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

Center for Tobacco Products,
(FDA No. FDA-2018-H-2149)

Complainant,
v.

Hometown Irving, LLC
d/b/a Irving Hometown Market,

Respondent.
Docket No. T-18-2442
Decision No. TB3640

Date: March 22, 2019

INITIAL DECISION

The Center for Tobacco Products (“CTP”) of the United States Food and Drug
Administration (“FDA”) seeks a civil money penalty against Respondent, Hometown
Irving, LLC d/b/a Irving Hometown Market (“Irving Hometown Market”), for six
violations of the Federal Food, Drug, and Cosmetic Act (“Act"), 21 U.S.C. § 301 et seq.,
and its implementing regulations, 21 C.F.R. pt. 1140, within a 48-month period.
Specifically, CTP alleges that Irving Hometown Market violated the Act by
impermissibly selling a covered tobacco product to a minor. The complaint also alleges
that Respondent previously sold cigarettes or smokeless tobacco to minors and failed to
verify, by means of photo identification containing a date of birth, that the purchasers
were 18 years of age or older. The complaint further alleges that Respondent Irving
Hometown Market previously admitted to five! violations of the regulations and,

' Complaint {J 10-11; see CRD Docket Number T-18-973 (Most Recent CMP Action,
FDA Docket Number FDA-2018-H-0273; see also CRD Docket Number T-17-3007,
FDA Docket Number FDA-2017-H-1707; CRD Docket Number T-16-1323, FDA
Docket Number FDA-2016- H-2067; FDA Docket Number FDA-2015-H-4294.
therefore, CTP seeks an $11,182 civil money penalty against Respondent for at least six
violations within a 48-month period. For the reasons discussed below, I find in favor of
CTP and impose an $11,182 penalty against Respondent.

Procedural History

CTP began this matter by serving an administrative complaint on Respondent, Hometown
Irving, LLC d/b/a Irving Hometown Market, at 462 U.S. Route 202, Rindge, New
Hampshire 03461, and by filing a copy of the complaint with the FDA’s Division of
Dockets Management. The complaint alleges that Irving Hometown Market
impermissibly sold a covered tobacco product to a minor, thereby violating the Act and
its implementing regulations.

On July 5, 2018, Respondent timely filed an answer, admitting all the allegations in the
complaint. Answer 4 1. As a defense, Respondent asserted, in essence, that its employee
did ask for the ID but did not check it properly; it has trained employees in the proper
way of checking IDs; and it has documents its employees have signed, indicating they
will check IDs. Jd. § 2. Respondent also indicated that the civil money penalty that CTP
requests is too high and it could not afford the penalty. Jd. § 3. Finally, Respondent
asserted that it feels that it is paying for the mistakes of others, and reiterated that it
trained its employees on how to check and make sure that they do not sell to minors. Jd.

On July 10, 2018, I issued an Acknowledgment and Pre-Hearing Order (“APHO”) that
set out the deadlines for the parties’ submissions in this case, and informal briefs for the
parties to complete and submit. On July 19, 2018, CTP filed a Status Report stating,
“(t]he parties have been unable to reach a settlement in this case. CTP remains willing to
engage in settlement discussions but, absent an executed settlement agreement, intends to
proceed to a hearing.”

On August 28, 2018, CTP filed a Motion to Compel Discovery and Motion to Extend
Deadlines. Docket Nos. 8-9. CTP’s supporting documents included copies of its Request
for Production of Documents (“CTP’s RFP”, “CTP Ex. A”) and delivery notification
(“CTP Ex. B”). On September 25, 2018, CTP withdrew its Motion to Compel. On July
16, 2018, Respondent submitted an Informal Brief of Respondent (“Respondent’s Br.”)
and on September 11, 2018, Respondent submitted five discovery documents in response
to CTP’s discovery requests. Docket Nos. 12 -12d.

On October 31, 2018, CTP timely filed its pre-hearing exchange. CTP’s exchange
included an Informal Brief of Complainant (“CTP Br.”), a list of proposed witnesses and
exhibits, and 19 numbered exhibits (“CTP Ex. 1- Ex. 19”). CTP’s exhibits included the
written direct testimony of two witnesses: Ms. Laurie Sternberg, Senior Regulatory
Counsel, Office of Compliance and Enforcement, CTP, FDA (‘Sternberg Declaration”,
“CTP Ex. 9”), and Mr. Ben Williams (“Inspector Williams”), FDA-commissioned
Inspector for the state of New Hampshire (‘‘Williams Declaration,” “CTP Ex. 10”).
Respondent did not submit proposed exhibits or witness testimony.

On December 14, 2018, I held a pre-hearing telephone conference call with the parties.
During the prehearing conference call, I explained my role as an impartial Administrative
Law Judge. I determined that Respondent is proceeding pro se. We discussed CTP’s
pre-hearing exchanges and witness testimony in this matter. I noted that Respondent did
not submit proposed exhibits or witness testimony. I explained that the purpose of a
hearing is to allow for the cross-examination and re-direct of any witnesses who have
provided sworn testimony in exchanges.

l explained the CTP witnesses’ testimonies to Respondent, and asked whether he wished
to cross-examine them. Respondent declined to cross-examine CTP’s proposed
witnesses. The parties agreed to waive a hearing and agreed to a decision based on the
written record. As Respondent did not object to CTP’s proposed exhibits, marked as
CTP Ex. 1 to CTP Ex. 19, I entered them into the record.

On that same day, I issued an Order Granting Waiver of Hearing and advised the parties
that they may file supplemental briefs by no later than January 17, 2019. On December
21, 2019, Respondent filed a document labelled Final Submission (“Respondent’s
Supplemental Br.). On January 16, 2019, CTP submitted a Supplemental Brief of
Complainant (“CTP Supplemental Br.”), and two attachments. Dockets Nos. 19-19b.
Accordingly, I find that the record is complete.

Issues

1. Whether Respondent sold a covered tobacco product to a minor on April 27, 2018,
in violation of 21 C.F.R. § 1140.14(b)(1).

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

Applicable Regulations

The Act prohibits the misbranding of tobacco products while they are held for sale after
shipment in interstate commerce. 21 U.S.C. § 331(k). 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. § 333(f)(9). 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

> On August 8, 2016, the citations to certain tobacco violations changed. For more
information see: https://federalregister.gov/a/2016-10685.
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 establishes factors that a presiding officer must consider in determining the civil
money penalty amount. The presiding officer must “take into account the nature,
circumstances, extent, and gravity of the violation or violations and, with respect to the
violator, ability to pay, effect on ability to continue to do business, any history of prior
such violations, the degree of culpability, and such other matters as justice may require.”
21 US.C. § 333(£)(5)(B).

Analysis
I. Violations

In considering the first issue of whether a violation of 21 C.F.R. § 1140.14(b)(1) occurred
on April 27, 2018, I note that Respondent admitted in both the answer and the brief that
the violation occurred. Answer § 1, Respondent’s Br. § 4. The evidence offered by CTP,
which includes the Williams Declaration, corroborates Respondent’s admission. CTP
Ex. 10.

April 27, 2018 Inspection

Inspector Williams’ declaration stated that on April 27, 2018, he conducted a follow-up
inspection of Respondent’s establishment accompanied by a minor. CTP Ex. 10 7.
Before the inspection, he confirmed that the minor had “true and accurate photographic
identification establishing [her] actual date of birth,” confirmed that the minor was under
the age of 18, on the day of the inspection, and confirmed that she did not have “any
tobacco products in [her] possession.” /d. During the inspection, Inspector Williams
parked “around the corner from the front door” of Respondent’s establishment. Id. § 8.
He observed the minor exit from his “vehicle’s passenger door and round the corner
toward the front of the establishment.” Jd. After a few minutes, he observed the minor
“round the same corner and return to [the] vehicle.” Jd. 49. The minor “immediately
anded him the package of ENDS/E-liquid.” Jd. He “observed that the package of
ENDS/E-liquid was JUUL cool mint.” Jd. He “labeled [it] as evidence and
photographed all of the panels of the package.” Jd. In accordance with standard
procedures at the time of the inspection, he stated, “he remained in the same location and
then processed the evidence.” Jd. CTP has also offered corroborating evidence,
including a redacted photocopy of the minor’s ID and photographs that Inspector
Williams took of the JUUL cool mint e-liquid product purchased in Respondent’s store
by the minor purchaser. CTP Ex. 13-15.

Previous Civil Money Penalty Actions

CTP also alleges that in a previous civil money penalty action, Respondent admitted to
five violations of the Act within a 36-month period. Complaint { 10-11; CTP Br. at 2-4.
Specifically, CTP alleged five violations for selling cigarettes or smokeless tobacco to
minors on the following dates: April 30, 2015, August 12, 2015, January 14, 2016,
October 16, 2016, and December 28, 2017. CTP also alleged one violation for failing to
verify the age of a person with photographic identification on April 30, 2015. Complaint
§ 10. 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. Orton Motor, Inc., d/b/a Orton’s Bagley v. U.S. Dep’t of Health & Human
Serv., 884 F.3d 1205 (D.C. Cir. 2018). Respondent does not dispute that the five alleged
violations occurred and “expressly waived its right to contest such violations in
subsequent actions.” Complaint § 11.

Respondent submits, as a defense, that the April 27, 2018 violation was due to the
carelessness of its employee, who failed to check the minor’s ID correctly. Answer § 2;
Respondent’s Br. at {J 4, 6; Respondent’s Supplemental Br. While I have considered this
statement as a defense, the Board has indicated that employees are acting in the course of
their employment in making these sales and “[t]he mere fact that Respondent instructed
its clerks not to sell to minors . . . is an inadequate defense because the [business is]
obligated to ensure that its policies are enforced and effective.” TOH, Inc. d/b/a
Ridgeville Service Center, DAB No. 2668, at 17-18 (2015) (citation omitted).

Based on the evidence in the record and the admissions of Respondent, I find that
Respondent sold a covered tobacco product, specifically, JUUL cool mint e-liquid
product, to a minor, in violation of 21 CFR 1140.14(b)(1), on April 27, 2018. I further
find there is no dispute that Respondent committed at least six violations of the Act and
its implementing regulations over a 48-month period. As Respondent admitted to the
current and previous allegations, there is no dispute as to the material facts in the case
before me. As a result, I find Respondent liable for all of the violations alleged in the
complaint. Accordingly, the only issue remaining before me is whether the civil money
penalty of $11,182 that CTP seeks is an appropriate amount.

I. Appropriateness of the Civil Money Penalty of $11,182

After considering the factors under the applicable statute, I find that the civil money
penalty of $11,182 that CTP seeks against Respondent, for at least six violations of the
Act and its implementing regulations over a 48-month period, is an appropriate amount.
When determining an appropriate penalty, the presiding officer must evaluate any
circumstances that mitigate or aggravate the violation. 17 C.F.R. § 17.34. As noted
above, under the applicable statute, I must “take into account the nature, circumstances,
extent, and gravity of the violation or violations and, with respect to the violator, ability

to pay, effect on ability to continue to do business, any history of prior such violations,
the degree of culpability, and such other matters as justice may require.” 21 U.S.C.

§ 333()(5)(B).
a. Nature, Circumstances, Extent and Gravity of the Violations

I have found that Respondent committed at least six violations of the Act with a 48-
month period. Respondent admits that on April 27, 2018, its employee failed to check
the minor’s ID correctly. Answer § 2; Respondent’s Br. at ff 4, 6; Respondent’s
Supplemental Br. As previously discussed, Respondent has now failed to comply with
the Act and regulations on six separate occasions: April 30, 2015, August 12, 2015,
January 14, 2016, October 16, 2016, December 28, 2017, and April 27, 2018. This
repeated inability of Respondent to comply with federal tobacco regulations over a period
of 48 months demonstrates these violations are serious in nature and a civil monetary
penalty is appropriate.

b. Respondent’s Ability to Pay

Respondent asserted in its brief that the penalty of $11,182 is “prohibitively high and will
have a severely negative effect on our operation.” Respondent’s Br. 45. However,
Respondent has not provided any evidence that it does not have the ability to pay the
$11,182 penalty, despite requests for production of financial information from CTP.
CTP’s RFP, CTP Ex. A., at 4. As a result, there is no evidence in the written record to
establish an inability to pay the penalty.

c. Effect on Ability to do Business

Similarly, Respondent has not presented any evidence regarding the effect of the civil
money penalty on its ability to do business. As noted above, in its brief, Respondent
asserts that the penalty would have a “severely negative effect” on its business.
Respondent’s Br. § 5. However, as asserted by CTP, the penalty will not affect
respondent’s ability to do business since it may continue to sell tobacco products and
other products at the business. CTP Br. at 11-12. Absent evidence in the record to the
contrary, I find that the $11,182 penalty will not have a substantial effect on
Respondent’s ability to do business.

d. History of Prior Violations

Respondent is a repeat violator of FDA tobacco regulations prohibiting the sale of
cigarettes, smokeless tobacco, and covered tobacco products to minors. This is the sixth
admitted violation of the Act and its implementing regulations by Respondent within a
48-month period. As discussed above, Respondent committed five prior violations for
selling cigarettes or smokeless tobacco to minors on the following dates: April 30, 2015,
August 12, 2015, January 14, 2016, October 16, 2016, and December 28, 2017.
Complaint § 10. Respondent also committed one violation for failing to verify the age of
a person with photographic identification on April 30, 2015. Jd. Respondent’s repeated
inability to comply with FDA tobacco regulations supports the imposition of a higher
penalty.

e. Degree of Culpability

The record shows that Respondent sold a covered tobacco product to a minor in violation
of 21 C.F.R. § 1140.14(b)(1) on April 27, 2018. The record also shows that Respondent
sold cigarettes or smokeless tobacco to minors in violation of 21 C.F.R. § 1140.14(a)(1)
on April 30, 2015, August 12, 2015, January 14, 2016, October 16, 2016, and December
28, 2017. Finally, the record shows that on April 30, 2015, Respondent failed to verify
the identification of the purchaser, in violation of 21 C.F.R. § 1140.14(a)(2)(i). Based on
Respondent’s admissions regarding the current and previous violations and the evidence
in the record, I find Respondent fully culpable for six violations of the Act and its
implementing regulations within a 48-month period.

jf. Additional Mitigating Factors

After reviewing Respondent’s arguments, I do not find any additional mitigating factors.
In requesting a lower civil money penalty, Respondent argued that the infraction was due
to an employee who made a mistake in evaluating the minor’s ID and it should not be
responsible for its employees’ mistakes, especially after it provided its employees with
training. Answer §{ 2, 3; Respondent’s Br. at 5-7. As noted above, however, employers
are liable for their employees’ actions and the fact that Respondent trained its clerks not
to sell to minors is not an adequate defense. TOH, Inc. d/b/a Ridgeville Service Center,
DAB No. 2668, at 17-18 (2015) (citation omitted).

Respondent further asserts that it has taken a number of corrective actions to guard
against future violations. Respondent’s Supplemental Br. As CTP correctly notes, these
statements do not conform to the requirements of 21 CFR 17.37(b) and are not
considered evidence on the issue of mitigation. CTP’s Supplemental Br. at 2. However,
even assuming that Respondent’s statements are valid and taking the statements at face
value, any such corrective steps have been ineffective. Within four months of the
previous civil money penalty action on January 22, 2018, which involved sales to minors
on five different occasions, Respondent violated the federal tobacco regulations again by
selling a covered tobacco product to a minor on April 27, 2018. Accordingly, I do not
find that any corrective actions taken by Respondent are mitigating factors.

I find no basis to reduce the penalty. Accordingly, I find a civil money penalty amount
of $11,182 to be appropriate, under the provisions of 21 U.S.C. § 333(f)(5)(B) and 21
US.C. § 333(f)(9).
Conclusion

Pursuant to 21 C.F.R. § 17.45, Limpose a civil money penalty of $11,182 against
Respondent, Hometown Irving, LLC d/b/a Irving Hometown Market, for six violations of
the Act, 21 U.S.C.§301 et. seq., within a 48-month period. Pursuant to 21 C.F.R.

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

/s/
Mary M. Kunz
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2018-H-1786)

Complainant,
v.

Mount Rainier Dollar and Food Mart Inc.
d/b/a Alife Dollar Food Mart,

Respondent.
Docket No. T-18-2158
Decision No. TB3625

Date: March 20, 2019

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Mount Rainier Dollar and Food Mart Inc. d/b/a Alife Dollar
Food Mart, at 3847 34th Street, Mount Rainier, Maryland 20712, and by filing a copy of
the complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. The complaint alleges that Alife Dollar Food Mart 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 to minors and failed to
verify, by means of photo identification containing a date of birth, that a purchaser was
18 years of age or older. The complaint further alleges that Respondent Alife Dollar
Food Mart previously was found liable for three violations of regulations found at

21 C.F.R. pt. 1140 and, therefore, CTP seeks to impose a $5,591 civil money penalty
against Respondent Alife Dollar Food Mart.
I. Background and Procedural History

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on May 10, 2018, CTP served the
complaint on Respondent Alife Dollar Food Mart by United Parcel Service. On June 8,
2018, Mr. Solomon Bekele, an attorney for Respondent, filed a Notice of Appearance and
a timely answer. On June 11, 2018, I issued an Acknowledgment and Prehearing Order
(APHO) acknowledging receipt of Respondent’s answer and establishing procedural
deadlines for this case. 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 July 12, 2018, to request that the other party provide copies of
documents relevant to this case. APHO ¥ 12. 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). Id.

On June 22, 2018, CTP served its Request for Production of Documents on Respondent.
On August 8, 2018, CTP filed a Motion to Compel Discovery (Motion to Compel
Discovery) stating it had not received a response to its Request for Production of
Documents and requested “an order be entered compelling Respondent to respond to
CTP’s Request for Production of Documents in its entirety.”

In an August 10, 2018 letter issued by my direction, Respondent was given until August
24, 2018, to file a response to CTP’s Motion to Compel Discovery. Respondent failed to
file any response to CTP’s Motion to Compel Discovery or otherwise respond to the
August 10, 2018 letter. Therefore, in an August 29, 2018 order, I granted CTP’s motion
and ordered Respondent to comply with CTP’s Request for Production of Documents by
September 13, 2018. I also extended the parties’ prehearing exchange deadlines by thirty
days. I warned Respondent that a failure to comply might result in sanctions, including
the issuance of an Initial Decision and Default Judgment finding Respondent liable for
the violations listed in the complaint and imposing a civil money penalty.

On September 13, 2018, Respondent filed its Production of Documents and Explanation.
Subsequently, on October 30, 2018, CTP filed an Unopposed Motion to Extend
Deadlines and Notice of Pending Settlement. In its Motion, CTP stated that the parties
“have agreed to settle this matter,” and that “CTP understands that payment is
forthcoming from Respondent.” CTP requested again “that all deadlines in this case be
extended for thirty (30) days, so that Respondent can pay the agreed-upon civil money
penalty, and CTP can process [Respondent’s] payment.” In an October 31, 2018 order, I
granted a thirty-day extension. The thirty-day extension granted Respondent a December
24, 2018 deadline for its prehearing exchange.

On December 6, 2018, CTP filed its prehearing exchange, including an Informal Brief of
Complainant, Complainant’s List of Proposed Witnesses and Exhibits, and thirteen
proposed exhibits. Respondent’s deadline of December 24, 2018, passed without it filing
a prehearing exchange. On January 7, 2019, I issued an order notifying the parties that I
had received a prehearing exchange from CTP, but had not received a prehearing
exchange from Respondent. Further, I informed the parties that I would hold a
prehearing conference on Wednesday, January 23, 2019, at 11:00 AM Eastern time.

On January 23, 2019, I held a prehearing conference. Counsel for CTP appeared for the
scheduled prehearing conference, but Respondent did not appear at the prehearing
conference or provide any response to the Order that scheduled the conference. I issued
an Order to Show Cause on January 23, 2019, informing Respondent that it had until
February 8, 2019, to show cause for its failure to appear at the prehearing conference. I
also informed Respondent that failure to show cause “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 civil money penalty.” To date,
Respondent has failed to file any response to my Order to Show Cause.

The issue before me is whether my sanction — striking Respondent’s Answer and issuing
default judgment — is the appropriate one. The harshness of the sanctions I impose upon
either party must relate to the nature and severity of the misconduct or failure to comply.
See 21 C.F.R. § 17.35(b). Respondent initially failed to comply with my
Acknowledgement and Prehearing Order as discovery materials requested by the
Complainant were not provided as set forth by that order. After I issued an Order to
Compel, Respondent provided the material requested by the Complainant. Respondent
failed to appear at the January 23, 2019 prehearing conference or respond in any manner
to said scheduling order. On January 23, 2019, I issued an Order to Show Cause. The
Respondent failed to reply to that order. This 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, I strike Respondent’s answer for failing to comply with
three judicial orders.

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 October 31, 2017, CTP initiated a previous civil money penalty action, CRD
Docket Number T-18-245, FDA Docket Number FDA-2017-H-6299, against
Respondent for three! violations of 21 C.F.R. pt. 1140 within a twenty-four month
period. CTP alleged those violations to have occurred at Respondent’s business
establishment, 3847 34th Street, Mount Rainier, Maryland 20712, on January 4,
2017, and October 23, 2017;

' One violation was documented on January 4, 2017, and two on October 23, 2017.
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 12:36 PM on April 10, 2018, at Respondent’s business
establishment, 34th Street, Mount Rainier, Maryland 20712, an FDA
commissioned inspector documented Respondent’s staff selling a Black & Mild
cigar 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 Alife Dollar Food Mart’s liability under the Act. The
Act prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product
is misbranded if sold or distributed in violation of regulations issued under section 906(d)
of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).
The Secretary of the U.S. Department of Health and Human Services issued the
regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1;
see 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 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)(i), retailers must verify, by means of photographic
identification 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, a $5,591 civil money penalty is permissible for five violations of
the regulations found at 21 C.F.R. pt. 1140.

Order

For these reasons, | enter default judgment in the amount of $5,591 against Respondent
Mount Rainier Dollar and Food Mart Inc. d/b/a Alife Dollar 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/
Wallace Hubbard
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.

Aloke and Anand Food Corporation
d/b/a 4 Brothers Food Store,

Respondent.

Docket No. T-18-3245
FDA Docket No. FDA-2018-H-3142

Decision No. TB3579

Date: March 12, 2019

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint)
against Respondent, Aloke and Anand Food Corporation d/b/a 4 Brothers Food Store,
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 impermissibly sold covered
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
seq., and its implementing regulations, 21 C.F.R. pt. 1140. CTP seeks a civil money
penalty of $5,591 for at least five violations 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 this action, 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 15, 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 10, 2018. On September 14, 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 September 27, 2018. On November 7, 2018,
CTP filed a Motion to Compel Discovery asserting that Respondent had not responded to
its discovery request. On November 26, 2018, a letter issued by my direction advised
Respondent that it had until December 11, 2018, to file a response to CTP’s Motion to
Compel Discovery. See also 21 C.F.R. § 17.32(c); APHO § 19. Respondent failed to
submit a response to CTP’s Motion to Compel or the November 26, 2018 letter, or
otherwise comply with CTP’s Request for Production of Documents.

On January 2, 2019, I issued an Order granting CTP’s Motion to Compel Discovery and
ordering Respondent to produce responsive documents to CTP’s Request for Production
of Documents by January 18, 2019. I warned:

Failure to [comply] 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 civil money penalty.

January 2, 2019, Order, at 1-2. In the same Order, I also extended the parties’ pre-
hearing exchange deadlines. Jd. at 2.

On January 28, 2019, CTP filed a Status Report and Motion to Impose Sanctions. CTP
advised that Respondent had not complied with my January 2, 2019 Order requiring
Respondent to produce documents responsive to CTP’s Request for Production of
Documents by January 18, 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.

On January 31, 2019, a letter issued by my direction informed Respondent that it had
until February 15, 2019, to file a response to CTP’s Motion to Impose Sanctions. To
date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or the
January 31, 2019 letter.

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 2, 2019, Order, when it failed to
submit documents responsive to CTP’s Request for Production of Documents by
January 18, 2019.

Respondent failed to defend its action despite the following opportunities:

e By letter issued by my direction on November 26, 2018, Respondent was informed
that it had until December 11, 2018, to file a response to CTP’s Motion to Compel
Discovery. Respondent failed to respond to CTP’s Motion to Compel or
otherwise respond to the November 26, 2018 letter; and
e By letter issued by my direction on January 31, 2019, Respondent was informed
that it had until February 15, 2019, to file a response to CTP’s Motion to Impose
Sanctions. Respondent failed to respond to CTP’s Motion to Impose Sanctions or
otherwise respond to the January 31, 2019 letter.

I find that Respondent failed to comply with orders and procedures governing this
proceeding, failed to defend this action, 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 warnings that its failure could result in
sanctions. I specified that those sanctions may include striking its Answer and “issuance
of an Initial Decision and Default Judgment finding Respondent liable for the violations
listed in the Complaint and imposing a civil money penalty.” APHO § 16; January 2,
2019, Order, at 1-2. Respondent also failed to defend this action, despite express
reminders of the opportunity through letters issued by my direction. 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), lam 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 4 Brothers Food Store, an establishment that sells tobacco
products and is located at 2008 Northeast 164th Street, North Miami, Florida
33162. Complaint §§j 7-8.

¢ On March 30, 2018, CTP initiated the first civil money penalty action, CRD
Docket Number T-18-1787, FDA Docket Number FDA-2018-H-1309, against
Respondent for violations of 21 C.F.R. pt. 1140. Complaint § 11.

e The previous action concluded when Respondent “admitted all of the allegations
in the Complaint and paid the agreed upon penalty.” Specifically, Respondent
admitted to two violations of the regulations on July 13, 2017, and two on March
14, 2018.! Further, “Respondent expressly waived its right to contest such
violations in subsequent actions.” Complaint §§ 11-12.

e During a subsequent inspection of Respondent’s establishment conducted on June
27, 2018, an FDA-commissioned inspector documented that “a person younger
than 18 years of age was able to purchase a Black & Mild cigar . . . at
approximately 12:07 PM.” The inspector also documented that “the minor’s
identification was not verified before the sale... .” Complaint § 9.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded
if 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 covered tobacco products to any person younger than

18 years of age. 21 C.F.R. § 1140.14(b)(1). The regulations also require retailers to
verify, by means of photographic identification containing the purchaser’s date of birth,
that no covered tobacco product purchasers are younger than 18 years of age. 21 C.F.R.
§ 1140.14(b)(2)(i).

' Customarily, CTP counts all violations documented during each inspection
individually, except all violations documented during the initial inspection are only
counted as one violation. Orton Motor, Inc. d/b/a Orton’s Bagley v. U.S. Dep’t of Health
& Human Serv., 884 F.3d 1205 (D.C. Cir. 2018). In this case, CTP counts only three
prior violations in calculating the total number of violations that fall within the current
36-month period at issue.
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 covered tobacco products to persons younger than 18 years
of age on July 13, 2017, March 14, 2018, and June 27, 2018. 21 C.F.R. § 1140.14(b)(1).
On those same dates, Respondent also violated the requirement that retailers verify, by
means of photo identification containing a purchaser’s date of birth, that no covered
tobacco product purchasers are younger than 18 years of age. 21 C.F.R.

§ 1140.14(b)(2)(). 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,

(FDA No. FDA-2018-H-0080)
Complainant,

v.

Nishva Inc.
d/b/a Woodville Chevron,

Respondent.
Docket No. T-18-830
Decision No. TB003517

Date: February 13, 2019

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a civil money penalty (CMP) of
$279 against Respondent, Nishva Inc. d/b/a Woodville Chevron, located at 8231
Woodville Highway, Tallahassee, Florida 32305, for two 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, within a period of 12-months. Specifically, CTP alleges that
Woodville Chevron violated the Act by impermissibly selling covered tobacco products
to minors, and failing to verify, by means of photo identification containing a date of
birth, that a purchaser was 18 years of age or older. For the reasons discussed below, I
find in favor of CTP and impose a $279 CMP against Respondent.

Procedural History

CTP began this matter by serving an administrative complaint seeking a $279 civil
money penalty on Respondent Woodville Chevron, at 8231 Woodville Highway,
Tallahassee, Florida 32305, and by filing a copy of the complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management.

On February 6, 2018, Respondent, represented by its manager, Angela Williams, timely
filed an Answer to CTP’s complaint, denying the allegations. On February 13, 2018, I
issued an Acknowledgement and Pre-Hearing Order (APHO) that set deadlines for
discovery and the parties pre-hearing exchanges.

On April 12, 2018, Respondent filed supplemental documents, which are captioned in the
DAB E-File system as “Answer.” (Supplemental Answer) The filing included an
alcoholic beverages and tobacco license issued by the State of Florida, and letters from
Respondent’s manager and owner denying the allegations.

On April 23, 2018, CTP filed a Motion to Compel Discovery, requesting “that an order
be entered to require Respondent to comply with the Request for Production of
Documents in its entirety.” Docket (“Dkt.”) Entry 8. On April 24, 2018, a letter was
issued by my direction informing Respondent that it had until May 8, 2018, to file a
response to CTP's Motion to Compel Discovery. Dkt. Entry 11. An order was issued on
May 23, 2018, granting that motion and ordering Respondent to comply with CTP’s
Request for Production of Documents, after Respondent failed to file any response to
CTP’s Motion or otherwise respond to the April 24, 2018 letter. Dkt. Entry 12. On June
8, 2018, CTP filed a Motion to Impose Sanctions for Respondent’s failure to produce
documents in response to CTP’s request. Dkt. Entry 14. On June 13, 2018, CTP
withdrew its June 8, 2018 Motion to Impose Sanctions because Respondent complied
with CTP’s request. Dkt. Entry 19.

On July 6, 2018, CTP filed its pre-hearing exchange consisting of its Informal Brief, a list
of proposed witnesses and exhibits, and 18-numbered exhibits (CTP Exs. 1-18). CTP’s
exhibits included the written direct testimony of the FDA-commissioned inspector who
conducted both inspections at issue, Inspector Marquietta Bowens-White. Respondent
did not file a pre-hearing exchange.

On August 22, 2018, I held a pre-hearing conference call. During the pre-hearing
conference, we discussed the procedural history of the case and the evidence submitted
by CTP. Respondent advised of its intent to cross-examine CTP Inspector Bowens-
White, who conducted both the June 5, 2017 and December 12, 2017 inspections.

On September 21, 2018, I conducted a hearing in this case. The purpose of the hearing
was to allow Respondent to cross-examine Inspector Bowens-White. During the hearing,
I admitted CTP’s Exs. 1-18 into the record without objection. Transcript (Tr.) at 7.
On October 10, 2018, I informed the parties that the Court had received the transcript of
the hearing. I also set the deadlines for the parties’ simultaneous post-hearing brief
submissions as December 10, 2018. Neither party filed a post-hearing brief.

Analysis

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

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

CTP determined to impose a civil money penalty against Respondent pursuant to the
authority conferred by the Act and implementing regulations at Part 21 of the Code of
Federal Regulations. The Act prohibits the misbranding of tobacco products while they
are held for sale after shipment in interstate commerce. 21 U.S.C. § 331(k). FDA and its
agency, CTP, may seek civil money penalties from any person who violates the Act’s
requirements as they relate to the sale of tobacco products. 21 U.S.C. § 331(f)(9). The
sale of covered tobacco products to an individual who is under the age of 18 is a violation
of implementing regulations. 21 C.F.R. § 1140.14(b)(1). In addition, a retailer’s failure
to verify, by means of photographic identification containing a purchaser’s date of birth,
that no covered tobacco products purchaser is younger than 18 years of age is also a
violation of the regulations. 21 C.F.R. § 1140.14(b)(2)(i).

1. Alleged Violations

CTP alleges that Respondent committed two violations! of the Act and its implementing
regulations over a 12-month period. Complaint at § 1.

In its Complaint, CTP asserts the following:

' Two violations were documented on June 5, 2017, and one on December 12, 2017. In
accordance with FDA guidance, CTP counted the violations observed at the initial
inspection as a single violation, and the violations observed at subsequent inspections as
separate individual violations. See Orton Motor Co. d/b/a Orton’s Bagley v. HHS, 884
F.3d 1205 (D.C. Cir. 2018).
e At approximately 12:40 p.m. on June 5, 2017, at Respondent’s business
establishment, 8231 Woodville Highway, Tallahassee, Florida 32305, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
two Swisher Sweets Grape 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 June 22, 2017, CTP informed Respondent of the
inspector’s June 5, 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 5:34 p.m. on December 12, 2017, at Respondent’s business
establishment, 8231 Woodville Highway, Tallahassee, Florida 32305, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
two Swisher Sweets cigars to a person younger than 18 years of age.

In its Answer, Respondent denied all of the violations alleged in the Complaint. Answer
at 1. Ms. Williams argued that she was the clerk on duty at the time of the inspection on
December 12, 2017, and that she did not sell a Swisher Sweet cigarillo to a minor. Jd. at
3.

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

CTP’s case against Respondent rests on the testimony of FDA-commissioned Inspector
Bowens-White plus corroborating evidence. CTP Exs. 4, 6-9, 12. At the time of the
respective inspections, Inspector Bowens-White was an FDA-commissioned officer with
the state of Florida. Inspector Bowens-White’s duties included determining whether
retailers were compliant with the age and photo identification requirements relating to the
sale of tobacco products. CTP Ex. 4, at ff] 1-4. The inspections entailed accompanying
contract undercover buy minors who attempt to purchase tobacco products from retail
establishments such as the one operated by Respondent. Id. at § 2.

i. June 5, 2017 Violations

Inspector Bowens-White’s declaration states that she conducted a compliance check
inspection at Woodville Chevron, located at 8231 Woodville Highway, Tallahassee,
Florida 32305 on June 5, 2017, at approximately 12:40 p.m. CTP Ex. 4, at 97. Inspector
Bowens-White testified that during the inspection she “observed Minor A purchase a
package of cigars from an employee at the establishment. Prior to the purchase [she]
observed that Minor A did not present any identification to the employee.” Jd. at § 8.

The Inspector’s report further states that she parked her car near Respondent’s
establishment, watched Minor A enter the establishment, and entered the business
moments after the Minor. From the Inspector’s location, inside the business, she had a
clear, unobstructed view of the sales counter and Minor A. Minor A purchased a package
of cigars and the employee did not provide a receipt. Both she and the minor exited the
store and returned to the car. Id. at § 8.

ii. December 12, 2017 Violation

Inspector Bowens-White’s declaration states that she conducted a subsequent compliance
check inspection at Woodville Chevron, located at 8231 Woodville Highway,
Tallahassee, Florida 32305 on December 12, 2017, at approximately 5:34 p.m. CTP Ex.
4, at § 11. Inspector Bowens-White further stated that during the inspection she
“observed Minor A purchase a package of cigars from an employee at the establishment.
The employee did not provide Minor A with a receipt after the purchase.” Jd. at J 12.

During cross-examination of Inspector Bowens-White, in reference to the December 12,
2017 inspection, Ms. Williams inquired whether the Inspector entered the establishment
before or after Minor A. Inspector Bowens-White confirmed that she entered after the
minor. Tr. at 10.

b. Respondent’s Position

Respondent filed both an Answer and a Supplemental Answer, denying that cigars were
sold to minors, or that Respondent failed to verify the minor’s age during the inspections
at issue. See Answer at 1. Ms. Williams argued that she received conflicting information
with no factual basis regarding the alleged violations. She contends that she was
informed that the minor who purchased the covered tobacco product was requested to
present identification and, subsequently, she was informed that the minor was not
requested to present identification for verification. Answer at 2,3. Ms. Williams further
argued that she was the clerk on duty at the time of the inspection on December 12, 2017,
and that she did not sell any tobacco items to a minor. Jd. Additionally, Ms. Williams
argued that the video recording for the December 12, 2017 inspection was reviewed, and
did not contain any footage of the December 12, 2017 inspection. Supplemental Answer
at 2.

At the hearing, Ms. Williams attempted to testify as to her own recollection of what
occurred on the dates at issue. I informed Ms. Williams that she could not testify at the

hearing because she did not submit any direct testimony under oath by the pre-hearing
exchange date. The purpose of the hearing was to allow Respondent an opportunity to
cross-examine Inspector Bowens-White. Both parties would have ample opportunity to
submit additional argument by way of the post-hearing brief exchange. Tr. at 10-11. I
informed the parties that Ms. Williams’ statements would be treated as legal arguments
and not sworn testimony. /d. at 14.

3. Findings of Fact

I find Respondent’s arguments to be without merit. Respondent offered no evidence to
rebut the testimony of Inspector Bowens- White regarding the sales at issue or the failure
to verify the age of the purchaser. Ms. Williams argued that she received conflicting
information of the alleged incidents, but according to CTP’s complaint, the June 5, 2017
inspection documented two violations, the sale to a minor of the package of two Swisher
Sweets Grape cigars and the failure of the clerk to verify photographic identification of
the minor. The December 12, 2017 inspection only alleges a single violation of selling a
package of two Swisher Sweets cigars to a minor. This illustrates that there is no
conflicting story, as these are two separate incidents, in which only one incident includes
the failure of Respondent to verify identification. Respondent also failed to submit the
referenced December 12, 2017 video recording as evidence to substantiate its claim that
the incident did not in fact occur.

The evidence of record establishes to my satisfaction that the violations alleged in the
Complaint in fact occurred on the dates in question. The testimony of Inspector Bowens-
White, plus the corroborating evidence is sufficient to establish that it is more likely than
not that Respondent unlawfully sold covered tobacco products to minors and failed to
verify that a purchaser was of sufficient age, in violation of 21 C.F.R. § 1140.14(b)(1)
and 1140.14(b)(2)(i).

Therefore, I find that the facts as outlined above establish Respondent Woodville
Chevron’s liability under the Act for two violations within a 12-month period.

Il. Civil Money Penalty

Pursuant to 21 U.S.C. § 333(f)(9), Respondent Woodville Chevron is liable for a CMP
not to exceed the amounts listed in FDA’s civil money penalty regulations at 21 C.F.R.
§ 17.2. In its Complaint, CTP sought to impose the penalty amount, $279, against
Respondent for two violations of the Act and its implementing regulations within a 12-
month period. Complaint at { 1.

In its Answer, Respondent denied any obligation to pay a civil money penalty arguing
that there is insufficient proof it violated the regulations.
I have found that Respondent committed two violations of the Act and its implementing
regulations within a 12-month period. When determining the amount of a civil money
penalty, 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).

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

Ihave found that Respondent committed two violations of selling covered tobacco
products to minors and failed to verify, by means of photo identification containing a date
of birth, that one of the purchasers was 18 years of age or older. The repeated inability of
Respondent to comply with federal tobacco regulations is serious in nature and the civil
money penalty amount should be set accordingly.

B. Respondent's Ability to Pay and Effect on Ability to do Business

Respondent has not presented any evidence that it does not have the ability to pay the
$279 CMP sought by CTP.

C. History of Prior Violations

The current action is the first civil money penalty action brought against Respondent for
violations of the Act and its implementing regulations. As noted above, Respondent has,
at least two times violated the prohibition against selling covered tobacco products to
persons younger than 18 years of age, 21 C.F.R. § 1140.14(b)(1), and also failed to
verify, by means of photo identification containing a date of birth, that a purchaser was
18 years of age or older, 21 C.F.R. § 1140.14(b)(2)(i).

D. Degree of Culpability
Based on my finding that Respondent committed the violations as alleged in the current
Complaint, I hold it fully culpable for two violations of the Act and its implementing
regulations.

E. Additional Mitigating Factors
Mitigation is an affirmative defense for which Respondent bears the burden of proof.
Respondent must prove any affirmative defenses and any mitigating factors by a

preponderance of the evidence. 21 C.F.R. § 17.33(c).

Respondent has asserted “[w]e are very strict on I.D. our customers, we have the all the
proper signs to let our customers know we do require I.D. when purchasing alcohol and
tobacco products ....” Answer at 3. However, this in itself is not a mitigation factor,
since Respondent through its employee failed to actually prevent the sales at issue.

Respondent has violated the regulations on two separate occasions. These regulations
were created as an initiative to avert minors from purchasing tobacco products. Thus, I
find no basis for mitigation of the CMP sought by CTP, which I find proportional and
appropriate in this case.

F. Penalty

Based on the foregoing reasoning, I find the penalty amount of $279 to be reasonable and
appropriate under 21 U.S.C. § 333(f)(5)(B) and 333(f)(9).

Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $279 against
Respondent, Nishva Inc. d/b/a Woodville Chevron, for two 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 12-month period. Pursuant to 21 C.F.R.

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

/s/
Catherine Ravinski
Administrative Law Judge


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

Center for Tobacco Products,
Complainant

v.
UEL, Inc.
d/b/a Knight’s Discount Liquor,
Respondent

FDA Docket No. FDA-2018-H-0077
CRD Docket No. T-18-827

Decision No. TB3502

Date: February 5, 2019

INITIAL DECISION

Found:

1) Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R.

§ 1140.14(a)(1)! as charged in the Complaint; and

2) Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R.
§ 1140.14(a)(1), and 1140.14(a)(2)(i) as charged in the prior Complaint;

and

3) Respondent committed six (6) violations in a 48-month period as set forth

hereinabove.

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

' On August 8, 2016, the citations to certain tobacco violations changed. For more
information see: https://federalregister.gov/a/2016-10685. For the purpose of clarity,
when referencing the violations alleged in the Complaint, I will refer to the regulations as

they currently appear.
Glossary:

ALJ administrative law judge”

CMP civil money penalty

CTP/Complainant Center for Tobacco Products

DJ Default Judgment

FDCA Federal Food, Drug, and Cosmetic Act (21 U.S.C.A.
Chap. 9)

DN UPS Delivery Notification

FDA Food and Drug Administration

HHS Dept. of Health and Human Services

OSC Order to Show Cause

POS UPS Proof of Service

SOP Service of Process

Respondent UEL, Inc. d/b/a Knight’s Discount Liquor

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 17.3

II. PROCEDURAL BACKGROUND
The Center for Tobacco Products (CTP/Complainant) filed a Complaint on
January 11, 2018, alleging that FDA documented six (6) violations within a 48-month

period.

2 See 5 C.F.R. § 930.204.

3 See also Butz v. Economou, 438 U.S. 478 at 513, 98 S.Ct. 2894, 57 L.Ed.2d 895
(1978); Marshall v. Jerrico, Inc., 446 U.S. 238 (1980); Federal Maritime Com’n v. South
Carolina State Ports Authority, 535 U.S. 743, 744 (2002).

2
There is a presumption UEL, Inc. d/b/a Knight’s Discount Liquor (Respondent or
Knight’s Discount Liquor) was served with process on January 10, 2018, by United
Parcel Service (UPS). Respondent filed an answer on February 13, 2018.4 On March 1,
2018, I issued a Pre-Hearing Order (PHO) setting a schedule for filings and procedures.

Pursuant to my PHO, CTP served Respondent’s counsel with a Request for
Production of Documents on March 12, 2018. On April 18, 2018, CTP filed Motions to
Compel Discovery and Stay Deadlines averring that Respondent failed to comply with its
request for production of documents. On May 10, 2018, I issued an Order giving
Respondent until May 21, 2018, to comply with CTP’s Request for Production of
Documents. I warned Respondent that its “[fJailure to [comply] 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 civil money penalty.” My
May 10, 2018 Order also stayed all deadlines pending resolution of the discovery issue.
Respondent did not file a response to CTP’s Motion to Compel or otherwise respond to
CTP’s request for production.

On May 25, 2018, CTP filed a Motion to Impose Sanctions against Respondent
asserting that Respondent failed to respond to CTP’s request for production of documents
or comply with my May 10, 2018 Order. In its motion, CTP asked that I strike

Respondent’s Answer and issue a Default Judgment against Respondent as a sanction for

4 T note that the deadline for Respondent’s submission of an answer was February 9,
2018. Respondent’s counsel filed a Notice of Appearance and Answer on February 13,
2018. CTP did not object to the timeliness of Respondent’s Answer.

3
failure to comply with my Orders. On June 6, 2018, counsel for Respondent filed a
response to CTP’s Motion to Impose Sanctions stating that, due to his unfamiliarity with
the Departmental Appeals Board’s electronic case filing system, he was unaware of
CTP’s April 18, 2018 Motion to Compel, or my May 10, 2018 Order. Counsel further
advised that upon receipt of CTP’s Motion to Impose Sanctions, steps were taken to
comply with CTP’s request for production of documents. On June 7, 2018, based on
Respondent’s response, I issued an Order denying CTP’s Motion to Impose Sanctions
and re-establishing the simultaneous pre-hearing exchange deadline.

On July 23, 2018, CTP filed its pre-hearing exchange, containing a brief (CTP
Pre-Hearing Br.), a list of proposed witnesses and exhibits, and 16 exhibits (CTP Exhibits
(Exs.) 1-16), and including the written direct testimony of two proposed witnesses (CTP
Exs. 5 and 6). As of the deadline set in my June 7, 2018 Order, Respondent’s pre-hearing
exchange was not received in the Civil Remedies Division. Nor did Respondent file any
objections to CTP’s proposed exhibits.

On July 30, 2018, I issued an Order scheduling a hearing in this case for August
30, 2018. My Order also directed the parties to, among other things, advise within 15
days of the hearing of their respective intent to cross-examine the opposing party’s
witness. Subsequently, based on CTP counsel’s unavailability and motion to reschedule
the hearing, I issued an Order on August 9, 2018 rescheduling the hearing for September
13, 2018 at 1:00 PM Eastern Time.

On September 7, 2018, I issued an Order noting Respondent’s failure to advise of

its intent to cross-examine CTP’s witnesses, in accordance with my July 30, 2018 and

4
August 7, 2018 Orders scheduling a hearing. The September 7, 2018 Order gave
Respondent until September 11, 2018 to inform the Civil Remedies Division of its intent
to cross-examine CTP’s witnesses. I further advised that failure to follow my directive
would result in cancellation of the scheduled hearing and issuance of a decision on the
record. On September 11, 2018, Respondent filed its notice of intent to cross-examine
CTP’s witness, FDA-commissioned Inspector Janet Reaves.

On September 12, 2018, CTP filed a Motion to Exclude Evidence Not Exchanged
in Accordance with 21 C.F.R. § 17.25 and Administrative Law Judge Orders (Motion to
Exclude). In its Motion to Exclude, CTP noted Respondent’s reference to “video
footage” in the Notice to Cross-Examine submitted on September 11, 2018 — two days
before commencement of the scheduled hearing. CTP asserted:

Based on the representation made by Respondent’s counsel in the

Notice[,] . . . it appears that he intends to introduce security camera footage
allegedly from December 14, 2017 at 1:43 P.M. into evidence at the hearing.
It is unclear how Respondent’s counsel intends to use such footage, but
presumably he either intends to present it through his own witness or to use
it to cross-examine Inspector Reaves. Accordingly, CTP seeks an order
excluding Respondent from presenting any evidence, testimonial or
documentary, including the security camera footage referenced in the Notice,
at the hearing in this matter, due to Respondent’s failure to timely exchange
evidence as required under 21 C.F.R. § 17.25(a), the [PHO], and the June 7,

2018 Order.
Motion to Exclude at 3.

I conducted a hearing on September 13, 2018. See Transcript (Tr.). The purpose
of the hearing was to allow Respondent an opportunity to cross-examine Inspector Janet
Reaves only. During the hearing, Respondent made references to videotape footage that
does not appear as part of the evidentiary record.

The matter is now ready for decision. 21 C.F.R. § 17.45(c).

Ill. BURDEN OF PROOF

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

Iv. LAW

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

V. ISSUES
Did Respondent violate 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) as
alleged in the Complaint?
If so, is a civil money penalty in the amount of $11,182 appropriate?
VI. ALLEGATIONS

A. Complainant’s recitation of facts

CTP alleged that Respondent owned an establishment, doing business under the
name Knight’s Discount Liquor, located at 5139 Park Heights Avenue, Baltimore,
Maryland 21215. Respondent’s establishment receives tobacco products in interstate

commerce and holds them for sale after shipment in interstate commerce.
During an inspection of Knight’s Discount Liquor conducted on December 14,
2017, an FDA-commissioned inspector documented the following violation:

Selling cigarettes 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 cigarettes on December 14, 2017, at approximately 1:43 PM.

B. Respondent’s recitation of facts

In its Answer, Respondent denies the allegations pertaining to sale to a minor or
failure to verify a purchaser’s age on December 14, 2017. Respondent also disputes the

civil money penalty sought by CTP. Answer.

VII. PRIOR VIOLATIONS

On June 21, 2017, CTP initiated a previous civil money penalty action, CRD
Docket Number T-17-4862, FDA Docket Number FDA-2017-H-3752 (see also, CRD
Docket Number T-17-2165, FDA Docket Number FDA-2017-H-0776), against
Respondent for five violations’ of 21 C.F.R. pt. 1140. CTP alleged those violations to
have occurred at Respondent’s business establishment, 5139 Park Heights Avenue,

Baltimore, Maryland 21215, on March 2, 2016, August 16, 2016, and May 5, 2017.

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

settlement on that claim. Further, “Respondent expressly waived its right to contest such

5 An FDA-commissioned inspector documented one violation on March 2, 2016, two on
August 16, 2016, and two on May 5, 2017.
violations in subsequent actions.”

VIII. FAMILY SMOKING PREVENTION AND TOBACCO CONTROL ACT

The “relevant statute” in this case is actually a combination of statutes and
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 387 a-1 directed FDA to re-issue, with some modifications, regulations
previously passed in 1996. 21 U.S.C. § 387 a-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 (March 19, 2010), codified at

21 C.E.R. pt. 1140 (2015); 21 U.S.C. § 387£(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
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/Rules

9
Regulations Guidance/UCM447310.pdf [hereinafter Guidance for Industry], at 13-14.
So, for instance, if a retailer sells a 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, 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).

IX. HEARING

I conducted a hearing on September 13, 2018, by telephone.

Claudia Ahiabor, Esquire, appeared on behalf of Complainant.

Peter Prevas, Esquire, appeared on behalf of Respondent.

Witness Janet Reaves (an FDA Inspector), and Laurie Sternberg (Senior
Regulatory Counsel, CTP, FDA) provided written direct testimony (CTP Exs. 5 and 6) on
behalf of CTP, and Inspector Reaves was cross-examined by Respondent at the hearing.
Tr. at 9-15, 23-25.

X. SUMMARY OF TESTIMONY AND EVIDENCE
A. Complainant’s case
CTP submitted evidence and testimony in the form of written declarations and

photographs. Complainant offered CTP Exs. 1-16, inclusive, which were marked for

10
identification. Respondent did not object to CTP’s exhibits. Therefore, I admitted CTP
Exs. 1-16 into evidence. Tr. at 25-26.
Inspector Janet Reaves

Witness Janet Reaves, the FDA-commissioned Inspector who conducted the
inspection at issue on December 14, 2017, testified on behalf of Complainant.
Complainant provided Inspector Reave’s written direct testimony as CTP Ex. 6.

Inspector Reaves testified that on December 14, 2017, at approximately 1:43 PM,
she and a confidential state-contracted minor (Minor A) conducted an undercover buy
(UB) compliance check inspection at Respondent’s establishment, Knight’s Discount
Liquor, located at 5139 Park Heights Avenue, Baltimore, Maryland 21215. Before the
inspection, Inspector Reaves confirmed that Minor A had his or her photographic
identification (CTP Ex. 9) and did not have any tobacco products in his or her possession.
CTP Ex. 6, at 2-3.

According to her testimony, Inspector Reaves entered Respondent’s establishment
after Minor A. The inspector testified that from her unobstructed location in the
establishment, she observed Minor A purchase a package of cigarettes “directly from an
employee” at Respondent’s establishment. The inspector testified that Minor A did not
receive a receipt after the purchase. CTP Ex. 6, at 3.

Inspector Reaves testified that after both she and Minor A separately exited
Respondent’s establishment, they returned to the vehicle where immediately upon
entering, Minor A handed the inspector the package of Newport Box cigarettes.

Inspector Reaves labeled the cigarettes as evidence, photographed the evidence (CTP

11
Exs. 10, 11), and processed the evidence in accordance with standard procedures at the
time of the inspection. CTP Ex. 6, at 3.

According to Inspector Reaves, she recorded the inspection shortly thereafter in
the FDA’s Tobacco Inspection Management System (TIMS) (CTP Ex. 8) and created a
contemporaneous Narrative Report (CTP Ex. 7). Inspector Reaves also testified that CTP
Exs. 7-8 and 10-11 were true and accurate copies. CTP Ex. 6, at 3.

On cross-examination, Inspector Reaves testified that on entering Respondent’s
establishment at approximately 1:43 PM on December 14, 2017, she observed Minor A
purchase a package of Newport Box cigarettes. Inspector Reaves also testified that at no
time on the date of inspection did she purchase a package of cigarettes from
Respondent’s establishment. Tr. at 10. Inspector Reaves further testified that the time of
inspection was 1:43 PM. /d. at 11, 13. At the hearing, Inspector Reaves also mentioned
that Minor A was a “male,” and that she did not recall what either she or Minor A wore

on the day of inspection. Jd. at 10, 11-12.

B. Respondent’s case
Respondent did not submit written direct testimony or documentary evidence in
accordance with my PHO dated March 1, 2018, and subsequent Order dated June 7,
2018.
It is Respondent’s position that, based on review of videotape footage from
Respondent’s establishment on December 14, 2017 at 1:43 PM: 1) no tobacco product

was sold to a minor; and therefore, 2) the CMP of $11,182 sought by CTP is

12
inappropriate since no violation occurred on December 14, 2017. CRD E-File Docket
Number 6, at 2-3 (R’s Post Br.).
XI. PRELIMINARY MATTER - RULING ON MOTION TO EXCLUDE

On September 12, 2018, CTP filed a Motion to Exclude Evidence Not Exchanged
in Accordance with 21 C.F.R. § 17.25 (Motion to Exclude) and the Administrative Law
Judge’s Orders. CTP argued:

[T]he ALJ ordered Complainant and Respondent to file their pre-
hearing exchanges by July 23, 2018 .... The contents of the pre-hearing
exchange were described in the [PHO]; specifically, paragraph 4(b) of the
[PHO] required that each party’s pre-hearing exchange consist of, among
other things, a list of all proposed exhibits and witnesses and a copy of each
proposed exhibit, including the written direct testimony of any proposed

witness.

Respondent did not submit a pre-hearing exchange by the July 23,
2018 deadline. ...

[O]n September 11, 2018 — two days before the scheduled hearing in
this case — Respondent’s counsel filed a “Notice of Intent to Cross-Examine
Janet Reaves (FDA Commissioned Inspector) in which he states the
following:

“Respondent intends to cross examine [CTP] witness,

Janet Reaves .... A review of the security camera

13
footage for the premises on December 14, 2017 at 1:43
P.M. reveals one African American female entering the
premises .... A copy of the security camera footage
was provided to counsel for [CTP] for review... .”

Based on representation made by Respondent’s counsel in the

Notice[,] . . . it appears that he intends to introduce security camera footage

allegedly from December 14, 2017 at 1:43 P.M. into evidence at the hearing.

It is unclear how Respondent’s counsel intends to use such footage, but

presumably he either intends to present it through its own witness or to use

it to cross-examine Inspector Reaves. Accordingly, CTP seeks an order

excluding Respondent from presenting any evidence, testimonial or

documentary, including security camera footage referenced in the Notice at

the hearing in this matter due to Respondent’s failure to timely exchange of

evidence as required under 21 C.F.R. § 17.25(a) and the June 7, 2018 order.
Motion to Exclude at 1-3.

At the outset of the telephone hearing convened on September 13, 2018, CTP’s
pending Motion to Exclude was addressed. Tr. at 6-8. Respondent stated that the
videotape footage was provided to CTP on a thumb drive as part of its June 6, 2018
discovery submission. /d. at 7. CTP confirmed receipt of the thumb drive. CTP
contended that its objections “are based on the fact that the video was not submitted as
part of the record for us to raise objections to it on the record with regards to its
legitimacy and authenticity.” /d. At the hearing, I preliminarily denied CTP’s Motion to

14
Exclude, but afforded CTP an opportunity to renew it Motion to Exclude in its post-
hearing brief, and Respondent an opportunity to file a response. Jd. at 8, 25.

On November 19, 2018, CTP filed its Post-Hearing Brief (CTP Post Br.). In its
submission, CTP renewed its Motion to Exclude from evidence the purported December
14, 2017, videotape footage, “and any testimony about the videotape being considered.”
CTP Post Br. at 4-5. CTP objected “because the videotape was not properly exchanged
and it was not authenticated by Respondent.” CTP Post Br. at 5.

On November 19, 2018, Respondent submitted its post-hearing brief (R’s Post
Br.). CRD E-File Docket Number 26. In its post-hearing brief, Respondent relies
heavily on the content of the videotape footage to rebut Inspector Reaves’ testimony, and
to support its assertion that no violation occurred on December 14, 2017, as alleged in
CTP’s Complaint. Id.

On March 1, 2018 and June 7, 2018, I issued Orders which established deadlines
for the submission of pre-hearing exchanges which included, among other things,
proposed exhibits, witness and exhibit list, and written direct testimony of any proposed
witnesses. See CRD E-File Docket Numbers 6, 14. As previously discussed, Respondent
provided CTP with a copy of the videotape footage. However, Respondent did not

submit this footage as part of its pre-hearing exchange, or at any point thereafter. At no

point during these proceedings did Respondent offer this purported evidence for my

consideration.

15
Accordingly, I grant CTP’s Motion to Exclude and any testimony or argument
made based on the content of the videotape footage will not be considered in deciding
this case.

XII. ANALYSIS OF EVIDENCE AND TESTIMONY
A. Complainant’s case

Complainant offered and I have admitted into evidence CTP Exs. 1-16.

Pursuant to 21 C.F.R. § 17.33(b) in order to prevail, CTP must prove
Respondent’s liability and the appropriateness of the penalty under the applicable statute
by a preponderance of the evidence.

I must determine whether the allegations in the Complaint are true, and if so,
whether Respondent’s actions identified in the Complaint violated the law. 21 C.F.R.

§ 17.45(b)(1).
B. Respondent’s case

Respondent did not offer any evidence for inclusion into the record. Pursuant to
21 C.F.R. § 17.33(c), Respondent must prove any affirmative defenses and any
mitigating factors by a preponderance of the evidence.

C. Analysis

1. I find and conclude that CTP has shown by a preponderance of the

evidence that Respondent violated 21 C.F.R. § 1140.14(a)(1) when it

impermissibly sold cigarettes to a minor on December 14, 2017 at

approximately 1:43 PM.

16
On December 14, 2017, Inspector Reaves conducted a UB compliance check
inspection of Respondent’s establishment with a confidential state-contracted minor.
Inspector Reaves confirmed that Minor A did not possess any tobacco products in his or
her possession before entering the establishment. CTP Ex. 6, at 3.

The inspector entered into Respondent’s establishment with Minor A and took a
position where she “had a clear, unobstructed view of the sales counter and Minor A.”
Id. Inspector Reaves observed Minor A purchase a package of cigarettes from an
employee in Respondent’s establishment. Inspector Reaves observed that Minor A did
not get a receipt from the employee for the purchase. After Inspector Reaves and
Minor A separately exited Respondent’s establishment, they returned to the vehicle.
When they entered the vehicle, Minor A immediately tendered the package of cigarettes
to Inspector Reaves. Inspector Reaves observed that the package of cigarettes were
Newport Box cigarettes. /d. Inspector Reaves labeled the cigarettes as evidence,
documented the physical evidence (CTP Exs. 10, 11) and contemporaneously recorded
the transaction (CTP Exs. 7, 8). Id.

Inspector Reaves’ testimony is additionally supported by physical evidence. CTP
submitted a redacted copy of the undercover minor’s state photo identification, listing the
date of birth as September 20, 2000, showing that Minor A was 17 years old during the
December 14, 2017, inspection. CTP Ex. 9. CTP also submitted copies of the
photographs that Inspector Reaves took of the package of Newport Box cigarettes. CTP

Exs. 10, 11.

17
I find Inspector Reaves’ testimony to be credible and unbiased. I find that it, in
conjunction with the corroborating documentary evidence (e.g., the contemporaneous
reports) and physical evidence (e.g., photographs), is sufficient to satisfy CTP’s burden of
proving that Respondent violated 21 C.F.R. § 1140.14(a)(1) on December 14, 2017, at
approximately 1:43 PM by a preponderance of the evidence.

2. Respondent offered no affirmative proof to rebut the evidence of

noncompliance on December 14, 2017, presented by CTP.

In its post-hearing brief, Respondent maintains that the evidence presented by CTP
does not establish that the December 14, 2017, violation occurred. Respondent
references purported videotape footage of the December 14, 2017, inspection and notes
Inspector Reaves’ hearing testimony; stating that neither she nor Minor A were observed
in Respondent’s videotape footage. R’s Post Br. at 2-3.

Respondent failed to submit the purported footage or any evidence whatsoever in
support of its position. This videotape footage is not part of the record of this case, has
not been authenticated, and I have ruled I will not consider Respondent’s arguments
based on the content of the purported footage. However, even if I were to consider
Respondent’s arguments regarding the videotape footage and Inspector Reaves’ review of
the footage, these arguments would not sufficiently rebut Inspector Reaves’ sworn
testimony and related documentation regarding the December 14, 2017 inspection or

otherwise alter my decision.

18
Respondent has not provided any evidence to rebut the documentation submitted
by CTP or the testimony of Inspector Reaves. Therefore, I conclude that Respondent has
not proved any affirmative defense by a preponderance of the evidence.

XII. 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 civil monetary penalty.
21 U.S.C. §§ 331, 333.

I find and conclude that the evidence presented supports a finding that on March 2,
2016, August 16, 2016, May 5, 2017, and December 14, 2017, Respondent violated 21
U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1), in that persons younger than 18
years of age were able to purchase cigarettes or smokeless tobacco.

I find and conclude that the evidence presented supports a finding that on August
16, 2016, and May 5, 2017, Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R.
§1140.14(a)(2)(i), in that Respondent failed to verify, by means of photo identification
containing a purchaser’s date of birth, that no cigarette or smokeless tobacco purchasers
are younger than 18 years of age.

The conduct set forth above on March 2, 2016, August 16, 2016, May 5, 2017, and
December 14, 2017 counts as six (6) violations under FDA policy for purposes of
computing the civil money penalty. See Guidance for Industry, at 13-14. Accordingly, I
find and conclude that Respondent is liable for six (6) violations of FDA policy in a 48-

month period.

19
XIV. PENALTY

There being liability under the relevant statute, I must now determine the amount
of penalty to impose. Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a civil
money penalty not to exceed the amounts listed in FDA’s civil money penalty regulations
at 21 C.F.R. § 17.2. In its Complaint, CTP sought to impose the maximum penalty
amount, $11,182, against Respondent for six (6) violations of the Act and its
implementing regulations within a 48-month period. Complaint § 1. In its pre- and post-
hearing briefs, CTP continued to assert that an $11,182 civil money penalty is
appropriate. CTP Informal Brief at 8-11 (CRD E-File Docket Number 15); CTP Post Br.
at 5-7 (CRD E-File Docket Number 25).

As discussed, I found that CTP met its burden by a preponderance of the evidence
and concluded that Respondent committed six (6) violations of the Act and its
implementing regulations within a 48-month period.

In essence, Respondent denies any obligation to pay a civil money penalty
arguing:

... the alleged sale of cigarettes to a minor either did not occur at all, at

worst, or the CTP has not met its burden of proof by a preponderance of

evidence at best. Therefore, no civil money penalties or other sanctions

should be imposed against the Respondent.

R’s Post Br. at 4.
When determining the amount of a civil money penalty, I am required to take into

account “the nature, circumstances, extent and gravity of the violations and, with respect

20
to the violator, ability to pay, effect on ability to continue to do business, any history of
prior such violations, the degree of culpability, and such other matters as justice may
require.” 21 U.S.C. § 333(f)(5)(B).

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

I have found that Respondent specifically committed four (4) violations of selling
cigarettes or smokeless tobacco to minors, and two (2) violations of failing to verify the
photographic identification of a purchaser, totaling six (6) violations of the tobacco
regulations. Respondent’s repeated inability to comply with federal tobacco regulations
is serious in nature and the civil money penalty amount should be set accordingly.

B. Respondent’s Ability to Pay and Effect on Ability to do Business

Respondent has not presented any evidence that it does not have the ability to pay
the $11,182 civil money penalty sought by CTP.

C. History of Prior Violations

It is undisputed that Respondent is a repeated violator of FDA’s tobacco
regulations prohibiting the sale of tobacco products to minors. Respondent has been the
subject of two (2) prior CMP actions. Specifically, Respondent has, three (3) times,
violated the prohibition against selling cigarettes or smokeless tobacco to persons
younger than 18 years of age, and two (2) times, failed to verify that the cigarette or
smokeless tobacco purchasers were of sufficient age. 21 C.F.R. § 1140.14(a)(1),

1140.14(a)(2)(i).

21
D. Degree of Culpability

Based on my finding that Respondent committed the six (6) violations alleged in
the Complaint, I hold it fully culpable for its violations of the Act and its implementing
regulations.

E. Additional Mitigating Factors

Mitigation is an affirmative defense for which Respondent bears the burden of
proof. See 21 C.F.R. § 17.33(c). I do not find any mitigating factors. Respondent has
not provided any evidence or witnesses to refute the evidence submitted by CTP proving
the sale of cigarettes to Minor A by one of its employees on December 14, 2017, at
approximately 1:43 PM.

The purpose of the TCA to prevent unlawful sales of tobacco products to minors.
Tobacco is a highly addictive and dangerous product. The reason that sales of tobacco
products to minors is unlawful is that consumption of these products at an early age can
lead to a lifetime of addiction, to illness, and ultimately to premature death. Sales of
tobacco products to minors are unlawful because younger individuals often lack the
maturity and judgment to make informed decisions about whether to consume such
inherently dangerous and addictive products. Selling tobacco products to these
individuals puts them at risk for all of the adverse consequences that addiction can cause.

I find and conclude there is no reason to consider mitigation of the penalty herein.

F. Penalty

Based on the foregoing reasoning, I conclude a penalty amount of $11,182 is

appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

22
XV. CONCLUSION

Respondent committed six (6) violations in a 48-month period as set forth in the

Complaint. Respondent is liable for a civil money penalty of $11,182. See 21 C.F.R.

§ 17.2.
WHEREFORE,
ORDERED as follows

a. I find Re:

evidence having read and considered it be and is hereby

spondent has been served with process herein and is subject to

this forum;

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

evidence
specifical
May 5, 2

standard, support a finding Respondent violated 21 U.S.C. § 331,
ly 21 C-F.R. § 1140.14(a)(1) on March 2, 2016, August 16, 2016,
017, and December 14, 2017, in that a person younger than 18

years of age was able to purchase cigarettes or smokeless tobacco as set

forth in t

e Complaint;

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

evidence
specifical

standard, support a finding Respondent violated 21 U.S.C. § 331,
ly 21 C.F.R. § 1140.14(a)(2)(i) on August 16, 2016, and May 5,

2017, in that Respondent failed to verify the age of a person purchasing
cigarettes or smokeless tobacco by means of photographic identification
containing the bearer’s date of birth as set forth in the Complaint;

d. I find and conclude Respondent committed six (6) violations of the
regulations within a 48-month period; and

e. [assess a

monetary penalty in the amount of $11,182, is appropriate.

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

23