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

Center for Tobacco Products,
Complainant,

v.
Khush Family Inc.
d/b/a Eastfield Mall — Mall’s Corner News Stand,

Respondent.

FDA Docket No. FDA-2018-H-3862
CRD Docket No. T-19-121

Decision No. TB3754

Date: April 23, 2019

INITIAL DECISION AND DEFAULT JUDGMENT

Found:

1) Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R.
§ 1140.14(a)(1) and (a)(2)(i) as charged in the Complaint; and
2) Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R.
§ 1140.14(a)(1) and (a)(2)(i) as charged in the prior complaint; and
3) Respondent committed six violations in a 48-month period as set forth

hereinabove.

4) Respondent is hereby assessed a civil penalty in the amount of $11,182.

Glossary:

ALJ administrative law judge!
CMP civil money penalty
CTP/Complainant Center for Tobacco Products
DJ Default Judgment

' See 5 C.F.R. § 930.204.
FDCA Federal Food, Drug, and Cosmetic Act (21 U.S.C.A.

Chap. 9)
FDA Food and Drug Administration
HHS Dept. of Health and Human Services
Respondent Khush Family Inc. d/b/a Eastfield Mall —
Mall’s Corner News Stand
TCA The Family Smoking Prevention and Tobacco Control

Act, Pub. L. No. 111-31, 123 Stat. 1776 (2009)

I. JURISDICTION

I have jurisdiction to hear this case pursuant to my appointment by the Secretary

of Health and Human Services and my authority under the Administrative Procedure Act
(5 U.S.C. §§ 554-556), 5 U.S.C.A. § 3106, 21 U.S.C. § 333(f)(5), 5 C.F.R. §§ 930.201 et

seq. and 21 C.F.R. Part 17.7

II. PROCEDURAL BACKGROUND

The Center for Tobacco Products (CTP/Complainant) filed a Complaint on
October 16, 2018, against Khush Family Inc. d/b/a Eastfield Mall — Mall’s Corner News
Stand (Respondent or Eastfield Mall — Mall’s Corner News Stand), located at 1655
Boston Road, Springfield, Massachusetts 01129, alleging that FDA documented six
violations within a 48-month period.

Respondent was served with process on October 15, 2018, by United Parcel

Service. Respondent timely filed an answer on November 14, 2018.

2 See also Butz v. Economou, 438 U.S. 478, 513 (1978); Marshall v. Jerrico, Inc., 446
U.S. 238 (1980); Federal Maritime Com’n v. South Carolina State Ports Authority, 535
USS. 743, 744 (2002).
On November 21, 2018, I issued an Acknowledgment and Pre-Hearing Order
(Pre-Hearing Order) in which I set a schedule for exchanges of evidence and argument.
Pursuant to that order, CTP sent Respondent a Request for Production of Documents on
December 4, 2018, which Respondent received on December 5, 2018. Respondent had
until December 15, 2018, to file a motion for a protective order or until January 3, 2019,
to provide responsive documents. 21 C.F.R. § 17.23(a), (d); Pre-Hearing Order J 3. On
February 12, 2019, CTP filed a Motion to Compel Discovery in which CTP averred that
Respondent failed to respond to CTP’s Request for Production of Documents in its
entirety. Respondent did not file a response to CTP’s Motion to Compel Discovery. See
21 C.F.R. § 17.32(c).

On February 14, 2019, I issued an Order to Compel Discovery and Order to Show
Cause to Respondent. I explained that Respondent failed to comply with the procedural
rules in failing to respond to CTP’s Request for Production of Documents and the
procedures and directives governing these proceedings. I instructed Respondent to show
cause and produce the documents requested in CTP’s Request for Production of
Documents on or before March 1, 2019. I warned:

. .. failure to comply will result in sanctions, which may
include striking Respondent’s answer resulting in the issuance
of an Initial Decision and Default Judgment finding
Respondent liable for the violations listed in the Complaint and
imposing a civil money penalty. 21 C.F.R. § 17.35.

February 14, 2019 Order (emphasis in original). I provided that if Respondent failed to

comply, CTP may file a Motion to Impose Sanctions by March 15, 2019.
On March 11, 2019, CTP filed a Status Report and Motion to Impose Sanctions.
CTP reported that Respondent had not complied with my Order to Compel Discovery and
Order to Show Cause to Respondent requiring Respondent to produce documents
responsive to CTP’s Request for Production of Documents by March 1, 2019. CTP
argued that sanctions against Respondent for its repeated non-compliance are an
appropriate remedy. Specifically, CTP asked that I strike Respondent’s answer as a
sanction and issue an Initial Decision and Default Judgment, imposing a civil money
penalty against Respondent. Respondent did not file a response to CTP’s Motion to

Impose Sanctions. See 21 C.F.R. § 17.32(c).

Ill. STRIKING RESPONDENT’S ANSWER
Pursuant to 21 C.F.R. § 17.35(a), I may sanction a person, including any party or
counsel for:
(1) _ Failing to comply with an order, subpoena, rule, or procedure
governing the proceeding;
(2) Failing to prosecute or defend an action; or
(3) Engaging in other misconduct that interferes with the speedy,
orderly, or fair conduct of the hearing.
Here, Respondent failed to comply with my November 21, 2018 Pre-Hearing
Order and 21 C.F.R. § 17.23(a), when it failed to provide documents responsive to CTP’s
Request for Production of Documents within 30 days. Respondent failed to comply with
my February 14, 2019, I issued an Order to Compel Discovery and Order to Show Cause

to Respondent requiring Respondent to show cause and comply with CTP’s Request for

Production of Documents by March 1, 2019. Respondent has failed to comply with my
orders and procedures governing this proceeding. Respondent’s misconduct has
interfered with the speedy, orderly, or fair conduct of this proceeding. I find sanctions
are appropriate pursuant to 21 C.F.R. § 17.35(a).

The harshness of the sanctions I impose upon either party must relate to the nature
and severity of the misconduct or failure to comply. 21 C.F.R. § 17.35(b). I find and
conclude that Respondent’s misconduct is sufficient to warrant striking its answer and
issuing a decision without further proceedings. 21 C.F.R. § 17.35(c); see 21 C.F.R.

§ 17.11 (a).

IV. BURDEN OF PROOF

CTP as the petitioning party has the burden of proof. 21 C.F.R. § 17.33.

Vv. LAW

21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i).

VI. ISSUE
Did Respondent violate 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1)

and (a)(2)(i) as alleged in the Complaint?

VII. DEFAULT
I find Respondent was served and is subject to the jurisdiction of this forum, as
established by the UPS Delivery Notification and Notice of Filing filed by CTP and by
Respondent’s answer seeking relief.

Striking Respondent’s answer leaves the Complaint unanswered.
It is Respondent’s right to participate in the legal process.
It is Respondent’s right to request a hearing or to waive a hearing.

I find Respondent waived its right to a hearing pursuant to 21 C.F.R. § 17.11(b).

VII. ALLEGATIONS

A. Agency’s recitation of facts

CTP alleged that Respondent owns an establishment, doing business under the
name Eastfield Mall — Mall’s Corner News Stand, located at 1655 Boston Road,
Springfield, Massachusetts 01129. Respondent's establishment receives tobacco products
in interstate commerce and holds them for sale after shipment in interstate commerce.

During an inspection of Eastfield Mall — Mall’s Corner News Stand conducted on
July 20, 2018, an FDA-commissioned inspector documented the following violations:

a. Selling regulated tobacco products to a minor, in violation of 21 C.F.R.

§ 1140.14(a)(1). Specifically, a person younger than 18 years of age was able
to purchase a package of Newport Box 100s cigarettes on July 20, 2018, at
approximately 2:52 PM; and

b. Failing to verify the age of a person purchasing tobacco products by means of

photographic identification containing the bearer's date of birth, as required by
21 C.F.R. § 1140.14(a)(2)(i). Specifically, the minor’s identification was not
verified before the sale, as detailed above, on July 20, 2018, at approximately

2:52 PM.
B. Respondent’s recitation of facts

I struck Respondent’s Answer from the record. 21 C.F.R. § 17.35(a).

Accordingly, Respondent filed no responsive pleadings that I may consider.

IX. PRIOR VIOLATIONS

On September 15, 2017, CTP initiated a previous civil money penalty action, CRD
Docket Number T-17-6556, FDA Docket Number FDA-2017-H-5689, against
Respondent for violations of 21 C.F.R. pt. 1140, four of which occurred during the 48-
month period relevant in the current Complaint.? CTP alleged those violations to have
occurred at Respondent’s business establishment, located at 1655 Boston Road,
Springfield, Massachusetts 01129, on May 28, 2016, and August 17, 2017.4

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. Further, “Respondent expressly waived its right to contest such
violations in subsequent actions.”

I find and conclude Respondent committed six violations of 21 U.S.C. § 331,
specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i) within a 48-month period as set

forth in the Complaint.

X. FAMILY SMOKING PREVENTION AND TOBACCO CONTROL ACT

The “relevant statute” in this case is actually a combination of statutes and

3 Additional violations may have occurred outside of the relevant 48-month period. See
also CRD Docket Number T-17-1126, FDA Docket Number FDA-2016-H-4267.
4 Two violations were identified on May 28, 2016, and two on August 17, 2017.

7
regulations: The Family Smoking Prevention and Tobacco Control Act, Pub. L. No.
111-31, 123 Stat. 1776 (2009) (TCA), amended the Food, Drug, and Cosmetic Act

(21 U.S.C.A. Chap. 9) (FDCA) and created a new subchapter of that Act that dealt
exclusively with tobacco products, (21 U.S.C. §§ 387-387u), and it also modified other
parts of the FDCA explicitly to include tobacco products among the regulated products
whose misbranding can give rise to civil, and in some cases criminal, liability. The 2009
amendments to the FDCA contained within the TCA also charged the Secretary of Health
and Human Services with, among other things, creating regulations to govern tobacco
sales. The Secretary’s regulations on tobacco products appear in Part 1140 of Title 21,
Code of Federal Regulations.

Under the FDCA, “[a] tobacco product shall be deemed to be misbranded if, in the
case of any tobacco product sold or offered for sale in any State, it is sold or distributed
in violation of regulations prescribed under section 387f(d).” 21 U.S.C. § 387c(a)(7)(B)
(2012). Section 387a-1 directed FDA to re-issue, with some modifications, regulations
previously passed in 1996. 21 U.S.C. § 387a-1(a) (2012). These regulations were passed
pursuant to section 387f(d), which authorizes FDA to promulgate regulations on the sale
and distribution of tobacco products; 75 Fed. Reg. 13,225 (Mar. 19, 2010), codified at 21
C.F.R. Part 1140 (2015); 21 U.S.C. § 387f(d)(1) (2012). Accordingly, 21 C.F.R.

§ 1140.1(b) provides that “failure to comply with any applicable provision in this part in
the sale, distribution, and use of cigarettes and smokeless tobacco renders the product
misbranded under the act.”

Under 21 U.S.C. § 331(k), “[t]he alteration, mutilation, destruction, obliteration, or

8
removal of the whole or any part of the labeling of, or the doing of any other act with
respect to, a food, drug, device, tobacco product, or cosmetic, if such act is done while
such article is held for sale (whether or not the first sale) after shipment in interstate
commerce and results in such article being adulterated or misbranded” is a prohibited act
under 21 U.S.C. § 331. Thus, when a retailer such as Respondent misbrands a tobacco
product by violating a requirement of 21 C.F.R. Part 1140, that misbranding in turn
violates the FDCA, specifically 21 U.S.C. § 331(k). FDA may seek a civil money
penalty from “any person who violates a requirement of this chapter which relates to
tobacco products.” 21 U.S.C. § 333(f)(9)(A) (2012). Penalties are set by 21 U.S.C.

§ 333 note and 21 C.F.R. § 17.2. Under current FDA policy, the first time FDA finds
violations of 21 C.F.R. Part 1140 at an establishment, FDA only counts one violation
regardless of the number of specific regulatory requirements that were actually violated,
but if FDA finds violations on subsequent occasions, it will count violations of specific
regulatory requirements individually in computing any civil money penalty sought. This
policy is set forth in detail, with examples to illustrate, at U.S. Food & Drug Admin.,
Guidance for Industry and FDA Staff, Civil Money Penalties and No-Tobacco-Sale
Orders for Tobacco Retailers, Responses to Frequently Asked Questions (Revised)

(2016), available at http://www.fda.gov/downloads/TobaccoProducts/Labeling/

RulesRegulations Guidance/UCM447310.pdf, at 13-14. So, for instance, if a retailer sells

a regulated tobacco product on a particular occasion to a minor without checking for
photographic identification, in violation of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), this

will count as two separate violations for purposes of computing the civil money penalty,

9
unless it is the first time violations were observed at that particular establishment. This
policy of counting violations has been determined by the HHS Departmental Appeals
Board to be consistent with the language of the FDCA and its implementing regulations.

See Orton Motor Co. d/b/a Orton’s Bagley v. HHS, 884 F.3d 1205 (D.C. Cir. 2018).

XI. LIABILITY

When a retailer such as Respondent is found to have “misbranded” a tobacco
product in interstate commerce, it can be liable to pay a CMP. 21 U.S.C. §§ 331, 333.
A retailer facing such a penalty has the right, set out in statute, to a hearing under the
Administrative Procedure Act. 21 U.S.C. § 333(f)(5)(A). A retailer can forfeit its
rights under the statute and regulations by failing to participate in the process, a failure
known as a “default.” 21 C.F.R. § 17.11.

As set forth above, it is Respondent’s right to decide whether to participate in the
legal process. It is Respondent’s right to decide to request a hearing and it is
Respondent’s right to waive a hearing.

As detailed above, I find Respondent waived its right to a hearing.

XII. IMPACT OF RESPONDENT’S DEFAULT
Because striking a Respondent’s answer leaves the complaint unanswered, an ALJ
must assume as true all factual allegations in the complaint and issue an initial decision,
imposing “the maximum amount of penalties provided for by law for the violations
alleged” or “the amount asked for in the complaint, whichever is smaller” if “liability

under the relevant statute” is established. 21 C.F.R. § 17.11(a)(1), (2). Compare 21

10
C.F.R. § 17.45 (initial decision must state the “appropriate penalty” and take into account
aggravating and mitigating circumstances).

Two aspects of Rule 17.11 are important in default cases.

First, CTP benefits from a regulatory presumption (the ALJ shall assume that the
facts alleged in the complaint are true) that relieves it from having to put on evidence.

The presumption affords a party, for whose benefit the presumption runs, the
luxury of not having to produce specific evidence to establish the point at issue. When
the predicate evidence is established that triggers the presumption, the further evidentiary
gap is filled by the presumption. See 1 Weinstein's Federal Evidence § 301.02[1], at
301-7 (2d ed. 1997); 2 McCormick on Evidence § 342, at 450 (John W. Strong ed., 4th
ed. 1992); Routen v. West, 142 F.3d 1434, 1440 (Fed. Cir. 1998).°

Second, as far as the penalty is concerned, my discretion is limited by the language
of the regulation. I may not tailor the penalty to address any extenuation or mitigation,
for example, nor, because of notice concerns, may I increase the penalty beyond the

smaller of (a) CTP’s request or (b) the maximum penalty authorized by law.

5 However, when the opposing party puts in proof to the contrary of that provided by the
presumption, and that proof meets the requisite level, the presumption disappears. See
Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 254-55 (1981); A.C.
Aukerman, 960 F.2d at 1037 (“[A] presumption . . . completely vanishes upon the
introduction of evidence sufficient to support a finding of the nonexistence of the
presumed fact.”); see also Weinstein’s Federal Evidence § 301App.100, at 301 App.-13
(explaining that in the “bursting bubble” theory once the presumption is overcome, then it
disappears from the case); 9 Wigmore on Evidence § 2487, at 295-96 (Chadbourn rev.
1981). See generally Charles V. Laughlin, Jn Support of the Thayer Theory of
Presumptions, 52 Mich. L. Rev. 195 (1953); Routen v. West, 142 F.3d 1434, 1440 (Fed.
Cir. 1998).

11
XIII. LIABILITY UNDER THE RELEVANT STATUTE

Taking the CTP’s allegations as set forth in the Complaint as true, the next step is
whether the allegations make out “liability under the relevant statute.” 21 C.F.R.
§ 17.11 (a).

I assume all the allegations in the Complaint to be true.

I find and conclude that the evidentiary facts, by a preponderance of the evidence
standard, support a finding Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R.
§ 1140.14(a)(1), in that a person younger than 18 years of age was able to purchase
regulated tobacco products on May 28, 2016, August 17, 2017, and July 20, 2018.

I find and conclude that the evidentiary facts, by a preponderance of the evidence

standard, support a finding Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R.
§ 1140.14(a)(2)(i), on the same dates, in that Respondent also violated the requirement
that retailers verify, by means of photo identification containing a purchaser’s date of
birth, that no regulated tobacco products purchasers are younger than 18 years of age.
The conduct set forth above on May 28, 2016, August 17, 2017, and July 20, 2018

counts as six violations for purposes of computing the civil money penalty.

XIV. PENALTY
There being liability under the relevant statute, I must now determine the amount
of penalty to impose. My discretion regarding a penalty is constrained by regulation. I
must impose either the maximum amount permitted by law or the amount requested by

the Center, whichever is lower. 21 C.F.R. § 17.11(a)(1), (a)(2).

12
In terms of specific penalties available, the legislation that provides the basis for
assessing civil monetary penalties divides retailers into two categories: those that have
“an approved training program” and those that do not. Retailers with an approved
program face no more than a warning letter for their first violation; retailers without such
a program begin paying monetary penalties with their first. TCA § 103(q)(2), 123 Stat.
1839, codified at 21 U.S.C. § 333 note. See 21 C.F.R. § 17.2. The FDA has informed the
regulated public that “‘at this time, and until FDA issues regulations setting the standards
for an approved training program, all applicable CMPs will proceed under the reduced
penalty schedule.” FDA Regulatory Enforcement Manual, Aug. 2015, § 5-8-1. Because
of this reasonable exercise of discretion, the starting point for punishments and the rate at

which they mount are clear — the lower and slower schedules.

XV. MITIGATION
It is incumbent upon Respondent to present any factors that could result in
mitigation of CTP’s proposed penalty. Specifically, it is Respondent’s burden to provide
mitigating evidence. In a default, a respondent has failed to participate and has failed to
present any evidence regarding potential mitigation. I have no reason to mitigate the

penalty.

XVI. CONCLUSION
Respondent committed six violations in a 48-month period and so, Respondent is

liable for a civil money penalty of $11,182. See 21 C.F.R. § 17.2.

13
WHEREFORE, evidence having read and considered it be and is hereby

ORDERED as follows:

a. I find Respondent has been served with process herein and is subject
to this forum.

b. I find Respondent failed to comply with my November 21, 2018 Pre-
Hearing Order and my February 14, 2019 Order to Compel
Discovery and Order to Show Cause to Respondent.

c. I find Respondent failed to comply with my orders and procedures
governing this proceeding, constituting misconduct that has
interfered with the speedy, orderly, or fair conduct of this
proceeding. 21 C.F.R. § 17.35(a).

d. I find Respondent’s misconduct warrants striking its answer as a
sanction. 21 C.F.R. § 17.35(c).

e. I find striking Respondent’s answer leaves the Complaint
unanswered. 21 C.F.R. § 17.11.

f. I find Respondent is in default.

g. Iassume the facts alleged in the Complaint to be true. 21 C.F.R.

§ 17.11.
h. I find the facts set forth in the Complaint establish liability under the

relevant statute.
I assess a monetary penalty in the amount of $11,182.

/s/
Richard C. Goodwin
U.S. Administrative Law Judge

14


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

v.

Gui Qing Liu
d/b/a QQ Chinese Restaurant,

Respondent.

Docket No. T-19-543
FDA No. FDA-2018-H-4357

Decision No. TB3747
Date: April 19, 2019
INITIAL DECISION AND DEFAULT JUDGMENT

I hereby impose a civil money penalty (CMP) in the amount of $559, against Respondent,
Gui Qing Liu d/b/a QQ Chinese Restaurant (Respondent), for three violations of federal
tobacco regulations over a period of 24-months.

I. Background

The Center for Tobacco Products (Complainant or CTP) seeks to impose a CMP in the
amount of $559, against Respondent, located at 723 East Chelton Avenue, Philadelphia,
Pennsylvania 19144, for three 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 24-month period. The complaint alleges that Respondent impermissibly sold
covered tobacco products to minors, and failed to verify, by means of photo identification
containing a date of birth, that the purchasers were 18 years of age or older, thereby
violating the Act, and its implementing regulations at 21 C.F.R. pt. 1140. Therefore,
CTP seeks a $559 civil money penalty against Respondent QQ Chinese Restaurant for
three violations within a 24-month period.
As provided in 21 C.F.R. §§ 17.5 and 17.7, on November 20, 2018, Complainant served
the complaint on Respondent QQ Chinese Restaurant by United Parcel Service.
Respondent timely filed its answer on November 21, 2018, via the DAB E-Filing System.
Respondent requested a hearing to contest the allegations. Respondent contends that it
never sold tobacco to a minor without asking for identification.| Answer at 1. On
November 27, 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
December 28, 2018, to request the opposing 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). The parties were warned that failure to comply with any order
including the APHO may result in sanctions.

On January 25, 2019, Complainant filed a Motion to Compel Discovery stating that it
sent its Request for Production of Documents to Respondent on December 19, 2018.
Complainant also stated that it had not received a response from Respondent to its
Request for Production of Documents and requested that I issue an order requiring
Respondent to comply with Complainant’s Request for Production of Documents. Ina
February 1, 2019 letter issued by my direction, Respondent was given until February 18,
2019, to file a response to Complainant’s Motion to Compel Discovery.

Respondent failed to file a response to Complainant’s Motion to Compel Discovery or
the February 1, 2019 letter. Accordingly, in an order dated February 22, 2019, I granted
Complainant’s Motion to Compel Discovery and ordered Respondent to comply with
Complainant’s Request for Production of Documents by March 8, 2019. Respondent was
warned 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 and imposing a penalty.

On March 13, 2019, Complainant filed a Status Report and Motion to Impose Sanctions
indicating that Respondent had not complied with my February 22, 2019 order.
Complainant requested I strike Respondent’s answer and issue an initial decision and
default judgment imposing a money penalty against Respondent. In a March 14, 2019
letter issued by my direction, Respondent was given until March 28, 2019, to file a
response to Complainant’s Motion to Impose Sanctions. To date, Respondent has not
responded to Complainant’s Motion to Impose Sanctions or the March 14, 2019 letter.

' On December 3, 2018, our office received a mailed version of Respondent’s answer,
which entailed the same information as the answer Respondent filed via the DAB E-
Filing system.
I may sanction a party for failing to comply with an order, subpoena, rule, or procedure
governing the proceeding; failing to prosecute or defend an action; or engaging in other
misconduct that interferes with the speedy, orderly, or fair conduct of the hearing. 21
C.F.R. § 17.35(a). Here, Respondent failed to comply with the deadline set forth in the
APHO for responding to a discovery request, and the order granting Complainant’s
Motion to Compel Discovery issued on February 22, 2019. Respondent also did not
respond to Complainant’s Motion to Impose Sanctions or the letter sent by my direction
on March 14, 2019. 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). This repeated
conduct is sufficiently egregious to warrant striking Respondent’s answer and issuing an
initial decision by default. Therefore, pursuant to 21 C.F.R. § 17.35, lam granting
Complainant’s Motion to Impose Sanctions, and striking Respondent’s answer for failing
to comply with multiple judicial orders and directives.

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 At approximately 7:20 PM on March 16, 2017, at Respondent’s business
establishment, 723 East Chelton Avenue, Philadelphia, Pennsylvania 19144, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
two Garcia y Vega Game Green cigars 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;

e Ina warning letter dated March 23, 2017, CTP informed Respondent of the
inspector’s March 16, 2017 documented violations, and that such actions violate
federal law. The letter further warned that Respondent’s failure to correct its
violations could result in a civil money penalty or other regulatory action;

e During a subsequent inspection, at approximately 5:42 PM on August 30, 2018, at
Respondent’s business establishment, 723 East Chelton Avenue, Philadelphia,
Pennsylvania 19144, an FDA-commissioned inspector documented Respondent’s
staff selling a package of two Garcia y Vega Game Pineapple cigars 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 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); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016). Under 21
C.F.R. § 1140.14(b)(1), no retailer may sell covered tobacco products to any person
younger than 18 years of age. Under 21 C.F.R. § 1140.14(a)(b)(i), retailers must verify,
by means of photographic identification containing a purchaser’s date of birth, that no
covered tobacco product purchasers are younger than 18 years of age.

A $559 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $559 against Respondent Gui
Qing Liu d/b/a QQ Chinese Restaurant. 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,
Complainant
v.

NS Group Florida, Inc.
d/b/a Dollar Plus,

Respondent.

Docket No. T-19-27
FDA Docket No. FDA-2018-H-3719

Decision No. TB3728

Date: April 12, 2019

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint)
against Respondent, NS Group Florida, Inc. d/b/a Dollar Plus, alleging facts and legal
authority sufficient to justify imposing a civil money penalty of $5,591. CTP began this
case by serving a 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’s staff sold regulated tobacco products to minors and
failed to verify that purchasers were of sufficient age, thereby violating the Federal Food,
Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seg., and its implementing regulations,
21 C.F.R. pt. 1140. CTP seeks a civil money penalty of $5,591, for five violations of the
regulations within a 36-month period.

During the course of these administrative proceedings, Respondent failed to comply with
orders and procedures governing this proceeding and failed to defend its actions, which
interfered with the speedy, orderly, or fair conduct of this proceeding. 21 C.F.R.
§ 17.35(a). Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I strike Respondent’s
Answer and issue this decision of default judgment.

I. Procedural History

On October 4, 2018, CTP served the Complaint on Respondent by United Parcel Service,
pursuant to 21 C.F.R. §§ 17.5 and 17.7. Respondent timely filed its Answer to CTP’s
Complaint. On November 6, 2018, I issued an Acknowledgement and Pre-Hearing Order
(APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for
discovery. I directed that a party receiving a discovery request must provide the
requested documents within 30 days of the request. APHO § 12; see 21 C.F.R.

§ 17.23(a). I warned that I may impose sanctions if a party failed to comply with any
order, including the APHO. APHO § 16.

On December 20, 2018, CTP filed a Motion to Compel Discovery asserting that
Respondent did not respond to its discovery request as required by my APHO and
regulations. By Order of December 21, 2018, I informed Respondent of its deadline to
file a response to CTP’s Motion to Compel Discovery, and warned that if Respondent
failed to respond, “I may grant CTP’s motion in its entirety.” See also 21 C.F.R. §
17.32(c); APHO § 19. Respondent did not respond.

On February 12, 2019, I issued an Order to Compel Discovery in which I granted CTP’s
motion and ordered Respondent to produce documents responsive to CTP’s discovery
request by February 20, 2019. I warned Respondent that:

[F]ailure to comply may result in sanctions, which may
include striking its filings and issuing an Initial Decision and
Default Judgment finding Respondent liable for the violations
listed in the Complaint and imposing a civil money penalty.

February 12, 2019, Order to Compel Discovery (emphasis in original).

On February 25, 2019, CTP filed a Motion to Impose Sanctions. CTP advised that
Respondent did not produce responsive documents in compliance with my Order to
Compel Discovery. By Order of February 25, 2019, I informed Respondent of its
deadline to file a response to CTP’s motion and warned Respondent that if it failed to file
a response, “I may grant CTP’s Motion to Impose Sanctions in its entirety.”
February 25, 2019, Order (emphasis in original). Respondent did not respond.

IL. Striking Respondent’s Answer

I may sanction a party for:
(1) — Failing to comply with an order, subpoena, rule, or procedure
governing the proceeding;

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

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

21 C.F. § 17.35(a).

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

e Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 12 of my
APHO, when Respondent failed to respond to CTP’s Request for Production of
Documents within 30 days; and

e Respondent failed to comply with my February 12, 2019 Order to Compel
Discovery, when it failed to submit the documents responsive to CTP’s Request
for Production of Documents by February 20, 2019.

Respondent also failed to defend its action despite my December 21, 2018, and
February 25, 2019, orders informing Respondent of such opportunities and warning of
consequences.

I find that Respondent failed to comply with orders and procedures governing this
proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly,
or fair conduct of this proceeding. I conclude that Respondent’s conduct establishes a
basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the nature and severity of the
misconduct or failure to comply. 21 C.F.R. § 17.35(b). Here, Respondent failed to
comply with two of my orders, despite my explicit warnings that its failure could result in
sanctions. I specified that those sanctions “may include striking its filings and issuing an
Initial Decision and Default Judgment finding Respondent liable for the violations listed
in the Complaint and imposing a civil money penalty.” February 12, 2019, Order to
Compel Discovery. Respondent also failed to defend its actions, despite my orders
expressly reminding Respondent of the opportunity. Respondent’s repeated misconduct
interfered with the speedy, orderly, or fair conduct of this proceeding.

I find that Respondent’s actions are sufficient to warrant striking its Answer and issuing a
decision by default, without further proceedings. 21 C.F.R. § 17.35(b), (c)(3).
Accordingly, I strike Respondent’s Answer, and issue this Initial Decision and Default
Judgment, assuming the facts alleged in CTP’s Complaint to be true. 21 C.F.R.

§§ 17.35(c)(3), 17.11(a).
I. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered. Therefore, I am
required to issue an initial decision by default, provided that the Complaint is sufficient to
justify a penalty. 21 C.F.R. § 17.11(a). Pursuant to 21 C.F.R. § 17.11(a), 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 Plus, an establishment that sells tobacco products and is
located at 4683 Northwest 199th Street, Miami Gardens, Florida 33055.
Complaint §§ 5-6.

e CTP initiated a civil money penalty action on June 23, 2017, CRD Docket
Number T- 17-4839, FDA Docket Number FDA- 2017-H-3729, against
Respondent for violations of 21 C.F.R. pt. 1140, four of which occurred during the
36-month period relevant in the current Complaint. See also CRD Docket
Number T-17-1376, FDA Docket Number FDA-2016-H-4546. Complaint § 9.

e The previous action concluded when an Initial Decision and Default Judgment
was entered by an Administrative Law Judge, “finding that all of the violations
alleged in the Complaint occurred.” Specifically, one violation on February 21,
2016, one violation on June 13, 2016, and two violations on April 30, 2017.
Complaint §§ 9-10.

e During a subsequent inspection of Respondent’s establishment conducted on
July 27, 2018, an FDA-commissioned inspector documented that “a person
younger than 18 years of age was able to purchase a package of Newport Box
cigarettes . . . at approximately 8:31 PM.” Complaint § 7.

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,
13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016). The
regulations prohibit the sale of regulated tobacco products to any person younger than

18 years of age. 21 C.F.R. § 1140.14(a)(1). The regulations also require retailers to
verify, by means of photographic identification containing the purchaser’s date of birth,

that no regulated tobacco product purchaser is younger than 18 years of age. 21 C.F.R.
§ 1140.14(a)(2)(i).

Taking the above alleged facts as true, Respondent had at least five violations of
regulations found at 21 C.F.R. pt. 1140 within a 36-month period. Respondent violated
the prohibition against selling regulated tobacco products to persons younger than

18 years of age on February 21, 2016, June 13, 2016, April 30, 2017, and July 27, 2018.
21 C.F.R. § 1140.14(a)(1). On April 30, 2017, Respondent also violated the requirement
that retailers verify, by means of photo identification containing a purchaser’s date of
birth, that no regulated tobacco product purchaser is younger than 18 years of age.

21 C.F.R. § 1140.14(a)(2)(i). Therefore, Respondent’s actions constitute violations of
law that merit a civil money penalty.

CTP has requested a civil money penalty of $5,591, which is a permissible penalty under
the regulations. 21 C.F.R. § 17.2. Therefore, I find that a civil money penalty of $5,591
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,
Complainant,
v.

Jarbo and Abro, Inc.
d/b/a Buscemis 5,

Respondent.

Docket No. T-19-362
FDA No. FDA-2018-H-4141

Decision No. TB3724
Date: April 12, 2019
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Jarbo and Abro, Inc. d/b/a Buscemis 5, at 42990 Garfield
Road, Clinton Township, Michigan 48038, and by filing a copy of the complaint with the
Food and Drug Administration’s (FDA) Division of Dockets Management. The
complaint alleges that Buscemis 5 impermissibly sold cigarettes and covered tobacco
products to minors and failed to verify, by means of photo identification containing a date
of birth, that the covered tobacco product purchaser was 18 years of age or older, thereby
violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seg., and
its implementing regulations, 21 C.F.R. pt. 1140. CTP seeks a $279 civil money penalty
against Respondent Buscemis 5 for two violations within a 12-month period.

During the hearing process, Respondent failed to comply with judicial orders and
directions. I, therefore, strike Respondent’s answer and issue this decision of default
judgment.
I. Background

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on November 2, 2018, CTP served the
complaint on Respondent Buscemis 5 by United Parcel Service. On December 6, 2018,
after Respondent’s answer was filed, I issued an Acknowledgment and Pre-hearing Order
(APHO) 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 January 7, 2019, to request that the other
party provide copies of documents relevant to this case. The APHO also stated that,
pursuant to 21 C.F.R. § 17.23(a), a party receiving such a request must provide the
requested documents no later than 30 days after the request has been made. APHO § 12.
The parties were warned that failure to comply with any order including the APHO may
result in sanctions. APHO 16.

On February 12, 2019, CTP filed a Motion to Compel Discovery stating that its request
for production of documents (RFP) was served on Respondent on January 7, 2019. CTP
further stated that it did not receive a response from Respondent regarding its RFP, and
requested that I issue an order requiring Respondent to comply. In a February 13, 2019
letter issued by my direction, Respondent was given until February 27, 2019 to file a
response to CTP’s Motion to Compel Discovery. Respondent did not file a response to
CTP’s Motion to Compel Discovery or the February 13, 2019 letter. Therefore, on
February 28, 2019, I granted CTP’s Motion to Compel Discovery and ordered
Respondent to comply with CTP’s RFP by March 8, 2019. I warned Respondent that
failure to comply with my order may result in sanctions, including the issuance of an
initial decision and default judgment finding Respondent liable for the violations alleged
in the complaint and imposing a civil money penalty.

On March 15, 2019, CTP filed a Status Report and Motion to Impose Sanctions stating
that Respondent had not produced documents in response to CTP’s RFP as ordered. CTP
requested I strike Respondent’s answer and issue an initial decision and default judgment
imposing a civil money penalty against Respondent. In a March 19, 2019 letter issued by
my direction, Respondent was given until April 1, 2019 to file a response to CTP’s
Motion to Impose Sanctions. To date, Respondent has not responded to the Motion to
Impose Sanctions or the March 19, 2019 letter.

Therefore, pursuant to 21 C.F.R. § 17.35, I grant CTP’s Motion to Impose Sanctions, and
strike Respondent’s answer for failing to comply with multiple judicial orders and
directions. Specifically, Respondent failed to comply with my December 6, 2018 APHO
requiring it to respond to CTP’s RFP within 30 days after the request has been made, and
my February 28, 2019 order requiring it to respond to CTP’s RFP by March 8, 2019.
Additionally, Respondent failed to respond to CTP’s Motion to Compel Discovery,
CTP’s Motion to Impose Sanctions, or the February 13, 2019 and March 19, 2019 letters
issued by my direction. 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 At approximately 7:35 PM on January 8, 2018, at Respondent’s business
establishment, 42990 Garfield Road, Clinton Township, Michigan 48038, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
two Swisher Sweets Tropical Fusion cigars 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;

e Ina warning letter dated January 25, 2018, CTP informed Respondent of the
inspector’s January 8, 2018 documented violations, and that such actions violated
federal law. 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 12:45 PM on August 24, 2018, at Respondent’s business
establishment, 42990 Garfield Road, Clinton Township, Michigan 48038, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
Marlboro cigarettes to a person younger than 18 years of age.

These facts establish Respondent Buscemis 5’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. § 387¢(a)(7)(B); 21 C.F.R. § 1140.1(b). The
Secretary of the U.S. Department of Health and Human Services issued the regulations at
21 C.F.R. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see also 21
U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974,
28,975-76 (May 10, 2016). Under 21 C.F.R. § 1140.14(a)(1) and 21 C.F.R.

§ 1140.14(b)(1), no retailer may sell cigarettes or covered tobacco products to any person
younger than 18 years of age. Under 21 C.F.R. § 1140.14(b)(2)(i), retailers must verify,
by means of photographic identification containing a purchaser’s date of birth, that no
covered tobacco product purchasers are younger than 18 years of age.

Under 21 C.F.R. § 17.2, a $279 civil money penalty is permissible for two violations of
the regulations found at 21 C.F.R. pt. 1140 within a 12-month period.
Order

For these reasons, I enter default judgment in the amount of $279 against Respondent
Jarbo and Abro, Inc. d/b/a Buscemis 5. 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,
Complainant,
v.

Sublime Plus Inc.
d/b/a City Mini Mart,

Respondent.

Docket No. T-19-11
FDA Docket No. FDA-2018-H-3707

Decision No. TB3710

Date: April 11, 2019

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Sublime Plus Inc. d/b/a City Mini Mart, at 150 Belmont
Avenue, Springfield, Massachusetts 01108, and by filing a copy of the complaint with the
Food and Drug Administration’s (FDA) Division of Dockets Management. CTP seeks to
impose an $11,182 civil money penalty against Respondent for a total of six violations
within a 48-month period. The complaint alleges that a previous civil money penalty
action concluded after Respondent admitted to three violations of the Federal Food, Drug,
and Cosmetic Act (Act), 21 U.S.C. § 301 et seg., and its implementing regulations,

21 C.F.R. pt. 1140. The complaint also alleges that Respondent subsequently sold
regulated tobacco products to minors and failed to verify, by means of photo
identification containing a date of birth, that the purchasers were 18 years of age or older,
thereby further violating the Act and its implementing regulations.
During the course of these administrative proceedings, Respondent failed to comply with
orders and procedures governing this proceeding and failed to defend its actions, which
interfered with the speedy, orderly, or fair conduct of this proceeding. 21 C.F.R.

§ 17.35(a). Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I strike Respondent’s
Answer and issue this decision of default judgment.

I. Procedural History

On October 3, 2018, CTP served the complaint on Respondent by United Parcel Service,
pursuant to 21 C.F.R. §§ 17.5 and 17.7. On November 2, 2018, Respondent, through
counsel, timely answered CTP’s complaint. On November 5, 2018, I issued an
Acknowledgement and Pre-Hearing Order (APHO) that set deadlines for the parties’
filings and exchanges, including a schedule for discovery. I directed that a party
receiving a discovery request must provide the requested documents within 30 days of
the request. APHO § 12; see 21 C.F.R. § 17.23(a). I warned:

I may impose sanctions including, but not limited to, dismissal
of the complaint or answer, if a party fails to comply with any
order (including this order), fails to prosecute or defend its
case, or engages in misconduct that interferes with the speedy,
orderly, or fair conduct of the hearing. 21 C.F.R. § 17.35.

APHO § 16.

In accordance with the deadlines set forth in the APHO, CTP served Respondent with its
Request for Production of Documents on November 15, 2018. On January 4, 2019, CTP
filed a Motion to Compel Discovery asserting that Respondent had not responded to its
discovery request. By letter issued at my direction, Respondent was informed that it had
until January 22, 2019, to file a response to CTP’s Motion to Compel Discovery.

See also 21 C.F.R. § 17.32(c); APHO ¥ 19. Respondent did not respond.

On January 25, 2019, I issued an Order to Compel Discovery in which I granted CTP’s
motion and ordered Respondent to produce responsive documents to CTP’s Request for
Production of Documents by February 8, 2019. I stated:

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

January 25, 2019, Order to Compel Discovery (emphasis in original).
On February 15, 2019, CTP filed a Motion to Impose Sanctions. CTP advised that
Respondent had not complied with my Order to Compel Discovery, and asked that I
strike Respondent’s Answer as a sanction and issue an Initial Decision and Default
Judgment. By Order of February 20, 2019, I informed Respondent that it had until March
4, 2019, to file a response to CTP’s Motion to Impose Sanctions. I warned: “If
Respondent fails to file a response, I may grant CTP’s Motion to Impose Sanctions in
its entirety.” February 20, 2019, Order (emphasis in original). Respondent did not
respond.

Il. Striking Respondent’s Answer
I may sanction a party for:

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

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

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

21 C.F. § 17.35(a).

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

e Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 12 of my
APHO, when Respondent failed to respond to CTP’s Request for Production of
Documents within 30 days; and

e Respondent failed to comply with my January 25, 2019, Order to Compel
Discovery, when it failed to submit the documents responsive to CTP’s Request
for Production of Documents by February 8, 2019.

Respondent failed to defend its action despite the following opportunities:

e By letter issued at my direction, Respondent was informed that it had until
January 22, 2019, to file a response to CTP’s Motion to Compel Discovery.
Respondent did not defend its action; and

e By Order of February 20, 2019, I informed Respondent that it had until March 4,
2019, to file a response to CTP’s Motion to Impose Sanctions. Respondent did not
defend its action.

I find that Respondent failed to comply with orders and procedures governing this
proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly,
and fair conduct of this proceeding. I conclude that Respondent’s conduct establishes a
basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the nature and severity of the
misconduct or failure to comply. 21 C.F.R. § 17.35(b). Here, Respondent failed to
comply with two of my orders, despite my explicit and repeated warnings that its failure
could result in sanctions. I specified that those sanctions may include striking its Answer
and “issuing an Initial Decision and Default Judgment finding Respondent liable for the
violations listed in the Complaint and imposing a civil money penalty.” January 25,
2019, Order to Compel Discovery. Respondent also failed to defend its actions, despite
my express reminders of the opportunity. Respondent’s repeated misconduct interfered
with the speedy, orderly, or fair conduct of this proceeding. I find that Respondent’s
actions are sufficient to warrant striking its Answer and issuing a decision by default,
without further proceedings. 21 C.F.R. § 17.35(b), (c)(3). Accordingly, I strike
Respondent’s Answer. 21 C.F.R. § 17.35(c)(3).

I. Default Decision

Striking Respondent’s Answer leaves the complaint unanswered. Therefore, I am
required to issue an initial decision by default, provided that the complaint is sufficient to
justify a penalty. 21 C.F.R. § 17.11(a). Pursuant to 21 C.F.R. § 17.11(a), 1am required
to “assume the facts alleged in the complaint to be true” and, if those facts establish
liability under the Act, issue a default judgment and impose a civil money penalty.
Accordingly, I must determine whether the allegations in the complaint establish
violations of the Act.

Specifically, CTP alleges the following facts in its complaint:

e¢ On July 18, 2016, CTP initiated a previous civil money penalty action, CRD
Docket Number T-16-1128, FDA Docket Number FDA-2016-H-1831, against
Respondent for violations of 21 C.F.R. pt. 1140, three! of which occurred within
the 48-month period relevant here. CTP alleged those violations to have occurred
at Respondent’s business establishment located at 150 Belmont Avenue,
Springfield, Massachusetts 01108, on March 31, 2015, and December 30, 2015;

e The previous action concluded when Respondent admitted the allegations
contained in the Complaint issued by CTP, and paid the agreed upon monetary

' Two violations were documented on March 31, 2015, and two on December 30, 2015.
In accordance with customary practice, CTP counted the violations identified during the
initial inspection as a single violation, and, unless otherwise indicated, counted
subsequent violations individually.
penalty in settlement of that claim. Further, “Respondent expressly waived its
right to contest such violations in subsequent actions”;

e At approximately 11:33 AM on September 2, 2017, at Respondent’s business
establishment located at 150 Belmont Avenue, Springfield, Massachusetts 01108,
an FDA-commissioned inspector documented Respondent’s staff selling a package
of two Garcia y Vega Game Mango cigars 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;

e Ina warning letter dated November 9, 2017, CTP informed Respondent of the
inspector’s September 2, 2017 documented violations, and that such actions
violate federal law. 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 11:32 AM on July 5, 2018, at Respondent’s business
establishment located at 150 Belmont Avenue, Springfield, Massachusetts 01108,
an FDA-commissioned inspector documented Respondent’s staff selling a package
of two Garcia y Vega Game Blue cigars to a person younger than 18 years of age.
The inspector also documented that staff failed to verify, by means of
photographic identification containing a date of birth, that the purchaser was
18 years of age or older.

These facts establish Respondent City Mini Mart’s liability under the Act. The Act
prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if sold or distributed in violation of regulations issued under section 906(d)
of the Act. 21 U.S.C. § 387f(d); see 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. § 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) and (b)(1),? no
retailer may sell regulated tobacco products to any person younger than 18 years of age.
Under 21 C.F.R. § 1140.14(a)(2)(i) and (b)(2)(i), retailers must verify, by means of
photographic identification containing a purchaser’s date of birth, that no regulated
tobacco product purchasers are younger than 18 years of age.

2 In accordance with customary practice, it appears that CTP counted the violations
identified in the September 2, 2017 inspection immediately preceding the warning letter,
as a single violation and subsequent violations individually.

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

An $11,182 civil money penalty is permissible under 21 C.F.R. § 17.2, for six violations
of the regulations found at 21 C.F.R. pt. 1140 within a 48-month period.

Order

For these reasons, I enter default judgment in the amount of $11,182 against Respondent
Sublime Plus Inc. d/b/a City Mini Mart. Pursuant to 21 C.F.R. § 17.11(b), this order
becomes final and binding upon both parties after 30 days of the date of its issuance.

/s/
Catherine Ravinski
Administrative Law Judge


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

v.

Washington Ave Convenient LLC
d/b/a Convenient Food Mart,

Respondent.

Docket No. T-19-311
FDA No. FDA-2018-H-4080

Decision No. TB3707
Date: April 9, 2019
INITIAL DECISION AND DEFAULT JUDGMENT

I hereby impose a civil money penalty (CMP) in the amount of $5,591, against
Respondent, Washington Ave Convenient LLC d/b/a Convenient Food Mart
(Respondent), for five violations of federal tobacco regulations over a period of 36-
months.

I. Background

The Center for Tobacco Products (Complainant or CTP) seeks to impose a CMP in the
amount of $5,591, against Respondent, located at 33 Washington Avenue, Wheeling,
West Virginia 26003, for five 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 to minors, failed to verify, by means of photo identification containing a date of
birth, that one of the purchasers was 18 years of age or older, thereby violating the Act,
and its implementing regulations at 21 C.F.R. pt. 1140. The complaint further alleges
that an Initial Decision and Default Judgment was previously entered against Respondent
Convenient Food Mart for two violations of regulations found at 21 C.F.R. pt. 1140 and,
therefore, CTP seeks a $5,591 civil money penalty against Respondent Convenient Food
Mart for five violations within a 36-month period.

As provided in 21 C.F.R. §§ 17.5 and 17.7, on October 30, 2018, Complainant served the
complaint on Respondent Convenient Food Mart by United Parcel Service. Respondent
timely filed its answer on November 29, 2018. Respondent admitted the allegations, but
requested a penalty reduction as the company implemented new policies to prevent future
violations. On November 29, 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 January 7, 2019, to request the opposing 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). The parties were warned that failure to comply with
any order including the APHO may result in sanctions.

On January 17, 2019, Complainant filed a Motion to Compel Discovery stating that it
sent its Request for Production of Documents to Respondent on December 12, 2018.
Complainant also stated that it had not received a response from Respondent to its
Request for Production of Documents and requested that I issue an order requiring
Respondent to comply with Complainant’s Request for Production of Documents. Ina
January 18, 2019 letter issued by my direction, Respondent was given until February 1,
2019, to file a response to Complainant’s Motion to Compel Discovery.

Respondent failed to file a response to Complainant’s Motion to Compel Discovery or
the January 18, 2019 letter. Accordingly, in an order dated March 1, 2019, I granted
Complainant’s Motion to Compel Discovery and ordered Respondent to comply with
Complainant’s Request for Production of Documents by March 8, 2019. Respondent was
warned 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 and imposing a penalty.

On March 14, 2019, Complainant filed a Status Report and Motion to Impose Sanctions
indicating that Respondent had not complied with my March 1, 2019 order. Complainant
requested I strike Respondent’s answer and issue an initial decision and default judgment
imposing a money penalty against Respondent. In a March 18, 2019 letter issued by my
direction, Respondent was given until March 29, 2019, to file a response to
Complainant’s Motion to Impose Sanctions. To date, Respondent has not responded to
Complainant’s Motion to Impose Sanctions or the March 18, 2019 letter.

Therefore, pursuant to 21 C.F.R. § 17.35, 1am granting Complainant’s Motion to Impose
Sanctions, and striking Respondent’s answer for failing to comply with multiple judicial
orders and directives. Specifically, Respondent failed to comply with the deadline set
forth in the APHO for responding to a discovery request, and the order granting
Complainant’s Motion to Compel Discovery issued on March 1, 2019. Respondent also
did not respond to Complainant’s Motion to Impose Sanctions or the letter sent by my
direction on March 18, 2019. 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:

¢ On March 31, 2017, CTP initiated a previous civil money penalty action, CRD
Docket Number T-17-3084, FDA Docket Number FDA-2017-H-1793, against
Respondent for two violations of 21 C.F.R. pt. 1140 within a 12-month period.
CTP alleged those violations to have occurred at Respondent’s business
establishment, 33 Washington Avenue, Wheeling, West Virginia 26003, on
February 7, 2016, and October 20, 2016;

e The previous action concluded when an Initial Decision and Default Judgment
was entered by an Administrative Law Judge, “finding that all of the violations
alleged in the Complaint occurred”;

e At approximately 6:33 PM on March 28, 2018, at Respondent’s business
establishment, 33 Washington Avenue, Wheeling, West Virginia 26003, an FDA-
commissioned inspector documented Respondent’s staff selling a package of
Marlboro 100’s cigarettes to a person younger than 18 years of age;

e Ina warning letter dated May 24, 2018, CTP informed Respondent of the
inspector’s March 28, 2018 documented violation, and that such action violates
federal law. The letter further warned that Respondent’s failure to correct its
violation could result in a civil money penalty or other regulatory action;

e During a subsequent inspection, at approximately 3:49 PM on August 6, 2018, at
Respondent’s business establishment, 33 Washington Avenue, Wheeling, West
Virginia 26003, an FDA-commissioned inspector documented Respondent’s staff
selling a package of Marlboro Special Blend 100’s 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 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); 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.

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

Order

For these reasons, | enter default judgment in the amount of $5,591 against Respondent
Washington Ave Convenient LLC d/b/a Convenient Food Mart. Pursuant to 21 C.F.R.
§ 17.11(b), this order becomes final and binding upon both parties after 30 days of the
date of its issuance.

/s/
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,
Complainant,
v.

Motown Mini Mart Inc.
d/b/a Motown Mini Mart / BP,

Respondent.

Docket No. T-18-3283
FDA Docket No. FDA-2018-H-3200

Decision No. TB3666

Date: April 1, 2019

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Motown Mini Mart Inc. d/b/a Motown Mini Mart / BP, at 801
South Martin Luther King Jr. Boulevard, Lansing, Michigan 48915, and by filing a copy
of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. CTP seeks to impose a $559 civil money penalty against Respondent
Motown Mini Mart / BP for three violations within a 24-month period. Specifically, the
complaint alleges that Motown Mini Mart / BP impermissibly sold regulated tobacco
products to minors and failed to verify, by means of photo identification containing a date
of birth, that the purchasers were 18 years of age or older, 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.

During the course of these administrative proceedings, Respondent failed to comply with
orders and procedures governing this proceeding and failed to defend its actions, which
interfered with the speedy, orderly, or fair conduct of this proceeding. 21 C.F.R.
§ 17.35(a). Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I strike Respondent’s
Answer and issue this decision of default judgment.

I. Procedural History

On August 21, 2018, CTP served the complaint on Respondent by United Parcel Service,
pursuant to 21 C.F.R. §§ 17.5 and 17.7. Respondent timely answered CTP’s complaint.
On September 19, 2018, I issued an Acknowledgement and Pre-Hearing Order (APHO)
that set deadlines for the parties’ filings and exchanges, including a schedule for
discovery. I directed that a party receiving a discovery request must provide the
requested documents within 30 days of the request. APHO § 12; see 21 C.F.R.

§ 17.23(a). I warned:

I may impose sanctions including, but not limited to, dismissal
of the complaint or answer, if a party fails to comply with any
order (including this order), fails to prosecute or defend its
case, or engages in misconduct that interferes with the speedy,
orderly, or fair conduct of the hearing. 21 C.F.R. § 17.35.

APHO § 16.

In accordance with the deadlines set forth in the APHO, CTP served Respondent with its
Request for Production of Documents on October 19, 2018. On December 4, 2018, CTP
filed a Motion to Compel Discovery asserting that Respondent had not responded to its
discovery request. By letter issued at my direction, Respondent was informed that it had
until December 14, 2018, to file a response to CTP’s Motion to Compel Discovery.

See 21 C.F.R. § 17.32(c); APHO § 19. Respondent did not respond.

On January 7, 2019, I issued an Order to Compel Discovery in which I granted CTP’s
motion and ordered Respondent to produce responsive documents to CTP’s Request for
Production of Documents by January 28, 2019. I stated:

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

January 7, 2019, Order to Compel Discovery (emphasis in original).

On February 15, 2019, CTP filed a Status Report and Motion to Impose Sanctions. CTP
advised that Respondent had not complied with my January 7, 2019 Order to Compel
Discovery requiring Respondent to produce documents responsive to CTP’s Request for
Production of Documents by January 28, 2019. CTP argued that sanctions against
Respondent for its repeated non-compliance are an appropriate remedy. Specifically,
CTP asked that I strike Respondent’s Answer as a sanction and issue an Initial Decision
and Default Judgment finding Respondent liable for the violations listed in the complaint
and imposing a civil money penalty.

By Order of February 20, 2019, I informed Respondent that it had until March 4, 2019, to
file a response to CTP’s Motion to Impose Sanctions. I warned: “If Respondent fails to
file a response, I may grant CTP’s Motion to Impose Sanctions in its entirety.”
February 20, 2019, Order (emphasis in original). Respondent did not timely respond.!

Il. Striking Respondent’s Answer
I may sanction a party for:

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

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

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

21 C.F. § 17.35(a).

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

e Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 12 of my
APHO, when Respondent failed to respond to CTP’s Request for Production of
Documents within 30 days; and

e Respondent failed to comply with my January 7, 2019, Order to Compel
Discovery, when it failed to submit the documents responsive to CTP’s Request
for Production of Documents by January 28, 2019.

Respondent failed to defend its action despite the following opportunities:
e By letter issued at my direction, Respondent was informed that it had until

December 14, 2018, to file a response to CTP’s Motion to Compel Discovery.
Respondent did not defend its action; and

' Tnote that on March 26, 2019, Respondent sent an untimely response by email, which
did not address the basis of CTP’s Motion to Impose Sanctions.
e By Order of February 20, 2019, I informed Respondent that it had until March 4,
2019, to file a response to CTP’s Motion to Impose Sanctions. Respondent did not
defend its action.

I find that Respondent failed to comply with orders and procedures governing this
proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly,
and fair conduct of this proceeding. I conclude that Respondent’s conduct establishes a
basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the nature and severity of the
misconduct or failure to comply. 21 C.F.R. § 17.35(b). Here, Respondent failed to
comply with two of my orders, despite my explicit and repeated warnings that its failure
could result in sanctions. I specified that those sanctions may include striking its Answer
and “issuing an Initial Decision and Default Judgment finding Respondent liable for the
violations listed in the Complaint and imposing a civil money penalty.” January 7, 2019,
Order to Compel Discovery. Respondent also failed to defend its actions, despite my
express reminders of the opportunity. Respondent’s repeated misconduct interfered with
the speedy, orderly, or fair conduct of this proceeding. I find that Respondent’s actions
are sufficient to warrant striking its Answer and issuing a decision by default, without
further proceedings. 21 C.F.R. § 17.35(b), (c)(3). Accordingly, I strike Respondent’s
Answer. 21 C.F.R. § 17.35(c)(3).

I. Default Decision

Striking Respondent’s Answer leaves the complaint unanswered. Therefore, I am
required to issue an initial decision by default, provided the complaint is sufficient to
justify a penalty. 21 C.F.R. § 17.11(a). Pursuant to 21 C.F.R. § 17.11(a), 1am required
to “assume the facts alleged in the complaint to be true” and, if those facts establish
liability under the Act, issue a default judgment and impose a civil money penalty.
Accordingly, I must determine whether the allegations in the complaint establish
violations of the Act.

Specifically, CTP alleges the following facts in its complaint:

e At approximately 3:54 PM on November 16, 2017, at Respondent’s business
establishment, 801 South Martin Luther King Jr. Boulevard, Lansing, Michigan
48915, an FDA-commissioned inspector documented Respondent’s staff selling a
VUSE Berry e-liquid product 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;
e Ina warning letter dated November 30, 2017, CTP informed Respondent of the
inspector’s November 16, 2017 documented violations, and that such actions
violate federal law. 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 2:33 PM on June 13, 2018, at Respondent’s business
establishment, 801 South Martin Luther King Jr. Boulevard, Lansing, Michigan
48915, an FDA-commissioned inspector documented Respondent’s staff selling a
VUSE Nectar e-liquid product to a person younger than 18 years of age. The
inspector also documented that staff failed to verify, by means of photographic
identification containing a date of birth, that the purchaser was 18 years of age or
older.

These facts establish Respondent Motown Mini Mart / BP’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); 81 Fed. Reg.
28,974, 28,975-76 (May 10, 2016). Under 21 C.F.R. § 1140.14(b)(1), no retailer may sell
regulated tobacco products to any person younger than 18 years of age. Under 21 C.F.R.
§ 1140.14(b)(2)(), retailers must verify, by means of photographic identification
containing a purchaser’s date of birth, that no regulated tobacco product purchasers are
younger than 18 years of age.

A $559 civil money penalty is permissible under 21 C.F.R. § 17.2 for three violations of
the regulations found at 21 C.F.R. pt. 1140 within a 24-month period.

Order

For these reasons, | enter default judgment in the amount of $559 against Respondent
Motown Mini Mart Inc. d/b/a Motown Mini Mart / BP. 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.

Oasis Petro Inc.
d/b/a BP,

Respondent.

Docket No. T-18-3596
FDA No. FDA-2018-H-3619

Decision No. TB3652
Date: March 26, 2019
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Oasis Petro Inc. d/b/a BP, at 4276 West Fort Street, Detroit,
Michigan 48209, and by filing a copy of the complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management. The complaint alleges that
BP impermissibly sold a covered tobacco product to a minor and failed to verify, by
means of photo identification containing a date of birth, that the purchaser was 18 years
of age or older, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21
U.S.C. § 301 et seg., and its implementing regulations, 21 C.F.R. pt. 1140. The
complaint also alleges that Respondent previously sold cigarettes or smokeless tobacco
products to minors and failed to verify, by means of photo identification containing a date
of birth, that the purchasers were 18 years of age or older. The complaint further alleges
that an Initial Decision and Default Judgment was previously entered against Respondent
BP for five violations of regulations found at 21 C.F.R. pt. 1140 and, therefore, CTP
seeks to impose an $11,182 civil money penalty against Respondent BP for seven
violations within a 48-month period.

During the hearing process, Respondent failed to comply with two judicial orders
regarding CTP’s discovery request. I therefore strike Respondent’s answer and issue this
decision of default judgment.
I. Background

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on September 27, 2018, CTP served the
complaint on Respondent BP by United Parcel Service. Respondent, through counsel,
timely filed an answer, in which, Respondent requested this matter to be dismissed.

On October 29, 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
December 7, 2018, to request that the other party provide copies of documents relevant to
this case. The APHO also stated that, pursuant to 21 C.F.R. § 17.23(a), a party receiving
such a request must provide the requested documents no later than 30 days after the
request has been made. The parties were warned that failure to comply with any order
including the APHO may result in sanctions.

On January 10, 2019, CTP filed a Motion to Compel Discovery stating that its request for
production of documents (RFP) was delivered to Respondent on November 29, 2018.
CTP further stated that it did not receive a response from Respondent regarding its RFP,
and requested that I issue an order requiring Respondent to comply. Respondent did not
file a response to CTP’s Motion to Compel Discovery. Therefore, on January 31, 2019, I
granted CTP’s Motion to Compel Discovery and ordered Respondent to comply with
CTP’s RFP by February 8, 2019. I warned Respondent that failure to comply with my
order may result in sanctions, including the issuance of an initial decision and default
judgment finding Respondent liable for the violations alleged in the complaint and
imposing a civil money penalty.

On February 12, 2019, CTP filed a Status Report and Motion to Impose Sanctions stating
that Respondent has not produced any documents as ordered. CTP requested I strike
Respondent’s answer and issue an initial decision and default judgment imposing a civil
money penalty against Respondent. In a February 13, 2019 letter issued by my direction,
Respondent was given until February 27, 2019 to file a response to CTP’s Motion to
Impose Sanctions. To date, Respondent has not responded to the Motion to Impose
Sanctions or to the February 13, 2019 letter.

Therefore, pursuant to 21 C.F.R. § 17.35, 1am granting CTP’s Motion to Impose
Sanctions, and striking Respondent’s answer for failing to comply with two separate
judicial orders. Specifically, Respondent failed to comply with my October 29, 2018
APHO and my January 31, 2019 order requiring it to respond to CTP’s RFP.
Additionally, Respondent failed to respond to CTP’s Motion to Impose Sanctions or the
February 13, 2019 letter. 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:

© On April 21, 2017, CTP initiated a previous civil money penalty action, CRD
Docket Number T-17-3472, FDA Docket Number FDA-2017-H-2228, against
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, 4276 West Fort Street, Detroit, Michigan 48209, on January 17,
2015, November 28, 2015, and November 12, 2016;

e The previous action concluded when an Initial Decision and Default Judgment
was entered by an Administrative Law Judge, “finding that all of the violations
alleged in the Complaint occurred;”

e At approximately 7:02 p.m. on July 11, 2018, at Respondent’s business
establishment, 4276 West Fort Street, Detroit, Michigan 48209, an
FDA-commissioned inspector documented Respondent’s staff selling a blu Classic
Tobacco electronic nicotine delivery system (ENDS) product to a person younger
than 18 years of age. The inspector also documented that staff failed to verify, by
means of photographic identification containing a date of birth, that the purchaser
was 18 years of age or older.

These facts establish Respondent BP’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 US.C. § 387£(d); see 21 U.S.C. § 387¢(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) and 21 C.F.R. § 1140.14(b)(1),? no
retailer may sell cigarettes, smokeless tobacco, or covered tobacco products to any person
younger than 18 years of age. Under 21 C.F.R. § 1140.14(a)(2)(i) and 21 C.F.R.

§ 1140.14(b)(2)(), retailers must verify, by means of photographic identification

' One violation was documented on January 17, 2015, two on November 28, 2015, and
two on November 12, 2016. See also CRD Docket Number T-16-533, FDA Docket
Number FDA-2016-H-1032.

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

containing a purchaser’s date of birth, that no cigarette, smokeless tobacco, or covered
tobacco product purchasers are younger than 18 years of age.

Under 21 C.F.R. § 17.2, an $11,182 civil money penalty is permissible for seven
violations of the regulations found at 21 C.F.R. pt. 1140.

Order

For these reasons, I enter default judgment in the amount of $11,182 against Respondent
Oasis Petro Inc. d/b/a BP. Pursuant to 21 C.F.R. § 17.11(b), this order becomes final and
binding upon both parties after 30 days of the date of its issuance.

/s/
Margaret G. Brakebusch
Administrative Law Judge