tobacco products
dealer permit constitutes consent to an inspection without warrant by Florida Division of
Alcoholic Beverages and Tobacco or its authorized assistants, Respondent argues that
there is no evidence of coordination with the Division or local authorities, therefore
knowing consent to this area was required. R. Pre-Hearing Br. at 4nl. As previously
discussed, the inspection by Inspector Joseph was authorized, but even if that was not the
case, the surveillance video submitted by Respondent does not show Inspector Joseph
accessing behind-the-counter during the undercover buy. Respondent also admits that the
video fails to corroborate this claim. R. Pre-Hearing Br. at 4. Further, Inspector Joseph
testified that he observed the sale of cigarettes to the minor through the window. CTP
Ex. 4 at 3; T. 12-13. Respondent has not provided any evidence to refute Inspector
Joseph’s testimony.

I find that the evidence shows CTP has fulfilled its burden that Respondent violated the
regulations on March 10, 2018. 21 C.F.R. § 1140.14(a)(1); 21 C.F.R. § 1140.14(a)(2)(i).

Il. Civil Money Penalty

I have found that Respondent committed five violations of the Act and its implementing
regulations within a 36-month period. The FDA, and its 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). In its Complaint, CTP sought to impose the
maximum penalty amount, $5,591, against Respondent. Complaint ] 1. Accordingly, I
now turn to whether a $5,591 civil money penalty is appropriate.

When determining the amount of a civil money penalty, I am required to 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); see also 21 C.F.R. § 17.34.

i. Nature, Circumstances, Extent and Gravity of the Violations

Respondent has failed to comply with the Act and its implementing regulations on five
occasions. The repeated inability of Respondent to comply with federal tobacco
regulations is serious in nature and the civil money penalty amount should be set
accordingly.
ii. Respondent's Ability to Pay And Effect on Ability to do Business

Respondent has not presented any evidence that it does not have the ability to pay the
$5,591 civil money penalty sought by CTP.

iii. History of Prior Violations

As noted, Respondent has five times violated the prohibition against selling cigarettes or
smokeless tobacco to persons younger than 18 years of age, and failed to verify, by
means of photo identification containing a purchaser's date of birth, that no cigarette or
smokeless tobacco purchasers are younger than 18 years of age. 21 C.F.R.

§ 1140.14(a)(1); 21 C.F.R § 1140.14(a)(2)(i). Respondent’s continued unwillingness or
inability to comply with the federal tobacco regulations calls for a more severe penalty.

iv. Degree of Culpability
Respondent is culpable for five violations of the Act and its implementing regulations.
v. Matters as Justice May Require/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). Respondent argues for a reduction
in the CMP amount based on its remedial conduct of implementing the “We Card”
program to educate employees as to proper tobacco sale procedures in order to prevent
sales to underage persons. R. Pre-Hearing Br. at 4.

While I acknowledge Respondent’s efforts, I do not find it sufficient to reduce the
penalty as Respondent did not timely implement the measures to prevent reoccurrences.
The most recent inspection occurred on March 10, 2018, but according to the evidence
submitted, it was not until September 18, 2018, that Respondent educated its employees
on the federal law as it pertains to tobacco sales. Therefore, I do not believe that a
reduced penalty is appropriate. Accordingly, I affirm the $5,591 penalty.

vi. Penalty

Based on the foregoing reasoning, I find a penalty amount of $5,591 to be appropriate
under 21 U.S.C. §§ 303(f)(5)(B) and 333(f)(9).
Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $5,591 against
Respondent, D and P Operations Inc. d/b/a Marathon, 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. pt. 1140, within a 36-month period. Pursuant to 21 C.F.R.

§ 17.45(d), this order becomes final and binding upon both parties after 30 days of the
date of its issuance.

/s/
Wallace Hubbard
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.

El Tornado, LLC
d/b/a El Tornado Drive Thru,

Respondent.

Docket No. T-18-2458
FDA Docket No. FDA-2018-H-2169

Decision No. TB 3918
Date: May 31, 2019
INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a civil money penalty (CMP)
against Respondent, El Tornado, LLC d/b/a El Tornado Drive Thru, located at 5009
North Doffing Road, Mission, Texas 78574, for seven 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. pt. 1140, within a 48-month period.' Specifically, in this instance, CTP alleges
that Respondent violated the Act by impermissibly selling cigarettes to a minor and
failing to verify, by means of photo identification containing a date of birth, that the
purchaser was 18 years of age or older.

' Previously, on June 20, 2017, CTP initiated a CMP action for five violations, which
was resolved after Respondent admitted all of the allegations in the complaint and paid
the agreed upon penalty. In acknowledging that the alleged violations occurred,
Respondent expressly waived its right to contest such violations in subsequent actions.
See Notice of Settlement Agreement FDA Docket FDA-2017-H-3603, CRD Docket T-
17-4725. See also FDA Docket FDA-2016-H-4070, CRD Docket T-17-947.
Procedural History

CTP began this case by serving an administrative complaint on June 8, 2018, seeking an
$11,182 civil money penalty on Respondent, at 5009 North Doffing Road, Mission,
Texas 78574, and by filing a copy of the complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management. Respondent timely answered
CTP’s Complaint. In its answer, Respondent admitted the allegations, but contested the
civil money penalty. Respondent’s Answer (Answer) at 1-2.

On July 18, 2018, I issued an Acknowledgment and Pre-Hearing Order, which
established the procedure and deadlines in this case. On August 10, 2018, CTP filed an
Unopposed Motion to Extend Deadlines and Notice of Pending Settlement (Motion).
CRD Docket No. 5. The Motion requested that the deadlines be extended so that
Respondent could pay the agreed upon civil money penalty. I granted the motion on
August 13, 2018. CRD Docket No. 6.

CTP filed its pre-hearing exchange on November 8, 2018. CTP’s pre-hearing exchange
included 16 numbered exhibits (CTP Exs. 1-16) and declarations of two witnesses,
including Inspector Maria Isabel Martinez. Respondent did not file a pre-hearing
exchange.

On December 18, 2018, I held a prehearing conference call in this case. Respondent did
not appear at the prehearing conference call, or provide any response to the Order that
scheduled the prehearing conference call. Respondent was ordered to show cause for its
failure to appear at the prehearing conference no later than January 3, 2019. On January
4, 2019, Respondent answered the order informing that he was away for the holidays and
unable to check his mail.

On February 13, 2019, I held a prehearing conference call in this case. During the pre-
hearing conference call, the parties agreed that an administrative hearing was not required
and consented to a decision based on the administrative record. I admitted the proposed
exhibits into the record as there was no objection to any of the proposed exhibits.
Following the pre-hearing conference, I gave the parties until March 12, 2019, to submit
final briefs or argument.

On March 12, 2019, CTP submitted its final brief on the penalty amount. On April 9,
2019, our office received correspondence postmarked March 12, 2019, from Respondent
forwarded from FDA. The correspondence included a Texas Sales and Tax Permit and a
sworn declaration of Respondent’s owner, Norberto Soto. On April 18, 2019, a letter was
issued by my direction to advise the parties that CTP had until May 3, 2019, to indicate
whether it objects to the admittance of Respondent’s sworn testimony. On May 3, 2019,
CTP moved to exclude Respondent’s declaration into evidence pursuant to 21 C.F.R.

§§ 17.25(a), 17.37(b), and the July 18, 2019 Acknowledgment and Pre-Hearing Order. I

grant CTP’s motion as Respondent failed to timely submit its testimony in accordance
with the applicable regulations and my July 18, 2019 Acknowledgment and Pre-Hearing
Order.

Accordingly, I am issuing a decision on the record in this case.

Issues

1. Whether Respondent sold cigarettes to a minor on December 2, 2017, and failed to
verify, by means of photo identification containing a date of birth, that the
purchaser was 18 years of age or older, in violation of 21 C.F.R. § 1140.14(a)(1)
and 21 C.F.R. § 1140.14(a)(2)(i).

2. Whether the civil money penalty of $11,182 that CTP seeks is an appropriate
amount, pursuant to the provisions of 21 C.F.R. § 17.33(a).

Analysis

In order to prevail, CTP must prove Respondent’s liability by a preponderance of the
evidence. The U.S. Supreme Court has described the preponderance of the evidence
standard as requiring that the trier-of-fact believe that the existence of a fact is more
probable than not before finding in favor of the party that had the burden to persuade the
judge of the fact’s existence. Jn re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe
and Products of California, Inc. v. Construction Laborers, 508 U.S. 602, 622 (1993).

CTP has the burden to prove Respondent’s liability and appropriateness of the penalty by
a preponderance of the evidence. 21 C.F.R. § 17.33(b). Respondent has the burden to
prove any affirmative defenses and any mitigating factors likewise by a preponderance of
the evidence. 21 C.F.R. § 17.33(c).

I. Violations

CTP determined to impose a CMP against Respondent pursuant to the authority conferred
by the Federal Food, Drug, and Cosmetic Act (Act) and implementing regulations at Part
21 of the Code of Federal Regulations. The Act prohibits the misbranding of tobacco
products while they are held for sale after shipment in interstate commerce. 21 U.S.C.

§ 331(k). A tobacco product is misbranded if distributed or offered for sale in any state
in violation of regulations issued under section 906(d) of the Act. 21 U.S.C.

§ 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). FDA and its agency, 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. § 331(£)(9).
The sale of cigarettes to an individual who is under the age of 18 years is a violation of
implementing regulations. 21 C.F.R. § 1140.14(a)(1). The failure to verify, by means of
photo identification containing the bearer's date of birth, that no cigarette purchaser is
younger than 18 years of age is also a violation of implementing regulations. 21 C.F.R.

§ 1140.14(a)(2)(i).

In the instant case, at approximately 3:15 PM on December 2, 2017, an FDA-
commissioned inspector conducted an inspection of El Tornado Drive Thru, located at
5009 North Doffing Road, Mission, Texas 78574. CTP alleged that during the
inspection, Respondent committed violations of selling cigarettes to a minor, in violation
of 21 C.F.R.§ 1140.14(a)(1), and failing to verify the age of the purchaser by means of
photographic identification containing the bearer's date of birth, in violation of 21 C.F.R.
§ 1140.14(a)(2)(i). Specifically, a person younger than 18 years of age was able to
purchase a package of Camel Crush Regular Fresh cigarettes. Complaint at 3.

To support the December 2, 2017 allegations, CTP submitted evidence including the
declaration of Inspector Maria Isabel Martinez, the inspector at the time of the incident,
Inspector Martinez’s narrative report of the alleged incident, and photographs of the
package of Camel Crush Regular Fresh Cigarettes allegedly purchased on December 2,
2017. CTP Exs. 6, 8-11.

In her declaration, Inspector Martinez stated that at approximately 3:15 PM on December
2, 2017, she conducted a follow-up compliance check inspection at Respondent’s
location, 5009 North Doffing Road, Mission, Texas 78574. CTP Ex. 6 at 2. Inspector
Martinez further stated:

During the inspection, Minor A drove my car into El Tornado Drive Thru. I
was directly behind Minor A in the left back seat inside my vehicle. From
my location, I had a clear, unobstructed view of the sales clerk come out to
Minor A. During the inspection, I observed Minor A purchase a package of
cigarettes from an employee at the establishment. Prior to the purchase, I
observed that Minor A did not present any identification to the employee.
The employee did not provide Minor A with a receipt after the purchase.

Id. at 3. After the inspection, Inspector Martinez retrieved the cigarette package from
Minor A, which she observed were Camel Crush Regular Fresh cigarettes. Inspector
Martinez stated that she then labeled the cigarettes as evidence, photographed all of the
panels of the package, and processed the evidence with standard procedures at the time of
the inspection. Jd. at 3.

On its face, this evidence is more than sufficient to prove that Respondent violated the
law on December 2, 2017. In fact, Respondent’s owner, Mr. Soto admitted to the alleged
violations in its Answer. Therefore, I find that Respondent violated the regulations on
December 2, 2017. 21 C.F.R. § 1140.14(a)(1); 21 C.F.R. § 1140.14(a)(2)(i).

I. Civil Money Penalty

I have found that Respondent committed seven violations of the Act and its implementing
regulations within a 48-month period. The FDA, and its 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). In its Complaint, CTP sought to impose the
maximum penalty amount, $11,182, against Respondent. Complaint {] 1. Accordingly, I
now turn to whether an $11,182 civil money penalty is appropriate.

When determining the amount of a civil money penalty, I am required to 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); see also 21 C.F.R. § 17.34.

i. Nature, Circumstances, Extent and Gravity of the Violations

Respondent has failed to comply with the Act and its implementing regulations on seven
occasions. The repeated inability of Respondent to comply with federal tobacco
regulations is serious in nature and the civil money penalty amount should be set
accordingly.

ii. Respondent's Ability to Pay And Effect on Ability to do Business

Respondent’s owner, Mr. Soto, argued that El Tornado Drive Thru is a family business
and that he does not have the money to pay the full penalty amount as business has been
slow. Answer at 1. However, Respondent has not presented any documentary evidence
to corroborate the assertion that it does not have the ability to pay the $11,182 civil
money penalty sought by CTP.

iii. History of Prior Violations

As noted, Respondent has seven times violated the prohibition against selling tobacco
products to persons younger than 18 years of age, and failing to verify, by means of photo
identification containing a purchaser's date of birth, that no tobacco product purchasers
are younger than 18 years of age. 21 C.F.R. § 1140.14(a)(1); 21 C.F.R § 1140.14(a)(2)(i).
Respondent’s continued unwillingness or inability to comply with the federal tobacco
regulations calls for a more severe penalty.
iv. Degree of Culpability
Respondent is culpable for seven violations of the Act and its implementing regulations.
vy. Matters as Justice May Require/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). Respondent has not presented any

mitigating factors that have been admitted into evidence.

vi. Penalty

Based on the foregoing reasoning, I find a penalty amount of $11,182 to be appropriate
under 21 U.S.C. §§ 303(f)(5)(B) and 333(f)(9).

Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $11,182 against
Respondent, El Tornado, LLC d/b/a El Tornado Drive Thru, for seven 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. pt. 1140, within a 48-month period. 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.

/s/
Wallace Hubbard
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2018-R-1510)

Complainant,
v.

Exxon Express Inc.
d/b/a Exxon Food Mart / S and S Food Mart,

Respondent.
Docket No. T-18-1939
Decision No. TB3878

Date: May 29, 2019
INITIAL DECISION

I hereby impose a No-Tobacco-Sale Order (“NTSO”) against Respondent, Exxon
Express Inc. d/b/a Exxon Food Mart / S and S Food Mart (“Respondent”), for a period of
30 consecutive calendar days, for five repeated violations of federal tobacco regulations
over a period of 36 months.

Background

The Center for Tobacco Products (“CTP”) seeks to impose an NTSO, for a period of 30
calendar days, against Respondent, located at 255 West Woodrow Wilson Avenue,
Jackson, Mississippi 39213, for five repeated violations of the Federal Food, Drug, and
Cosmetic Act (the Act), 21 U.S.C. § 301 et seq., and its implementing regulations, 21
C.F.R. pt. 1140, within a 36-month period. CTP’s Complaint alleges that Respondent’s
staff impermissibly sold cigarettes to a minor, failed to verify that the purchasers were
purchasers were of sufficient age, and opened packages of cigarettes intended for the sale
of individual cigarettes, thereby violating the Act, 21 U.S.C. § 301 et seq., and its
implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. pt. 1140.
The complaint likewise alleges that Respondent previously admitted to violations of
regulations found at 21 C.F.R. pt. 1140. Specifically, CTP alleges that Respondent
committed: (1) one original violation and two repeated violations of sale of cigarettes or
smokeless tobacco to a minor, in violation of 21 C.F.R. § 1140.14(a)(1)!, on July 9, 2015,
August 4, 2016, and November 30, 2017; (2) one original violation and two repeated
violations of failure to verify the age of a person purchasing cigarettes or smokeless
tobacco by means of photographic identification containing the bearer’s date of birth, in
violation of 21 C.F.R. § 1140.14(a)(2)(i), on July 9, 2015, August 4, 2016, and November
30, 2017; and 3) one original violation and one repeated violation of offering open
packages of cigarettes intended for the sale of individual cigarettes, in violation of 21
C.F.R. § 1140.14(a)(4), on October 9, 2015, and November 17, 2017. See Complaint §§
1, 6, 9, 10; see also Informal Brief of Complainant at 1-2. Therefore, CTP seeks the
imposition of an NTSO against Respondent for a period of 30 consecutive calendar days.

Procedural History

CTP began this matter by serving an administrative complaint (“Complaint”), seeking an
NTSO for a period of 30 calendar days, on Respondent at 255 West Woodrow Wilson
Avenue, Jackson, Mississippi 39213, and by filing a copy of the Complaint with the Food
and Drug Administration’s (“FDA”) Division of Dockets Management. DAB E-File
Docket (“Dkt.”) #1, 1b.

On May 17, 2018, Respondent, through counsel, timely filed an Answer (“Answer”).
Dkt. #3a. On May 29, 2018, I issued an Acknowledgment and Pre-Hearing Order
(“APHO”) that set out the deadlines for the parties’ submissions in this case, and issued
informal briefs for the parties to complete and submit. Dkt. #4-4b.

On August 15, 2018, pursuant to 21 C.F.R. § 17.23(a), CTP filed a Motion to Compel
Discovery indicating that CTP had not received a response to its request for production of
documents. Dkt. #7. On August 15, 2018, CTP also filed a Motion to Extend Deadlines.
Dkt. #8. An August 21, 2018 letter issued by my direction allowed Respondent until
September 5, 2018 to file a response to CTP’s motion to compel discovery. Dkt. #10.

On August 21, 2018, I also issued an Order that extended the parties’ pre-hearing
exchange deadlines. Dkt. #11.

On September 10, 2018, I issued an Order that granted CTP’s motion to compel
discovery. Dkt. #12. I noted that Respondent had not filed a response to CTP’s motion
to compel discovery. In that Order, I directed Respondent to comply with CTP’s request
for production of documents by September 26, 2018. I warned that “[flailure to do so

' On August 8, 2016, the citations to certain tobacco violations changed. For more
information see: https://federalregister.gov/a/2016-10685.

may result in sanctions, including the issuance of an Initial Decision and Default
Judgment finding Respondent liable for the violations listed in the Complaint . . . .”
The September 10, 2018 Order also extended the parties’ pre-hearing exchange
deadlines.

2

On October 2, 2018, CTP filed a Motion to Impose Sanctions advising me that
Respondent had not complied with my September 10, 2018 Order and asking me to strike
the Respondent’s answer and issue a default judgment in this case. Dkt. #13. In an
October 4, 2018 letter issued by my direction, Respondent was given until October 19,
2018 to file a response to CTP’s motion. Dkt. #14. The October 4, 2018 letter also
extended the parties’ pre-hearing exchange deadlines. On October 19, 2018, Respondent,
through counsel, filed 1) Respondent’s Response to CTP’s Motion for Sanctions; and 2)
Respondent’s Discovery Responses. Dkt. #16-17.

On August 20, 2018, CTP filed its pre-hearing exchange. Dkt. #9-9r. CTP’s pre-hearing
exchange included an Informal Brief of Complainant, a list of proposed witnesses and
exhibits, and 17 numbered exhibits. CTP’s exhibits included the declaration of one
witness, Inspector Pamela Smith.7 CTP Exhibit (Ex.) 5. On October 11, 2018,
Respondent filed a document captioned “Respondent’s Pre-Hearing Exchange.” Dkt.
#15. Respondent’s exchange submission included an Informal Brief, identification of
proposed exhibits and one proposed witness, Ibrahim Nadish, and a brief summary of the
witness’s anticipated testimony.

On October 23, 2018, a letter by my direction was issued to the parties acknowledging
receipt of Respondent’s October 11 and 19, 2018 filings, and advising Respondent that it
had until the previously established November 19, 2018 deadline to file a pre-hearing
exchange that complies with the directives established in the May 29, 2018 APHO. Dkt.
#18, at 2. The letter also informed that, in the absence of submitting a pre-hearing
exchange in compliance with the APHO, Respondent would be precluded from
“presenting any exhibits, witness testimony, and/or witness statements at the hearing.”
Id. Because CTP filed its exchange documents on August 20, 2018 and in compliance
with the APHO, the letter also afforded CTP the opportunity to file a supplemental pre-
hearing exchange, if any. Respondent did not respond to the October 23, 2018 letter.

2 Tnote that the September 10, 2018 Order inadvertently referenced imposition of “a civil
money penalty.” It should correctly reference imposition of “a no-sale-tobacco order.”
See Dkt. #12, at 2.

3 Subsequent to the inspections at issue, Inspector Smith’s last name was changed to
Smith-Grant. See Hearing Transcript (“Tr.”) at 4, 6. For the purposes of this decision,
the inspector will be referenced by the name used at the time of the inspection — Inspector
Smith.
On January 4, 2019, I held a pre-hearing conference (“PHC”) in this case. During the
prehearing conference, I explained that the sole purpose of a hearing under the applicable
regulations was to allow for the cross-examination and re-direct of any witnesses who
had provided sworn testimony in pre-hearing exchanges, and only if the opposing party
elected to cross-examine the witness. We also discussed the parties’ pre-hearing
exchanges and witnesses. Respondent’s counsel advised of his intent to cross-examine
CTP’s witness, Inspector Smith. See Dkt. #20. Respondent’s counsel also advised that
he would not present any witnesses at the hearing to provide testimony on Respondent’s
behalf.

On January 28, 2019, I held a hearing in this case. During the course of the hearing, I
admitted the parties’ exhibits. Respondent cross-examined Inspector Smith. See Tr. at
14-34. CTP then elected not to conduct a re-direct examination of Inspector Smith. Jd. at
34.

On February 21, 2019, I informed the parties that the Court had received the transcript of
the hearing, and set the deadline for the parties’ post-hearing brief submissions as March
25, 2019. Dkt. #22. Also, the parties were given until March 25, 2019 to file any
corrections to the transcript. On March 25, 2019, CTP filed a Notice of Waiver of Post-
Hearing brief. Dkt. #23. To date, Respondent has not filed any post-hearing submission.
As the briefing period is over, I now render my decision.

Issues

A. Whether Respondent Exxon Food Mart / S and S Food Mart sold cigarettes to a
minor, failed to verify that the cigarette purchaser was of sufficient age, and
opened packages of cigarettes intended for the sale of individual cigarettes, on
November 17 and 30, 2017, in violation of 21 C.F.R. § 1140.14(a)(1), 21 C.F.R.
§ 1140.14(a)(2)(i), and 21 C.F.R. § 1140.14(a)(4).

B. Whether an NTSO for a period of 30 consecutive calendar days is reasonable.
Applicable Regulations and Guidelines

The Act provides for civil money penalties (“CMPs”) and NTSOs. NTSOs are
authorized at 21 U.S.C. § 333(f)(8). The section allows for the imposition of an NTSO
against a person who has committed “repeated violations” of restrictions on the sale of
tobacco products. The term “repeated violations” is defined to mean “at least 5 violations
of particular requirements over a 36-month period at a particular retail outlet... .” See
FDA Civil Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers:
Guidance for Industry (revised December 2016) at 3, 5-6, available at
https://www.fda.gov/TobaccoProducts/Labeling/RulesRegulationsGuidance/ucm447308.

htm. The Act also provides that “[p]rior to the entry of a no-sale order under this
paragraph, a person shall be entitled to a hearing... .” 21 U.S.C. § 333(f)(8).

The Act establishes the factors that must be considered in deciding on the length of an
NTSO, but it does not specify the NTSO duration:

In determining the . . . period to be covered by a no-tobacco-sale order, the
Secretary shall take into account the nature, circumstances, extent, and
gravity of the . . . violations and, with respect to the violator, . . ., 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); see also Kat Party Store, Inc. d/b/a Mr. Grocer Liquor
Store, CRD No. T-16-1684, at 2 (2016).

CTP’s guidance document establishes a maximum NTSO duration of 30 days for a
retailer’s first NTSO. See Determination of the Period Covered by a No-Tobacco-Sale
Order and Compliance with an Order: Guidance for Tobacco Retailers (August 2015) at
4, available at
http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/U

CM460155.pdf.

I find that under 21 U.S.C. § 333(f)(8), I have the authority to impose an NTSO. While
the CTP’s guidance documents are not binding, as a matter of law, I consider them to be
persuasive.

Analysis
I. Violations
A. Alleged Violations, Parties’ Contentions, and Findings of Fact

CTP determined to impose an NTSO against Respondent pursuant to the authority
conferred by the Act and implementing regulations at Part 21 of the Code of Federal
Regulations (“C.F.R.”). The Act prohibits the misbranding of tobacco products while
they are held for sale after shipment in interstate commerce. 21 U.S.C. § 331(k). The
FDA and its agency, CTP, may seek the imposition of remedies against any person who
violates the Act’s requirements as they relate to the sale of tobacco products. 21 U.S.C.

§ 331(£)(9). The sale of tobacco products to an individual who is under the age of 18, the
failure to verify the photographic identification of an individual who is not over the age
of 26, and offering open packages of cigarettes intended for the sale of individual
cigarettes are violations of implementing regulations. 21 C.F.R. § 1140.14(a)(1), (2), (4).
1. Alleged Violations

CTP alleges that Respondent committed five repeated violations of the Act and its
implementing regulations over a 36-month period. See Complaint § 1. CTP states that it
only included repeated violations that occurred within a specified 36-month period after
the original violations. /d. at 1 n.1. In its Complaint, CTP alleged that at an unspecified
time on November 17, 2017, at Respondent’s business establishment, 255 West
Woodrow Wilson Avenue, Jackson, Mississippi 39213, an FDA-commissioned inspector
observed open packages of cigarettes intended for the sale of individual cigarettes.
Complaint § 6; Informal Brief of Complainant at 4. The Complaint also alleges that at
approximately 3:54 PM on November 30, 2017, at Respondent’s business establishment,
255 West Woodrow Wilson Avenue, Jackson, Mississippi 39213, an FDA-commissioned
inspector documented Respondent’s staff selling a package of Newport Box cigarettes to
a person younger than 18 years of age and failing to verify that the cigarette purchaser
was of sufficient age. Complaint § 6; see also Informal Brief of Complainant at 5-10.

Respondent concedes the past violations that were at issue in the two prior CMP actions
against Respondent. See Answer §f 8-10. Respondent denies the current violation, and
denies that it allegedly “committed a total of five repeated violations within a 36-month
period.” Id. 494, 6, 11.

As Respondent has acknowledged that there have been past violations, (see Answer at §§]
8-10), I find that the only issues before me, concerning violations, are: (1) whether
Respondent sold cigarettes to a minor and failed to verify the purchaser’s age, on
November 30, 2017, in violation of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i); and (2)
whether Respondent opened packages of cigarettes for individual sale on November 17,
2017, in violation of 21 C.F.R. § 1140.14(a)(4), as alleged in the Complaint.

2. Parties’ Contentions and Evidence
a. CTP’s Position

CTP’s case against Respondent relies on the testimony of Inspector Pamela Smith.
Inspector Smith conducted a compliance check inspection on November 17, 2017.
Informal Brief of Complainant at 6. Subsequently, the inspector, accompanied by a state-
contracted undercover minor (Minor A), conducted a follow-up compliance inspection on
November 30, 2017. Informal Brief of Complainant at 7-10. As evidence+, CTP
provided a sworn declaration from Inspector Smith. See CTP Ex. 5 (“Smith
Declaration”). Inspector Smith is an FDA-commissioned officer with the State of
Mississippi. /d. § 3. Her duties include “perform[ing] undercover buy (‘UB’) and

4 The evidence discussed in this paragraph is not exhaustive.
advertising and labeling (‘A&L’) inspections required under FDA’s Tobacco Retail
Inspection Contract with the state of Mississippi.” Jd. J] 3-4.

Inspector Smith declared that she conducted an A&L compliance inspection check of
Respondent’s establishment on November 17, 2017. CTP Ex. 595. Inspector Smith
stated that she entered the establishment and advised the most responsible employee
available that she was conducting an A&L inspection. Id. § 6. The inspector stated that
while in the establishment she “observed that the establishment offered unpacked or
repacked individual Newport Box cigarettes and Seneca Menthol 100’s cigarettes for
sale.” Jd. § 8. Inspector Smith stated that prior to leaving the establishment, she issued a
Form FDA 482, Notice of Inspection, to the individual on site who identified himself as
the owner of the establishment. Id. § 9; see also CTP Ex. 7.

With regard to the November 30, 2017 inspection, Inspector Smith declared that, prior to
initiating the follow-up UB compliance check inspection, she confirmed Minor A’s
possession of his/her photographic identification, and that he/she did not possess any
tobacco products. CTP Ex. 5 § 14. The inspector stated that she watched Minor A enter
Respondent’s establishment, and that she entered moments after the minor. Id.

4 15. Inspector Smith asserted that she obtained an unobstructed view of the sales
counter and directly observed Minor A purchasing a package of cigarettes from
Respondent’s clerk. /d. Inspector Smith noted that Minor A did not present any
identification to the sales clerk, and the sales clerk did not provide a receipt after the sale.
Id. Inspector Smith declared that, after the transaction, she and Minor A returned to the
vehicle where the minor immediately handed the inspector the package of cigarettes. Id.
4] 16. The inspector observed that the package of cigarettes contained Newport Box
cigarettes. Jd. Inspector Smith processed the evidence according to procedure and
created a narrative report shortly thereafter. Id. {J 16-17.

Beyond Inspector Smith’s declaration, CTP also provided evidence corroborating her
testimony, including: photographs of the package of cigarettes Respondent unlawfully
sold to Minor A (CTP Exs. 13, 14); a copy of the Compliance Check Inspection Notice
(CTP Ex. 15); Inspector Smith’s Narrative Reports of the inspections (CTP Exs. 8, 11);
the TIMS Forms (CTP Exs. 9, 12); and a redacted copy of the Minor A’s identification
establishing his/her age at the time of the sale (CTP Ex. 10).

b. Respondent’s Position

Respondent filed an answer and an informal brief, 1) denying that cigarettes were sold to
a minor; 2) denying that Respondent failed to verify the minor’s age during the
November 30, 2017 inspection; and 3) arguing that the allegation regarding the open
packages of cigarettes intended for sale of individual cigarettes is “without merits and has
no factual basis.” Answer; Informal Brief of Respondent. Respondent asserts:
... That there is no credible or admissible evidence contained in the
exhibits before the Court proving that the alleged minor herein was younger
than 18 or that the ID allegedly in possession of the alleged minor was not a
“fake ID,” was validly issued by any lawful state agency and/or was legally
obtained by the alleged minor.

That the CTP is unable to carry its burden, under any applicable standard,
that the Respondent sold tobacco products to a person younger than 18 on
November 17 and 30 2017.

In addition, the Respondent would show that the allegation contained in
paragraph 6(c) is without merit and has no factual basis. The CTP’s
argument that “the most responsible person stated that the establishment
sells single cigarettes” is hearsay and is not admissible under any federal
rules....

Informal Brief of Respondent at 2.

In support of its assertions, and included as part of its pre-hearing exchange, Respondent
submitted the narrative reports created by Inspector Smith and photographs taken by
Inspector Smith during the November 17 and 30, 2017 inspections — all of which were
submitted by CTP as part of its pre-hearing exchange. See CTP Exs. 8, 11, 13, 14. As
part of its pre-hearing exchange, Respondent identified Ibrahim Nadish, manager of the
establishment, as a proposed witness. Respondent’s Pre-Hearing Exchange at 2-3.
However, Respondent did not file the written direct testimony of the proposed witness.°

c. Hearing Testimony

During the January 28, 2019 hearing, Respondent’s counsel challenged: 1) the validity of
a violation for open packages of cigarettes in the establishment; 2) the integrity of the
undercover inspection by attacking the credibility of Minor A; specifically, verification of
the minor’s ID and assertions that CTP cannot prove that Minor A was not carrying a
“fake ID;” and 3) the sale of cigarettes to a minor absent a receipt to prove the sale. See
Tr. at 17-19, 21-22, 25-29, 30-33; see also Respondent’s Pre-Hearing Exchange at 2.

I find that Respondent’s argument is speculative and misguided. Inspector Smith
testified credibly and comprehensively about her observations during the November 17
and 30, 2017 inspections at which she observed: 1) packages of cigarettes opened behind
the sales counter; 2) the sale of cigarettes to Minor A; and 3) Respondent’s failure to

5 As previously discussed, during the PHC conducted on January 4, 2019, Respondent’s
counsel advised that he would not present any witnesses at the hearing.
verify that Minor A was of sufficient age to purchase cigarettes. See Tr. at 18-19, 32;
CTP Ex. 5 (Smith Declaration) {ff 8, 14-15; CTP Ex. 8 (November 17, 2017 Narrative
Report) § 7; CTP Ex. 11 (November 30, 2017 Narrative Report) § 9, 10. I will not
recite every detail of Inspector Smith’s testimony, but will highlight the points relevant to
Respondent’s stated arguments.

e November 17, 2017 Violation

First and foremost, CTP’s Complaint did not allege a violation for sale of cigarettes to a
minor, or to anyone, during the November 17, 2017 inspection. The violation alleged
was pursuant to the regulations at 21 C.F.R. 1140.14(a)(4). Complaint § 6.c. The
regulation provides:

No retailer may break or otherwise open any cigarettes or smokeless
tobacco package to sell or distribute individual cigarettes... .

21 C.F.R. 1140.14(a)(4). Inspector Smith testified credibly and comprehensively about
her observations during the November 17, 2017 inspection. See Tr. at 17-23; CTP Ex. 5

q8.

Inspector Smith testified that she conducted an A&L compliance inspection at
Respondent’s establishment on November 17, 2017, at approximately 10:36 AM. CTP
Ex. 5 § 5; CTP Ex. 8 § 2; Tr. at 17. At the hearing, with regard to the November 17, 2017
inspection, counsel for Respondent focused cross-examination of Inspector Smith on the
issue of whether there is a violation if individual cigarettes are not sold. See Tr. at 18-20.
At the hearing, the inspector testified that she observed open packages of cigarettes next
to the establishment’s cash register. Tr. at 21-22. On cross-examination, Inspector Smith
testified, in part:

Q: And from looking at the narrative report . . . it says that the most
responsible person stated that the establishment sells single cigarettes, is
that correct?

: Yes, sir.

And who was that person?

: It was the person at the cash register. I don’t know his name.

: And you spoke with this person?

Yes, sir.

: And they told you that establishment sells single cigarettes?

Yes, sir.

>PO>O>rO>

OR OK Rk Ok
10

Q: ...just so l understand your testimony, what you observed that day was
a package of cigarettes on the counter, but there was no one selling those
cigarettes, or no one purchased those cigarettes in your presence?

A: That’s right. I did not see him purchase . . . actually purchase the single
cigarettes. I just saw them on the counter beside the cash register.

Tr. at 17-18, 22.

In her written direct testimony, Inspector Smith explained that upon entering
Respondent’s establishment on November 17, 2017, she informed the most
responsible person in the establishment that she was conducting an A & L
inspection. CTP Ex. 5 46. Consistent with her testimony during cross-
examination, she testified that the individual confirmed that the establishment sells
individual cigarettes. Id. 8. While she did not recall the name of the individual
during cross-examination, she testified in her direct written testimony that the
individual identified himself as the owner. Id. 4 9.

CTP submitted a copy of FDA Form 482, a Notice of Inspection that was
completed and issued to Respondent at the time of the November 17, 2017
inspection. CTP Ex. 7. Inspector Smith testified that the notice was issued to the
individual who identified himself as the owner and the form identifies Ibrahim
Nadish as the owner of the establishment. CTP Ex. 5 J 9; CTP Ex. 7.

Respondent did not present Ibrahim Nadish or any other individual as a witness to
rebut Inspector Smith’s testimony.

e November 30, 2017 Violations

The Complaint alleged that Respondent committed the violations of “selling cigarettes
... toa minor, in violation of 21 C.F.R. § 1140.14(a)(1) . . . [.]” and “failing to verify the
age of a person purchasing cigarettes . .. by means of photographic identification . . . as
required by 21 C.F.R. § 1140.14(a)(2)(i).” Complaint {ff 6.a, 6.b. On this issue,
Inspector Smith’s testimony was credible and concise as to her observations during the
November 30, 2017 inspection. See Tr. at 23-34; CTP Ex. 5 §j 14-17; CTP Ex. 11 4f§ 2-
7, 9-16.

On cross-examination, Respondent’s counsel did not question Inspector Smith regarding
the sales clerk’s verification of the minor’s identification. Instead, the questions focused
on the inspector’s verification of Minor A’s identification, specifically, the validity of the
minor’s identification. Tr. at 26-29. Respondent’s counsel also questioned the absence
of a receipt for the purchase of the cigarettes. Jd. at 31-33.
11

Inspector Smith testified that before the inspection at Exxon Food Mart / S and S Food
Mart, she confirmed that Minor A had photographic identification showing his/her actual
date of birth. See CTP Ex. 11 § 6 (Narrative Report); CTP Ex. 5 4 14 (Smith
Declaration); Tr. at 26. During the cross-examination, Inspector Smith testified that she
confirmed Minor A’s identification. Tr. at 26. Inspector Smith testified that she went
into the establishment with Minor A. /d. at 29. The inspector also testified that she was
close enough to the counter to be able to hear any conversation between Minor A and the
sales clerk. Jd. at 32. Inspector Smith testified that she observed Minor A purchase a
package of cigarettes from Respondent’s sales clerk. Jd. at 32.

This is the relevant excerpt of Inspector Smith’s testimony during the cross-examination:

Q: And it also indicates that you confirm[ed] that the minor had a[n] ID
showing his or her actual date of birth; is that correct?

That’s correct.

What agency issued the identification to the minor child?
Mississippi Department of Highway Patrol.

And was it a driver’s license?

No, sir. It was a permit.

PFOPOPY

kok KR OK Ok

A: A learner’s permit. I’m sorry, it was an identification card. Some...
students have driver’s license, some have identification cards but they are
all issued by the Mississippi Department of Public Safety Highway Patrol.

kok KR OK Ok

Q: And is it your testimony that the state of Mississippi issued
identification cards to minors?
A: Yes.

kok KR OK Ok

A: In order for a minor to work this program, the minor has to get an
identification card issued from the Mississippi Highway Patrol.

Q: And the identification card has his date of birth or her date of birth?
A: Yes.

Q: And what was the minor child’s date of birth in this case?

A: At the time, ... August the 23rd of 2000.

kok KR OK Ok
12

Did the minor child obtain a receipt for the purchase?
No.

Why not?

A receipt was not issued . . . by the clerk.

Do you know if the minor child requested a receipt?
No, I do not.

POPOL

OR OK Rk Ok

Q: [W]hat evidence do you have for this Court that this minor child
purchased cigarettes that day?

A: I was in the store with the child and I saw the child purchase the
cigarettes.

OR OK Rk Ok

Q: ...[D]id the child use all of the money that was given to him?
A: I don’t recall how much loose change[was] given to me by the minor.

Q: ... Just so I’m clear, there was no receipt of the purchase and there was
no - - You don’t know if there was any change given back from the
purchase?

A: Not that - - it was obviously given back, but I don’t know how much
change was given back from the purchase.

Q: And how much money was given to the child to do the purchase?

A: I don’t remember that.

Tr. at 26, 29, 31-34.
3. Findings of Fact

I find Inspector Smith’s testimony to be credible. I find that CTP has provided an
abundance of evidence to support its allegation that Respondent: 1) offered individual
cigarettes for sale on November 17, 2017, in violation of 21 C.F.R. § 1140.14(a)(4); 2)
sold cigarettes to Minor A on November 30, 2017, in violation of 21 C.F.R.

§ 1140.14(a)(1); and 3) failed to verify that Minor A was of sufficient age, in violation of
21 C.F.R. § 1140.14(a)(2)(i). I find that Respondent has failed to provide evidence to
rebut CTP’s allegations. As part of its pre-hearing exchange, Respondent identified one
proposed witness to provide testimony at the hearing. However, Respondent did not
submit written direct testimony in accordance with my APHO directives. Respondent
subsequently advised of its intent not to present any witness testimony at the hearing.
Further, Respondent has failed to submit any evidence which rebuts the allegations
alleged in CTP’s Complaint.
13

The facts as outlined above, establish that Respondent Exxon Express Inc. d/b/a Exxon
Food Mart / S and S Food Mart is liable under the Act. The Act prohibits misbranding of
a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded if sold or
distributed in violation of regulations issued under section 906(d) of the Act. 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 21 U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229
(Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016). Under 21 C.F.R.

§ 1140.14(a)(1), no retailer may sell cigarettes or smokeless tobacco to any person
younger than 18 years of age. Under 21 C.F.R. § 1140.14(a)(2)(i), retailers must verify,
by means of photographic identification containing a purchaser’s date of birth, that no
cigarette or smokeless tobacco purchasers are younger than 18 years of age. Further, 21
C.F.R. § 1140.14(a)(4) prohibits offering open packages of cigarettes for the purpose of
sale of individual cigarettes.

II. No-Tobacco-Sale-Order Penalty

I now address the second issue before me -- whether an NTSO for a period of 30 calendar
days is a reasonable penalty. The undisputed facts of this case show that Respondent is a
repeated violator of FDA’s tobacco regulations. Respondent has been the subject of two
prior CMP actions. See FDA Docket Number FDA-2016-H-0161; FDA Docket Number
FDA-2017-H-0654. Between July 9, 2015 and November 30, 2017, Respondent sold
cigarettes or smokeless tobacco to minors on three occasions. On those occasions,
Respondent failed to verify by means of photographic identification containing a
purchaser’s date of birth, that no cigarette or smokeless tobacco purchasers are younger
than 18 years of age. Further, on two occasions, Respondent also possessed open
packages of cigarettes for the sale of individual cigarettes. Complaint J 1 (Table), 6, 8-
10. For the purposes of the instant NTSO action, CTP counted the repeated violations
that occurred on August 4, 2016, November 17, 2017, and November 30, 2017.

As previously mentioned, Respondent has conceded that the past violations occurred.
Because Respondent already conceded the violations underlying the two previous CMPs,
and as part of the settlement processes that concluded the prior CMPs, expressly waived
its right to contest them in subsequent actions, there is no basis for questioning whether
the current allegations are repeat violations. Thus, Respondent committed a total of five
repeated violations of FDA’s tobacco regulations over a 36-month period.

Two prior settlements of the CMP actions did not deter Respondent from continuing to
unlawfully sell tobacco products to minors. CTP now believes that, for Respondent’s
five repeated violations in a 36-month period, an assessment of a 30-day NTSO is
appropriate. Informal Brief of Complainant at 14.

When determining the period to be covered by an NTSO, I am required to take into
account “the nature, circumstances, extent and gravity of the violations and, with respect
14

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).

A. Nature, Circumstances, Extent and Gravity of the Violations

Ihave found that Respondent committed a total of five repeated violations of FDA
tobacco regulations within a 36-month period. The repeated inability of Respondent to
comply with federal tobacco regulations and its “unwillingness and/or inability to comply
with the tobacco regulations” is serious in nature. See Informal Brief of Complainant at
3. Thus, I find that an NTSO of 30 calendar days is a reasonable penalty.

B. Respondent’s Ability to Pay

This factor does not apply to the circumstances here because the penalty sought is
exclusion (NTSO) and not a monetary penalty.

C. Effect on Ability to do Business

Respondent has not presented any evidence about the effect of a 30-day NTSO on its
ability to conduct its business. Iam not persuaded that the NTSO would severely hinder
Respondent Exxon Food Mart / S and S Food Mart’s ability to continue other lawful
retail operations during the NTSO period. Moreover, “the need to protect the [minors]
outweighs the adverse effects that an NTSO may have on an individual retailer’s
business, especially in light of the fact that imposition of this remedy is reserved only for
those retailers who demonstrate indifference to the requirements of law.” Kat Party
Store, Inc. d/b/a Mr. Grocer Liquor Store, CRD No. T-16-1684, at 3-4 (2016).

D. History of Prior Violations

It is undisputed that Respondent is a repeated violator of FDA’s tobacco regulations
prohibiting the sale of tobacco products to minors. The current action is the first NTSO
action against Respondent for violations of the Act and its implementing regulations. As
noted previously, Respondent has been the subject of two prior CMP actions. In addition
to the original violations on July 9, 2015, and the current violations on November 30,
2017, Respondent has, on one occasion, violated the prohibition against selling cigarettes
or smokeless tobacco to persons younger than 18 years of age, 21 C.F.R.

§ 1140.14(a)(1), and on one occasion violated the requirement that retailers verify, by
means of photo identification containing a purchaser’s date of birth, that no cigarette or
smokeless tobacco purchasers are younger than 18 years of age, 21 C.F.R.

§ 1140.14(a)(2)(i). Further, in addition to the original violation on October 9, 2015,
Respondent has additionally violated the prohibition against possessing open packages of
15

cigarettes for the purpose of the sale of individual cigarettes, 21 C.F.R. § 1140.14(a)(4),
on November 17, 2017. See Complaint §§ 1, 6, 8-10.

E. Degree of Culpability

Based on my finding that Respondent committed the most recent violations as alleged in
the current Complaint, I hold it fully culpable for all five repeated violations of the Act
and its implementing regulations.

F. Additional Mitigating Factors

I do not find any mitigating factors. Respondent has neither expressed a willingness to
comply with the FDA tobacco regulations nor presented a plan for correcting its
violations. Because Respondent is a habitual violator of the FDA tobacco regulations, I
find that a 30-day NTSO is necessary.

G. Penalty

Under 21 U.S.C. § 333(f)(8), an NTSO is permissible for five (5) repeated violations of
the regulations found at 21 C.F.R. pt. 1140. The maximum period of time for the first
NTSO received by a retailer is 30 consecutive calendar days. See Pub. L. 111-31, div. A,
title I, § 103(q)(1)(A), June 22, 2009, 123 Stat. 1838, 1839; Food & Drug Admin., Civil
Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers at 5-6, available at
http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/U
CM252955.pdf (last updated December 15, 2016).

Based on the foregoing reasoning, I find a penalty of an NTSO for 30 days to be
appropriate under 21 U.S.C. §§ 333(f)(8).

Conclusion

For these reasons, I impose a No-Tobacco-Sale Order against Respondent Exxon
Express, Inc. d/b/a Exxon Food Mart / S and S Food Mart, for a period of 30 consecutive
calendar days. During this period of time, Respondent shall stop selling cigarettes,
cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and covered tobacco
products regulated under the Federal Food, Drug, and Cosmetic Act. 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.

/s/
Margaret G. Brakebusch
Administrative Law Judge