Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Center for Tobacco Products,
Complainant,
v.
Albertson's LLC
d/b/a Acme Markets 7826,
Respondent.
Docket No. T-19-2922
FDA Docket No. FDA-2019-H-2329
Decision No. TB4618
ORDER GRANTING MOTION FOR PARTIAL SUMMARY DECISION AND PARTIAL SUMMARY DECISION
Found:
- Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) as charged in the complaint; and
- Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i) as charged in the prior complaint; and
- Respondent committed four violations in a 24-month period as set forth hereinabove.
- Respondent is hereby assessed a civil penalty in the amount of $2,282.
Glossary:
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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 17.2
II. PROCEDURAL BACKGROUND
The Center for Tobacco Products (CTP/Complainant) filed a Complaint on May 20, 2019, against Albertson’s LLC d/b/a Acme Markets 7826 (Respondent or Acme Markets 7826), at 4720 Limestone Road, Wilmington, Delaware 19808, alleging that FDA documented four violations within a 24-month period.
Respondent Acme Markets 7826 filed an Answer on June 13, 2019. In its Answer, Respondent admitted the violations alleged in the current complaint, but disputed the appropriateness of the $2,282 CMP sought by CTP.
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On June 20, 2019, I issued a Pre-Hearing Order (PHO) in which I set a schedule for pre-hearing exchanges of evidence and argument. Additionally, the PHO stated that either party could file a motion for summary decision as a part of its pre-hearing exchange. See PHO ¶ 4b.
On September 19, 2019, CTP filed a Motion for Partial Summary Decision requesting “partial summary decision for CTP on liability.” On that same date, CTP also timely filed its pre-hearing exchange which contained an informal brief and five proposed exhibits.
On October 24, 2019, I issued an Order Granting Motion for [Partial] Summary Decision and Order to Show Cause to Respondent (OSC). Respondent was ordered to show cause on or before October 29, 2019, why Partial Summary Decision should not be entered in favor of CTP. Respondent failed to file any responsive pleadings to my OSC.
III. BURDEN OF PROOF
The Center for Tobacco Products (CTP/Complainant) as the petitioning party has the burden of proof (21 C.F.R. § 17.33).
IV. LAW
21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and 1140.14(a)(2)(i).
V. ISSUE
Did Respondent violate 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and 1140.14(a)(2) as alleged in the complaint?
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VI. SUMMARY DECISION
Pursuant to 21 C.F.R. § 17.17(b), I am authorized to grant a motion for summary decision “if the pleadings, affidavits, and other materials filed in the record, or matters officially noticed, show that there is no genuine issue as to any material fact and that the party is entitled to summary decision as a matter of law.”
I find that Respondent was served, which Respondent has admitted, and that Respondent is subject to the jurisdiction of this forum, as established by its June 12, 2019 Answer filed on June 13, 2019.
In its Answer, Respondent conceded that the violations for which CTP seeks a money penalty occurred as alleged in the complaint.
Further, in my October 24, 2019 OSC, I ordered Respondent to Show Cause on or before close of business on October 29, 2019, why Partial Summary Decision should not be entered in favor of the Complainant pursuant to 21 C.F.R. § 17.17.
Respondent failed to file responsive pleadings to CTP’s Motion for Partial Summary Decision and my OSC. Thus, pursuant to 21 C.F.R. § 17.17, I find it appropriate to grant CTP’s Motion for Partial Summary Decision and find Respondent liable under the Act.
VII. ALLEGATIONS
A. Agency’s recitation of facts
CTP alleged that Respondent owned an establishment, doing business under the name Acme Markets 7826, located at 4720 Limestone Road, Wilmington, Delaware
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19808. Respondent's establishment received tobacco products in interstate commerce and held them for sale after shipment in interstate commerce.
During an inspection of Acme Markets 7826 conducted on February 18, 2019, 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 100s cigarettes on February 18, 2019, at approximately 6:30 PM.
B. Respondent’s recitation of facts
Respondent admitted the violations as alleged in the complaint.
VIII. PRIOR VIOLATIONS
On November 26, 2018, CTP initiated a previous civil money penalty action, CRD Docket Number T-19-619, FDA Docket Number FDA-2018-H-4460, against Respondent for three3 violations of 21 C.F.R. pt. 1140. CTP alleged those violations to have occurred at Respondent’s business establishment, 4720 Limestone Road, Wilmington, Delaware 19808, on July 29, 2017, and September 4, 2018.
The previous action concluded when Respondent admitted the allegations contained in the Complaint issued by CTP, and agreed to pay a monetary penalty in
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settlement of that claim. Further, “Respondent expressly waived its right to contest such violations in subsequent actions.”
I find and conclude Respondent committed four violations of 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and 1140.14(a)(2)(i) within a 24-month period as set forth in the complaint.
IX. 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
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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.F.R. Part 1140 (2015); 21 U.S.C. § 387f(d)(1) (2012). Accordingly, 21 C.F.R. § 1140.1(b) provides that “failure to comply with any applicable provision in this part in the sale, distribution, and use of cigarettes and smokeless tobacco renders the product misbranded under the act.”
Under 21 U.S.C. § 331(k), “[t]he alteration, mutilation, destruction, obliteration, or 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.,
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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/RulesRegulationsGuidance/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, Inc., d/b/a Orton’s Bagley v. U.S. Dep’t of Health & Human Serv., 884 F.3d 1205 (D.C. Cir. 2018).
X. LIABILITY
When a retailer such as Respondent is found to have “misbranded” a tobacco product in interstate commerce, it can be liable to pay a CMP. 21 U.S.C. §§ 331, 333. A retailer facing such a penalty has the right, set out in statute, to a hearing under the Administrative Procedure Act (21 U.S.C. § 333(f)(5)(A)). As set forth above, Respondent admitted the violations occurred as alleged in the complaint. However, Respondent argues that the CMP is too high and therefore inappropriate.
XI. LIABILITY UNDER THE RELEVANT STATUTE
Taking the CTP’s allegations as set forth in the complaint as true, the next step is
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whether the allegations make out “liability under the relevant statute” (21 C.F.R. § 17.11(a)).
Based on Respondent’s admission I find all the allegations in the complaint to be true.
I find and conclude that Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) in that a person younger than 18 years of age was able to purchase regulated tobacco products on July 29, 2017, September 4, 2018, and February 18, 2019.
I also find and conclude that Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(2)(i) on September 4, 2018, in that Respondent also violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 18 years of age.
The conduct set forth above on July 29, 2017, September 4, 2018, and February 18, 2019 counts as four violations under FDA policy for purposes of computing the civil money penalty. See Guidance for Industry, at 13-14.
XII. PENALTY
There being liability under the relevant statute, I must now determine the amount of penalty to impose. My discretion regarding a penalty is constrained by regulation. I must impose either the maximum amount permitted by law or the amount requested by CTP, whichever is lower. 21 C.F.R. § 17.11(a)(1), (a)(2).
In terms of specific punishments available, the legislation that provides the basis for assessing civil monetary penalties divides retailers into two categories: those that
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have “an approved training program” and those that do not. Retailers with an approved program face no more than a warning letter for their first violation; retailers without such a program begin paying monetary penalties with their first. TCA § 103(q)(2), 123 Stat. 1839, codified at 21 U.S.C. § 333 note; see also, 21 C.F.R. § 17.2. The FDA has informed the regulated public that “at this time, and until FDA issues regulations setting the standards for an approved training program, all applicable CMPs will proceed under the reduced penalty schedule.” FDA Regulatory Enforcement Manual, Aug 2015, ¶ 5‑8‑1. Because of this reasonable exercise of discretion, the starting point for punishments and the rate at which they mount are clear – the lower and slower schedules.
XIII. MITIGATION
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 did not refute the evidence submitted by CTP proving that at approximately 6:30 PM on February 18, 2019, one of its employees sold cigarettes to a minor. Further, in its Answer, Respondent asserted on that the CMP was “too high because: TRAINED EMPLOYEE FAILED TO FOLLOW COMPANY POLICY.” Answer ¶ 3 (emphasis in original). An employee’s failure to adhere to the company policy does not absolve Respondent from responsibility if an employee violates tobacco regulations.
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XIV. CONCLUSION
Respondent committed four violations in a 24-month period and thus, Respondent is liable for a civil money penalty of $2,282. See 21 C.F.R. § 17.2.
WHEREFORE, evidence having read and considered it be and is hereby ORDERED as follows:
- I find Respondent admitted the violations occurred as alleged in the Complaint.
- I find Respondent failed to respond to my Order to Show Cause.
- I assume the facts alleged in the complaint to be true.
- I find the facts set forth in the complaint establish liability under the relevant statute.
- I assess a monetary penalty in the amount of $2,282.
Richard C. Goodwin Administrative Law Judge
-
1. See 5 C.F.R. § 930.204.
- back to note 1 2. 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).
- back to note 2 3. One violation was documented on July 29, 2017, and two violations were documented on September 4, 2018. 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.
- back to note 3