Psycle Sam's Heady Glass LLC d/b/a Psycle Sam's Heady Glass, DAB TB5802 (2023)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint on Respondent, Psycle Sam’s Heady Glass LLC d/b/a Psycle Sam’s Heady Glass, at 1865 Henry Street, Suite 31, Muskegon, Michigan 49441, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that Psycle Sam’s Heady Glass impermissibly sold

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regulated tobacco products to underage purchasers and failed to verify, by means of photo identification containing a date of birth, that purchasers were 21 years of age or older, 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. 1140.2  CTP seeks a $638 civil money penalty against Respondent Psycle Sam’s Heady Glass for three3 violations within a 24-month period. 

During the course of this administrative proceeding, 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. § 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

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on August 22, 2022, CTP served the complaint on Respondent Psycle Sam’s Heady Glass by United Parcel Service.  On September 21, 2022, Respondent filed a timely Answer to CTP’s complaint.  On September 28, 2022, an Acknowledgment and Pre-Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery, was issued.  The APHO directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  APHO ¶ 4; See 21 C.F.R. § 17.23(a).  Respondent was warned that sanctions may be imposed if a party failed to comply with any order, including the APHO.  APHO ¶ 21. 

In accordance with the deadlines set forth in the APHO, CTP served Respondent with its Request for Production of Documents on November 3, 2022.  CTP Exhibits A and B.  On December 9, 2022, CTP filed a Motion to Compel Discovery, asserting that Respondent

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did not respond to its discovery request, as required by the APHO and regulations.  By Order of December 12, 2022, Respondent was notified of its deadline to file a response to the Motion to Compel Discovery and was warned that if it failed to respond, CTP’s motion would be granted in its entirety.  See Order at 1-2, Dec. 12, 2022.  See also 21 C.F.R. § 17.32(c); APHO ¶ 20.  Respondent did not respond.

On January 18, 2023, an Order Granting Complainant’s Motion to Compel Discovery (Order to Compel Discovery) was issued, in which Respondent was ordered to produce documents responsive to CTP’s discovery request by January 30, 2023.  Respondent was also ordered to notify CTP in writing if it did not have documents responsive to CTP’s request.  Respondent was warned that:

[F]ailure to comply with this 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. 

Order to Compel Discovery at 2.

On February 3, 2023, CTP filed a Complainant’s Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions) stating that, as of its filing, Respondent had not produced documents in response to CTP’s request for production of documents.  CTP argued that sanctions against Respondent for its repeated non-compliance were an appropriate remedy.  Motion to Impose Sanctions at 2.  Specifically, CTP asked that Judge Robinson strike the Respondent’s Answer as a sanction and issue an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing the requested civil money penalty of $638.  Id.  By Order of February 6, 2023, Respondent was informed that it had until February 21, 2023 to file a response to CTP’s Motion to Impose Sanctions.  Respondent was warned that if it failed to file a response, CTP’s Motion to Impose Sanctions may be granted and the requested civil money penalty of $638 would be imposed, pursuant to 21 C.F.R. § 17.35.  Order at 2, Feb. 6, 2023.  Respondent did not respond.4

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;

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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.

21 C.F.R. § 17.35(a).

I find that 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 4 of the APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with the Order to Compel Discovery when it failed to produce documents responsive to CTP’s Request for Production of Documents by January 30, 2023.

Respondent also failed to defend its action, despite the December 12, 2022 Order and the February 6, 2023 Order informing Respondent that it may file a response and warning Respondent of the consequences if it failed to do so.

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). When a party fails to comply with a discovery order, including the discovery provisions under the regulations, I may strike any pleadings or submissions of the party failing to comply.  21 C.F.R. § 17.35(c)(3).  Here, Respondent failed to comply with a procedural rule (21 C.F.R. § 17.23(a)), and two orders (APHO ¶ 4; Order to Compel Discovery), under 21 C.F.R. § 17.35(a)(1), despite numerous explicit warnings that its failure could result in sanctions (APHO ¶ 21; Order to Compel Discovery at 2; Order at 2, February 6, 2023). Respondent was twice specifically warned that failure to comply with orders 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.”  Order to Compel Discovery at 2; Order at 2, February 6, 2023.

Respondent also failed to defend its actions, under 21 C.F.R. § 17.35(a)(2), despite the orders expressly reminding Respondent that it may file a response.  Order at 2, December 12, 2022; Order at 2, February 6, 2023.  In fact, Respondent has not participated in this action in any meaningful fashion since filing its Answer.  Respondent’s repeated

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misconduct interfered with the speedy, orderly, or fair conduct of this proceeding, under 21 C.F.R. § 17.35(a)(3). 

I find that imposing the sanction of striking Respondent’s Answer and issuing a decision by default, without further proceedings, reasonably relates to the severity and nature of Respondent’s misconduct.  21 C.F.R. § 17.35(b), (c)(3).  Accordingly, I strike Respondent’s Answer.  21 C.F.R. § 17.35(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 complaint to be true” and, if those facts establish 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:

• At approximately 12:05 PM on December 1, 2021, at Respondent’s business establishment, 1865 Henry Street, Suite 3, Muskegon, Michigan 49441, an FDA-commissioned inspector conducted an inspection.  During this inspection, a person younger than 21 years of age was able to purchase a package of two Swisher Sweets Classic cigars.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was 21 years of age or older;

• In a warning letter dated January 6, 2022, CTP informed Respondent of the inspector’s December 1, 2021 documented violations, and that such actions violate federal law.  The law further warned that Respondent’s failure to correct its violations could result in a civil money penalty or other regulatory action;

• An FDA-commissioned inspector conducted a subsequent inspection on June 23, 2022, at approximately 12:38 PM, at Respondent’s business establishment located at 1865 Henry Street, Suite 3, Muskegon, Michigan 49441.  During this inspection, a person younger than 21 years of age was able to purchase a package of two Swisher Sweets Classic Strawberry cigars.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of

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birth, that the purchaser was 21 years of age or older.5

These facts establish Respondent Psycle Sam’s Heady Glass’ liability under the Act.  The Act prohibits misbranding of a regulated tobacco product.  21 U.S.C. § 331(k).  A regulated 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 also 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  The Secretary issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see also 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); see also 21 U.S.C. § 387f (note) (directing the Secretary to change references to persons younger than 18 to younger than 21, and to change the age verification requirements from individuals under the age of 26 to under the age of 30, in 21 C.F.R. subpart B of part 1140).  Under section 906(d)(5) of the Act, no retailer may sell regulated tobacco products to any person younger than 21 years of age and retailers must verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age. 

A $638 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $638 against Respondent Psycle Sam’s Heady Glass LLC d/b/a Psycle Sam’s Heady Glass.  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.