Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-1480)

Complainant
v.

Chaesun Han Osaka
d/b/a North Park Grocery,

Respondent.
Docket No. C-15-1
Decision No. CR3496

Date: December 4, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Chaesun Han Osaka, d/b/a North Park Grocery, at 10332
Aurora Avenue North, Seattle, Washington 98133, and by filing a copy of the complaint
with the Food and Drug Administration’s (FDA) Division of Dockets Management. The
complaint alleges that North Park Grocery impermissibly used a self-service display in a
non-exempt location, thereby violating the Federal Food, Drug, and Cosmetic Act (Act),
21 USC. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140. The
Complaint likewise alleges that Respondent North Park Grocery previously admitted to
two violations of regulations found at 21 C.F.R. pt. 1140 and, therefore, CTP seeks to
impose a $500 civil money penalty against Respondent North Park Grocery.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on October 8, 2014, CTP served the
complaint on Respondent North Park Grocery by United Parcel Service. In the complaint
and accompanying cover letter, CTP explained that, within 30 days, Respondent should
pay the penalty, file an answer, or request an extension of time in which to file an answer.
CTP warned Respondent that, if it failed to take one of these actions within 30 days, the
Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision
ordering it to pay the full amount of the proposed penalty.

Respondent North Park Grocery has neither filed an answer within the time prescribed,
nor requested an extension of time within which to file an answer. Pursuant to 21 C.F.R.
§ 17.11, L assume that the facts alleged in the complaint (but not its conclusory
statements) are true. Specifically:

¢ CTP previously issued a warning letter to Respondent North Park Grocery on
January 3, 2013, citing violations of 21 C.F.R. pt. 1140 on December 15, 2012, at
Respondent’s business establishment, 10332 Aurora Avenue North, Seattle,
Washington 98133;

¢ On September 18, 2013, CTP initiated a civil money penalty action, CRD Docket
Number C-13-1133, FDA Docket Number FDA-2013-H-0934, against
Respondent North Park Grocery for two violations of 21 C.F.R. pt. 1140 within a
12-month period. CTP alleged those violations to have occurred on December 15,
2012, and May 8, 2013;

¢ The previous action concluded when Chaesun Osaka, Respondent’s authorized
representative, settled the claims on Respondent’s behalf. On January 31, 2014,
Ms. Osaka signed an Acknowledgment Form in which she “admitt[ed] that the
violations . . . occurred, waiv[ed] her ability to contest the violations in the future,
and stat[ed] that she understood that the violations may be counted in determining
the total number of violations for purposes of future enforcement actions.” The
Administrative Law Judge closed the case on February 18, 2014;

e During a two-part inspection at Respondent’s business establishment, 10332
Aurora Avenue North, Seattle, Washington 98133, conducted on March 22 and
25,2014, FDA-commissioned inspectors documented the presence of a
self-service display of cigarette tobacco.

These facts establish North Park Grocery’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 CFR. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see 21 U.S.C.

§ 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010).
The regulations require a retailer to sell cigarettes and smokeless tobacco only in a direct,
face-to-face exchange.
21 C.F.R. § 1140.16(c).

Under 21 C.F.R. § 17.2, a $500 civil money penalty is permissible for three violations of the
regulations found at 21 C.F.R. pt. 1140.

Order

For these reasons, I enter default judgment in the amount of $500 against Respondent
Chaesun Han Osaka, d/b/a North Park Grocery. 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/
Catherine Ravinski
Administrative Law Judge


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

Center for Tobacco Products,
(FDA No. FDA-2014-H-1494)

Complainant
v.

Ali Ahmed
d/b/a Brothers Grocery,

Respondent.
Docket No. C-15-6
Decision No. CR3493

Date: December 3, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Ali Ahmed d/b/a Brothers Grocery, at 4685 Park Heights
Avenue, Baltimore, Maryland 21215, and by filing a copy of the complaint with the Food
and Drug Administration’s (FDA) Division of Dockets Management. The complaint
alleges that Brothers Grocery impermissibly sold cigarettes to minors 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.

CTP seeks to impose a $250 civil money penalty against Respondent Brothers Grocery.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on October 8, 2014, CTP served the
complaint on Respondent Brothers Grocery by United Parcel Service. In the complaint
and accompanying cover letter, CTP explained that, within 30 days, Respondent should
pay the penalty, file an answer, or request an extension of time in which to file an answer.
CTP warned Respondent that, if it failed to take one of these actions within 30 days, the
Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision
ordering it to pay the full amount of the proposed penalty.

Respondent Brothers Grocery has neither filed an answer within the time prescribed, nor
requested an extension of time within which to file an answer. Pursuant to 21 C.F.R.

§ 17.11, L assume that the facts alleged in the complaint (but not its conclusory
statements) are true. Specifically:

e At approximately 2:02 p.m. on December 5, 2013, at Respondent’s business
establishment, 4685 Park Heights Avenue, Baltimore, Maryland 21215, an FDA-
commissioned inspector observed Respondent’s staff selling a package of
Newport Box 100s cigarettes to a person younger than 18 years of age. The
inspector also observed 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;

e Ina warning letter dated February 20, 2014, CTP informed Respondent of the
inspector’s December 5, 2013 observations, and that such actions violate federal
law, 21 C.F.R. § 1140.14(a) and (b)(1). The letter further warned that
Respondent’s failure to correct its violations could result in a civil money penalty
or other regulatory action;

e At approximately 2:42 p.m. on March 26, 2014, at Respondent’s business
establishment, 4685 Park Heights Avenue, Baltimore, Maryland 21215, FDA-
commissioned inspectors documented Respondent’s staff selling a package of
Newport Box cigarettes to a person younger than 18 years of age.

These facts establish Respondent Bothers Grocery’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 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). Under 21
CFR. § 1140.14(a), no retailer may sell cigarettes to any person younger than 18 years
of age. Under 21 C.F.R. § 1140.14(b)(1), retailers must verify, by means of photographic
identification containing a purchaser’s date of birth, that no cigarette purchasers are
younger than 18 years of age.

A $250 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $250 against Respondent Ali
Ahmed d/b/a Brothers Grocery. 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/
Catherine Ravinski
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Downtown Saloon, Inc. / Scott A. Warner
d/b/a Downtown Saloon,

Respondent.

Docket No. C-15-72
FDA Docket No. FDA-2014-H-1564

Decision No: CR3490

Date: December 1, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint)
against Respondent, Downtown Saloon, Inc. / Scott A. Warner, d/b/a Downtown Saloon,
that alleges facts and legal authority sufficient to justify the imposition of a civil money
penalty of $250. Respondent did not answer the Complaint, nor did Respondent request
an extension of time within which to file an answer. Therefore, I enter a default
judgment against Respondent and assess a civil money penalty of $250.

CTP began this case by serving the Complaint on Respondent and filing a copy of the
Complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. The Complaint alleges that Respondent impermissibly sold cigarettes to a
minor, failed to verify that a cigarette purchaser was 18 years of age or older, and utilized
a vending machine to sell regulated tobacco products in a non-exempt facility, 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
(2013). CTP seeks a civil money penalty of $250.

On October 16, 2014, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and accompanying
cover letter, CTP explained that within 30 days, Respondent should pay the proposed
penalty, file an answer, or request an extension of time within which to file an answer.
CTP warned Respondent that if it failed to take one of these actions within 30 days, an
Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision
ordering Respondent to pay the full amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor has it
requested an extension. Pursuant to 21 C.F.R. § 17.11(a), 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 Downtown Saloon, an establishment that sells tobacco products
and is located at 7 North King Street, Leesburg, Virginia 20176. Complaint § 2.

e During an inspection of Respondent’s establishment on August 30, 2013, at
approximately 11:22 AM, an FDA-commissioned inspector observed that “a
person younger than 18 years of age was able to purchase a package of Marlboro
cigarettes .. .[.]” The inspector also observed that “the minor’s identification was
not verified before the sale . . . [.]” Finally, the inspector observed that the minor
was able to purchase the Marlboro cigarettes from a vending machine. Complaint

99.

¢ On October 17, 2013, CTP issued a Warning Letter to Respondent regarding the
inspector’s observations from August 30, 2013. The letter explained that the
observations constituted violations of regulations found at 21 C.F.R. § 1140.14(a),
(b)(1), and (c), and that the named violations were not necessarily intended to be
an exhaustive list of all violations at the establishment. The Warning Letter went
on to state that if Respondent failed to correct the violations, regulatory action by
the FDA or a civil money penalty action could occur and that Respondent is
responsible for complying with the law. Complaint § 9.

e Scott Warner, who identified himself as Respondent’s establishment’s owner,
responded to the Warning Letter in an October 22, 2013 letter and January 6, 2014
telephone call. Mr. Warner “stated that on the date of the inspection, his
‘employee did not do his job properly,’ and noted that the employee had since
been terminated. He further stated that he would do his “best to ... comply with
all laws, and regulations concerning tobacco products.” Mr. Warner also informed
CTP that “he would either move the vending machine behind the bar or sell
tobacco products from behind the bar without the vending machine.” Complaint

g 10.

e During a subsequent inspection of Respondent’s establishment on January 31,
2014, at an unspecified time, an FDA-commissioned inspector “observed a
vending machine that is accessible to all customers in the facility, and the
establishment’s owner told the inspector that minors are allowed to enter the
facility before 9:00 PM” Complaint § 1.

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 CFR. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see 21 U.S.C.

§ 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). The regulations prohibit the
sale of cigarettes to any person younger than 18 years of age. 21 C.F.R. § 1140.14(a).
The regulations also require retailers to verify, by means of photo identification
containing a purchaser’s date of birth, that no cigarette purchasers are younger than

18 years of age. 21 C.F.R. § 1140.14(b)(1). Moreover, the regulations require retailers to
sell cigarettes or smokeless tobacco exclusively in a direct, face-to-face exchange without
the assistance of any mechanical device unless the facility ensures that no one younger
than 18 years of age is present or permitted to enter at any time. 21 C.F.R. § 1140.14(c).

Taking the above alleged facts as true, Respondent violated the prohibition against selling
cigarettes to persons younger than 18 years of age, 21 C.F.R. § 1140.14(a), on August 30,
2013. That same date, Respondent also violated the requirement that retailers verify, by
means of photo identification containing a purchaser’s date of birth, that no cigarette
purchasers are younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1). Finally, on
January 31,2014, Respondent impermissibly maintained a vending machine in a facility
that allows minors to enter, in violation of 21 C.F.R. § 1140.14(c). Respondent’s actions
thus constitute violations of law that merit a civil money penalty.

CTP has requested a fine of $250, which is a permissible fine under the regulations.
21 C.F.R. § 17.2. Therefore, I find that a civil money penalty of $250 is warranted and so
order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Rem

edies Division

Center for Tobacco Products,

Complainant

Vv.

MGGDGM LLC
d/b/a Kountry Korner,

Respondent.

Docket

No. C-15-64

FDA Docket No. FDA-2014-H-1555

Decision

No. CR3489

Date: December 2, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) fi

led an Administrative Complaint (Complaint)

against Respondent, MGGDGM LLC d/b/a Kountry Korner, that alleges facts and legal
authority sufficient to justify the imposition of a civil money penalty of $250.

Respondent did not answer the Complaint,

nor did Respondent request an extension of

time within which to file an answer. Therefore, I enter a default judgment against

Respondent and assess a civil money penal

CTP began this case by serving the Compl
Complaint with the Food and Drug Admin:
Management. The Complaint alleges that
minors, thereby violating the Federal Foor
§ 301 et seq., and its implementing regulati
21 CFR. pt. 1140 (2013). CTP seeks a ci

ty of $250.

aint on Respondent and filing a copy of the
istration’s (FDA) Division of Dockets
Respondent impermissibly sold cigarettes to
, Drug, and Cosmetic Act (Act), 21 U.S.C.
ions, Cigarettes and Smokeless Tobacco,
vil money penalty of $250.

On October 16, 2014, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and accompanying
cover letter, CTP explained that within 30 days, Respondent should pay the proposed
penalty, file an answer, or request an extension of time within which to file an answer.
CTP warned Respondent that if it failed to take one of these actions within 30 days, an
Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision
ordering Respondent to pay the full amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor has it
requested an extension. Pursuant to 21 C.F.R. § 17.11(a), Iam 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 Kountry Korner, an establishment that sells tobacco products
and is located at 49017 Morris Road, Hammond, Louisiana 70401. Complaint § 3.

e During an inspection of Respondent’s establishment on October 18, 2013, at
approximately 6:13 PM, an FDA-commissioned inspector observed that “a person
younger than 18 years of age was able to purchase a package of Marlboro Silver
Pack cigarettes .. . [.]” Complaint J 10.

¢ On December 26, 2013, CTP issued a Warning Letter to Respondent regarding the
inspector’s observations from October 18, 2013. The letter explained that the
observations constituted a violation of a regulation found at 21 C.F.R.
§ 1140.14(a), and that the named violation was not necessarily intended to be an
exhaustive list of all violations at the establishment. The Warning Letter went on
to state 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 § 10.

e Patricia Prevost, Respondent’s establishment’s manager, responded to the
Warning Letter in a January 1, 2014 letter. “Ms. Prevost stated that she took
disciplinary action against the stated employee and conducted a training meeting
with all employees to make sure all employees are aware of both the laws
concerning tobacco sales and the consequences for violating those laws.”
Complaint § 11.

e During a subsequent inspection of Respondent’s establishment on April 5, 2014, at
approximately 3:49 PM, FDA-commissioned inspectors documented that “a

person younger than 18 years of age was able to purchase a package of Marlboro
100’s cigarettes .. . [.]” Complaint § 1.

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 CFR. 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). The regulations prohibit the
sale of cigarettes to any person younger than 18 years of age. 21 C.F.R. § 1140.14(a).

Taking the above alleged facts as true, Respondent violated the prohibition against selling
cigarettes to persons younger than 18 years of age, 21 C.F.R. § 1140.14(a), on October
18, 2013, and April 5, 2014. Therefore, Respondent’s actions constitute violations of law
that merit a civil money penalty.

CTP has requested a fine of $250, which is a permissible fine under the regulations.
21 C.F.R. § 17.2. Therefore, I find that a civil money penalty of $250 is warranted and so
order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human

Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-1500)

Complainant
v.

Mufeed Mustafa
d/b/a High Life Smoke Shop

Respondent.
Docket No. C-15-11
Decision No. CR3488

Date: December 1, 2014

>

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative

comp!

Buckeye Road, 104 B, Avondale, Arizona 85323, and by fil

with t

comp!

aint on Respondent, Mufeed Mustafa, d/b/a High Life Smoke Shop, at 11345 West

ing a copy of the complaint

he Food and Drug Administration’s (FDA) Division of Dockets Management. The
aint alleges that High Life Smoke Shop unlawfully utilized a self-service display in

a non-exempt facility, thereby violating the Federal Food, Drug, and Cosmetic Act (Act),
21 USC. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140. The

comp!

admitted to two violations of C.F.R. pt. 1140 and, therefore

aint likewise alleges that Respondent High Life Smo

e Shop had previously
, CTP seeks to impose a $500

civil money penalty against Respondent High Life Smoke Shop.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on October 9, 2014, CTP served the

comp!
comp!

aint on Respondent High Life Smoke Shop by Unite

Parcel Service. In the

aint and accompanying cover letter, CTP explained that, within 30 days,

Respondent should pay the penalty, file an answer, or request an extension of time in
which to file an answer. CTP warned Respondent that, if it failed to take one of these
actions within 30 days, the Administrative Law Judge could, pursuant to 21 C.F.R.

§ 17.11, issue an initial decision ordering it to pay the full amount of the proposed
penalty.

Respondent High Life Smoke Shop has neither filed an answer within the time
prescribed, nor requested an extension of time within which to file an answer. Pursuant
to 21 C.F.R. § 17.11, L assume that the facts alleged in the complaint (but not its
conclusory statements) are true. Specifically:

e CTP previously issued a warning letter to Respondent High Life Smoke Shop on
June 28, 2012, citing violations’ of 21 C.F.R. pt. 1140 on April 19, 2012, at
Respondent’s business establishment, 11345 West Buckeye Road, 104 B,
Avondale, Arizona 85323;

¢ On February 8, 2013, CTP initiated a previous civil money penalty action, CRD
Docket Number C- 13-379, FDA Docket Number FDA-2013-H-0136, against
Respondent High Life Smoke Shop for two violations of 21 C.F.R. pt. 1140 within
a 12-month period. CTP alleged those violations to have occurred on April 19,
2012, and November 20, 2012;

e The previous action concluded when Mufeed Mustafa, Respondent’s authorized
representative, settled the claims on Respondent’s behalf. On February 16, 2013,
Mr. Mustafa signed an Acknowledgment Form in which he “admitt[ed] that the
violations . . . occurred, waiv[ed] his ability to contest the violations in the future,
and stat[ed] that he understood that that violations may be counted in determining
the total number of violations for purposes of future enforcement actions.” The
Administrative Law Judge closed the case on March 21, 2013;

e During a subsequent two-part inspection of Respondent’s business establishment,
11345 West Buckeye Road, 104 B, Avondale, Arizona, 85323, conducted on

' Tn the complaint, CTP describes the action or actions that took place at Respondent
High Life Smoke Shop’s business establishment on April 19, 2012, as both “a violation”
and as “violations.” Complaint J 9. In a previous administrative complaint dated
February 7, 2013, and attached to the present complaint, however, CTP described three
discrete violations at Respondent High Life Smoke Shop’s business establishment on
April 19, 2012: a violation of 21 C.F.R. § 1140.14(a), a violation of 21 C.F.R.

§ 1140.14(b)(1), and a violation of 21 C.F.R. § 1140.16(c). Therefore, I will infer that
CTP’s description in the present complaint of “a violation” occurring on April 19, 2012,
was a typographical error.
March 19 and 26, 2014, FDA-commissioned inspectors documented the presence
of a self-service display of cigarette tobacco.

These facts establish Respondent High Life Smoke Shop’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 21 U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). Under 21
C.F.R. § 1140.14(a), no retailer may sell a tobacco product to any person younger than 18
years of age. Further, under 21 C.F.R. § 1140.14(b)(1), retailers must verify, by means of
photographic identification containing a date of birth, that the purchaser was 18 years of
age or older. The regulations also require a retailer to sell cigarettes and smokeless
tobacco only in a direct, face-to-face exchange. 21 C.F.R. § 1140.16(c).

A $500 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $500 against Respondent
Mufeed Mustafa, d/b/a High Life Smoke Shop. 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/
Catherine Ravinski
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-1456)

Complainant,
v.

Mini Rite Grocery LLC
d/b/a Mini-Rite Market,

Respondent.
Docket No. C-14-1980
Decision No. CR3487

Date: December 1, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Mini Rite Grocery LLC d/b/a Mini-Rite Market, at 460 Bird
Street, Bridgeport, Connecticut 06605, and by filing a copy of the complaint with the
Food and Drug Administration’s (FDA) Division of Dockets Management. The
complaint alleges that Mini Rite Grocery impermissibly sold cigarettes to a minor, failed
to verify, by means of photo identification containing a date of birth, that a tobacco
purchaser was 18 years of age or older, and opened packages of cigarettes in order to sell
individual cigarettes, thereby violating the Federal Food, Drug, and Cosmetic Act (Act),
21 USC. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140. CTP seeks
to impose a $250 civil money penalty against Respondent Mini Rite Grocery.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on October 2, 2014, CTP served the
complaint on Respondent Mini Rite Grocery by United Parcel Service. In the complaint
and accompanying cover letter, CTP explained that, within 30 days, Respondent should
pay the penalty, file an answer, or request an extension of time in which to file an answer.
CTP warned Respondent that, if it failed to take one of these actions within 30 days, the
Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision
ordering it to pay the full amount of the proposed penalty.

Respondent Mini Rite Grocery has neither filed an answer within the time prescribed, nor
requested an extension of time within which to file an answer. Pursuant to 21 C.F.R.

§ 17.11, L assume that the facts alleged in the complaint (but not its conclusory
statements) are true. Specifically:

e At approximately 1:27 p.m. on October 21, 2013, at Respondent’s business
establishment, 460 Bird Street, Bridgeport, Connecticut 06605, an
FDA-commissioned inspector observed Respondent’s staff selling a package of
Newport Box 100s cigarettes to a person younger than 18 years of age. The
inspector also observed 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;

e Ina warning letter issued January 2, 2014, CTP informed Respondent of the
inspector’s October 21, 2013 observations, and that such actions violate federal
law, 21 C.F.R. § 1140.14(a) and (b)(1). The letter further warned that
Respondent’s failure to correct its violations could result in a civil money penalty
or other regulatory action;

e Subsequently, during a two-part inspection conducted on March 17 and April 2,
2014, at Respondent’s business establishment, 460 Bird Street, Bridgeport,
Connecticut 06605, FDA-commissioned inspectors documented the presence of
individual unpackaged cigarettes. Respondent’s staff confirmed that the cigarettes
were available for individual purchase.

These facts establish Respondent Mini Rite Grocery’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 § 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 CFR. pt. 1140 under § 906(d) of the Act. 21 U.S.C. § 387a-1; see 21 U.S.C.

§ 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). Under 21 C.F R.

§ 1140.14(a), no retailer may sell cigarettes to any person younger than 18 years of age.
Under 21 C.F.R. § 1140.14(b)(1), retailers must verify, by means of photographic
identification containing a purchaser’s date of birth, that no cigarette purchasers are
younger than 18 years of age.
Moreover, 21 C.F.R. § 1140.14(d) dictates that no retailer may break or otherwise open
any cigarette or smokeless tobacco package to sell or distribute individual cigarettes.

A $250 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $250 against Respondent
Mini Rite Grocery LLC d/b/a Mini-Rite Market. 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/
Catherine Ravinski
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.

Dollar General Corporation
d/b/a Dollar General 281,

Respondent.
Docket No. C-14- 1931
FDA Docket No. FDA-2014-H-1412
Decision No. CR3484

Date: November 25, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint)
against Respondent, Dollar General Corporation d/b/a Dollar General 281 that alleges
facts and legal authority sufficient to justify the imposition of a civil money penalty of
$250. Respondent did not answer the Complaint, nor did Respondent request an
extension of time within which to file an answer. Therefore, I enter a default judgment
against Respondent and assess a civil money penalty of $250.

CTP began this case by serving the Complaint on Respondent and filing a copy of the
Complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. The Complaint alleges that Respondent impermissibly sold cigarettes to
minors and failed to verify that a cigarette 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
(2013). CTP seeks a civil money penalty of $250.
On September 25, 2014, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and accompanying
cover letter, CTP explained that within 30 days, Respondent should pay the proposed
penalty, file an answer, or request an extension of time within which to file an answer.
CTP warned Respondent that if it failed to take one of these actions within 30 days, an
Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision
ordering Respondent to pay the full amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor has it
requested an extension. Pursuant to 21 C.F.R. § 17.11(a), Iam 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 Dollar General 281, an establishment that sells tobacco products
and is located at 723 West 7th Avenue, Spearman, Texas 79081. Complaint § 3.

e During an inspection of Respondent’s establishment on October 12, 2013, at
approximately 1:51 PM, an FDA-commissioned inspector observed that “a person
younger than 18 years of age was able to purchase a package of Camel Crush
Regular Fresh cigarettes . . . [.]” The inspector also observed that “the minor’s
identification was not verified before the sale... .” Complaint § 10.

¢ On December 19, 2013, CTP issued a Warning Letter to Respondent regarding the
inspector’s observations from October 12, 2013. The letter explained that the
observation constituted a violation of regulations found at 21 C.F.R.
§ 1140.14(a) and (b)(1) and that the named violations were not necessarily
intended to be an exhaustive list of all violations at the establishment. The
Warning Letter went on to state that if Respondent failed to correct the violations,
regulatory action by the FDA or a civil money penalty action could occur and that
Respondent is responsible for complying with the law. Complaint J 10.

e Although United Parcel Service records indicate that an individual named
“Hernandez” received the warning letter, FDA never received a response.
Complaint § 11.

e During a subsequent inspection of Respondent’s establishment on March 1, 2014,
at approximately 11:47 AM, FDA-commissioned inspectors documented that “a
person younger than 18 years of age was able to purchase a package of Camel
Crush Regular Fresh cigarettes ... .”’ Complaint § 1.
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 CFR. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see 21 U.S.C.

§ 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). The regulations prohibit the
sale of cigarettes to any person younger than 18 years of age. 21 C.F.R. § 1140.14(a).
The regulations also require retailers to verify, by means of photo identification
containing a purchaser’s date of birth, that no cigarette purchasers are younger than

18 years of age. 21 C.F.R. § 1140.14(b)(1).

Taking the above alleged facts as true, on October 12, 2013, and March 1, 2014, the
Respondent violated the prohibition against selling cigarettes to persons younger than
18 years of age, 21 C.F.R. § 1140.14(a); and the requirement that retailers verify, by
means of photo identification containing a purchaser’s date of birth, that no cigarette
purchasers are younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1). Therefore,
Respondent’s actions constitute violations of law that merit a civil money penalty.

CTP has requested a fine of $250, which is a permissible fine under the regulations.
21 C.F.R. § 17.2. Therefore, I find that a civil money penalty of $250 is warranted and so
order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Modesto Radiology Imaging, Inc.,
(PTAN: GV704A),

(NPI: 1588954929),

Petitioner,

v.

Centers for Medicare & Medicaid Services
Docket No. C-14-1279

Decision No. CR3483

Date: November 25, 2014

DECISION

Petitioner, Modesto Radiology Imaging, Inc. is an independent diagnostic testing facility
(IDTF) located in Modesto, California that has been enrolled in the Medicare program
since April 1, 2012. It applied to add certain diagnostic services to its enrollment. The
Medicare contractor approved the application, with an effective billing date of April 20,
2013. Petitioner challenges that effective date.

For the reasons discussed below, I affirm the April 20, 2013 billing date.
Background

Petitioner is enrolled in the Medicare program as an IDTF and, since April 1, 2012, has
been authorized to bill for certain approved services, including CT abdominal scans and
CT pelvic scans. P. Ex. 3. On July 19, 2013, it applied to add a purportedly additional
testing service — combined abdominal-pelvic scans — to its enrollment (although the
parties dispute whether this was a new service). In a letter dated July 30, 2013, the then

' Neither party submitted a copy of the July 19 application, but they seem to agree that
an acceptable application was filed on that date. See CMS Br. at 2.
Medicare contractor, Palmetto GBA, approved the additional service with the effective
billing date of April 20, 2013. CMS Ex. 1. Petitioner requested reconsideration.

In a reconsidered determination, dated April 9, 2014, a representative from the new
Medicare contractor, Noridian Healthcare Solutions, affirmed the April 20 date.
Petitioner timely filed this appeal.

The parties have submitted briefs (CMS Br.; P. Br.) and CMS moves for summary
judgment. However, because neither party has any witnesses to present, an in-person
hearing would serve no purpose.” See Acknowledgment and Pre-hearing Order at 5 (§ 8)
and 6 (§ 10). CMS submits two exhibits (CMS Exs. | and 2). In the absence of any
objection, I admit into evidence CMS Exs. | and 2.

Petitioner’s Exhibits. Petitioner submits five exhibits (P. Exs. 1-5). Citing 42 C.F.R.

§ 498 .56(e), CMS objects to my admitting two of those documents: P. Ex. 1, an affidavit
signed by the IDTF’s coding specialist; and P. Ex. 2, a list of claims for services that
were not covered because they were provided prior to the April 20, 2013 effective date.
Section 498.56(e)(1) directs the administrative law judge (ALJ) to examine any new
documentary evidence to determine whether the supplier has good cause for submitting
the evidence for the first time at the ALJ level. If the ALJ finds no good cause, she must
exclude the evidence from the proceeding and may not consider it in reaching a decision.
42 CFR. § 498.56(e)(2)(ii).

Because P. Ex. | is testimony and not documentary evidence, the regulation does not
apply. Arkady B. Stern, M.D., DAB No. 2329 at 4 n.4 (2010) (Observing that
“Tt]estimonial evidence that is submitted in written form in lieu of live in-person
testimony is not ‘documentary evidence’ within the meaning of 42 C.F.R. § 498.56(e).”).

With respect to P. Ex. 2, Petitioner concedes that it did not submit the document at
reconsideration but argues that good cause justifies my admitting it here. Petitioner
points out that neither Medicare contractor provided any notice that Petitioner could or
should submit any documents at the reconsideration level. In the July 30 notice letter,
Palmetto provided a number to call “[i]f you disagree with this initial determination.”
The letter says nothing about submitting documentary evidence. CMS Ex. 1. Worse,
Noridian sent Petitioner a letter dated December 20, 2013, that effectively instructed
Petitioner not to submit any documents: “You will receive a letter within 30 calendar
days, if we need any additional information.” P. Ex. 5. Because the contractors offered
Petitioner neither notice nor opportunity to submit evidence, I find good cause to allow
its admission at this level.

> Petitioner submits a single affidavit, but CMS has not asked to cross-examine the
affiant.
However, CMS also objects to my admitting P. Exs. 1 and 2 because they are not relevant
or material. I agree. Petitioner offers these documents to establish that Medicare should
reimburse for services it provided prior to April 20, 2013, arguing that those services are,
in fact, the same services for which it was already enrolled. As discussed below, I have
no authority to address this issue. Because the documents are neither relevant nor
material to any issue over which I have jurisdiction, I decline to admit them. 42 C.F.R.

§ 498.60(b). I admit P. Exs. 3-5.

Discussion

To enroll in the Medicare program, a prospective provider or supplier must submit an
enrollment application. Among other requirements, a prospective IDTF must certify that
it meets the standards and related requirements listed in 42 C.F.R. § 410.33(g). Among
those requirements, the prospective IDTF must enroll for “any diagnostic testing services
that it furnishes to a Medicare beneficiary.” 42 C.F.R. § 410.33(g)(16). With some
exceptions not applicable here, it must report any changes to its enrollment application
within 90 days. 42 C.F.R. § 410.33(g)(2).

After enrolling in April 2012, Petitioner billed the Medicare program for combined
abdominal-pelvic scans. The contractor apparently denied those claims, finding that the
facility was not enrolled to perform that service. Although the facility was enrolled to
provide abdominal scans and pelvic scans separately, the combined abdominal-pelvic
scan is considered a “bundled” service and is billed under a separate CPT code.” In
response, on July 19, 2013, Petitioner applied to add the additional service to its
enrollment, and the contractor approved its application and advised the facility that it
could submit claims under the new code starting July 30, 2013. Citing 42 C.F.R.

§ 410.33(g)(2), the contractor set the “date of approval” as April 20, 2013. CMS Ex. 1.

In its appeal, Petitioner “seeks an earlier effective date” so that it may bill for the
combined abdominal-pelvic scans it provided prior to April 20, 2013. To the extent that
the issue before me is the effective date, I have jurisdiction and the matter is easily
resolved. 42 C.F.R. § 498.3(b)(15). The effective date of an IDTF’s billing privileges is
the later of: 1) the date it filed its subsequently-approved application; or 2) the date it first
started furnishing services. 42 C.F.R. § 410.33(i). Thus, the effective date can be no
earlier than July 19, 2013.

By regulation, some suppliers (physicians, nonphysician practitioners, and their
organizations) may retrospectively bill for services provided prior to their effective date
of enrollment. 42 C.F.R. § 424.521. The regulations do not include a comparable

> CPT (current procedural terminology) codes are used to describe medical procedures
and physician services.
provision for IDTFs. Nevertheless, citing 42 C.F.R. § 410.33(g)(2), the contractor
designated the “date of approval” as April 20, 2013, and the reconsidered determination
agrees. CMS Ex. 1. No one has explained how a reporting requirement, like section
410.33(g)(2), can be used to authorize retrospective billing, but the parties do not dispute
that aspect of the reconsidered determination, so I will not disturb it. The effective date
of enrollment is July 19, 2013, and the retrospective billing date can be no earlier than
April 20, 2013.

I question whether this case is truly an effective-date challenge, however. Beyond
articulating that as the issue, no one has treated this as an effective-date case. Neither the
reconsidered determination nor either party even mentions 42 C.F.R. § 410.33(i). Idon’t
know how anyone can review the effective date without referring to the regulation that
governs effective dates.

At bottom, Petitioner thinks that it should be reimbursed for the combined scans based on
its initial enrollment and makes some compelling arguments in support of its position.*
But I am not authorized to hear such matters. If a supplier is unhappy with the Medicare
contractor’s denial of a claim, it may appeal to the Office of Medicare Hearings and
Appeals (OMHA) and then the Medicare Appeals Council. 42 C.F.R. § 405.1000-1140;
see 42 C.F.R. § 498.3(b) (listing “initial determinations” that are reviewable in this
forum).

Conclusion

I affirm the July 19, 2013 effective date (with billing retrospective to April 20, 2013). I
have no jurisdiction to review the denials of claims.

/s/
Carolyn Cozad Hughes
Administrative Law Judge

* CMS points out that it requires enrollment for each testing service in order to insure
that compensation for the service is authorized and that the IDTF has the appropriate
equipment, has trained its technicians properly, and provides appropriate supervision.
CMS Br. at 6. It seems that these criteria were met when CMS enrolled the facility to
perform the individual scans. On the other hand, CMS may have legitimate reasons for
tying enrollment to the CPT codes. But these are issues for a different forum.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-1381)

Complainant,
v.

Sandys Stop and Shop LLC / Sandra Knapic
d/b/a Sandy's Stop N' Shop,

Respondent.
Docket No. C-14-1894
Decision No. CR3482

Date: November 24, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Sandys Stop and Shop LLC / Sandra Knapic d/b/a Sandy's
Stop N' Shop, 1939 Highway 15 South, Saint George, South Carolina 29477, and by
filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division
of Dockets Management. The complaint alleges that Sandy's Stop N' Shop unlawfully
sold cigarettes to minors and failed to verify that the cigarette purchasers were 18 years
of age or older, thereby violating the Federal Food, Drug, and Cosmetic Act (Act),

21 USC. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless
Tobacco, 21 C.F.R. pt. 1140. CTP seeks to impose a $500 civil money penalty against
Respondent Sandy's Stop N' Shop.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on September 23, 2014, CTP served the
complaint on Respondent Sandy's Stop N' Shop by United Parcel Service. In the
complaint and accompanying cover letter, CTP explained that, within 30 days,
Respondent should pay the penalty, file an answer, or request an extension of time in
which to file an answer. CTP warned Respondent that, if it failed to take one of these
actions within 30 days, the Administrative Law Judge could, pursuant to 21 C.F.R.

§ 17.11, issue an initial decision ordering it to pay the full amount of the proposed
penalty.

Respondent Sandy's Stop N' Shop has neither filed an answer within the time prescribed,
nor requested an extension of time within which to file an answer. Pursuant to 21 C.F.R.
§ 17.11, L assume that the facts alleged in the complaint (but not its conclusory
statements) are true. Specifically:

e At approximately 11:32 a.m. on September 14, 2013, at Respondent’s business
establishment, at 1939 Highway 15 South, Saint George, South Carolina 29477, an
FDA-commissioned inspector observed that a person younger than 18 years of age
was able to purchase a package of Newport Box 100 cigarettes. 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.

e Ina warning letter dated November 7, 2013, CTP informed Respondent of the
inspector’s September 14, 2013 observations, and that such actions violate federal
law, 21 C.F.R. § 1140.14(a) and (b)(1). The letter further warned that
Respondent’s failure to correct its violations could result in a civil money penalty
or other regulatory action;

e At approximately 9:29 a.m. on July 9, 2014, at Respondent’s business
establishment, at 1939 Highway 15 South, Saint George, South Carolina 29477,
FDA-commissioned inspectors observed that a person younger than 18 years of
age was able to purchase a package of Newport Box cigarettes. The inspectors
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 Sandy's Stop N' Shop’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 21 U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). The
regulations prohibit the sale of cigarettes to any person younger than 18 years of age.
21 CFR. § 1140.14(a). The regulations also require retailers to verify, by means of
photo identification containing a purchaser’s date of birth, that no cigarette purchasers are
younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1).

A $500 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $500 against Respondent
Sandys Stop and Shop LLC / Sandra Knapic d/b/a Sandy's Stop N' Shop. Pursuant to
21 CFR. § 17.11(b), this order becomes final and binding upon both parties after 30
days of the date of its issuance.

/s/
Catherine Ravinski
Administrative Law Judge