KDC, Inc. d/b/a Zip's Party Store / Marathon, DAB TB5284 (2021)

INITIAL DECISION

I sustain the determination of the Center for Tobacco Products (“CTP”) of the United States Food and Drug Administration (“FDA”) to impose a civil money penalty of $292 against Respondent, KDC, Inc. d/b/a Zip’s Party Store / Marathon.

I.  Background

Respondent requested a hearing in order to challenge CTP’s determination to impose a civil money penalty.  After the parties completed pre-hearing exchanges of briefs and exhibits I directed Respondent to advise me whether it desired that I convene an in-person hearing so that its counsel could cross-examine CTP’s witnesses.  Respondent did not reply to my directive.  For that reason, I conclude that Respondent does not desire an in-person hearing.  I close the record and decide this case based on the parties’ written evidence.

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CTP offered 22 proposed exhibits, identified as CTP Ex. 1 - CTP Ex. 22.  These proposed exhibits include witnesses’ declarations, notably the testimony of Colin Consiglio (CTP Ex. 4) and Dianne Perukel (CTP Ex. 5), who are FDA-commissioned inspectors who respectively conducted inspections of Petitioner’s facility on April 7, 2019, and January 19, 2020.  Respondent did not object to my receiving the proposed exhibits into evidence, including the testimony of Mr. Consiglio and Ms. Perukel.  I receive CTP Ex. 1 - CTP. Ex. 22 into evidence.

Respondent offered one proposed exhibit, identified as R. Ex. 2.  CTP did not object to my receiving this exhibit and so, I receive it into evidence.  In its brief, Respondent asserted that it relied on an additional exhibit, purportedly identified as R. Ex. 1.  Respondent asserted that this exhibit consists of a video recording of a sale of tobacco products occurring on January 19, 2020.  However, Respondent did not offer the purported exhibit as part of its pre-hearing exchange and the deadline that I set for filing exhibits has expired.  Consequently, I have nothing before me in the nature of R. Ex. 1 that I can receive.

Respondent also provided a witness list including the names of three individuals, designating them as proposed witnesses.  Respondent failed to provide written direct testimony for any of these proposed witnesses, as I required in my Acknowledgment and Initial Pre-hearing Order.  Therefore, Respondent is foreclosed from presenting the testimony of these proposed witnesses.

II.  Issues, Findings of Fact and Conclusions of Law

A. Issues

The issues are whether:

1. Respondent sold tobacco products to minor purchasers in violation of federal regulations governing the sale of tobacco products; and
2. A civil money penalty of $292 is a reasonable remedy.

B.  Findings of Fact and Conclusions of Law

CTP determined to impose a civil money penalty 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 sale of tobacco products to an individual who is under the age of 18 is a violation of implementing regulations.  21 C.F.R. § 1140.14(a)(1), (b)(1).

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CTP premises its case on the results of inspections of Respondent’s facility, conducted on April 7, 2019, and January 19, 2020.  Mr. Consiglio testified that, on April 7, 2019, he drove to Petitioner’s store accompanied by a minor.  CTP Ex. 4 at 2.  He averred that he verified that the minor possessed true and accurate photographic identification showing his/her actual date of birth.  Id.; CTP Ex. 10.  Additionally, he verified that the minor had no tobacco products on his/her possession.  He did so by asking the minor directly, by inspecting the contents of the minor’s pockets, and by having the minor leave his/her bag in the vehicle.  CTP Ex. 4 at 2-3.

Mr. Consiglio testified that the minor then entered Petitioner’s establishment.  He followed shortly thereafter.  CTP Ex. 4 at 3.  Mr. Consiglio stated that he went to a location in the establishment from which he had a clear and unobstructed view of the sales counter.  He averred that he watched the minor purchase cigarettes.  Id.

Mr. Consiglio testified that the cigarettes purchased by the minor were Marlboro cigarettes.  He labeled the cigarettes as evidence and photographed them.  CTP Ex. 4 at 3; CTP Exs. 11-12.

Ms. Perukel testified that she drove to Respondent’s establishment on January 19, 2020, in the company of a minor.  CTP Ex. 5 at 2.  She averred that she verified that the minor possessed true and accurate photographic identification.  Id.  Ms. Perukel testified that she verified that the minor did not possess any tobacco products by visually inspecting the minor, by asking the minor directly, by inspecting the contents of the minor’s pockets, and by having the minor leave his/her bag in the vehicle.  Id. at 2-3.

Ms. Perukel testified that from her parked vehicle she had an unobstructed view of the entrance and exit to Petitioner’s establishment.  CTP Ex. 5 at 3.  She remained in her vehicle while the minor left the vehicle and entered the establishment.  Id.  Minutes later, according to Ms. Perukel, the minor left the establishment, returned directly to the vehicle and handed her a Swisher Sweet Classic cigar.  Id. Ms. Perukel averred that she labeled the cigar as evidence and photographed them.  Id.; CTP Exs. 16-17.

The evidence that I have described is ample proof that Respondent violated regulations governing the sale of tobacco products to minors, committing two violations during a period of less than one year. Mr. Coniglio’s testimony, if not rebutted, establishes that he directly observed the unlawful sale of a tobacco product – Marlboro cigarettes – by one of Respondent’s employees.  Ms. Perukel’s testimony leads to the inference that someone employed by Respondent unlawfully sold a tobacco product – a Swisher Sweet Classic cigar – to a minor.  I draw that inference from the fact that the minor entered Respondent’s establishment without a tobacco product in his/her possession and exited with a tobacco product.  The only reasonable explanation for those events is that the minor was able to purchase the product while in the store.

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Respondent’s asserted defenses are unpersuasive.  It does not deny that it unlawfully sold a tobacco product to a minor on April 7, 2019.  See Brief of Respondent (Respondent’s brief) at 2.  It seems to argue, however, that the transaction at issue on January 19, 2020, was either lawful or that the minor purchaser deceived its employee by offering identification that showed him/her to be of lawful age.  Id.  It asserts that the “video of the incident clearly show[s] that the employee secured identification from the purchase[r] and enter[ed] the birth date into the cash register in order to continue the sale.”  Id.

However, Respondent failed to offer the purported video as evidence.  Absent such evidence, there exists no proof that Respondent’s employee checked the minor purchaser’s identification and verified from that identification that the minor purchaser was of lawful age.  I do not find that Respondent rebutted Ms. Perukel’s testimony in the absence of any proof supporting Respondent’s assertion.

The unrebutted evidence proves that on two occasions Respondent made unlawful sales of a tobacco product to minor purchasers.  That is egregious conduct.  Regulations authorize a penalty of up to $292 for the violations committed by Respondent.  45 C.F.R. § 102.3; 21 U.S.C. § 333(f)(9).

Underscoring the egregiousness of Respondent’s conduct is the fact that Respondent made its second unlawful sale after having received a warning from CTP in the wake of the first unlawful sale.  CTP Ex. 1. 

I take notice that tobacco products are highly addictive and dangerous to the health of those who consume them.  They may have lethal long-term effects on consumers.  Younger purchasers are highly susceptible to becoming addicted.  A penalty of $292 is plainly reasonable given the dangers of tobacco products and Respondent’s repeated unlawful sales of these products to minor purchasers. 

In its brief Respondent avers that it paid a $100 penalty to remedy the April 7, 2019 unlawful sale.  I find no evidence to support this assertion.  CTP did not assess any penalty prior to imposing the penalty that is at issue here.