Casa Bonita Gourmet Deli Inc. d/b/a Casa Bonita Gourmet Deli, DAB TB7732 (2024)

ORDER GRANTING CTP’S MOTION TO IMPOSE SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an Administrative Complaint (Complaint) on Respondent, Casa Bonita Gourmet Deli Inc. d/b/a Casa Bonita Gourmet Deli, at 2 West 125th Street, New York, New York 10027, and by filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management. CTP seeks to impose a $638 civil money penalty against Respondent for at least three¹ violations of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C.

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§ 301 et seq., and its implementing regulations, 21 C.F.R. part 1140,² within a 24-month period.

Respondent’s representative filed an Answer to the Complaint. However, during the course of this administrative proceeding, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend this action, which interfered with the speedy, orderly, or fair conduct of this proceeding. 21 C.F.R. § 17.35(a).

Currently, CTP’s Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions) is pending before me. CTP’s Motion to Impose Sanctions requests that I strike Respondent’s Answer as a sanction for failing to respond to CTP’s discovery requests and issue a default judgment against Respondent. Accordingly, pursuant to 21 C.F.R. §

17.35(c)(3), I strike Respondent’s Answer and issue this decision of default judgment.

Procedural History

On August 17, 2023, CTP served the Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. CRD Docket (Dkt.) Entry No. 1b (Proof of Service). On September 18, 2023, Respondent’s representative registered for DAB E-File. On that same date, Respondent’s representative filed a timely answer to CTP’s Complaint.

On September 22, 2023, I issued an Acknowledgment and Pre-Hearing Order (APHO). The APHO set deadlines for the parties’ filings and exchanges, including a schedule for discovery. In the APHO, among other things, I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request. APHO ¶ 4; see also 21 C.F.R. § 17.23(a). The APHO further warned:

I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of the hearing. 21 C.F.R. § 17.35.

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APHO ¶ 21.

On November 20, 2023, CTP filed a Motion to Compel Discovery, asserting that Respondent had not responded to its discovery request as required by the APHO and the regulations. CRD Dkt. Entry No. 7 (Motion to Compel Discovery). On that same date, CTP also filed an Unopposed Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the December 15, 2023 due date for CTP’s pre-hearing exchange . . . .” CRD Dkt. Entry No. 8 at 2 (Unopposed Motion to Extend Deadlines). On November 21, 2023, I issued an Order advising Respondent that it had until December 5, 2023, to file a response to CTP’s Motion to Compel Discovery. I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.” CRD Dkt. Entry No. 9 at 2; see also APHO ¶¶ 20-21; 21 C.F.R. § 17.32(c). In my Order, I also extended the pre-hearing exchange deadlines. Id.

On November 24, 2023, Respondent submitted a brief statement asserting that “[t]he state agent imposed a penalty when we sold the cigarette without a license for $5000 which was paid via check no:174535 (see Attachment) under check payment.” CRD Dkt. Entry No. 10. Respondent also submitted what appears to be a check record of an October 26, 2022, payment to the Division of Alcohol Beverage Control. CRD Dkt. Entry No. 11. Respondent’s assertion appears to be that the civil money penalty is “already paid.”

See CRD Dkt. Entry No. 3b.

On November 29, 2023, a letter by my direction (BDL) issued which, among other things, reaffirmed Respondent’s December 5, 2023, deadline to respond to CTP’s Motion to Compel. The BDL also directed CTP to advise this tribunal, not later than December 15, 2023, whether Respondent’s November 24, 2023, submission satisfied “any or all” of CTP’s Request for Production of Documents (RFP) and “whether the [RFP] and Motion to Compel Discovery remain in issue.” CRD Dkt. Entry No. 12. On December 12, 2023, CTP submitted its response to the November 29, 2023, BDL, stating:

. . . it is CTP’s position that Respondent’s November 24 Submission has not satisfied any or all of CTP’s Request for Production of Documents. CTP respectfully requests that an order be entered compelling Respondent to respond to CTP’s Request for Production of Documents in its entirety.

CRD Dkt. Entry No. 13 at 2.

On December 13, 2023, I issued an Order granting CTP’s Motion to Compel Discovery and ordered Respondent to produce responsive documents to CTP’s Request for Production of Documents by December 29, 2023. I warned:

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Failure to [comply] may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint . . . .

CRD Dkt. Entry No. 14 at 2 (emphasis in original). In the same Order, I also extended the parties’ pre-hearing exchange deadlines. Id. at 2.

On January 2, 2024, CTP filed a Status Report and Motion to Impose Sanctions. CTP advised that Respondent had not complied with the APHO or my December 13, 2023, Order Granting CTP’s Motion to Compel. CRD Dkt. Entry No. 15 at 2. CTP argued that sanctions against Respondent “[b]ased on Respondent’s pattern of conduct” are an appropriate remedy. Specifically, CTP asked that I strike 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 a $638 civil money penalty. Id. at 3. On January 2, 2024, CTP also filed a Motion to Extend Deadlines. CRD Dkt. Entry No. 16.

On January 4, 2024, I issued an Order giving Respondent until January 19, 2024, to file a response to CTP’s Motion to Impose Sanctions. CRD Dkt. Entry No. 17 at 2. The January 4, 2024, Order also extended the parties’ pre-hearing exchange deadlines. Id. at 3. To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or my January 4, 2024, Order.

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

(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 multiple judicial orders and directives. Specifically, Respondent has not complied with:

• the regulation at 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

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• my December 13, 2023, Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by December 29, 2023.

Additionally, Respondent failed to defend this action. 21 C.F.R. § 17.35(a)(2). Specifically:

• Respondent did not file a response to CTP’s Motion to Compel Discovery, as permitted by the regulations and my November 21, 2023, Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my January 4, 2024, Order.

Respondent’s failure to respond to CTP’s motions, to comply with my multiple orders, and to fulfill its discovery obligations suggests that it has abandoned its defense in this case.

In the absence of any explanation from Respondent, I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend this action, and, as a result, interfered with the speedy, orderly, and 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 two of my orders, despite my explicit warnings that its failure could result in sanctions. CRD Dkt. Entry No. 14 at 2; APHO ¶ 21. Nor did Respondent respond to any of CTP’s motions. See CRD Dkt. Entry Nos. 9 at 1-2; 17 at 2. Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding. I find that Respondent’s actions are sufficiently egregious to warrant striking its Answer and issuing a decision by default, without further proceedings. 21 C.F.R. § 17.35(b), (c)(3); see also KKNJ, Inc. d/b/a Tobacco Hut 12, DAB No. 2678 at 8 (2016) (concluding that “the ALJ [Administrative Law Judge] did not abuse her discretion in sanctioning Respondent’s ongoing failure to comply with the ALJ’s directions by striking Respondent’s answer to the Complaint.”).

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). Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act.

For the purposes of this decision, I assume the facts alleged in the Complaint to be true. Specifically:

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• At approximately 11:58 AM on July 28, 2022, at Respondent’s business establishment, 2 West 125th Street, New York, New York 10027, an FDA-commissioned inspector conducted an inspection. During the inspection, a person younger than 21 years of age was able to purchase a Black & Mild cigar. Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was of sufficient age;³
• In a warning letter dated September 8, 2022, CTP informed Respondent of the inspector’s July 28, 2022, documented violations, and that such actions violate federal law. The letter further warned that Respondent’s failure to correct its violations could result in a civil money penalty or other regulatory action;
• At approximately 4:57 PM on May 27, 2023, at Respondent’s business establishment, 2 West 125th Street, New York, New York 10027, an FDA-commissioned inspector conducted a subsequent inspection. During this inspection, a person younger than 21 years of age was able to purchase a Black & Mild Original cigar. Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was of sufficient age.

These facts establish Respondent Casa Bonita Gourmet Deli’s 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 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); 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.

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Order

For these reasons, I enter default judgment in the amount of $638 against Respondent Casa Bonita Gourmet Deli Inc. d/b/a Casa Bonita Gourmet Deli. 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.

Endnotes

¹ The Complaint alleges two violations on July 28, 2022, and two violations on May 27, 2023. 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. 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).

² On December 20, 2019, the Act was amended by the Further Consolidated Appropriations Act, 2020, (Pub. L. No. 116–94, § 603(a)-(b)), to raise the federal minimum age for sale of tobacco products to 21, and directed the Secretary of the U.S. Department of Health and Human Services (Secretary) to “update all references to persons younger than 18 years of age in subpart B of part 1140 of title 21, Code of Federal Regulations, and to update the relevant age verification requirements under such part 1140 to require age verification for individuals under the age of 30.” 21 U.S.C. § 387f (note).

³ The identification violations alleged by CTP on July 28, 2022, and May 27, 2023, are governed by section 906(d) of the Act, which went into effect as of December 20, 2019, although CTP cites 21 C.F.R. § 1140.14(b)(2)(i), which have not been updated to reflect the age change. See Complaint ¶¶ 13.b, 15.b; see also supra fn.2.