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

Center for Tobacco Products,
(FDA No. FDA-2017-H-3288)

Complainant
v.

Rohan Petroleum, Inc.
d/b/a Tiger Mart / Exxon,

Respondent.
Docket No. T-17-4435
Decision No. TB3034

Date: August 24, 2018

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a civil money penalty
(CMP) against Respondent, Rohan Petroleum, Inc. d/b/a Tiger Mart / Exxon,
located at 2244 Sarno Road, Melbourne, Florida 32935, for five violations of the
Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140, within a 36-month period.
Specifically, CTP alleges that Respondent violated the Act by impermissibly
selling cigarettes and/or smokeless tobacco to minors, on three separate dates, and
failing to verify, by means of photo identification containing a date of birth, that
the purchasers were 18 years of age or older, on those dates.

I. BACKGROUND AND PROCEDURAL HISTORY
CTP began this matter by serving an administrative complaint, seeking a $5,591

civil money penalty, on Respondent at 2244 Sarno Road, Melbourne, Florida
32935, and by filing a copy of the complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management. Respondent timely
answered CTP’s complaint denying the violations as alleged.

On July 11, 2017, I issued an Acknowledgment and Pre-Hearing Order setting
forth case procedures and exchange deadlines. On August 27, 2017, Respondent
filed its pre-hearing exchange, which included an employee written statement,
various policy documents, and multiple photographs. Respondent did not offer
any written direct testimony, in accordance with the regulations at 21 C.F.R.

§§ 17.25(a) and 17.37(b), by its exchange due date. Likewise, Respondent did not
submit any exhibits by its exchange due date. On September 29, 2017, CTP filed
its pre-hearing exchange, which included an Informal Brief of Complainant, and
14 exhibits (CTP Exhibits (Exs.) 1-14). The 14 exhibits included the direct
testimony, in the form of declarations, for two witnesses — Senior Regulatory
Counsel Laurie Sternberg and Inspector Christopher Castiello.

On November 30, 2017, I held a pre-hearing conference in this case. I explained
to the parties that the sole purpose of an administrative hearing was to afford the
parties an opportunity for cross-examination of the witnesses. Respondent
communicated its desire to cross-examine Inspector Castiello. On April 12, 2018,
I held a hearing in this case. During the course of the hearing, I admitted CTP’s
exhibits into evidence, and Respondent cross-examined Inspector Castiello.

On May 15, 2018, the hearing transcript was made available to the parties. On
May 16, 2018, I issued an Order that set a June 14, 2018 deadline for the parties to
submit their post-hearing briefs. CTP did not file a post-hearing brief.
Respondent timely filed its post-hearing brief (Resp. Post-hearing Brief). As the
briefing period is over, I now render my decision.

Il. ISSUES

A. Whether Respondent Tiger Mart / Exxon sold cigarettes to a minor and
failed to verify that the cigarette purchaser was of sufficient age, on
February 27, 2017, in violation of 21 C.F.R. §§ 1140.14(a)(1) and
1140.14(a)(2)(i).

B. Whether the penalty amount sought by CTP is reasonable.

Ill. ANALYSIS
A. Violations
CTP determined to impose a civil money penalty (CMP) against Respondent

pursuant to the authority conferred by the Act and implementing regulations at
Part 21 of the Code of Federal Regulations. The Act prohibits the misbranding of
tobacco products while they are held for sale after shipment in interstate
commerce. 21 U.S.C. § 331(k). 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 tobacco products to
an individual who is under the age of 18 and the failure to verify the photographic
identification of an individual who is not over the age of 26 are violations of
implementing regulations. 21 C.F.R. §§ 1140.14(a)(1), (a)(2)().

CTP alleges that Respondent committed five violations of the Act and its
implementing regulations within a 36-month period. Complaint at { 1.
Specifically, CTP alleges that, on February 27, 2017, Respondent sold cigarettes
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. Jd. at 99. The complaint
also alleges that Respondent previously admitted to three violations! of regulations
found at 21 C.F.R. pt. 1140. /d. at § 11. CTP’s case against Respondent rests on
the written declaration of Ms. Sternberg, the written declaration and hearing
testimony of Inspector Castiello, and the corroborating evidence.

During the relevant period, Inspector Castiello was an FDA-commissioned officer
with the State of Florida whose duties included determining a retailer’s
compliance with the age and photo identification requirements relating to the sale
of tobacco products. CTP Ex. 4, at 1-2. His inspections entailed accompanying
trained undercover minors who attempted to purchase tobacco products from retail
establishments such as the one operated by Respondent. Id. at 2.

Inspector Castiello testified that on February 27, 2017, he and an undercover
minor (Minor A) conducted a follow-up undercover buy (UB) compliance check
inspection at Respondent’s place of business, located at 2244 Sarno Road,
Melbourne, Florida 32935. CTP Ex. 4 at 2. Before the inspection, Inspector
Castiello confirmed that Minor A possessed his/her true and correct photographic
identification and that Minor A did not have any tobacco products in his/her
possession. Jd.

Inspector Castiello also testified that he parked his car near Respondent’s
establishment. He accompanied Minor A into Respondent’s establishment. Jd. at
3; see also Hearing Transcript (Tr.) at 13. Inspector Castiello took a position
where he had a clear, unobstructed view of the sales counter and Minor A. Jd. He

! Two violations were documented on October 9, 2015, and two on June 5, 2016.
In accordance with customary practice, CTP counted the violations at the initial
inspection as a single violation, and all subsequent violations as separate
individual violations.
observed the employee of the establishment sell Minor A a package of cigarettes.
Id. He also observed that prior to the purchase Minor A did not present any
identification to the employee. CTP Ex. 4, at 3. After the transaction, Inspector
Castiello and Minor A returned to the vehicle where immediately upon entering,
Minor A handed the inspector the package of cigarettes. /d.; Tr. at 13-14.
Inspector Castiello observed that the package of cigarettes were Newport
cigarettes. CTP Ex. 4, at 3. After driving to a safe location, Inspector Castiello
processed the evidence according to procedure and completed a narrative report.
Id.

In her written direct testimony, Ms. Sternberg, Senior Regulatory Counsel for
CTP’s Office of Compliance and Enforcement, testified that the Newport brand
cigarettes purchased during the February 27, 2017 inspection, were manufactured
or processed for commercial distribution at facilities in North Carolina. CTP Ex.
3, at 3. The manufacturer of Newport brand cigarettes does not have any
production facilities in Florida, where the cigarettes were purchased. Id.

Respondent does not dispute that a sale to a minor occurred, but asserts that
different employees were involved during each violation. Answer at 1; Resp.
Post-hearing Brief at 1. Concerning the sale of cigarettes and smokeless tobacco,
Respondent states that according to its employees “they had not sold [to] any
minor.” Answer at 1. However, Respondent concedes that its employees did sell
cigarettes to a minor by stating “I had try (sic) to saw (sic) the video and try (sic)
to convince there (sic) mistake, they left the job, fired.” Jd. 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. A violation of section 1140.14(a)(1) only requires
that a sale to a minor occurred, and does not take into account a retailer’s intent to
determine liability.

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. This
verification is not required for any person over the age of 26. Respondent does not
address whether its employees verified the purchaser’s age. However, Respondent
does assert that it trains each employee to check the identification of cigarette or
tobacco product purchasers. Answer at 2. Section 1140.14(a)(2)(i) is purely
objective and does not consider a retailer’s training program or the effectiveness of
the training.

Respondent has not offered any evidence or testimony to rebut CTP’s allegations,
or refute the sworn declarations and testimony of Inspector Castiello and Ms.

Sternberg; specifically, that it sold cigarettes or smokeless tobacco to a minor and
failed to verify the minor’s identification on February 27, 2017. Asa result, I find
that the facts as outlined above establish Respondent Rohan Petroleum, Inc. d/b/a
Tiger Mart / Exxon is liable for five violations under the Act within a 36-month
period.

B. Civil Money Penalty

Pursuant to 21 U.S.C. § 333(£)(9), Respondent Rohan Petroleum, Inc. d/b/a Tiger
Mart / Exxon 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, $5,591, against Respondent for
five violations of the Act and its implementing regulations within a 36-month
period. Complaint at § 1.

I find that Respondent committed five violations of the Act and its implementing
regulations within a 36-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(£)(5)(B).
a. Nature, Circumstances, Extent and Gravity of the Violations

I find that Respondent committed a total of five violations of selling tobacco
products to minors, and failing to verify, by means of photo identification
containing a date of birth, that the purchasers were 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 stated that the penalty amount is too high. Answer at 2.

However, Respondent has not presented any evidence that it does not have the
ability to pay the $5,591 civil money penalty sought by CTP. Nor has Respondent
presented evidence that the penalty will affect the Respondent’s the ability to
continue to do business.
ec. History of Prior Violations

The current action is the second civil money penalty action that CTP has brought
against Respondent. On January 3, 2017, CTP initiated a previous CMP action,
CRD Docket Number T-17-1320, FDA Docket Number FDA-2016-H-4478,
against Respondent for three violations of 21 C.F.R. pt. 1140 within a 24-month
period. Complaint at § 11. The previous action concluded when Respondent
admitted the allegations contained in the Complaint issued by CTP, and paid the
agreed upon monetary penalty in settlement of that claim. Jd. at § 12. While
Respondent has already paid a civil money penalty for its previous violations, its
continued inability to comply with the federal tobacco regulations calls for a more
severe penalty.

d. Degree of Culpability

I find that Respondent committed the five violations as alleged in complaint, and I
hold it fully culpable for all five violations of the Act and its implementing
regulations.

e. Additional Mitigating Factors

Although it appears Respondent recognizes that it bears some responsibility for
training its employees that they are not to sell tobacco products to minors,
Respondent has not expressed any remorse for its repeated violations and has
suggested that responsibility for the violations should be directed to its employees,
and not the business owner. Answer at 1-2. Resp. Post-hearing Brief at 1.
Respondent asserts that before hiring an employee, it trains the candidates for
employment of the importance of checking identification and that there are store
policies about selling cigarettes and tobacco products. Respondent also asserts
that each employee is required to watch an FDA video related to sales of tobacco
products and a video distributed by the Florida Petroleum Marketers Association
that includes content on tobacco sales. Answer at 2. Further, Respondent asserts
that “As Business owner, we had provided all training, procedure to identify
proper driver (sic) license, tool to check birthday, decal to check ID date, swipe
system in register, signs NO ID No Sales Tobacco/Beer Sale...” Resp. Post-
hearing Brief at 1-2.

Though Respondent’s attempts to train employees and deter tobacco sales to
minors are commendable, they have been ineffective, and I do not find any
mitigating factors. Respondent has not provided any evidence that it has
implemented new policies for its employees about when to verify the age of
tobacco product purchasers. Because this is Respondent’s second CMP action,
and Respondent has had ample opportunity to correct its violations and come into
compliance, I find that a civil money penalty of $5,591 is appropriate.

IV. PENALTY

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

Vv. CONCLUSION

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $5,591 against
Respondent, Rohan Petroleum, Inc. d/b/a Tiger Mart / Exxon, for five violations of
the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140, within a 36-month period.

/s/
Wallace Hubbard
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2018-H-0219)

Complainant
v.

Maynard’s Food Center of Westbrook, Inc.
d/b/a Maynard’s Food Center,

Respondent.
Docket No. T-18-943
Decision No. TB2988

Date: August 13, 2018

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Maynard’s Food Center of Westbrook, Inc. d/b/a Maynard’s
Food Center, at 315 Main Avenue North, Lake Preston, South Dakota 57249, and by
filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division
of Dockets Management. The complaint alleges that Maynard’s Food Center
impermissibly 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, 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 to
impose a $279 civil money penalty against Respondent Maynard’s Food Center.

I. Background and Procedural History

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on January 19, 2018, CTP served the
complaint on Respondent Maynard’s Food Center by United Parcel Service. On
February 20, 2018, Respondent timely filed an answer. On March 14, 2018, I issued an
Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of
Respondent’s answer and establishing procedural deadlines for this case. The APHO
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 April 16, 2018, to
request that the other party provide copies of documents relevant to this case. The order
also stated that a party receiving such a request must provide the requested documents no
later than 30 days after the request has been made, pursuant to 21 C.F.R. § 17.23(a).

On April 3, 2018, CTP served its Request for Production of Documents on Respondent.
On May 10, 2018, CTP filed a Motion to Compel Discovery stating it has not received a
response to its Request for Production of Documents and requesting “an order be entered
to require Respondent to comply with the Request for Production of Documents in its
entirety.”

Ina May 11, 2018 letter issued by my direction, Respondent was given until May 25,
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 May 11,
2018 letter. Therefore, in a May 29, 2018 order, I granted CTP’s motion and ordered
Respondent to comply with CTP’s Request for Production of Documents by June 14,
2018. Respondent was warned that a 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.

On June 20, 2018, CTP filed a Motion to Impose Sanctions stating “Respondent has yet
to produce a single document in response to the discovery requests.” CTP requested I
strike Respondent’s answer and issue a default judgment imposing a civil money penalty
in the amount of $279 against Respondent. In a June 21, 2018 letter issued by my
direction, Respondent was given until July 5, 2018, to file a response to CTP’s Motion to
Impose Sanctions. To date, Respondent has failed to file any response to CTP’s Motion
to Impose Sanctions.

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 two judicial directions.
Specifically, Respondent failed to comply with my March 14, 2018 APHO and
Respondent failed to comply with my May 29, 2018 order to comply with CTP’s Request
for Production of Documents. This 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 6:33 p.m. on March 21, 2017, at Respondent’s business
establishment, 315 Main Avenue North, Lake Preston, South Dakota 57249, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
Marlboro Gold Pack 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;

e Ina warning letter dated June 8, 2017, CTP informed Respondent of the
inspector’s March 21, 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 2:13 p.m. on December 27, 2017, at Respondent’s business
establishment, 315 Main Avenue North, Lake Preston, South Dakota 57249, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
Marlboro Gold Pack cigarettes to a person younger than 18 years of age.

These facts establish Respondent Maynard’s Food Center’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), 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 $279 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $279 against Respondent
Maynard’s Food Center of Westbrook, Inc. d/b/a Maynard’s Food Center. Pursuant to 21
C.F.R. § 17.11(b), this order becomes final and binding upon both parties after 30 days of
the date of its issuance.

/s/
Wallace Hubbard
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2017-H-6798)

Complainant,
v.

Mr. Tango Enterprises Inc.
d/b/a National Tobacco and Shisha,

Respondent.
Docket No. T-18-612
Decision No. TB2966
Date: August 3, 2018
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP or Complainant) filed an Administrative
Complaint (complaint) against Mr. Tango Enterprises Inc. d/b/a National Tobacco and
Shisha (Respondent). In its complaint, Complainant alleges that Respondent
impermissibly sold covered tobacco products to a minor, thereby violating the Federal
Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing
regulations, 21 C.F.R. pt. 1140. The complaint likewise alleges that Respondent
previously admitted to three violations of regulations found at 21 C.F.R. pt. 1140 and,
therefore, Complainant seeks to impose a $2,236 civil money penalty against
Respondent. Respondent filed an answer to the complaint, but has failed to comply with
multiple judicial orders and directions during the hearing process. I therefore strike
Respondent’s answer and issue this decision of default judgment.
I. Procedural History

On December 13, 2017, Complainant began this matter by serving a complaint on
Respondent, seeking a $2,236 civil money penalty. On January 10, 2018, Respondent’s
counsel timely filed a notice of appearance and a motion requesting an extension of the
deadline to file its answer. On January 12, 2018, I issued an order that granted the
extension and provided Respondent with a new deadline to file its answer. On
February 12, 2018, Respondent timely filed its Answer and Affirmative Defenses
(Answer), and two Exhibits, Exhibits A-B inclusive. In its Answer, Respondent made a
counterclaim for malicious prosecution. See Answer at 9!.

On February 13, 2018, I issued an Acknowledgment and Pre-Hearing Order (APHO) that
gave the parties the deadline dates for several filings, including the dates for discovery.
Specifically, the APHO explained that the parties may request copies of documents
relevant to this case and that the requesting party must serve the request for documents no
later than March 23, 2018. See APHO § 12. As indicated in the APHO, a party who
received such a request was required to provide the requested documents no later than 30
days after the request had been made. The APHO also explained that sanctions may be
imposed if a party failed to comply with any order, including the APHO. See id. § 16.

On March 14, 2018, Complainant’s counsel filed a notice of appearance, a Motion to
Dismiss Respondent’s Counterclaim (motion) and one exhibit, Exhibit 1. The next day,
with Respondent’s permission, Complainant filed a joint status report indicating that the
parties were unable to reach a settlement and intended to proceed to a hearing. On
March 20, 2018, a letter issued by my direction, gave Respondent until April 3, 2018, to
file a response to Complainant’s motion. To date Respondent has not filed a response.

On May 3, 2018, Complainant filed an Unopposed Motion to Extend Deadlines. On that
same date, pursuant to 21 C.F.R. § 17.23(a), Complainant also filed a Motion to Compel
Discovery (MTC) and three exhibits, A-C inclusive. In that motion, Complainant stated
that it served a Request for Production of Documents (RFP) on Respondent on

March 23, 2018 and indicated it had not received a response to its request. On

May 4, 2018, I issued an order that extended the parties’ pre-hearing exchange deadlines.
On that same date, a letter was issued by my direction, which provided Respondent with
a deadline of May 21, 2018 to file a response to Complainant’s MTC. To date
Respondent has not filed a response to Complainant’s motion.

On May 31, 2018, I issued an order that granted Complainant’s motion and ordered
Respondent to comply with Complainant’s RFP by June 8, 2018. For the second time,

' The Answer pages are not numbered.
2 A typographical error erroneously gave Respondent until April 3, 3018 instead of
April 3, 2018, to file its Response.
Respondent was warned that a 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 listed in the Complaint and imposing a civil money penalty.” The
order also extended the parties’ pre-hearing exchange deadlines.

On June 11, 2018, Complainant filed Complainant’s Status Report and Motion to Impose
Sanctions (MTIS) advising me that Respondent had not complied with my May 31, 2018
order. Complainant asked me to strike the Respondent’s Answer and issue a default
judgment in this case. On that same date, Complainant also filed a motion requesting that
I extend the pre-hearing exchange deadlines. In a June 12, 2018 letter issued by my
direction, Respondent was given until June 26, 2018 to file a response to Complainant’s
MTIS. In an order issued the same day, I also extended the parties’ pre-hearing exchange
deadlines. To date Respondent has not filed a response to Complainant’s MTIS.

Il. Striking Respondent’s Answer

Pursuant to 21 C.F.R. § 17.35, lam granting Complainant’s MTIS, and striking
Respondent’s Answer, including the malicious prosecution counterclaim, for failing to
comply with multiple judicial orders and directions. Specifically, Respondent has not
complied with: (1) the deadline set forth in the APHO for responding to a discovery
request; nor (2) the order granting Complainant’s motion to compel discovery issued on
May 31, 2018. Further, I note that Respondent did not avail itself of the opportunity to
respond to Complainant’s Motion to Dismiss Respondent’s Counterclaim and
Complainant’s MTIS pursuant to the letters issued, by my direction, on March 20, 2018,
and June 12, 2018, respectively.

Further, 21 C.F.R. § 17.35(a)(2) provides that, in addition to a party’s failure to comply
with an order, subpoena, rule, or procedure governing the proceedings, a presiding officer
may impose sanctions for a party’s failure to prosecute or defend an action. Respondent
has not only failed to act in response to my orders of February 13, 2018, and

May 31, 2018, Respondent has failed to take any action in response to Complainant’s
motions, or to otherwise defend its February 12, 2018 Answer. Sanctions, therefore, are
appropriate in this case. The issue is whether Complainant’s proposed sanction — striking
Respondent’s Answer and issuing a default judgment — is fitting. 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). I find here that Respondent's
repeated failure to comply is sufficiently egregious to warrant striking the Answer and
issuing a decision without further proceedings. See id.

Ill. Default Decision

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

For purposes of this decision, I assume the facts alleged in the Complaint are true and
conclude the default judgment is merited based on the allegations of the Complaint and
the sanctions imposed on Respondent for failure to comply with the orders. 21 C.F.R.
§ 17.11. Specifically:

On May 1, 2017, CTP initiated a previous civil money penalty action, CRD
Docket Number T-17-3690, FDA Docket Number FDA-2017-H-2469, against
Respondent for three? violations of 21 C.F.R. pt. 1140. CTP alleged those
violations to have occurred at Respondent’s business establishment, 6905 West
12th Avenue, Hialeah, Florida 33014, on August 29, 2016, and December

11, 2016. Complaint § 11.

The previous action was closed when Respondent “admitted all of the allegations
in the Complaint and paid the agreed upon penalty.” Further, “Respondent
expressly waived its right to contest such violations in subsequent actions.”
Complaint § 12.

At approximately 11:55 AM on November 25, 2017, at Respondent’s business
establishment, 6905 West 12th Avenue, Hialeah, Florida 33014, an FDA-
commissioned inspector documented Respondent’s staff selling a Black & Mild
cigar to a person younger than 18 years of age. Complaint § 9.

These facts establish Respondent National Tobacco and Shisha’s liability under the Act.
The Act prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco
product is misbranded if sold or distributed in violation of regulations issued under
section 906(d) of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R.
§ 1140.1(b). The Secretary of the U.S. Department of Health and Human Services issued
the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-
1; see 21 U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 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. § 17.2, a $2,236 civil money penalty is permissible for four violations of
the regulations found at 21 C.F.R. pt. 1140.

3 Two violations were documented on August 29, 2016, and two on December 11, 2016.

In accordance with customary practice, CTP counted the violations at the initial
inspection as a single violation, and all subsequent violations as separate individual
violations.
ORDER

For these reasons, I enter default judgment in the amount of $2,236 against Respondent
Mr. Tango Enterprises Inc. d/b/a National Tobacco and Shisha. Pursuant to 21 C.F.R.
§ 17.11(b), this order becomes final and binding upon both parties after 30 days of the
date of its issuance.

/s/
Catherine Ravinski
Administrative Law Judge


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

(FDA No. FDA-2017-R-6130)
Complainant
v.

BKD Oil, Inc.
d/b/a Maplecrest Marathon / Food Center,

Respondent.
Docket No. T-18-122
Decision No. TB2957

Date: August 3, 2018

INITIAL DECISION
Introduction:

The Center for Tobacco Products (Complainant or CTP) presented sufficient evidence
and testimony to prove that BKD Oil Inc. d/b/a Maplecrest Marathon / Food Center
(Respondent) committed five repeated violations of the Food & Drug Administration
(FDA) tobacco regulations within a 36-month period. Respondent is found responsible
for its violations and is ordered to stop selling cigarettes, cigarette tobacco, roll-your-own
tobacco, smokeless tobacco, and covered tobacco products, regulated under the Federal
Food, Drug, and Cosmetic Act, for a period of 20 consecutive days.

Background:

On October 16, 2017, Complainant served its complaint with cover letter on Respondent,
through United Parcel Service, at Respondent’s business address located at 6303
Stellhorn Road, Fort Wayne, Indiana 46815. On October 17, 2017, Complainant filed a

1
copy of the complaint, cover letter and proof of service with this court. Departmental
Appeals Board E-File Docket (Dkt.) Entries 1, Complaint; 14, Cover Letter; and 1», Proof
of Service. On November 15, 2017, Respondent’s Counsel filed its notice of appearance
and answer to the complaint. Dkt. Entries 3, Notice of Appearance; and 3,, Answer. An
acknowledgement and prehearing order issued on November 30, 2017, which gave the
parties the deadline dates for several filings, including the dates for exchanges. Dkt.
Entry 4, Acknowledgment and Pre-Hearing Order. Complainant and Respondent each
filed its exchange by the deadline dates. After that, an order issued scheduling the
hearing and giving the parties until April 27, 2018, to file any objections to the exhibits
submitted as evidence in this case. Dkt. entry 11, Order Scheduling In-Person Telephone
Hearing. Neither party filed any objections. On May 1, 2018, Respondent filed a Notice
of Waiver of Hearing, and asked that a decision be made based solely on the
administrative record. Dkt. Entry 12, Notice of Waiver of Hearing. Complainant agreed
and both parties later filed final briefs. The administrative record is now complete and
this case is ready for decision.

Allegations/Penalty Proposed:

Complainant claims that Respondent has repeatedly violated the regulations authorized
by the Federal Food, Drug and Cosmetic Act (Act). Specifically, Complainant claims
that Respondent repeatedly sold cigarettes or smokeless tobacco to minors (persons
younger than 18 years old), in violation of 21 C.F.R. § 1140(a)(1)'. Complainant also
claims that Respondent repeatedly failed to verify, by means of photographic
identification, that no buyer was younger than 18 years old, in violation of 21 C.F.R.

§ 1140(a)(2)(i). Complaint at 1-2. As a penalty for the alleged violations, Complainant
asks for a No-Tobacco-Sale Order (NTSO) for a 30 consecutive day period. Id.

Legal Standards:

Regulation 21 C.F.R. §17.33 states that Complainant must prove, by a preponderance of
the evidence, that Respondent is liable for its actions and that the assessed penalty is
appropriate. In meeting the preponderance of the evidence standard, the Complainant
must show that what it alleges in its complaint is more likely than not true, and the
penalty it seeks is fitting. Finding the Respondent liable simply means that the court has
determined that Respondent is responsible for its actions.

This regulation also provides that the Respondent must prove its affirmative defenses and
mitigating factors by the same preponderance of the evidence standard.

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

2

The law at 21 U.S.C. § 331(f)(5)(B) requires that when determining the period to be
covered by a no-tobacco-sale order, such factors as the nature, circumstances, extent, and
gravity of the violation or violations and the effect on the violators ability to continue to
do business, any history of prior such violations, the degree of culpability, and such other
matters as justice may require, must be taken in account.

Evidence:
As part of its exchange, Complainant offered as evidence an Informal Brief, an exhibit

list, and 14 exhibits (CTP Ex. 1-14 inclusive). Complainant also submitted a Final Brief.
Without any objections, Complainant’s evidence is admitted.

As part of its exchange, Respondent offered as evidence an Informal Brief, an exhibit list,
and nine exhibits (Res. Ex. 1-9 inclusive). Respondent also offered a Final Brief with
one exhibit (RFB Exh. 1). Without any objections, Respondent’s evidence is admitted.

Issues:
1. On June 20, 2017 at approximately 7:33 p.m., as alleged in the complaint:

a. Did Respondent commit a repeated violation of 21 C.F.R. § 1140.14(a)(1)
by selling cigarettes to a minor?

b. Did Respondent commit a repeated violation of 21 C.F.R.
§ 1140.14(a)(2)(i) by failing to verify, by means of photographic
identification, that the buyer was 18 years old or older?

2. If Respondent did commit the claimed repeated violations, is a 30-consecutive day
No-Tobacco-Sale Order a fitting penalty?

Analysis:
Complaint/Answer:

a. Complaint
Complainant asserts that on June 20, 2017, an inspector working on behalf of FDA,
conducted an inspection of Respondent’s business located at 6303 Stellhorn Road, Fort
Wayne, Indiana 46815. Complaint at 3-4. It further claims that during that inspection,
Respondent violated the regulations that prohibit retailers from selling cigarettes to
minors. Jd. at 4. It also alleges that during the inspection, Respondent failed to verify
the age of the buyer by means of photographic identification containing the buyer’s
picture and date of birth. /d. Complainant claims that these two types of violations have
happened before at Respondent’s business, and that Respondent admitted to those prior
violations, paid the required penalties and gave up its right to challenge those violations

3
again in the future. Jd. at 5-6. Lastly, Complainant states that it warned Respondent and

all retailers that a 30 consecutive day No-Tobacco-Sale Order may be requested when the
business has five or more repeated violations of the rules within a 36-month period. Jd. at
3.

b. Answer

Respondent objects to a restriction on selling tobacco products for any period of time.
Answer at 1. Respondent disputes Complainant’s claim that it has had five repeated
violations and argues that Complainant has “improperly” counted the “incidents.” Id.
Respondent states that it “has had three (3) violations in a thirty six (36) month period.
Id. Respondent suggests that the “violations which occurred involved rogue employees
who] have been terminated since their incident[s].” Jd. Respondent admits “the current
status of the law” and admits “that CTP has provided public notice to the retailer” about
committing five or more repeated violations and the resulting penalties. Jd. at 3.
Respondent confirms that it owns and does business under the name and address listed in
the complaint. /d. Respondent states that it is “unaware” and “without
nowledge...regarding the June 20, 2017 incident” and “therefore denies” the claims
made in the complaint. Jd. Respondent did, however, also contend that it “believed that
two (2) rogue employees...may have intentionally sold tobacco to minors to try and get
the business] in trouble or to otherwise ‘stick it to the owners’.” Jd. Respondent admits
that it had prior violations and has “been the subject of two (2) prior CTP actions” as
stated in the complaint. /d. at 3-4. Lastly, Respondent asks that this court “not impose
any type of no-tobacco-sale order” because it would be “financially crippling” and would
“potentially put them out of business.” Jd. at 4.

Complainant’s Case:

Among other things, Complainant submitted an Informal Brief of the Complainant (IBC).
In this brief, Complainant contends that has “met its burden of proving that Respondent
committed five repeated violations of FDA’s tobacco regulation in a 36-month period and
that a 30-consecutive day no-tobacco-sale order is an appropriate penalty in this case.”
IBC at 1. Complainant argues that “[i]n light of Respondent’s multiple repeated
violations, as well as its unwillingness or inability to correct its violative (sic) actions, an
NTSO is necessary in order for Respondent to grasp the seriousness and importance of
the requirements related to the sale of tobacco products.” IBC at 12-13. Complainant
further argues that it “sought the 30-consecutive day NTSO in this case because it is...
appropriate here because Respondent violated the tobacco regulations seven times in a
nineteen-month period, between November 10, 2015, and June 20, 2017.” Id. at 15.
Complainant asserts that it “reminded Respondent about its responsibilities under the law,
directed Respondent to resources to help ensure compliance with the law, and notified
Respondent that a future violation could result in a civil money penalty, or other
enforcement actions.” Jd. at 16.

To prove its case, Complainant submitted several documents, including the sworn
statement of inspector Jason L. Baker (CTP Ex. 14). This detailed written testimony
describes Inspector Baker’s account of what he saw on June 20, 2017. Inspector Baker
states that when he conducted a follow-up undercover buy compliance check inspection
at Respondent’s business location, he took a photograph of Respondent’s business sign
and confirmed the name of the business before the inspection. /d. at 2-3. Along with the
inspector were a chaperone and a person younger than 18 years old, who the inspector
calls “Minor A.” Jd. at 3. The inspector asserts that before the inspection, he confirmed
that Minor A did not have any tobacco products or identification. Jd.

The inspector described the buy as follows: 1.) He and Minor A entered Respondent’s
business together while the chaperone remained in the car; 2.) He positioned himself for
an “unobstructed view” of the buy; 3.) He saw Respondent’s staff sell Minor A tobacco
products without Minor A showing any identification before the sale; 4.) Minor A left
the store before him to return to the car; and 5.) Immediately after entering the car,
Minor A handed him the tobacco products purchased in Respondent’s business. CTP Ex.
14.

Complainant included a copy of Minor A’s identification; a picture of Respondent’s
business sign; a picture of the tobacco products bought from Respondent’s business,
before and after being placed in the evidence bag; and a copy of the report made by the
inspector and uploaded minutes after the buy. CTP Ex. 4-9, inclusive.

Lastly, Complainant’s Final Brief (CFB) argues that “Respondent has paid civil money
penalties for prior violations, yet it has continued to violate the law...[therefore]...a 30-
day NTSO is a necessary and appropriate consequence for Respondent’s continued illegal
behavior that has constituted a risk to the public health.” CFB at 2-3.

Respondent’s Case

Among other things, Respondent submitted an Informal Brief of the Respondent (IBR).
In this brief, Respondent contends that Complainant “has not and cannot meet its burden
of proving that Respondent committed five (5) repeated violations of FDA’s tobacco
regulation in a thirty six (36) month period.” IBR at 1. Respondent argues that the
“complaint improperly double counts incidents on December 8, 2016 and June 20, 2017
to obtain the necessary five (5) repeated violations.” Jd. Respondent insists that it only
“has had three (3) violations in a thirty six (36) month period.” Jd. Respondent further
asserts that the claimed violations “involved rogue employees...[who] have been
terminated since the incident.” /d. at 1-2.

Respondent denies that it “knowingly or intentionally” sold tobacco products to a minor
or minors under the age of 18 as alleged, and states that it has “never been provided any
proof that [the violations] occurred.” IBR at 3. Respondent offered one affirmative

5
defense to Complainant’s claims, when it stated that “it is possible that a false or fake
identification was used.” Id. at 4.

Respondent also offered several mitigating factors. For example, Respondent says that it
“has made it a point of emphasis with [its] employees to ID everyone buying tobacco
products regardless of their age” and has “instituted a mandatory training program
regarding the sale of tobacco products.” IBR at 2. Respondent contends that its
andbook “informs all employees” of its “zero tolerance policy and employees are
warned: ‘IF YOU SELL TO A MINOR, PLAN ON LOSING YOUR JOB. PLAN ON
BEING CRIMINALLY CHARGED.”” Id.

Respondent further states that it “invested thousands of dollars in new software...to
prevent [its] employees from selling tobacco products to minors.” IBR at 2. According
to Respondent, the new software “forces the employee to either scan the customer ID or
enter the date of birth to insure the person is of legal age to purchase” when “the tobacco
product is scanned for purchase.” Jd. Respondent also submits that “[n]ew cameras were
installed to insure that the owners could catch anyone trying to sell to minors and prevent
the sale and/or terminate the clerk immediately.” /d. Further, Respondent states that
“signs are posted near the register informing customers and employees that they must be
18 years of age to buy tobacco products.” Id.

Respondent contends that it “is extremely concerned that any type of NTSO would
bankrupt” its business. IBR at 3. Respondent argues that “banning the sale of tobacco
products for any period of time would be financially crippling...and would potentially
put [it] out of business.” Jd. Respondent explains that it is “concerned that a ban of
selling tobacco for any period of time would severely diminish its repeat customer base
and be a bigger financial penalty than just losing revenue for a certain number of days of
business.” Jd. Respondent also states that it “has done everything it can to prevent
further sale of tobacco to minors by employees...[and] is open to other suggestions as to
ow to prevent employees from selling tobacco to minors in the future.” Jd.

Respondent included a copy of the business employee handbook; a picture of the cash
register with the new software system; pictures of the installed cameras; pictures of
signs that notify customers they must be 18 years old to buy tobacco products; financial
documents that show Respondent’s cigarette sales and total department sales. Res. Ex. 1,
4-12, and 15, respectively.

Respondent also filed a Respondent Final Brief (RFB). In that brief, Respondent states
that it has hired a private company to spot check their employees to make sure they are
not selling tobacco to minors. RFB at 1. Respondent argues “that the thirty (30) day
NTSO would be an undue burden to [the business] and as such, is not appropriate in light
of the seriousness of the alleged violations.” Jd. Further, Respondent “respectfully
asserts that a financial penalty in the amount of $5,000.00 which would be equal to the

6
profit lost from the sale of tobacco for thirty (30) days, would be a more appropriate
penalty.” RFB at 1-2. Alternatively, “Respondent suggests that an NTSO be issued for
two (2) days or some combination of a lesser NTSO plus a fine.” Jd. at 3.

Respondent included a copy of an email showing its enrollment in the “We Card ID
CHECK-UP Service.” RFB Ex. 1.

Discussion:

a. Prior violations
As stated in the Informal Brief of the Complainant (IBC), this is the third case CTP has
brought against Respondent for its sale of tobacco products to persons younger than 18
years old and failure to confirm the age of the buyers. IBC at 2. Two prior civil money
penalty (CMP) actions were brought by Complainant against Respondent for violations
occurring on November 10, 2015, March 10, 2016 and December 8, 2016. Id. at 3.
Respondent argues “The Complaint improperly double counts incidents on
December 8, 2016 and June 20, 2017 to obtain the necessary five (5) repeated violations
in an effort to impose a NTSO.” IBR at 1. I note, however, that in both CMP actions,
Respondent admitted the violations of selling tobacco products to minors and failing to
confirm, by asking for identification, that no buyer was younger than 18 years old. IBC
at 3-4. By virtue of these admissions, Respondent gave up its right to future challenges
of these violations. Complainant correctly notes, “Respondent’s liability for the [prior]
violations is administratively final” and is not available for review in this case. Jd. at 3.
Because the violations that occurred before June 20, 2017, are not open for review,
Respondent’s argument challenging the December 8, 2016 violations is barred.

b. Violation count
Even if Respondent were allowed to raise the December 8, 2016, violations as part of its
argument about the count used to meet the threshold for the penalty sought, Respondent’s
argument would still fail. As pointed out in Complainant’s Final Brief (CFB), “CTP’s
counting scheme, which was followed in this case, has been upheld both by the
Departmental Appeals Board in Orton Motor, Inc. d/b/a Orton’s Bagley, DAB No. 2717,
2016 WL 4076361 (H.H.S. June 30, 2016) and by the United States Court of Appeals for
the District of Columbia Circuit in Orton Motor, Inc. d/b/a Orton’s Bagley v. United
States Department of Health and Human Services, 884 F.3d 1205 (D.C. Cir. 2018).”

c. Current violations
This case, solely focuses on the violations which Complainant claims occurred on
June 20, 2017. In order to prevail, Complainant must show that the alleged violations
occurred. The evidence Complainant provided in this case convincingly shows that
Respondent committed the claimed violations. Inspector Baker’s sworn statement says
that he had an unobstructed view of the sales counter and the minor. CTP Ex. 14 at 2.
His eyewitness testimony is believable and the supporting evidence appears to be true.

7
Complainant met its burden of proving that Respondent committed the violations at issue.
Respondent did not make any statements or offer any evidence to dispute the testimony
and evidence submitted by Complainant.

Instead, Respondent’s arguments tend to support a finding that the violations as alleged
occurred on June 20, 2017. Respondent argues that it either didn’t “knowingly or
intentionally” commit the violations, or in the alternative, that the violations were
committed by “rogue employees” who wanted to “stick it to the owner.” It appears that
both arguments are made by Respondent in an attempt to relieve it of its liability, but
these arguments actually have the opposite effect, and they both fail. First, whether or
not the violations were committed “knowingly or intentionally” is not the standard.
Complainant does not have to prove intent. Complainant only has to prove that the
violations occurred, which it has done. And arguing that specific employees committed
the acts to hurt the owner would actually prove that the acts were intentional. Second, as
Respondent admits, the violations were committed by employees of Respondent’s
business — “rogue” or not — and that fact alone makes Respondent liable for the
violations. As Complainant rightly states the “Respondent is liable for the actions of all
its] employees.” CFB at 2.

Respondent also made one affirmative defense” to Complainant’s claims, when it stated
that “it is possible that a false or fake identification was used.” IBR at 4. Respondent,
owever, did not offer any evidence in support of this claim, so Respondent failed to
meet its burden of proving this defense.

d. Mitigating Factors

When deciding whether or not the penalty asked for is the right penalty, the court must
look at the following: the nature, circumstances, extent, and gravity of the violation or
violations; the effect on the violator’s ability to continue to do business; any history of
prior such violations; the degree of culpability; and such other matters as justice may
require.

Complainant contends that “[a]ll of Respondent’s violations are serious in nature”
because they breach “FDA’s efforts to protect minors from the multiple adverse health
effects associated with tobacco use.” IBC at 12. Respondent is clearly liable for its
actions and the actions of its employees. Respondent has, however, provided sufficient
evidence that demonstrates that after the June 20, 2017 violations, it has taken effective
steps to try to prevent the violations from happening again. Respondent has shown that it
‘as a written policy against selling tobacco products to persons under 18 years old and
that it has informed its employees of the applicable laws. Respondent has done this
through its training program, employee handbook, and signs at the counters. Respondent

2 Respondent made other claims (e.g. entrapment), but failed to substantiate these claims
with evidence, testimony or legal arguments. The claims, therefore, will not be addressed.

8
has also shown that it has established disciplinary consequences for employees who don’t
follow these rules. Respondent has already fired two employees, and its written policy
clearly lists termination as a consequence of employee noncompliance. Lastly,
Respondent has implemented new software that requires its employees to verify age
using photographic identification, and installed cameras to monitor employee conduct.
All of the actions Respondent has taken are consistent with CTP guidance for preventing
additional tobacco sales to minors.

While it is understandable that Respondent is concerned about the future of its business,
Respondent did not provide sufficient evidence to demonstrate that an NTSO would force
it into bankruptcy or make it close its doors. Respondent provided extensive tax filings
for recent years and a sales report generated on January 23, 2018. Respondent did not,
owever, provide any suggested interpretation of the data in the documents to
demonstrate a certainty of bankruptcy or the extent of financial loss as alleged. Although
Respondent asserts that a 30-day NTSO would impact sales other than tobacco products
as customers may be lost during the mandatory period of the NTSO, there is not
sufficient evidence more than speculation to demonstrate the impact that Respondent
suggests. Respondent argues that cigarette sales constitute 65 percent of its total sales.
While Respondent contends that there is a low profit margin on the sale of cigarettes,
Respondent also suggests a civil money penalty of five thousand dollars ($5,000) in lieu
of a mandatory NTSO. Respondent argues that this amount would equal the profits for
tobacco sales during a 30 day period. Although it is somewhat unclear how $5,000 can
constitute the profits for 65 percent of Respondent’s sales for a 30 day period, I do not
find the suggested penalty appropriate in lieu of the NTSO.

What Respondent is requesting as a penalty, is not an adequate penalty given its repeated
violations. Respondent had ample warnings from Complainant about the consequences
of repeat violations. Respondent wants to blame its employees, but ultimately,
Respondent is responsible for what occurs in its business. As Complainant pointed out,
Respondent “continued employment of such ‘rogue’ employees for many months and
through several acknowledged illegal sales of tobacco to minors.” CFB at 2. Also, if
Respondent had implemented the preventive measures after receiving the initial warnings
and civil money penalties, perhaps it could have stopped the unlawful sales to minors and
avoided the imposition of an increased penalty. The penalty Respondent suggests is not
appropriate given Respondent’s history of previous violations and its degree of
culpability. I find, however, that Respondent has taken very deliberate steps to prevent
these unlawful sales from reoccurring. On June 23, 2017, Complainant issued a Notice
of Compliance Check Inspection notifying Respondent of the June 20, 2017 inspection
and the alleged violations. Respondent submitted evidence to show that by mid-July
2017, Respondent installed new software that imposed age verification before the sale of
tobacco products. The installation of this software, along with the posting of numerous
signs and the installation of extension security cameras are demonstrable signs that

Respondent has attempted to prevent further unlawful sales. For that reason, I find that it
is appropriate to reduce the penalty sought by the Complainant.

Findings of Fact:

Complainant has met its burden of proving, by a preponderance of the evidence, that
Respondent committed a repeated violation of 21 C.F.R. § 1140.14(a)(1), when it sold
cigarettes to a person younger than 18 years old on June 20, 2017.

Complainant has met its burden of proving, by a preponderance of the evidence, that
Respondent committed a repeated violation of 21 C.F.R. § 1140.14(a)(2)(i), when it
failed to confirm, by asking for identification, that no buyer was younger than 18 years
old.

Respondent has met its burden by proving, by a preponderance of the evidence, that there
are mitigating factors to show that a reduced penalty is fitting.

Conclusions of Law:

Respondent committed five repeated violations of FDA’s tobacco regulation in a
36-month period.

Respondent is liable for a No-Tobacco-Sale Order.

Penalty Imposed:

A No-Tobacco-Sale Order is imposed on Respondent for a period of 20 consecutive days.
Order

For these reasons Respondent is found liable for its violations and is ordered to stop

selling cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and

covered tobacco products, regulated under the Federal Food, Drug, and Cosmetic Act, for
a period of 20 consecutive days.

IT IS SO ORDERED.

/s/
Margaret G. Brakebusch
Administrative Law Judge

10


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2017-R-6625)

Complainant
v.

Landover Services, Inc.
d/b/a US Fuel,

Respondent.
Docket No. T-18-490
Decision No. TB2942

Date: July 30, 2018

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (complaint)
against Respondent, Landover Services, Inc. d/b/a US Fuel, which alleges that US Fuel
sold cigarettes and/or smokeless tobacco to minors, 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 likewise alleges that Respondent US Fuel committed
five repeated violations of FDA tobacco regulations within a 36-month period, and
therefore, CTP seeks to impose a No-Tobacco-Sale Order against Respondent US Fuel
for a period of 30 consecutive calendar days.

Although Respondent filed an answer to the complaint, it has subsequently failed to
comply with judicial orders, failed to defend its action, and engaged in conduct which has
interfered with the speedy, orderly, and fair conduct of this proceeding. I therefore
STRIKE Respondent’s answer and issue this decision of default judgment.
I. Introduction

CTP began this case by serving a complaint on Respondent US Fuel at 6705 Martin
Luther King Jr. Highway, Hyattsville, Maryland 20785, and by 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
cigarettes and/or smokeless tobacco to minors and failed to verify that tobacco product
purchasers were of sufficient age, and it seeks a No-Tobacco-Sale Order against
Respondent for a period of 30 consecutive calendar days.

On December 12, 2017, Respondent filed a timely Answer to the complaint via the DAB
E-File system. I issued an Acknowledgment and Pre-Hearing Order (APHO) on
December 21, 2017, which explained to the parties what they must do to present evidence
and arguments in this case. The APHO also established deadlines for discovery requests
and pre-hearing briefs. The APHO directed CTP to file its pre-hearing exchange by
March 13, 2018, and it directed Respondent to file its pre-hearing exchange by April 3,
2018.

On January 19, 2018, CTP filed a status report which indicated that the parties were
engaged in settlement discussions and intended to continue those conversations. On
March 6, 2018, CTP filed a Motion to Compel Discovery and a Motion to Extend
Deadlines in the APHO. On March 7, 2018, I granted the Motion to Extend Deadlines in
the APHO. Also on that date, the staff attorney assigned to this case issued a letter by my
direction allowing Respondent until March 21, 2018, 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 otherwise respond to the March 7, 2018 letter. Accordingly, I granted the
Motion to Compel Discovery on March 22, 2018. Respondent was given until April 6,
2018, to comply with CTP’s Request for Production of Documents. My March 22, 2018
Order also extended the parties respective pre-hearing exchange deadlines.

In accordance with the March 22, 2018 Order, CTP timely filed its pre-hearing exchange
and a list of exhibits on April 27, 2018. Respondent did not file a pre-hearing exchange
or any supporting exhibits by its May 18, 2018 deadline. On May 25, 2018, I issued a
Pre-Hearing Order scheduling a pre-hearing conference on Monday, July 9, 2018, at
11:00 AM Eastern Time, so that the parties could discuss the issues remaining in the case
in light of Respondent’s failure to file a pre-hearing exchange, proposed exhibits, or
witness testimony.

The pre-hearing conference was convened as scheduled on July 9, 2018, and Mr. Michael
Varrone and Ms. Rachel Babbitt appeared on behalf of CTP. Neither Respondent nor
Respondent’s counsel appeared for the call, nor did they contact the Departmental
Appeals Board (DAB) prior to the call to indicate they would be unable to attend. On
July 10, 2018, I issued an Order to Show Cause, allowing Respondent until July 16, 2018,
to show cause for its failure to appear at the pre-hearing conference. On July 16, 2018,
Respondent’s counsel filed a response to my order stating that counsel “overestimated
[his] abilities and assumed that [he] would be present in [his] office and available after
arriving home from summer vacation with [his] family,” on the afternoon of July 9, 2018.
In support of his response, counsel submitted a flight itinerary booked on June 9, 2018,
showing that he departed Tampa, Florida at 10:25 AM on July 9, 2018, scheduled to
arrive in Baltimore, Maryland, at 12:45 PM the same afternoon.

I. Striking Respondent’s Answer

Pursuant to 21 C.F.R. § 17.35(a)(1), (2), and (3),! I am striking Respondent’s answer for
failing to comply with judicial orders, failing to defend the case, and interfering with the
speedy, orderly, and fair conduct of the hearing. Specifically, Respondent did not
comply with CTP’s Request for Production of Documents until after I granted CTP’s
Motion to Compel Discovery. Counsel also failed to appear for the July 9, 2018 pre-
hearing conference. Moreover, in his response to my Order to Show Cause, counsel did
not demonstrate that extraordinary circumstances prevented him from appearing for the
conference.

An extraordinary circumstance is defined as a circumstance which is beyond a party’s
ability to control that prevents the party from discharging the duty to file a timely
response. 4447 Corner Store, DAB CR1037 (2012). Ordinary negligence, simple
neglect, and/or attorney error do not amount to an extraordinary circumstance. Neves v.
Holder, 613 F.3d 30, 36 (1st Cir. 2010); Cmty Dental Servs. v. Tani, 282 F.3d 1164,
1168-69 (9th Cir. 2002); In re Aquatic Dev. Grp., Inc., 352 F.3d 671, 679 (2nd Cir.
2003). Counsel’s failure to appear due to “overestimat[ing] [his] abilities and assum[ing]
[he] would be present in [his] office,” does not constitute an extraordinary circumstance,
because inadvertently booking a flight at the same time as a pre-hearing conference is
within counsel’s control. Counsel did not offer any explanation as to why he booked a
flight to Baltimore, Maryland, when he was already scheduled to appear at a pre-hearing
conference on the same day at the same time. The Pre-Hearing Order scheduling the July
9, 2018 conference was issued on May 25, 2018, more than six weeks prior to the
conference and two weeks before counsel booked his flight. Counsel had several weeks
to predict the conflict and avoid it by rescheduling the conference or the date and time of
his return from vacation, but he failed to do so.

' 21 C.F.R. § 17.35 governs the issuance of sanctions. That section reads, in relevant
part, “(a) The presiding officer 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.”
Even assuming, arguendo, that extraordinary circumstances had arisen on the day of the
conference, counsel made no attempt to contact the DAB on July 9, 2018, to indicate that
he was unavailable due to unforeseen circumstances. After I issued an Order to Show
Cause on July 10, 2018, Respondent waited until July 16, 2018, the due date of the
response, to file a response providing a reason for his absence. Counsel’s explanation for
failing to attend the pre-hearing conference does not demonstrate extraordinary
circumstances. Therefore, sanctions are appropriate in this case.

The issue is whether striking Respondent’s answer and issuing a default judgment is
appropriate under these circumstances. The harshness of the sanctions I impose upon
either party must relate to the nature and severity of the misconduct or failure to comply.
I find that Respondent’s failure to comply with CTP’s discovery request until after an
Order Compelling Discovery was issued interfered with the speedy and orderly conduct
of this proceeding. 21 C.F.R. § 17.35(a)(1), (a)(3). In addition, counsel’s failure to
appear at the July 9, 2018 pre-hearing conference after service of the May 25, 2018 Order
constitutes failure to defend the action. 21 C.F.R. § 17.35(a)(2). Counsel’s conduct is
sufficiently egregious to warrant striking the answer and issuing a decision without
further proceedings. See 21 C.F.R. § 17.35(b).

Ill. Default Decision

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

For purposes of this decision, I assume the facts alleged in the complaint are true and
conclude the default judgment is merited based on the allegations of the complaint and
the sanctions imposed on Respondent for failure to comply with the orders. 21 C.F.R.
§ 17.11. Specifically, CTP alleges the following facts in its complaint:

e On February 20, 2014, CTP initiated the first civil money penalty action, CRD
Docket Number C-14-1760, FDA Docket Number FDA-2014-H-1238, against
Respondent for violations” of 21 C.F.R. pt. 1140. CTP alleged those violations to
have occurred at Respondent’s business establishment, 6705 Martin Luther King

2 Respondent’s original violation for selling cigarettes and/or smokeless tobacco to a
minor occurred on October 8, 2013.
Jr. Highway, Landover, Maryland 20785,° on October 8, 2013, and February 20,
2014;4

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

e¢ On March 10, 2015, CTP initiated the second civil money penalty action, CRD
Docket Number C-15-1537, FDA Docket Number FDA-2015-H-0709, against
Respondent for violations® of 21 C.F.R. pt. 1140. CTP alleged those violations to
have occurred at Respondent’s business establishment, 6705 Martin Luther King
Jr. Highway, Hyattsville, Maryland 20785, on October 17, 2014;

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

¢ On October 30, 2015, CTP initiated the third civil money penalty action, CRD
Docket Number T-17-377, FDA Docket Number FDA-2015-H-3859, against
Respondent for six violations of 21 C.F.R. pt. 1140 within a 48-month period.
CTP alleged those violations to have occurred at Respondent’s business
establishment, 6705 Martin Luther King Jr. Highway, Hyattsville, Maryland
20785, on June 23, 2015;

3 T note that Respondent’s address in the first CMP action was listed as “6705 Martin
Luther King Jr. Highway, Landover, Maryland 20785,” and its address in the subsequent
actions was listed as “6705 Martin Luther King Jr. Highway, Hyattsville, Maryland
20785.” Respondent has made no indication that its store location has changed or that it
is not the same Respondent from the original complaint.

+ According to CTP’s chart entitled “Violative Inspection Dates,” the original violations
of 21 C.F.R. Part 1140 for selling cigarettes and/or smokeless tobacco occurred on
October 8, 2013. Although Respondent also sold cigarettes and/or smokeless tobacco to
a minor on February 20, 2014, this date was not counted as a repeated violation, as it
occurred outside of the 36 month window during which Respondent committed five
repeated violations. See complaint § 1, Figure | entitled “Violative Inspection Dates.”

5 Respondent’s original violation for failure to verify, by means of photographic
identification containing a purchaser’s date of birth, that no cigarette or smokeless
tobacco purchasers are younger than 18 years of age occurred on October 17, 2014.
e The third action concluded when an Initial Decision was entered by an
Administrative Law Judge, “finding Respondent liable for the June 23, 2015
violations and concluding that the Respondent committed six violations in a forty-
eight month period as set forth in the complaint”;

e At approximately 12:34 p.m. on June 21, 2017, at Respondent’s business
establishment, 6705 Martin Luther King Jr. Highway, Hyattsville, Maryland
20785, an FDA-commissioned inspector documented Respondent’s staff selling a
package of Newport Box 100s cigarettes to a person younger than 18 years of age.

The inspector also documented that staff failed to verify, by means of

photographic identification containing a date of birth, that the purchaser was 18

years of age or older.

These facts establish 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. § 387£(d)(1); 75 Fed. Reg. 13,225,
13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016). Under 21
C.F.R. § 1140.14(a)(1)°, no retailer may sell tobacco products 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 tobacco product
purchasers are younger than 18 years of age.

Taking the above-alleged facts as true, Respondent had five repeated violations of
regulations found at 21 C.F.R. pt. 1140. Respondent violated the prohibition against
selling cigarettes and/or smokeless tobacco to persons younger than 18 years of age, 21
C.F.R. § 1140.14(a)(1), on October 8, 2013, and repeated those violations on October 17,
2014, June 23, 2015, and June 21, 2017. On October 17, 2014, Respondent also violated
the requirement that retailers verify, by means of photographic identification containing a
purchaser’s date of birth, that no tobacco product purchasers are younger than 18 years of
age, 21 C.F.R. § 1140.14(a)(2)(i), and repeated those violations on June 23, 2015, and
June 21, 2017. Therefore, Respondent’s actions constitute violation of law, which merit
a No-Tobacco-Sale Order.

Under 21 U.S.C. § 333(£)(8), a No-Tobacco-Sale Order is permissible for five repeated
violations of the regulations found at 21 C.F.R. pt. 1140. The maximum period of time
for the first No-Tobacco-Sale Order received by a retailer is 30 consecutive calendar

days. See Pub. L. 111-31, div. A, title I, § 103(q)(1)(A), June 22, 2009, 123 Stat. 1838,

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

1839; Food & Drug Admin., Civil Money Penalties and No-Tobacco-Sale Orders For
Tobacco Retailers at 5-6, available at
http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/U
CM252955.pdf (last updated Dec. 15, 2016); Determination of the Period Covered by a
No-Tobacco-Sale Order and Compliance with Order at 3-4, available at
https://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/
UCM460155.pdf (last updated August 2015).

Order

For these reasons, I enter default judgment against Respondent Landover Services, Inc.
d/b/a US Fuel, in the form of a No-Tobacco-Sale Order, for a period of 30 consecutive
calendar days. During this period of time, Respondent shall stop selling cigarettes,
cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and covered tobacco
products regulated under the Federal Food, Drug, and Cosmetic Act. Pursuant to 21
C.F.R. § 17.11(b), this order becomes final and binding upon both parties after 30 days of
the date of its issuance.

/s/
Wallace Hubbard
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Baydoun Brothers, Inc.
d/b/a Shell Food Mart,

Respondent.

Docket No. T-17-4958
FDA Docket No. FDA-2017-R-3855

Decision No. TB2939

Date: July 30, 2018

DECISION

l impose a No Tobacco Sale Order (NTSO) against Respondent, Baydoun Brothers, Inc.
d/b/a Shell Food Mart, for a period of 30 consecutive calendar days based on
Respondent’s repeated violations of federal tobacco regulations over a period of 36
months.

I. Background

Respondent requested a hearing in order to challenge the Center for Tobacco Products’
(CTP’s) proposal to impose an NTSO against it. The parties filed pre-hearing briefs, and
I held a hearing on April 11, 2018. At the hearing, I received into evidence exhibits from
CTP that are identified as CTP Exhibit (Ex.) 1-CTP Ex. 13. I also received an exhibit
from Respondent consisting of the affidavit of Ghazzey Baydoun. | identified that
affidavit as R. Ex. 1. Transcript (Tr.) at 7; Feb. 26, 2018, Order Scheduling Hearing.
IL. Issues, Findings of Fact and Conclusions of Law
A. Issues

The issues are: whether Petitioner committed five violations of applicable regulations
governing sales of tobacco products to minors within a period of 36 months; and whether
an NTSO of 30 consecutive days’ duration is a reasonable remedy.

B. Findings of Fact and Conclusions of Law

CTP asserts that I should impose an NTSO against Respondent pursuant to the authority
conferred by the Federal Food, Drug, and Cosmetic Act (Act) and implementing
regulations at Part 21 of the Code of Federal Regulations (C.F.R.). The Act prohibits the
misbranding of tobacco products while they are held for sale after shipment in interstate
commerce. 21 U.S.C. § 331(k). The Food and Drug Administration (FDA) and its
agency, CTP, may seek the imposition of remedies against any person who violates the
Act’s requirements as they relate to the sale of tobacco products. 21 U.S.C. § 331(£)(9).
The sale of tobacco products to an individual who is under the age of 18 and the failure to
verify the photographic identification of an individual who is not over the age of 26 are
violations of implementing regulations. 21 C.F.R. § 1140.14(a)(1), (a)(2)(i).

Remedies may consist of civil money penalties and NTSOs. NTSOs are authorized at
21 U.S.C. § 387£(8). The section allows for the imposition of an NTSO against a person
who has committed “repeated violations” of restrictions on the sale of tobacco products.
The term “repeated violations” is defined to mean “at least 5 violations of particular
requirements over a 36-month period at a particular retail outlet ....” 21 U.S.C. § 333.

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

In determining the . . . period to be covered by a no-tobacco-sale order, the
Secretary shall take into account the nature, circumstances, extent, and
gravity of the . . . violations, and with respect to the violator, . . ., effect on
ability to continue to do business, any history of prior such violations, the
degree of culpability, and such other matters as justice may require... .

21 U.S.C. § 333(f)(5)(B).

CTP developed policy guidelines that establish maximum NTSO durations. For a first
NTSO, CTP recommends that the maximum duration be 30 calendar days.
Determination of the Period Covered by a No-Tobacco-Sale Order and Compliance with
Order at 3-4, available at https://www.fda.gov/downloads/TobaccoProducts/Labeling
/RulesRegulationsGuidance/UCM446547.pdf (last updated Aug. 2015) (Guidance) at 4.

CTP’s policy is to, in general, seek the maximum duration for an NTSO established by
the guidelines. It explains its rationale for establishing these recommended maximum
NTSO durations as follows:

First, if there are grounds for imposing an NTSO, the retailer has already
engaged in repeated violations of the law and regulations restricting the sale
and distribution of tobacco products, and therefore has a prior history of
violations. Second, the restrictions codified in part 1140 [of the
regulations] are intended to protect the public health, especially children
and adolescents, and FDA therefore considers repeated violations of these
restrictions to be very serious. Nearly 9 out of 10 adult daily smokers
smoked their first cigarette by age 18 (87 percent). If the current trajectory
of smoking rates continues, 5.6 million children alive today will die
prematurely as a result of smoking. Third, FDA believes that imposing
NTSOs where the periods of time gradually increase, starting with a
maximum of 30 days and then a maximum of 6 months before issuing an
order permanently prohibiting the sale of tobacco products, strikes an
appropriate balance between considerations related to the number, extent,
and gravity of the violations on one hand, and the retailer’s ability to do
business on the other hand. The increasing periods of time for which FDA
intends to impose NTSOs are also consistent with the scheme of increasing
[civil money penalties]... .

Id. (footnotes omitted).

I find CTP’s guidelines to be entirely reasonable when read in the context of the Act’s
language and purpose. The guidelines are not written as regulations and are not,
therefore, binding as a matter of law. But, they are persuasive, and I accord CTP
deference in view of its expertise in administering the Act and implementing regulations.
I find especially persuasive the guidelines’ reliance on statistics showing the terrible
consequences of smoking on our population and the strong linkage between tobacco
addiction and commencement of smoking at an early age.

Iam mindful also that an NTSO may have a profound effect on a retailer’s business and
even on that retailer’s ability to stay in business. However, this remedy is reserved only
for the most egregious offenders — individuals and entities that have repeatedly violated
the law despite the imposition against them of escalating civil money penalties — and is
necessary if for no other reason than to protect the public against these offenders’
inability to comply with law and regulations governing tobacco sales. Generally
speaking, the need to protect the public outweighs the adverse effects that an NTSO may
have on an individual retailer’s business, especially in light of the fact that imposition of
this remedy is reserved only for those retailers who demonstrate indifference to the
requirements of law.

Respondent is a repeated violator of law and regulations. This case constitutes the third
time that CTP pursued sanctions against Respondent. On November 24, 2015, CTP
charged Respondent with unlawful sales of tobacco products to minor purchasers on
July 16 and March 26, 2015, in violation of 21 C.F.R. § 1140(a)(1); and on March 26,
2015, failing to verify the age of a purchaser by checking that individual’s photographic
identification in violation of 21 C.F.R. § 1140.14(a)(2)(i). CTP Ex. 1. Respondent
admitted these allegations and that case became administratively final. CTP Ex. 3. On
September 23, 2016, CTP filed a second complaint against Respondent, charging
Respondent with again unlawfully selling tobacco products to a minor purchaser and
failing to verify the age of a purchaser by checking that individual’s photographic
identification, in violation of 21 C.F.R. § 1140(a)(1) and (a)(2)(i). That unlawful sale and
failure to check identification occurred on March 5, 2016. On November 22, 2016,
Respondent admitted these allegations, and as with the first complaint, this second
complaint became administratively final. CTP Ex. 4.

In the instant case, CTP alleges that on February 1, 2017, Respondent again unlawfully
sold tobacco products to a minor and failed to verify that purchaser’s age by checking her
photographic identification. CTP offered convincing and unrebutted proof to establish its
allegations. Justin Bishop, an FDA-commissioned inspector, testified that, on

February 1, 2017, he went to Respondent’s establishment accompanied by a minor. CTP
Ex. 13 § 10. He verified that the minor had no tobacco products in her possession prior
to entering the establishment but that she had photographic identification verifying her
age. Id. 49. He entered Respondent’s establishment immediately after the minor
entered, and took up a position from which he had an unobstructed view of Respondent’s
sales counter. He watched the minor purchase a package of cigarettes (Newport Box
100s) and observed the clerk fail to check the minor’s identification. Id. §§ 13-14.

I find Inspector Bishop’s testimony to be credible. Inspector Bishop’s testimony is
supported by his contemporaneous photographs (CTP Exs. 7-8), narrative report (CTP
Ex. 10), and inspection form (CTP Ex. 9).

The evidence of additional noncompliance coupled with Respondent’s past history of
violations establishes that Respondent repeated violations of the regulations governing
sales of tobacco products to minors five times in a 36-month period.' In light of that, an
NTSO is an authorized remedy.

' Respondent’s original violation of 21 C.F.R. § 1140.(a)(1) was on March 26, 2015, and
Respondent repeated that violation on July 16, 2015, March 5, 2016, and February 1,
2017. Respondent’s original violation of 21 C.F.R. § 1140.(a)(2)(i) was on March 26,
2015, and Respondent repeated that violation on March 5, 2016, and February 1, 2017.
I find that imposition of an NTSO for 30 consecutive days is reasonable. It is evident that
multiple civil money penalties have not deterred Respondent from continuing to sell
tobacco products in violation of law. I impose the remedy because something other than
a civil money penalty plainly is needed here. Moreover, I do so because, if for no other
reason, the public needs to be insulated from Respondent’s business practices for a
reasonable period of time.

I have considered Respondent’s arguments in opposing the imposition of an NTSO of 30
consecutive calendar days and I find them to be insufficient to mitigate or eliminate the
remedy. Respondent contends that an NTSO would cause it to suffer severe financial
hardship. It estimates that it would lose sales in the range of $40,000 to $50,000 if it
were barred from selling tobacco products for 30 consecutive days and that such a loss
might jeopardize its ability to continue in business. R. Ex. 1. However, Respondent has
offered nothing by way of corroboration for this contention — no financial records
whatsoever. I do not find this assertion to be credible in the absence of corroboration.

Moreover, I do not find Respondent’s assertion as to anticipated sales losses to be
persuasive even if it accurately states the likely impact of an NTSO on its business
operations. Respondent’s premise is that the heart of its business is tobacco sales. It
asserts that few customers would patronize its establishment if it were barred from
making such sales. Maybe so, but if, in fact, tobacco sales are the heart of Respondent’s
business, then Respondent should exercise diligence in assuring that it does not sell
tobacco products to minors. The record establishes that Respondent has been anything
but diligent. And, given that, removing Respondent from the stream of sales of tobacco
products for a 30-day period is eminently reasonable.

/s/
Steven T. Kessel
Administrative Law Judge