Perry Gas and Mart, LLC d/b/a Mobil Mart, DAB TB5187 (2020)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, Perry Gas and Mart, LLC d/b/a Mobil Mart, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $5,705.  CTP began this case by serving a Complaint on Respondent and filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The Complaint alleges that Respondent’s staff sold regulated tobacco products to minors and failed to verify that purchasers were of sufficient age, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140.  CTP seeks a civil money penalty of $5,705 for five violations of the regulations within a 36-month period.

During the course of these administrative proceedings, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend its actions, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R.

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

I.        Procedural History

On October 8, 2019, CTP served the Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  Respondent timely filed its Answer.  On January 6, 2020, I issued an Acknowledgement and Pre-Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery.  I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  APHO ¶ 12; see 21 C.F.R. § 17.23(a).  I warned that I may impose sanctions if a party failed to comply with any order, including the APHO.  APHO ¶ 16. 

On March 19, 2020, CTP filed a Motion to Compel Discovery asserting that Respondent did not respond to its discovery request as required by my APHO.  On the same date, CTP also filed a Motion to Extend Deadlines.  On March 20, 2020, I issued an Order informing Respondent of its deadline to file a response to CTP’s Motion to Compel Discovery, and warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  See also 21 C.F.R. § 17.32(c); APHO ¶ 19.  My March 20, 2020 Order also extended the pre-hearing exchange deadlines.  Respondent did not file a response.

On April 7, 2020, I issued an Order granting CTP’s Motion to Compel Discovery, and ordered Respondent to produce documents responsive to CTP’s discovery request by April 29, 2020.  I warned Respondent that failure to comply may result in sanctions, which may include issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.  My April 7, 2020 Order also extended the pre-hearing exchange deadlines.

On May 6, 2020, CTP filed a Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions).  CTP advised that Respondent did not produce responsive documents as ordered.  On that same date, CTP also filed a Motion to Extend Deadlines.  On May 7, 2020, I issued an Order informing Respondent of its deadline to file a response to CTP’s motion and warned Respondent that if it failed to file a response, I may grant CTP’s motion in its entirety.  Respondent did not file a response.

II.      Striking Respondent’s Answer

I may sanction a party for:

(1)      Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;
(2)      Failing to prosecute or defend an action; or

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

21 C.F.R. § 17.35(a).

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

• Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 12 of my APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with my April 7, 2020 Order Granting Motion to Compel Discovery, when it failed to submit the documents responsive to CTP’s Request for Production of Documents by April 29, 2020.

Respondent also failed to defend its action despite my March 20, 2020, and May 7, 2020, orders informing Respondent of such opportunities and warning of consequences. 

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

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

Accordingly, I grant CTP’s Motion to Impose Sanctions.  I find that Respondent’s actions are sufficient to warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3). 

III.     Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered.  Therefore, I am required to issue an initial decision by default, provided that the Complaint is sufficient to justify a penalty.  21 C.F.R. § 17.11(a).  Pursuant to 21 C.F.R. § 17.11(a), I am required to “assume the facts alleged in the [C]omplaint to be true” and, if those facts establish

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liability under the Act, issue a default judgment and impose a civil money penalty.  Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act. 

Specifically, CTP alleges the following facts in its Complaint:

• Respondent owns Mobil Mart, an establishment that sells tobacco products and is located at 1144 North Perry Street, Pontiac, Michigan 48340.  Complaint ¶¶ 7-8.
• On June 5, 2018, CTP initiated a prior civil money penalty action, CRD Docket T-18-2430, FDA Docket FDA-2018-H-2135, against Respondent for violations of 21 C.F.R. pt. 1140, three1 of which occurred during the 36-month period relevant in the current Complaint.  Complaint ¶ 11.
• The previous action concluded when Respondent admitted all of the allegations in the Complaint and paid the agreed upon monetary penalty.  Further, “Respondent expressly waived its right to contest such violations in subsequent actions.”  Complaint ¶ 12.
• An FDA-commissioned inspector conducted a subsequent inspection of Respondent’s establishment on July 2, 2019, at approximately 5:55 PM, during which “a person younger than 18 years of age was able to purchase a package of two Swisher Sweets Classic cigars . . . .”  Additionally, “the minor’s identification was not verified before the sale . . . .”  Complaint ¶ 9.

These facts establish that Respondent is liable under the Act.  The Act prohibits misbranding of a tobacco product.  21 U.S.C. § 331(k).  A tobacco product is misbranded if sold or distributed in violation of regulations issued under section 906(d) of the Act.  21 U.S.C. § 387c(a)(7)(B); 21 C.F.R § 1140.1(b).  The Secretary of the U.S. Department of Health and Human Services issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016).  The regulations prohibit the sale of regulated tobacco products to any person younger than 18 years of age.  21 C.F.R. § 1140.14(a)(1) and 1140.14(b)(1).  The regulations also require retailers to verify, by means of photographic identification containing the purchaser’s date of birth, that no regulated tobacco product purchaser is younger than 18 years of age.  21 C.F.R. § 1140.14(b)(2)(i).  

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

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18 years of age on June 6, 2017, April 28, 2018, and July 2, 2019.  21 C.F.R. § 1140.14(a)(1) and 1140.14(b)(1).  On April 28, 2018, and July 2, 2019, Respondent also violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that no regulated tobacco product purchaser is younger than 18 years of age.  21 C.F.R. § 1140.14(b)(2)(i).  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty. 

CTP has requested a civil money penalty of $5,705, which is a permissible penalty for five violations of the regulations found at 21 C.F.R. pt. 1140 within a 36-month period.  21 C.F.R. § 17.2.  Therefore, I find that a civil money penalty of $5,705 is warranted and so order one imposed.