Opinion ID: 172805
Heading Depth: 1
Heading Rank: 6

Heading: The DAB Reasonably Affirmed the Amount of the Money Penalties

Text: Under § 333(f)(1)(A) and the implementing regulations, a civil penalty may not exceed $16,500 for each violation. 21 U.S.C. § 333(f)(1)(A); 21 C.F.R. § 17.2. The appropriate amount of a money penalty is determined by considering mitigating and aggravating factors. 21 C.F.R. § 17.45(b)(3). FDA sought penalties of $10,000 for each violation from each petitioner, which the ALJ imposed and which the DAB ultimately affirmed. In their petition before this Court, petitioners contend their financial condition was ignored in assessing the penalty amount and that several mitigating factors justify a lower penalty. Petitioners' first argument is unfounded. The DAB meticulously explained why petitioners' financial disclosures were inadequate to give a reliable picture of petitioners' ability to pay a $170,000 penalty. TMJI, for example, refused to submit complete tax returns. Dr. Christensen refused to disclose money or property transfers. Neither petitioner explained a significant drop in profitability from 2004 to 2005 ($624,690 in ordinary business income on approximately $2.7 million in net sales in 2004 versus $203,108 in ordinary business income on the same amount of net sales in 2005) combined with a 52% increase in salaries during the same time period. Far from ignoring petitioners' financial condition, the DAB justifiably concluded that the ALJ's findings that TMJI and Dr. Christensen failed to make full financial disclosures are supported by substantial evidence in the record [as] a whole. His inference that a full disclosure would not have supported their assertions of an inability to pay is reasonable. The DAB also properly evaluated all factors petitioners characterize as mitigating. First, petitioners contend that they never refused to file the seventeen MDRs but only sought a dialogue with FDA to discuss their disagreement regarding whether MDRs were required before they filed them. As the DAB explained, however, the law does not require an explicit refusal to file; rather, the failure to file an MDR when the statute and regulations require it constitutes a violation of § 360i. Furthermore, petitioners do not have the authority to make the ultimate determinations of whether and when an MDR must be filed. That authority lies with Congress and FDA, which have clearly articulated their determinations in the statutes and implementing regulations. Accordingly, petitioners' failure to file MDRs and their recalcitrant responses to the repeated FDA warnings can reasonably be interpreted as explicit refusals to file. Second, the DAB reasonably rejected petitioners' contention that their failure to file MDRs after being informed that they were required to do so was in good faith. This finding is supported by substantial evidence in the administrative record, and petitioners' statement that TMJI's devices are not a threat to the public health is simply petitioners' own opinion. The DAB did not err in failing to accord significant weight to this self-serving assertion. Third, petitioners' offer to file the required MDRs if FDA promised to drop the CMP is also not a mitigating factor, and FDA's rejection of that offer does not violate the Small Business and Regulatory Enforcement Fairness Act. Indeed, petitioners only made the offer to file MDRs after the ALJ had held them liable and after the DAB had affirmed that decision. Offering to abide by the law only after being punished for not doing so does not mitigate the culpability of the initial unlawful conduct and the DAB's similar conclusion was not error. Finally, to the extent petitioners contend that other mitigating factors exist, we have carefully reviewed the extensive record in this case and conclude that the DAB's decision is legally tenable and supported by substantial evidence.