Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2017-R-5759)

Complainant,
v.

Joe Eideh
d/b/a 7-Eleven 34428,

Respondent.
Docket No. T-17-6603
Decision No. TB2782

Date: June 5, 2018

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint)
against Respondent, Joe Eideh d/b/a 7-Eleven 34428, alleging facts and legal authority
sufficient to justify imposition of a No-Tobacco-Sale Order against Respondent for a
period of 30 consecutive calendar days. Respondent answered the Complaint, but has
failed to comply with multiple judicial orders and directions during the administrative
proceedings. 21 C.F.R. § 17.35(a)(1). Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3),
I strike Respondent’s Answer, issue this decision of default judgment, and impose a No-
Tobacco-Sale Order against Respondent for a period of 30 consecutive calendar days.

I. Procedural History

CTP initiated this case by serving a Complaint on Respondent on September 21, 2017.
Proof of Service, DAB E-File Docket (Dkt.) No. 1b. The Complaint alleges that
Respondent’s staff impermissibly sold cigarettes or smokeless tobacco to minors and
failed to verify that the purchasers were of sufficient age, 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. Compl., Dkt. No. 1
4 6, 9-10. CTP seeks a No-Tobacco-Sale Order against Respondent for a period of 30
consecutive calendar days. Id. § 14.

In the Complaint and accompanying cover letter, CTP explained that within 30 days,
Respondent should file an answer or request an extension of time within which to file an
answer. Id. § 12; Cover Letter, Dkt. No. la, at 1. On October 20, 2017, Respondent
attempted to submit an answer to CTP’s Complaint via the DAB E-File system, but the
uploaded answer form was blank. Answer, Dkt. No. 3. On October 25, 2017, two days
after the answer deadline, Respondent filed a completed Answer form (Answer) opposing
the No-Tobacco-Sale Order and submitted a letter claiming technical difficulties that led
to the untimely filing of the Answer. See Dkt. Nos. 4, 5.

On November 1, 2017, I issued an Acknowledgment and Pre-Hearing Order (APHO).
APHO, Dkt. No. 6. In the APHO, I found that Respondent made a good faith attempt to
file timely Answer and, therefore, found good cause to accept the Answer despite the late
filing. Jd. at 1. I directed the parties to file a joint status report and explained to the
parties what they must do to present evidence and arguments in this case. Jd. at 3-7. I
also explained that the parties may request copies of documents relevant to this case and
that the requesting party must serve the request for documents no later than December 11,
2017. Id. at 7. I further explained that “a party receiving such a request must provide the
requested documents no later than 30 days after the request has been made.” Id. See also
21 C.F.R. § 17.23(a).

On December 1, 2017, consistent with my APHO and with Respondent’s authorization,
CTP filed a joint status report indicating the parties were unable to reach a settlement and
intended to proceed to a hearing. Joint Status Report, Dkt. No. 7. The status report
further stated that the first CMP action resulted in Respondent paying in full the agreed
upon civil money penalty amount, while the second CMP action resulted in a judgment
against Respondent for $5,000 with no payment received. Jd. at 1.

As part of the discovery process, CTP served a Request for Production of Documents
(RFP) on Respondent on December 6, 2017. Dkt. Nos. 8a-8c. Although the APHO
allowed a party 10 days from receipt of a RFP to move for a protective order, no such
motion was filed by Respondent. See APHO, Dkt. No. 6, at 7-8.

On January 10, 2018, pursuant to 21 C.F.R. § 17.32(a), CTP filed an Unopposed Motion
to Extend Deadlines stating that Respondent contacted CTP on January 3, 2018,
requesting additional time to respond to CTP’s RFP. Unopposed Mot. to Extend
Deadlines, Dkt. No. 8, at 1. The Motion further indicated that CTP consented to
extending Respondent’s response deadline to January 29, 2018. Jd. at 2. The parties also
requested to extend pre-hearing exchange deadlines to allow parties to properly prepare
their pre-hearing exchanges. Jd. On January 11, 2018, I issued an Order allowing
Respondent until January 29, 2018 to respond to CTP’s RFP and extending the parties’
respective pre-hearing exchange deadlines. Jan. 11, 2018 Order, Dkt. No. 9.

On February 8, 2018, pursuant to 21 C.F.R. § 17.32(a), CTP filed a Motion to Compel
Discovery indicating that CTP received no response to its RFP. Mot. to Compel, Dkt.
No. 11. On the same day, CTP also filed a Motion to Extend Deadlines, requesting a 30-
day extension of time of CTP’s pre-hearing exchange to allow Respondent to comply
with CTP’s RFP and provide CTP with sufficient time to prepare its pre-hearing
exchange. Mot. to Extend Deadlines, Dkt. No. 10. Notably, Respondent never filed a
motion for a protective order. A February 9, 2018 letter issued by my direction allowed
Respondent until February 26, 2018 to file a response to CTP’s Motion to Compel
Discovery. Feb. 9, 2018 By Direction Letter (BDL), Dkt. No. 12; see also 21 C.F.R.

§ 17.32(c). On February 9, 2018, I also issued an Order extending the parties’ respective
pre-hearing exchange deadlines. Feb. 9, 2018 Order, Dkt. No. 13.

Respondent failed to respond to CTP’s Motion to Compel Discovery. Accordingly, on
February 27, 2018, I issued an Order granting CTP’s Motion to Compel Discovery and
ordering Respondent to comply with CTP’s RFP by March 15, 2018. Feb. 27, 2018
Order, Dkt. No. 14. I warned Respondent that “[failure to do so may result in sanctions,
including the issuance of an Initial Decision and Default Judgment finding Respondent
liable for the violations listed in the Complaint... .”! Jd. at 1-2.

On March 21, 2018, CTP filed a Motion to Impose Sanctions advising that Respondent
failed to comply with my February 27, 2018 Order. Mot. to Impose Sanctions, Dkt. No.
15. CTP sought sanctions against Respondent in the form of striking the Respondent’s
Answer and issuance of a default judgment in this case. Jd. at 3. On March 21, 2018,
CTP also filed a Motion to Extend Deadlines. Mot. to Extend Deadlines, Dkt. No. 15a.
Ina March 21, 2018 letter issued by my direction, Respondent was given until April 5,
2018, to file a response to CTP’s Motion to Impose Sanctions. Mar. 21, 2018 BDL, Dkt.
No. 16; see also 21 C.F.R. § 17.32(c). On March 21, 2018, I also issued an Order staying
all pre-hearing deadlines pending resolution of the Motion to Impose Sanctions. Mar. 21,
2018 Order, Dkt. No. 17.

On April 3, 2018, Respondent filed a letter response indicating documents requested by
CTP were mailed to CTP in early January 2018. Letter, Dkt. No. 18. Respondent,
however, provided no evidence showing the documents were actually mailed to or
received by CTP. The letter also stated that Respondent was out of the country from
January 25, 2018 until the first week of March with no email access. Jd. Again,

' T note that the February 27, 2018 Order inadvertently referenced imposition of “a civil
money penalty.” It should have correctly referenced imposition of “a no-sale-tobacco
order.” See Feb. 27, 2018 Order, Dkt. No. 14, at 2.
Respondent provided no evidence confirming he was out of the country or had no email
access. The letter further stated that upon his return in the first week of March,
Respondent discovered that a deadline to file a response to CTP’s Motion to Impose
Sanctions was April 5, 2018. Jd. Respondent failed to provide any explanation for being
unable to comply with my February 27, 2018 Order directing Respondent to comply with
CTP’s RFP by March 15, 2018. Although Respondent’s letter stated that, upon his return
in early March, Respondent called CTP’s office and was told the documents he sent were
not received, Respondent failed to provide any evidence that the documents responsive to
CTP’s RFP were ever resubmitted to CTP. Jd.

In an April 5, 2018 letter issued by my direction, CTP was given until April 10, 2018 to
file any response to Respondent’s April 3, 2018 letter. Apr. 5, 2018 BDL, Dkt. No. 19.
On April 10, 2018, CTP filed a Response stating that, prior to filing its Motion to Impose
Sanctions, CTP checked multiple offices to verify that CTP received no response from
Respondent. CTP’s Response, Dkt. No. 20, at 1. In its Response, CTP further indicated
that upon receipt of Respondent’s April 3, 2018 letter, CTP checked once again with
multiple offices to confirm no documents responsive to CTP’s RFP were received from
Respondent. Jd. at 2.

Il. Striking Respondent’s Answer

Pursuant to 21 C.F.R. § 17.35(a)(1), I may sanction a party for failing to comply with an
order, subpoena, rule, or procedure governing the proceeding. As outlined above,
Respondent repeatedly failed to comply with my Orders. Although the APHO discovery
response deadlines were extended twice, Respondent failed to comply with any of the
established deadlines. Respondent failed to respond to CTP’s RFP in violation of my
January 11, 2018 Order. Respondent also failed to comply with my February 27, 2018
Order Granting CTP’s Motion to Compel Discovery, requiring Respondent to comply
with document production by March 15, 2018. Further, Respondent did not avail itself of
the opportunity to respond to CTP’s motion to compel pursuant to the letter issued at my
direction on February 9, 2018.

Although Respondent submitted a response to CTP’s Motion to Impose Sanctions, the
response included no evidence in support of the stated reasons for being unable to comply
with judicial orders. Furthermore, Respondent’s unsubstantiated claim that documents
responsive to CTP’s RFP were mailed (although never received by CTP) casts
considerable doubt on the veracity of his assertions in general. Indeed, Respondent made
no attempt to resubmit documents responsive to CTP’s RFP between the first week of
March and present. Accordingly, I find that Respondent failed to comply with my Orders
and has not established good cause for failure to comply with my Orders. The conduct of
Respondent in connection with the proceedings in this case since the Answer was filed
warrants sanctions. 21 C.F.R. §§ 17.35(a)(1), 17.35(c)(3). I, therefore, grant CTP’s
Motion to Impose Sanctions. 21 C.F.R. § 17.35(a)(1).

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). I find Respondent’s repeated
failure to comply, despite multiple warnings, is sufficiently egregious to warrant striking
the Answer and issue a decision by default, without further proceedings. 21 C.F.R.

§§ 17.35(c)(3), 17.1 1(a).

Accordingly, due to Respondent’s noncompliance, I am striking Respondent’s Answer
and issuing this Initial Decision and Default Judgment. 21 C.F.R. §§ 17.35(c)(3),
17.11(a).

Ill. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered. Therefore, I 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 No-Tobacco-Sale-
Order. 21 C.F.R. § 17.11(a). 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 December 1, 2014, CTP initiated the first civil money penalty action, CRD
Docket Number C-15-482, FDA Docket Number FDA-2014-H-2008, against
Respondent for three? violations of 21 C.F.R. pt. 1140 within a 24-month period.
CTP alleged those violations to have occurred at Respondent’s business
establishment, 73 Storey Avenue, Newburyport, Massachusetts 01950, on August
14, 2013 and June 11, 2014;

e The first 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 On July 15, 2015, CTP initiated the second civil money penalty action, CRD
Docket Number C-15-3153, FDA Docket Number FDA-2015-H-2239, against

2 In the first civil money action, two violations were documented on August 14, 2013,
and two on June 11, 2014. When determining the number of violations for a civil money
penalty, CTP counted the violations at the initial inspection as a single violation, and all
subsequent violations as separate individual violations, in accordance with customary
practice. However, when determining the number of violations for a No-Tobacco-Sale
Order, CTP counted both of the August 14, 2013 violations (sale to a minor and failure to
verify identification) as Respondent’s original violations.
Respondent for five violations of 21 C.F.R. pt. 1140 within a 36-month period.
CTP alleged those violations to have occurred at Respondent’s business
establishment, 73 Storey Avenue, Newburyport, Massachusetts 01950, on March
11, 2015;

e The second action concluded when Respondent admitted to all of the allegations in
the Complaint and an Initial Decision was entered by the administrative law judge,
finding Respondent liable for all violations and imposing a $5,000 penalty;

e At approximately 4:58 PM on June 8, 2017, at Respondent's business
establishment, 73 Storey Avenue, Newburyport, Massachusetts 01950, an FDA-
commissioned inspector documented Respondent’s staff selling a package of
Newport Box 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 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 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 United States
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.

Taking the above-alleged facts as true, Respondent had six repeated violations of
regulations found at 21 C.F.R. pt. 1140, within a 36-month period. Respondent 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), on August 14, 2013, and repeated those
violations on June 11, 2014, March 11, 2015, and June 8, 2017. Respondent also 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), on August 14, 2013, and repeated
those violations on June 11, 2014, March 11, 2015, and June 8, 2017. Therefore,
Respondent’s actions constitute violations of law that merit a No-Tobacco-Sale Order.

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

Under 21 U.S.C. § 333(£)(8), a No-Tobacco-Sale Order is permissible for six repeated
violations of the regulations found at 21 C.F.R. pt. 1140. See FDA Civil Money Penalties
and No-Tobacco-Sale Orders for Tobacco Retailers: Guidance for Industry, at 3, 5-6
(Dec. 2016),
ttps://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/
UCM252955.pdf. The maximum period of time for the first No-Tobacco-Sale Order
received by a retailer is 30 calendar days. See FDA Determination of the Period Covered
by a No-Tobacco-Sale Order and Compliance with an Order: Guidance for Tobacco
Retailers, at 4 (Aug. 2015),
ttp://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/U

CM460155.pdf.

ORDER

For these reasons, I enter default judgment against Respondent, Joe Eideh d/b/a 7-Eleven
34428, in the form of a No-Tobacco-Sale Order, 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/
Wallace Hubbard
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2017-H-3894)

Complainant
v.

Derya Corp.
d/b/a Sunniland Country Store,

Respondent.
Docket No. T-17-4993
Decision No. TB2779

Date: June 5, 2018

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an Administrative
Complaint on Respondent, Derya Corp. d/b/a Sunniland Country Store, located at 13213
County Road 858, Immokalee, Florida 34142, and by filing a copy of the Complaint with
the Food and Drug Administration’s (FDA) Division of Dockets Management. The
Complaint alleges that Sunniland Country Store impermissibly sold cigarettes or
smokeless tobacco to minors and failed to verify, by means of photo identification
containing a date of birth, that the purchasers were 18 years of age or older, 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 $5,591 civil
money penalty against Respondent Sunniland Country Store. During the hearing process,
Respondent failed to comply with judicial orders, which constitutes misconduct that has
interfered with the speedy, orderly, or fair conduct of this proceeding, and failed to
defend this action by not appearing for a hearing. I, therefore, strike Respondent’s
Answer and issue this decision of default judgment.
I. Procedural History

CTP began this matter on June 30, 2017, by serving an Administrative Complaint,
seeking a $5,591 civil money penalty, on Respondent, Derya Corp. d/b/a Sunniland
Country Store, at 13213 County Road 858, Immokalee, Florida 34142. See Compl.,
DAB E-File Docket (Dkt.) No. 1; Proof of Service, Dkt. No. 1b. Respondent, through
counsel, timely filed its Answer to CTP’s Complaint on July 12, 2017. Answer, Dkt. No.
3. Lissued an Acknowledgement and Pre-Hearing Order on July 17, 2017, that set
deadlines for the parties’ submissions including the discovery deadlines.

On August 16, 2017, CTP, with Respondent’s authorization, filed a Joint Status Report.
Joint Status Report, Dkt. No. 6. On August 28, 2017, CTP filed a Motion for Protective
Order claiming Respondent’s Request for Production of Documents (RFP) served on
CTP on August 16, 2017 seeks privileged and exempt from public disclosure documents.
Mot. for Protective Order, Dkt. No. 7. An August 30, 2017 letter issued by my direction
allowed Respondent until September 8, 2017, to file any response to CTP’s Motion for
Protective Order. Aug. 30, 2017 By Direction Letter (BDL), Dkt. No. 8, at 2. On
September 7, 2017, Respondent filed a Response to CTP’s Motion for Protective Order.
Resp’t’s Response, Dkt. No. 9. On September 18, 2017, I issued an Order granting in
part and denying in part CTP’s Motion for Protective Order, allowing: (1) CTP until
October 3, 2017 to produce documents responsive to Respondent’s RFP that have not
been subject to a protective order and submit any privilege log; (2) Respondent until
October 18, 2017 to file any challenge to any document on CTP’s privilege log; (3) CTP
until November 8, 2017 to file its prehearing exchange; and (4) Respondent until
November 29, 2017 to file its prehearing exchange. Sept. 18, 2017 Order, Dkt. No. 10.

On September 21, 2017, Respondent moved to amend its Answer to add additional
defenses stating that CTP had no objection to the amendment. Resp’t’s Mot. to Amend
Answer, Dkt. No. 11. On September 22, 2017, I granted Respondent leave to amend its
Answer. Sept. 22, 2017 Order, Dkt. Not. 12. On October 3, 2017, Respondent filed its
Amended Answer and Defenses. Am. Answer & Defenses, Dkt. No. 13. On the same
day, CTP filed its Privileged Document Log. Privilege Doc. Log, Dkt. No. 14.

CTP timely filed its pre-hearing exchange on November 8, 2017. CTP’s pre-hearing
exchange included an Informal Brief of Complainant (Dkt. No. 15), a list of proposed
witnesses and exhibits (Dkt. No. 15a), and 14 numbered exhibits (CTP Exs. 1-14, Dkt.
Nos. 15b-150). On November 28, 2017, Respondent timely filed its pre-hearing
exchange, which included an Informal Brief of Respondent (Dkt. No. 16) and two
exhibits (Resp’t’s Exs. 1-2, Dkt. Nos. 16a-16b). Respondent also moved to abate the
hearing and decision in this matter pending final ruling by the United State Court of
Appeals for the District of Columbia Circuit in Orton Motor Inc. v. U.S. Dep't of Health
& Human Servs., and indicated that CTP opposed the motion. Resp’t’s Mot. to Abate,
Dkt. No. 16c. A November 29, 2017 letter issued by my direction allowed CTP until

December 13, 2017 to respond to Respondent’s motion. Nov. 29, 2017 BDL, Dkt. No.
17. On December 13, 2017, CTP timely filed its Opposition to Respondent’s Motion to
Abate. CTP’s Opp’n, Dkt. Nos. 18-18c. I denied Respondent’s Motion to Abate on
December 15, 2017, and scheduled a telephone pre-hearing conference for January 11,
2018. Dec. 15, 2017 Order, Dkt. No. 19.

On January 11, 2018, I held a pre-hearing conference in this case. During the pre-hearing
conference, the parties communicated their intent to cross-examine each others’
witnesses. See Jan. 12, 2018 Order, Dkt. No. 22, at 1. Respondent asked to amend its
Answer and pre-hearing exchange, including its informal brief and exhibits, and CTP
objected. Jd. I allowed Respondent until January 29, 2018 to file a motion demonstrating
good cause for amending the Answer and the pre-hearing exchange and presenting any
proposed additional arguments and exhibits. Jd. at 1-2.

On January 30, 2018, I issued an Order scheduling a telephone hearing for March 29,
2018, at 1:00 PM Eastern Time. Jan. 30, 2018 Order, Dkt. No. 23. Shortly after,
Respondent filed a Motion for Reconsideration of Order Scheduling Telephone Hearing
claiming an unsuccessful attempt to file its motion to amend answer and informal brief on
the January 29, 2018 deadline, and requesting to reschedule the telephone hearing
scheduled for March 29, 2018. Resp’t’s Mot. for Reconsideration, Dkt. No. 24. I granted
Respondent’s motion on January 30, 2018, allowing Respondent until February 1, 2018
to re-file its motion to amend. Jan. 30, 2018 Order, Dkt. No. 25, at 1-2. CTP was
allowed until February 14, 2018, to respond to Respondent’s motion to amend. Jd. at 2.
By a separate Order, I cancelled the March 29, 2018 hearing. Jan. 30, 2018 Order, Dkt.
No. 26.

On January 30, 2018, Respondent filed a Motion to Amend Answer to Administrative

Complaint and the Informal Brief of Respondent, and submitted a proposed amended

answer and informal brief. Dkt. Nos. 27-27a. On February 14, 2018, CTP filed its

opposition to Respondent’s Motion to Amend. Dkt. Nos. 29-29e. On February 15, 2018,

I issued an Order denying Respondent’s motion ordering the parties to confer before

February 23, 2018 with respect to the dates that the parties are available for a telephone
earing. Feb. 15, 2018 Order, Dkt. No. 30, at 2.

On February 22, 2018, based on the parties’ proposed hearing dates (Dkt. No. 31), I
issued an Order Scheduling In-Person Telephone Hearing for April 19, 2018, at 1:00 PM
Eastern Time. Feb. 22, 2018 Order, Dkt. No. 32, at 1. The parties were provided with a
call-in telephone number and passcode. Jd. at 2. The February 22, 2018 Order was
served on Respondent’s counsel via the Departmental Appeals Board Electronic Case
Filing (E-File) system. Jd. at 3.

On March 27, 2018, Respondent’s counsel filed a Motion to Withdraw as Counsel for
Respondent due to irreconcilable differences. Mot. to Withdraw as Counsel for Resp’t,

Dkt. No. 33. The Motion to Withdraw provided Respondent’s last known address as
13213 County Road 858, Immokalee, Florida 34142, the same address that appears in the
Complaint (Dkt. No. 1 §/7) and on the Proof of Service (Dkt. No. 1b). Respondent’s
counsel served Respondent at its mailing address of record and at Respondent’s e-mail
address. Dkt. No. 33, at 2.

On March 28, 2018, I issued an Order granting counsel’s Motion to Withdraw and
reminded Respondent about the hearing scheduled for April 19, 2018, at 1:00 PM Eastern
Time. Mar. 28, 2018 Order, Dkt. No. 34, at 2. The March 28, 2018 Order again
provided parties with a call-in telephone number and passcode for the telephone hearing.
Id. at 2. The Order directed Respondent to register for E-File by no later than April 6,
2018. Id. The Order also established a deadline of April 12, 2018 to file evidentiary
objections. Jd. The March 28, 2018 Order was sent to Respondent’s mail and e-mail
addresses of record. Dkt. Nos. 34-35a.

On April 12, 2018, CTP filed its Objection to Evidence arguing Respondent’s Exhibit 2
entitled “Employee Letter” (Dkt. No. 16b) should be excluded from evidence as it was a
testimony of three signatories of the letter not submitted under penalty of perjury. CTP’s
Obj. to Evid., Dkt. No. 36. Respondent filed no evidentiary objections.

Respondent and its witness, Paula Miguel, failed to appear at the April 19, 2018 hearing
call. Apr. 19, 2018 Order, Dkt. No. 37, at 2. On April 19, 2018, I issued an Order to
Show Cause allowing Respondent until April 30, 2018 to show cause for its failure to
appear at the April 19, 2018 hearing. Jd. at 2. Respondent was warned that failure to
respond to the Order to Show Cause may result in sanctions. /d. Also in the Order, I
sustained CTP’s objection to Respondent’s Exhibit 2 and did not admit Respondent’s
Exhibit 2 into evidence. Jd. at 1. The Order admitted Respondent’s Exhibit 1 and CTP’s
Exhibits 1 through 14 into evidence. Jd. The April 19, 2018 Order was sent to
Respondent’s mailing address of record. Jd. at 3.

On May 2, 2018, the United States Postal Service returned Respondent’s copy of the
March 28, 2018 Order with a sticker stating “Return to Sender Attempted — Not Known
Unable to Forward” and a handwritten note stating “RETURN NO MORE.” Returned
Mail, Dkt. No. 39.

On May 7, 2018, although there was no evidence the address was improper, I issued an
Order extending Respondent’s deadline to respond to my Order to Show Cause from
April 30, 2018 to May 9, 2018. Dkt. No. 40, at 1. L again warned Respondent that failure
to respond to the Order may result in sanctions and enclosed a copy of my April 19, 2018
Order to Show Cause. Dkt. Nos. 40-40a. The May 7, 2018 Order along with the April
19, 2018 Order to Show Cause were e-mailed to Respondent’s e-mail address of record.
Dkt. Nos. 41-41b.

On May 22, 2018, Respondent’s copy of the April 19, 2018 Order was returned with a
sticker stating “Return to Sender Undeliverable as Addressed Unable to Forward” and a
handwritten note stating “NO MORE.” Returned Mail, Dkt. No. 42.

As of the date of this Decision, no response from Respondent has been received.
Il. Striking Respondent’s Answer
Pursuant to 21 C.F.R. § 17.35(a), 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.

Indeed, “[i]f a party fails to prosecute or defend an action . . . after service of a notice of
hearing, the presiding officer may dismiss the action or may issue an initial decision
imposing penalties and assessments.” 21 C.F.R. § 17.35(e).

Here, Respondent failed to comply with multiple judicial orders. 21 C.F.R. § 17.35(a)(1).
Specifically, Respondent failed to comply with my February 22, 2018 Order Scheduling
In-Person Telephone Hearing, as clarified in my March 28, 2018 Order, by failing to
appear at the April 19, 2018 hearing as scheduled. Respondent also failed to comply with
my March 28, 2018 Order, by not registering for E-File by the April 6, 2018 deadline.
Respondent further failed to comply with my April 19, 2018 Order to Show Cause, as
extended by my May 7, 2018 Order, by never showing cause for its failure to appear at
the hearing by the May 9, 2018 deadline. Respondent has not filed any notice advising
that his mailing or e-mail address of record has changed. Respondent’s failure to comply
with my orders constitutes misconduct that has interfered with the speedy, orderly, or fair
conduct of this proceeding. 21 C.F.R. § 17.35(a)(1), (a)(3).

In addition, Respondent’s failure to appear at the April 19, 2018 telephonic hearing after
service of the February 22, 2018 order scheduling a hearing and the March 28, 2018
reminder, constitutes failure to defend this action. 21 C.F.R. § 17.35(a)(2), (e).
Respondent’s failure to defend this action is further demonstrated by Respondent’s
failure to take any action with regard to this case after the withdrawal of its counsel,
which contrasts with its active participation, through counsel, prior to the withdrawal.
Indeed, Respondent has not participated in the defense of this action in any meaningful
fashion after the withdrawal of counsel. Because of the passage of time with no action on
the part of Respondent, I find that sanctions are appropriate under 21 C.F.R. § 17.35.
The harshness of the sanctions I impose upon either party must relate to the nature and
severity of the misconduct or failure. 21 C.F.R. § 17.35(b). I find and conclude that
Respondent’s misconduct, failure to comply with my orders, and failure to defend this
action are sufficiently egregious to warrant striking the Answer and issuing a decision
without further proceedings.

Ill. Default Decision

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

For purposes of this decision, I assume the facts alleged in the Complaint are true and
conclude the default judgment is merited based on the allegations of the Complaint. 21
C.F.R. § 17.11. Specifically:

e On January 4, 2017, CTP initiated a previous civil money penalty action, CRD
Docket Number T-17-1400, FDA Docket Number FDA-2016-H-4569, against
Respondent for three! violations of 21 C.F.R. pt. 1140 within a 24-month period.
Compl., Dkt. No. 1 § 11. CTP alleged those violations to have occurred at
Respondent’s business establishment, 13213 County Road 858, Immokalee,
Florida 34142, on October 7, 2014, March 10, 2015, and June 20, 2016. Jd. 47,
11.

e The previous action concluded when Respondent admitted the allegations
contained in the Complaint issued by CTP, and agreed to pay a monetary penalty
in settlement of that claim. Jd. § 12. Further, “Respondent expressly waived its
right to contest such violations in subsequent actions.” Jd.

e At approximately 4:55 p.m. on May 20, 2017, at Respondent’s business
establishment, 13213 County Road 858, Immokalee, Florida 34142, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
Newport Box cigarettes to a person younger than 18 years of age. Id. 49. 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. Id.

' Two violations were documented on October 7, 2014, one violation on March 10,
2015, and one on June 20, 2016. In accordance with customary practice, CTP counted
the violations at the initial inspection as a single violation, and all subsequent violations
as separate individual violations.
These facts establish Respondent Sunniland Country Store’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. § 387£(d); see also 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R.

§ 1140.1(b). The Secretary of the U.S. Department of Health and Human Services issued
the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-
1; see also 21 U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed
Reg. 28,974, 28975-76 (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.

A $5,591 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $5,591 against Respondent,
Derya Corp. d/b/a Sunniland Country Store. 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

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


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

Center for Tobacco Products,
(FDA No. FDA-2017-R-6670)

Complainant
v.

George’s Grocery USA, LLC
d/b/a George’s USA,

Respondent.
Docket No. T-18-522
Decision No. TB2777
Date: June 5, 2018
INITIAL DECISION AND DEFAULT JUDGMENT

I hereby impose a No-Tobacco-Sale Order (NTSO) against Respondent, George’s
Grocery USA, LLC d/b/a George’s USA (Respondent), for a consecutive six-month
period, for seven repeated violations of federal tobacco regulations over a period of 36
months.

I. Background

The Center for Tobacco Products (“Complainant” or ““CTP”) seeks to impose an NTSO,
for a consecutive six-month period, against Respondent, located at 2509 Main Street,
Bridgeport, Connecticut 06606, for seven 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. The complaint alleges that Respondent
impermissibly sold cigarettes or smokeless tobacco to minors, failed to verify, by means
of photo identification containing a date of birth, that the purchasers were 18 years of age
or older, and sold individual cigarettes, thereby violating the Act, and its implementing
regulations at 21 C.F.R. pt. 1140.
The complaint likewise alleges that Complainant previously initiated an NTSO action
against Respondent, in which, Respondent admitted to eight repeated! violations of the
Act within a 36-month period, and was subject to an NTSO for an agreed upon time
period. Therefore, Complainant now seeks a second NTSO against Respondent for a
consecutive six-month period.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on December 4, 2017, Complainant
served the complaint on Respondent George’s USA by United Parcel Service. On
January 4, 2018, Respondent filed an answer denying the allegations. On

January 11, 2018, I issued an Acknowledgment and Pre-hearing Order (APHO)
acknowledging receipt of Respondent’s answer and setting forth case procedures and
deadlines. The APHO contained a provision that set out instructions regarding a party's
request for production of documents. That provision states, in part, that a party had until
February 20, 2018, to request that the other party provide copies of documents relevant to
this case. The order also stated that a party receiving such a request 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).

On March 23, 2018, Complainant filed a Motion to Compel Discovery stating that it
served its Request for Production of Documents on Respondent on February 15, 2018. It
also stated that it had not received a response from Respondent regarding its Request for
Production of Documents and requested that I issue an order requiring Respondent to
comply with its Request for Production of Documents. In a March 26, 2018 letter issued
by my direction, Respondent was given until April 10, 2018 to file a response to
Complainant’s Motion to Compel Discovery.

On April 10, 2018, Respondent filed a response but did not provide an explanation for
failing to provide Complainant with the requested documents, and did not address
Complainant’s Motion to Compel Discovery. Accordingly, in an order dated

April 10, 2018, I granted Complainant’s Motion to Compel Discovery and ordered
Respondent to comply with Complainant’s Request for Production of Documents by
April 25, 2018. Respondent was warned that a failure to do so may 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 penalty.”

On May 1, 2018, Complainant filed a Motion to Impose Sanctions indicating that
Respondent had not complied with my April 10, 2018 order. In a May 2, 2018 letter
issued by my direction, Respondent was given until May 14, 2018 to file a response to

' Complainant is not counting two of the prior repeated violations in the current NTSO
action because they fall outside the specified 36-month period.

? The April 10, 2018 Order inadvertently referenced imposition of “a civil money
penalty.” It should have correctly referenced imposition of “a no-sale-tobacco order.”
Complainant’s Motion to Impose Sanctions. To date, Respondent has not responded to
Complainant’s Motion to Impose Sanctions or the May 2, 2018 letter.

Therefore, pursuant to 21 C.F.R. § 17.35, am granting Complainant’s Motion to Impose
Sanctions, and striking Respondent’s answer for failing to comply with three separate
judicial directions. Specifically, Respondent failed to comply with the deadline set forth
in the APHO for responding to a discovery request, the order granting Complainant’s
motion to compel discovery issued on April 10, 2018, and the letter sent by my direction
on May 2, 2018. This repeated conduct is sufficiently egregious to warrant striking
Respondent’s answer and issuing an initial decision by default.

I. Default Decision

Striking Respondent’s answer leaves the complaint unanswered. Pursuant to 21 C.F.R.
§ 17.11, Lassume that the facts alleged in the complaint (but not its conclusory
statements) are true. Specifically:

e¢ On May 12, 2014, Complainant initiated the first civil money penalty (CMP)
action, CRD Docket Number C-14-1057, FDA Docket Number
FDA-2014-H-0579, against Respondent for four? violations of 21 C.F.R. pt. 1140
within a 24-month period. Complainant alleged those violations* to have occurred
at Respondent’s business establishment, 2509 Main Street, Bridgeport,
Connecticut 06606, on June 11, 2013, October 7, 2013, and October 9, 2013;

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

¢ On December 9, 2014, Complainant initiated the second CMP action, CRD
Docket Number C-15-605, FDA Docket Number FDA-2014-H-2131, against
Respondent for seven violations of 21 C.F.R. pt. 1140 within a 48-month period.
Complainant alleged those violations to have occurred at Respondent’s business
establishment, 2509 Main Street, Bridgeport, Connecticut 06606, on
June 11, 2013, October 7, 2013, October 9, 2013, and August 19, 2014;

3 Two violations were documented on June 11, 2013, two on October 7, 2017, and one
on October 9, 2013. In accordance with customary practice, CTP counted the violations
at the initial inspection as a single violation, and all subsequent violations as separate
individual violations.

4 Respondent’s original violations occurred on June 11, 2013 (selling tobacco products to
a minor and failing to verify identification) and on October 9, 2013 (selling individual
cigarettes).
e The second CMP action concluded when an Initial Decision and Default Judgment
was entered by an Administrative Law Judge finding Respondent liable for the
violations;

¢ On September 14, 2015, Complainant initiated the third CMP action, CRD Docket
Number C-15-4064, FDA Docket Number FDA-2015-H-3290, against
Respondent for eight violations of 21 C.F.R. pt. 1140 within a 48-month period.
CTP alleged those violations to have occurred at Respondent’s business
establishment, 2509 Main Street, Bridgeport, Connecticut 06606, on
June 11, 2013, October 7, 2013, October 9, 2013, August 19, 2014, and
May 6, 2015;

e The third CMP action concluded when an Initial Decision and Default Judgment
was entered by an Administrative Law Judge finding Respondent liable for the
violations;

e Complainant initiated the first NISO action, CRD Docket Number T-17-2950,
FDA Docket Number FDA-2017-R-1621, against Respondent for eight repeated
violations’ of 21 C.F.R. pt. 1140 within a 36-month period. Complainant alleged
those violations to have occurred at Respondent’s business establishment, 2509
Main Street, Bridgeport, Connecticut 06606, on June 11, 2013, October 7, 2013,
October 9, 2013, August 19, 2014, May 6, 2015, and August 16, 2016;

e The first NTSO action concluded when Respondent admitted all of the allegations
in the complaint, agreed to an NTSO, and an Administrative Law Judge issued an
NTSO for the agreed-upon time period. Further, “Respondent expressly waived
its right to contest such violations in subsequent actions”;

¢ On August 1, 2017, at Respondent’s business establishment, 2509 Main Street,
Bridgeport, Connecticut 06606, an FDA-commissioned inspector observed open
packages of Newport cigarettes and Marlboro cigarettes. The owner confirmed
that individual cigarettes were available for individual purchase.

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 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. § 387f(d)(1); 75 Fed. Reg. 13,225,

5 CTP did not count repeated violations from Respondent’s first CMP in the current
NTSO case because they fall outside the 36-month period.
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 cigarettes or smokeless tobacco purchasers are younger than 18 years of age.
Under 21 C.F.R. § 1140.14(a)(4), no retailer may break or otherwise open any cigarette
package to sell or distribute individual cigarettes.

Under 21 U.S.C. § 333(£)(8), a No-Tobacco-Sale Order is permissible for seven repeated
violations of the regulations found at 21 C.F.R. pt. 1140. The maximum period of time
for the second No-Tobacco-Sale Order received by a retailer is six months. 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
ttp://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/U
CM252955.pdf (last updated Dec. 15, 2016); Determination of the Period Covered by a
No-Tobacco-Sale Order and Compliance with Order at 3-4, available at
ttps://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/
UCM460155.pdf (last updated August 2015).

Order

For these reasons, | enter default judgment against Respondent George’s Grocery USA,
LLC d/b/a George’s USA, in the form of a No-Tobacco-Sale Order, for a consecutive six-
month period. 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/
Catherine Ravinski
Administrative Law Judge

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


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Center for Tobacco Products,

(FDA No. FDA-2017-R-2455)
Complainant,

v.

Monroe Mobil, Inc.
d/b/a BP,

Respondent.
Docket No. T-17-3655
Decision No. TB2767

Date: May 31, 2018
INITIAL DECISION

I hereby impose a No-Tobacco-Sale Order (NTSO) against Respondent, Monroe Mobil,
Inc. d/b/a BP (Respondent), for a period of 30 consecutive calendar days, for five
repeated violations of federal tobacco regulations over a period of 36 months.

I. Background

The Center for Tobacco Products (CTP) seeks to impose an NTSO, for a period of 30
consecutive calendar days, against Respondent, located at 2731 Monroe Street, Dearborn,
Michigan 48124. CTP alleges that Respondent committed five repeated 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. CTP’s
Complaint alleges that Respondent’s staff impermissibly sold cigarettes to minors,
thereby violating the Act, 21 U.S.C. § 301 et seq., and its implementing regulations, 21
CFR. pt. 1140.
The Complaint likewise alleges that Respondent previously admitted to violations of
regulations found at 21 C.F.R. pt. 1140. Specifically, CTP asserts that Respondent
committed: (a) one original violation and two repeated violations of a sale to a minor, in
violation of 21 C.F.R. § 1140.14(a)(1),! on July 4, 2014, November 8, 2014, and
September 11, 2015; and (b) 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 4, 2014, November 8, 2014, and September 11, 2015. See
Compl., DAB E-File Docket (Dkt.) No. 1 § 1 & 9-10. CTP, therefore, seeks the
imposition of an NTSO against Respondent for a period of 30 consecutive calendar days.

IL. Procedural History

On April 20, 2017, CTP initiated this matter by serving an Administrative Complaint,
seeking an NTSO for a period of 30 consecutive calendar days, on Respondent at

2731 Monroe Street, Dearborn, Michigan 48124, and filing a copy of the Complaint with
the Departmental Appeals Board. Compl., Dkt. No. 1; Proof of Service, Dkt. No. 1b.

On May 22, 2017, Respondent, through counsel, timely filed an Answer. Answer, Dkt.
No. 3. On May 25, 2017, I issued an Acknowledgment and Pre-Hearing Order (APHO)
setting out the deadlines for the parties’ submissions in this case. APHO, Dkt. No. 4. I
also explained that the parties may request copies of documents relevant to this case and
that the requesting party must serve the request for documents no later than June 30,
2017. Id. at 7. I further explained that “a party receiving such a request must provide the
requested documents no later than 30 days after the request has been made.” Jd. See also
21 C.F.R. § 17.23(a). On June 20, 2017, CTP, with Respondent’s authorization, filed a
joint status report. Joint Status Report, Dkt. No. 5.

On August 8, 2017, pursuant to 21 C.F.R. § 17.32, CTP filed a Motion to Compel
Discovery indicating that CTP, consistent with the APHO, served a Request for
Production of Documents (RFP) on Respondent on June 30, 2017, but received no
response. Mot. to Compel, Dkt. No. 6, at 1; see also Dkt. Nos. 6a-6c. Although the
APHO allowed a party ten (10) days from receipt of a RFP to file a Motion for a
Protective Order (APHO, Dkt. No. 4, at 7), no such motion was filed by Respondent.
CTP, therefore, requested “that an order be entered to require Respondent to comply with
the [RFP] in its entirety.” Mot. to Compel, Dkt. No. 6, at 1-2.

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

On August 14, 2017, CTP timely filed its pre-hearing exchange. CTP’s pre-hearing
exchange included an Informal Brief of Complainant (Dkt. No. 7), a list of proposed
witnesses and exhibits (Dkt. No. 7a), and exhibits 1 through 21 (Dkt. Nos. 7b-7v,
respectively), containing the declaration of one witness, Inspector Justin J. Bishop (Dkt.
No. 7v).

An August 16, 2017 letter issued by my direction allowed Respondent until

August 30, 2017 to file a response to CTP’s Motion to Compel Discovery. Aug. 16, 2017
By Direction Letter, Dkt. No. 8; see also 21 C.F.R. § 17.32(c). On the same date,
consistent with 21 C.F.R. § 17.19(b)(17), I, sua sponte, issued an Order extending the
CTP’s and Respondent’s pre-hearing exchange deadlines to September 13, 2017 and
October 5, 2017, respectively. Aug. 16, 2017 Order, Dkt. No. 8a.

On August 22 and 23, 2017, Respondent filed its pre-hearing exchange. Respondent’s
exchange included a plan of action letter (Dkt. No. 10) and two images (Dkt. Nos. 9-9a).
On August 30, 2017, Respondent’s counsel, Michael L. Kalis, submitted Respondent’s
response to RFP. Dkt. No. 12. On August 31, 2017, Respondent, through counsel, filed
its witness list (Dkt. No. 13), but submitted no sworn statements of direct testimony from
any of the proposed witnesses.

On October 31, 2017, I held a pre-hearing conference (PHC) in this case. I explained that
the sole purpose of a hearing under the applicable regulations was to admit the parties’
exhibits and to allow for the cross-examination and re-direct of any witnesses who had
provided sworn testimony. Respondent’s counsel communicated the intent to cross-
examine CTP’s witness, Inspector Bishop. See Nov. 9, 2017 Order, Dkt. No. 15, at 1. I
also noted that Respondent failed to submit any exhibits or sworn testimony for any
witness intended to provide testimony at the hearing, as instructed in the APHO. See
APHO, Dkt. No. 4, at 4 & 6-7.

On November 9, 2017, I issued an Order scheduling the hearing for December 18, 2017.
See Nov. 9, 2017 Order, Dkt. No. 15, at 2. In that order, I allowed Respondent until
November 17, 2017 to submit any supplemental pre-hearing exchange materials, subject
to showing good cause for failing to submit its exchange materials by the exchange
deadline. Jd. at 1-2. I also allowed CTP until November 27, 2017 to respond to any
supplemental pre-hearing exchange submitted by Respondent. Jd. at 2.

On November 17, 2017, Respondent, through counsel, filed a Petition to Permit
Respondent to Introduce Two Affidavits at Trial, attaching affidavits of two witnesses,
Abed Farhat and Hassan Jawad. Pet. to Permit Resp’t to Introduce Two Affs. at Trial,
Dkt. No. 16. Respondent’s petition claimed that “Respondent’s counsel was unaware of
the Department’s Rules and Regulations” and “believed that answering the
Interrogatories satisfied the ... requirement... .” Jd. at 1. On November 21, 2017, I
issued an Order allowing CTP until December 4, 2017 to file a response to Respondent’s
petition. Nov. 21, 2017 Order, Dkt. No. 17. On December 4, 2017, CTP filed its
Opposition to Respondent’s Petition to Submit Untimely Written Direct Testimony,
requesting to deny Respondent’s petition on the grounds that Respondent failed to
demonstrate good cause for its submission of written testimony of two (2) proposed
witnesses over a month after the pre-hearing exchange deadline. Opp’n to Resp’t’s Pet.,
Dkt. No. 18, at 2 (citing C7P v. Ralph Baskerville d/b/a 4744 Corner Store, No. 2013-1,
2012 WL 7849559, at *2 (DAB Nov. 19, 2012)). On December 21, 2017, after careful
review of the parties’ submissions, I issued an Order denying Respondent’s Petition to
Permit the Introduction of Two Affidavits at Hearing, excluding the written statements of
the two proposed witnesses, Abed Farhat and Hassan Jawad, from the record, and
rescheduling the hearing. Dec. 21, 2017 Order, Dkt. No. 20

On February 1, 2018, I held a hearing in this case. During the course of the hearing, I
admitted CTP’s exhibits 1 through 21 over Respondent’s evidentiary objections as to
admissibility of the minor’s redacted driver’s license (CTP Ex. 3, Dkt. No. 7d). See Feb.
1, 2018 Hearing Transcript (Hr’g Tr.) 7:22-9:15. Respondent’s counsel, Mr. Kalis, cross-
examined Inspector Bishop. See Hr’g Tr. 10:8-16:21. CTP’s counsel, Samantha Hong,
then conducted a re-direct examination of Inspector Bishop. See Hr’g Tr. at 17:3-20:8.

On March 8, 2018, I issued an Order informing the parties that the Civil Remedies
Division had received the transcript of the hearing, which was subsequently uploaded
into DAB E-File (Dkt. No. 22), and set the deadline for the parties’ post-hearing brief
submissions as April 9, 2018. Mar. 8, 2018 Order, Dkt. No. 23, at 1-2. Also, the parties
were given until April 9, 2018 to file any corrections to the transcript. Jd. at 2. On April
9, 2018, Respondent, through counsel, filed Respondent’s Post-Judgment Brief. Resp’t’s
Post-J. Br., Dkt. No. 24. CTP did not file a post-hearing brief. As the briefing period is
over, I now render my decision.

Ill. Issues

A. Whether Respondent, Monroe Mobil, Inc. d/b/a BP, sold cigarettes to a minor, on
December 1, 2016, in violation of 21 C.F.R. § 1140.14(a)(1).

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

CTP determined to impose an NTSO against Respondent pursuant to the authority
conferred by the Act, 21 U.S.C. § 301 et seq., and implementing regulations, 21 C.F.R.
pt. 1140. 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).
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.

The Act provides for civil money penalties (CMPs) and NTSOs. Under 21 U.S.C.

§ 333(f)(8), an NTSO may be imposed 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, at 3 & 5-6 (Dec.
2016),
https://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/
UCM252955.pdf. 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 developed policy guidelines that
establish maximum NTSO durations. For a first NTSO, CTP recommends a

maximum duration of 30 calendar days. See FDA Determination of the Period
Covered by a No-Tobacco-Sale Order and Compliance with an Order: Guidance

for Tobacco Retailers, at 4 (Aug. 2015),
http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuid
ance/UCM460155.pdf.

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

Vv. Analysis
A. Allegations, Parties’ Contentions, and Findings of Fact
CTP alleges that Respondent committed five repeated violations of the Act and its

implementing regulations over a 36-month period. See Compl., Dkt. No. 1 41. CTP
identified Respondent’s original violations and Respondent’s repeated violations that
occurred within a specified 36-month period after the original violations. Jd. 4 1 n. 1; see
also id. § 1 (table).

As noted previously, the Complaint alleges that Respondent has been the subject of two
prior CMP actions. In addition to the original violations on July 4, 2014, Respondent has
twice 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 twice 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). See Compl., Dkt. No. 1 §§j 1 & 8-10.
CTP further alleges that the most recent repeated violation occurred at approximately
4:07 p.m. on December 1, 2016, at Respondent’s business establishment, 2731 Monroe
Street, Dearborn, Michigan 48124, when 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. Id. § 6.

Since Respondent admitted to the previous violations as part of its settlement processes
that concluded two prior CMP actions and expressly waived its right to contest them in
subsequent actions (see id. {J 9-10), the only issue before me is whether Respondent sold
cigarettes to a minor, on December 1, 2016, in violation of 21 C.F.R. § 1140.14(a)(1), as
alleged in the Complaint. Id. 6.

In its Answer, Respondent alleges “Respondent trains his cashier[s] to ask for
identification before selling cigarettes” and “Respondent has video surveillance? of
cashier checking I.D.” Answer, Dkt. No. 3 § 1. In its defense, Respondent explains that
the “[c]ashier did ask for identification from customer,” but the “[c]ashier must have
misread the driver’s license.” Jd. {J 1-2. Respondent states that an NTSO is
“inappropriate” because its prior violations from November 8, 2014 and September 11,
2015 should have counted as two violations rather than four. Id. 3. Respondent also
avers that “Respondent has been in business for 25 years, [and] these are his only
violations.” Jd.

Respondent’s Plan of Action Letter similarly alleges that Respondent’s staff is “well
trained for the job and understands the laws of selling tobacco products.” Resp’t’s Plan
of Action Letter, Dkt. No. 10. Respondent further asserts that the surveillance video (that
was never introduced into evidence) shows that the cashier asked for identification, but
that “[t]he cashier must have misread the driver’s license of the customer” and “even
though a mistake was made, it should not reflect upon the whole business... .” Jd.
Respondent highlights its certification for not selling tobacco products to minors during a
2017 compliance check by The Knoph Company, Inc., a county designated youth tobacco
use representative. Jd. Respondent states that the cashier who made the sale was

2 Notably, Respondent never offered any surveillance video as evidence.
terminated “because mistake such as this is not something to repeat.” Jd. Respondent
claims that “[h]aving a no-tobacco-sale order for 30 days will have a large impact on the
business as most of [Respondent’s] sales come from tobacco products and not the gas
itself.” Jd. Respondent filed two images (Dkt. Nos. 9-9a) with its Plan of Action Letter
allegedly showing Respondent updated its point of sales systems to verify the age of
every tobacco transaction allowing Respondent to know that a customer is underage by
stating “Purchase Not Allowed.” Jd. Respondent also states that it “will continue to
monitor more ways to secure tobacco transactions and have an even stricter training
regime for [its] employees.” Jd.

CTP’s case against Respondent relies on the sworn declaration of Inspector Bishop who
conducted a “follow-up undercover compliance check inspection at Respondent’s
establishment located at 2731 Monroe Street, Dearborn, MI 48124, on December 1,
2016.” Informal Br. of Complainant, Dkt. No. 7, at 5; see also Bishop Decl., CTP Ex.
21, Dkt. No. 7v J§ 8-9. According to Inspector Bishop’s testimony, he was
“accompanied by a confidential state-contracted minor, identified as 616 (‘Minor 616’).”
Id. Inspector Bishop is an FDA-commissioned officer with the State of Michigan
Department of Health and Human Services, employed by Prevention Michigan, Inc., a
third-party state contractor. Bishop Decl., CTP Ex. 21, Dkt. No. 7v § 2. His duties
include conducting “undercover buy (‘UB’) inspections required under FDA’s Tobacco
Retail Inspection Contract with the state of Michigan.” Jd. § 2. In further support of its
position, CTP provided Inspector Bishop’s Narrative Report of the undercover
inspection. Narrative Report, CTP Ex. 17, Dkt. No. 7r. CTP also provided a redacted
copy of the Minor 616’s identification (ID). See Minor 616 Mich. State Issued ID
Redacted, CTP Ex. 3, Dkt. No. 7d.

During the February 1, 2018 hearing, counsel for Respondent raised an objection to the
admission of the redacted copy of the Minor 616’ driver’s license (CTP Ex. 3, Dkt. No.
7d), arguing the driver’s license is a hearsay and there is no foundation offered (such as
the Minor 616’s narrative report). See Hr’g Tr. 7:22-9:12. I overruled the objections but
allowed Respondent to raise them in its post-hearing brief. See Hr’g Tr. 9:12-15. During
the cross-examination, Respondent’s counsel asked a question that was outside the scope
of Inspector Bishop’s declaration. Specifically, Respondent’s counsel asked about the
Minor 616’s narrative report not being included as evidence in this case. See Hr’g Tr.
10:11-18. I sustained CTP’s objection to this question. See id. Similarly, CTP’s counsel
asked a question about the Minor 616’s narrative report on re-direct, and I sustained
Respondent’s objection to this question. See Hr’g Tr. 18:8-19:5.

In its post-hearing brief, Respondent’s counsel challenged the integrity of the undercover
inspection by implicitly attacking the credibility of Minor 616. Respondent’s argument
focuses on verification of the minor’s ID and assertions that the redacted driver’s license
of Minor 616 was not properly admitted into evidence. See Resp’t’s Post-J. Br., Dkt. No.
24, at 3. Respondent argues that there is no testimony as to what driver’s license was
produced by Minor 616 when she purchased cigarettes from Respondent. See Resp’t’s
Post-J. Br., Dkt. No. 24, at 1 & 3; see also Hr’g Tr. 10:21-13:1. Respondent further

asserts tl
driver[’
616, Ins;

at “[t]here was no testimony to support a chain of evidence for the redacted
s license” and since Inspector Bishop did not redact the driver’s license of Minor
pector Bishop does not know whether the redacted driver’s license was the

license actually presented to the cashier by Minor 616. See Resp’t’s Post-J. Br., Dkt. No.

24, at 2-
“did not
“Tt}here
driver[’
see also

3; see also Hr’g Tr. 13:7-14:21. Respondent also contends that Inspector Bishop
take the minor’s driver’s license” nor “make a copy of the driver’s license,” and
is no testimony that the driver’s license of minor 616 was, in fact, the redacted

s license offered into evidence.” See Resp’t’s Post-J. Br., Dkt. No. 24, at 2 & 4;
Hr’g Tr. 16:2-19. Accordingly, Respondent argues that CTP failed to establish

that Res

pondent violated 21 C.F.R. § 1140.14(a)(1), because the redacted driver’s license

is “flawed” and CTP cannot prove that Respondent sold cigarettes to a minor. Resp’t’s
Post-J. Br., Dkt. No. 24, at 4.

These are the relevant excerpts of Inspector Bishop’s testimony on cross-examination:

Q Mr. Bishop, you say you observed this transaction at the

> DPO POS

BP Mobile. You were behind the minor during this
transaction; is that correct?

Yes, sir.

All right. And could you see if the minor produced any ID?
Yes, sir. In this case, the minor produced an ID.

Okay. But you don’t know what ID that was, do you?

Yes, sir. That was her -- that was the decoy’s personal ID.
Okay. And how do you know that? Did you see that
yourself? I mean, you were behind her.

Yes, sir. With the protocol that we use, we verify that they
have the correct ID for the work they do with us at the
beginning of the day, and we observe that the only thing that
they have on them is their ID and what we call the “buy”
money, “purchase” money.

Q Okay. But how do you know there wasn’t a different ID?

You could not see that ID that was being presented to the
cashier, could you?

A That’s true, sir. I couldn’t see it right there at the cashier.

OR OK Rk Ok

A The ID that was given was the one that was presented to me

at the beginning of the day.
Q Well, I don’t know. You can’t tell me or tell the Court what
ID was presented to the cashier because you did not
personally see the transaction; is that correct?

A I did see the transaction, but the exchange of the ID was so
quick I can’t -- yeah. I was under, you know, the impression
that was her ID, the only thing that she was carrying on her.
You were under the impression, but you can’t -- you can’t say
that you saw what ID was presented to the cashier?

That’s correct. That’s why we have our protocol, yeah.

OR OK Rk Ok

Q Okay. All right. So this ID that’s been submitted in this case

as evidence, you didn’t redact it. It was done by somebody

else. Is that correct?

Yes, sir.

Okay. So how would we know that this redacted ID was the

identification presented to the cashier?

A The date of birth matches the decoy. We do know the date of
birth, and that matches.

Qe

OR OK Rk Ok

Okay. All right. So you can’t tell us today that this redacted
driver’s license was the license used at that time?

A No. The only thing I can reference is the date of birth, the
decoy's date of birth, sir.

Hr’g Tr. 10:21-11:22; 12:10-13:1; 13:17-14:2; 14:17-14:21.

I find that Respondent’s arguments are misguided and speculative. Indeed, under 21
C.F.R. pt. 17, the Administrative Law Judge determines the admissibility of evidence and
has discretion to apply the Federal Rules of Evidence when deemed appropriate.
However, the Federal Rules of Evidence are not controlling in an administrative hearing,
and I am not bound by the Federal Rules of Evidence in these proceedings. 21 C.F.R.

§ 17.39(b). Iam only required to exclude evidence that is not relevant or material to the
issues before me. 21 C.F.R. § 17.39(c). I may, however, exclude relevant evidence if I
determine that its probative value is substantially outweighed by the danger of unfair
prejudice, confusion of the issues, or by considerations of undue delay or needless
presentation of cumulative evidence. 21 C.F.R. § 17.39(d). I find that the probative
value of the redacted driver’s license of Minor 616 (CTP Ex. 3, Dkt. No. 7d) is not
substantially outweighed by the danger of unfair prejudice or confusion of the issues. I
10

find that the redacted driver’s license of Minor 616 (CTP Ex. 3, Dkt. No. 7d) is relevant
and reliable.

Indeed, Inspector Bishop’s testimony provides credible and comprehensive overview of
his verification of the Minor 616’s age and driver’s license during the December 1, 2016
inspection. See Bishop Decl., CTP Ex. 21, Dkt. No. 7v J 9-10; see also Narrative
Report, CTP Ex. 17, Dkt. No. 7r §§ 5-6 & 9. I will not recite every detail of Inspector
Bishop’s testimony but will highlight the points relevant to Respondent’s contentions.

Inspector Bishop testified that all minors have to be 16 or 17 years old to be eligible to
participate in undercover buy inspections. Bishop Decl., CTP Ex. 21, Dkt. No. 7v J 6.
Inspector Bishop further testified that he confirmed before the inspection that Minor 616
was under the age of 18. Bishop Decl., CTP Ex. 21, Dkt. No. 7v 4.9. Inspector Bishop
also testified that before the inspection at Monroe Mobil, Inc. d/b/a BP, he physically
verified that Minor 616 had photographic identification showing her actual date of birth
and that Minor 616 had no tobacco products in her possession. See Hr’g Tr. 17:5-18:7;
see also Bishop Decl., CTP Ex. 21, Dkt. No. 7v § 9; Narrative Report, CTP Ex. 17, Dkt.
No. 7r §§ 5-6. Inspector Bishop further testified that a true and accurate copy of Minor
616’s ID was found at CTP exhibit 3 (Dkt. No. 7d) and he had no reason to believe
otherwise. See Hr’g Tr. 19:8-16. Still further Inspector Bishop testified that neither his
nor Minor 616’s compensation depend in any way on whether or not they uncovered a
violation. See Hr’g Tr. 19:17-20:6. Consistently, during the cross-examination,
Inspector Bishop testified that under the protocol, he verifies that minors have the correct
ID and observes that the only thing the minors have on them is their ID and “purchase”
money. Hr’g Tr. 11:13-17. Inspector Bishop further testified on cross-examination that
the date of birth on the redacted driver’s license (CTP Ex. 3, Dkt. No. 7d) matches the
date of birth of Minor 616. See Hr’g Tr. 13:21-142 & 14:17-21.

These are the relevant excerpts of Inspector Bishop’s testimony on re-direct examination:

Q Mr. Bishop, can you please take a look at your declaration,
paragraph 9.

A Yes.

Q It states that, “Before the inspection I confirmed that minor

616 was under the age of 18 and possessed her true and
accurate photographic identification showing her birth date as
October 17, 2000.” Do you see that?

A Yes, ma’am.

Q I believe when you were talking to Mr. Kalis you mentioned a
protocol. Can you please clarify what you do to confirm that
the minor has the accurate identification in possession before
the inspection?
11

A Yes, ma’am. So at the beginning of the day, when we pick up

our decoys, the decoys have to provide their ID to us,
physical. They have to take it out, and we observe the ID
through physical from holding the ID, and we make sure that
everything is correct for that minor.
And then after we physically verify the ID that they have,
then they're asked to carry that in their pocket with buy
money that we give them, and any other belongings such as
purses or wallets, or something, is stored in the car. So
throughout the day I’m ensuring that the decoy is not carrying
anything in their pocket than the ID and the buy money.

kok KR OK Ok

Q Back to paragraph 9 of your declaration, Mr. Bishop, the
following sentence states that, “A true and accurate redacted
copy of Minor 616’s identification is found at CTP Exhibit
3.” Do you see that?

A Yes, ma’am.

Q And if you take a look at CTP Exhibit 3, do you have any
reason to believe that that statement is inaccurate?

A No, ma’am.

Hr’g Tr. 17:5-18:7; 19:8-16.

I find Inspector Bishop’s testimony credible and the method Inspector Bishop used to
verify the Minor 616’s age and driver’s license sufficient. Inspector Bishop examined the
icense, compared the photo on the license with Minor 616, confirmed Minor 616 was
under 18 before the inspection, and verified Minor 616 had no tobacco product in her
possession prior to entering the store.

Still further, CTP’s Complaint did not allege a violation for failure to verify, by means of
photographic identification, the age of a person purchasing cigarettes or smokeless
tobacco (21 C.F.R. § 1140.14(a)(2)(i)) for the inspection conducted on December 1,
2016. The Complaint alleged only that, on December 1, 2016, “Respondent committed a
violation of selling cigarettes or smokeless tobacco to a minor, in violation of 21 C.F.R.

§ 1140.14(a)/1140.14(a)(1) ... .”- Compl., Dkt. No. 1 46. Inspector Bishop testified that
ie personally witnessed the purchase of a package of cigarettes by Minor 616 from an
employee at the Respondent’s establishment. See Bishop Decl., CTP Ex. 21, Dkt. No. 7v
{ 10; see also Narrative Report, CTP Ex. 17, Dkt. No. 7r 49. Inspector Bishop testified
that he personally observed the transaction as he entered the Respondent’s establishment
immediately after Minor 616 and had an unobstructed view of the sales counter and
Minor 616. See Bishop Decl., CTP Ex. 21, Dkt. No. 7v ¥ 10. Inspector Bishop testified

12

that he personally witnessed that the clerk checked Minor 616’s ID, but completed the
sale. See id. See also Hr’g Tr. 10:21-11:6. Inspector Bishop further testified that he
exited the store immediately after Minor 616 exited the store. See Bishop Decl., CTP Ex.
21, Dkt. No. 7v § 11. Inspector Bishop testified that upon their entry of the vehicle,
Minor 616 immediately handed over the package of Newport Box 100s cigarettes
purchased at BP to Inspector Bishop. Jd. Inspector Bishop’s testimony supports Minor
616 was under age of 18 as Inspector Bishop confirmed Minor 616’s age before the
inspection. Bishop Decl., CTP Ex. 21, Dkt. No. 7v § 9. Indeed, Respondent does not
dispute that Minor 616 was under 18 at the time of the sale at issue. Similarly,
Respondent does not dispute that the sale to Minor 616 on December 1, 2016 occurred.

I find that CTP met its burden and provided an abundance of evidence to support its
allegation that Respondent sold cigarettes to Minor 616 on December 1, 2016, in
violation of 21 C.F.R. § 1140.14(a)(1). L therefore, find that Respondent sold cigarettes
to Minor 616 on December 1, 2016.

In addition, the facts show that Respondent is a repeat violator who settled two prior
CMPs. See Compl., Dkt. No. 1 §§ 9-10. At the time of the December 1, 2016 violation,
therefore, Respondent was aware of the FDA’s enforcement program regarding tobacco
sales to minors. Moreover, each complaint provides information regarding the relevant
statutes and increasing penalties for additional violations, and a link to the guidance
regarding penalties. See, e.g., Compl., Dkt. No. 1 §§ 2-3.

The facts as outlined above, establish that Respondent, Monroe Mobil, Inc. d/b/a BP, 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.

B. No-Tobacco-Sale-Order Penalty

The second issue before me is whether an NTSO for a period of 30 consecutive calendar
days is a reasonable penalty. The undisputed facts of this case show that Respondent is a
repeat violator of FDA’s tobacco regulations. Respondent has been the subject of two
prior CMP actions. See FDA Dkt. No. FDA-2015-H-1270; CRD Dkt. No. C-15-2102,
FDA Dkt. No. FDA-2015-H-4748, CRD Dkt. No. T-16-1673. Between July 4, 2014 and
December 1, 2016, Respondent sold cigarettes or smokeless tobacco to minors on four
occasions. See Compl., Dkt. No. 1 §§ 1, 6 & 9-10. On three of those occasions,
Respondent failed to verify by means of photographic identification containing a
13

purchaser’s date of birth, that no cigarette or smokeless tobacco purchasers are younger
than 18 years of age. Id. Jf 1 & 9-10.

CTP imposed two CMPs on Respondent but the CMPs did not deter Respondent from
unlawfully selling tobacco products to minors. CTP requests that, for Respondent’s five
repeated violations in a 36-month period, an assessment of a 30-day NTSO is
appropriate. Informal Br. of Complainant, Dkt. No. 7, at 10. Respondent argues that an
NTSO is inappropriate because “[t]wo prior violations, 11/8/14 and 9/11/15 should be
two violations not four.” See Answer, Dkt. No. 3 § 3. This argument is foreclosed by the
Orton decision, which expressly upheld counting each instance of noncompliance with a
tobacco regulation as an independent violation. See Orton Motor Inc. v. U.S. Dep’t of
Health & Human Servs., 884 F.3d 1205, 1212-14 (D.C. Cir. 2018) (finding FDA’s
position that its enforcement authority permits to impose penalties for each violation of
the tobacco sale restrictions arising during a single inspection or transaction a persuasive
interpretation of the statute). Still further, 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, so there
is no basis for questioning whether the current allegation is a repeat violation. See
Compl., Dkt. No. 1 §§ 9-10. Thus, Respondent committed a total of five repeated
violations of FDA’s tobacco regulations over a 36-month period from November 8, 2014
through December 1, 2016. See id. § 1.

Although Respondent does not dispute its employee sold cigarettes to a minor on
December 1, 2016, Respondent argues for mitigation of the NTSO because: (1)
Respondent received a certification for not selling tobacco products to minors during a
2017 tobacco compliance check by its county designated youth tobacco use
representative, (2) Respondent’s owner allegedly ensures its staff is well-trained and
understands the laws of selling tobacco products, (3) the cashier asked for identification
from the customer as shown in the surveillance video (never offered as evidence), but
allegedly misread the driver’s license of the customer, (4) Respondent terminated the
cashier conducting the sale, (5) Respondent updated a point of sales system to verify the
age of every tobacco purchaser, and (6) Respondent “will continue to monitor more ways
to secure tobacco transactions and have an even stricter training regime for [its]
employees.” See Resp’t’s Plan of Action Letter, Dkt. No. 10; see also Answer, Dkt. No.
3 ff 1-2. Respondent also claims that a 30-day NTSO would “have a large impact on the
business as most of [its] sales come from tobacco products and not the gas itself.” Dkt.
No. 10.

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
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).
14

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

I have 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 is serious in nature. Accordingly, I find that an
NTSO of 30 consecutive calendar days is a reasonable penalty.

2. 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.

3. 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. A mere claim that a 30-day NTSO would “have a large
impact on the business as most of [Respondent’s] sales come from tobacco products and
not the gas itself” (Dkt. No. 10), without more, is not persuasive. Respondent presented
no evidence that the NTSO would severely hinder Respondent’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).

4. History of Prior Violations

Although the current action is the first NTSO action against Respondent, Respondent has
a significant history of prior repeated violations of the Act and its implementing
regulations prohibiting the sale of tobacco products to minors. Indeed, CTP imposed two
CMPs on Respondent, but the CMPs did not deter Respondent from continuing to violate
the tobacco regulations by unlawfully selling tobacco products to minors.

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

6. Additional Mitigating Factors

In its Plan of Action Letter (Dkt. No. 10), Respondent indicates that there is employee
training and an updated point of sales system that verifies the age before tobacco product
15

sales, and notes Respondent’s involvement in a local county program. While I commend
Respondent’s efforts, I do not find any mitigating factors. While Respondent may indeed
have training programs and a point of sales system that attempt to eliminate the illegal
sale of cigarettes or smokeless tobacco to minors, I am not persuaded that Respondent’s
efforts have been effective for Respondent’s establishment. Additionally, this is the fifth
violation within a short period of time for this store. Because Respondent is a habitual
violator of the FDA tobacco regulations, I find that a 30-day NTSO is necessary.

VI. Conclusion

For these reasons, I impose a No-Tobacco-Sale Order against Respondent Monroe Mobil,
Inc. d/b/a BP, 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/
Wallace Hubbard
Administrative Law Judge