S Brothers LLC d/b/a Sam's Food Stores 1036 / Citgo, DAB TB7773 (2024)

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

On April 7, 2023, the Center for Tobacco Products (CTP) served an Administrative Complaint on Respondent, S Brothers LLC d/b/a Sam’s Food Stores 1036 / Citgo, at 106 Sisson Avenue, Hartford, Connecticut 06106, and filed a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management. CTP seeks to impose a $6,397 civil money penalty against Respondent for five violations of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its

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implementing regulations, 21 C.F.R. Part 1140,¹ within a 36-month period.²

Respondent filed an Answer to the Complaint in this matter. However, during the course of this administrative proceeding, Respondent failed to comply with multiple judicial orders and directives and failed to defend its case, 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. After carefully considering the entire record, I grant CTP’s Motion to Impose Sanctions, strike Respondent’s Answer, and issue this default decision, pursuant to the provisions of 21 C.F.R. § 17.35(c)(3).

Procedural History

On April 7, 2023, CTP served an Administrative Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. CRD Docket (Dkt.) Entry No. 1b. On May 2, 2023, Respondent timely filed an Answer to CTP’s Complaint. CRD Dkt. Entry Nos. 3; 3a. In its Answer, Respondent admitted the allegations, asserted some defenses, and requested a reduction of the civil money penalty. CRD Dkt. Entry No. 3.

On May 8, 2023, an Acknowledgment and Status Report Order (ASRO) was issued setting a deadline for the parties to submit a joint status report regarding the status of the case not later than July 10, 2023. CRD Dkt. Entry No. 4. On July 10, 2023, CTP filed the joint status report indicating that the parties had been unable to reach settlement and intended to proceed to a hearing.

In response to the parties’ Joint Status Report, I issued a Pre-Hearing Order (PHO) on July 12, 2023. The PHO set deadlines for the parties’ filings and exchanges, including a schedule for discovery. The PHO informed that a party receiving a discovery request

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must provide the requested documents within 30 days of the request. CRD Dkt. Entry No. 7; PHO ¶ 4; see also 21 C.F.R. § 17.23(a). The PHO 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.

PHO ¶ 21.

On August 16, 2023, in compliance with the PHO ¶ 3, CTP timely filed a second joint status report. CRD Dkt. Entry No. 8. The status report indicated that Respondent had paid the full civil money penalties for its prior complaints, and that the parties had been unable to reach settlement, and intended to proceed to a hearing. Id.

On September 29, 2023, CTP filed a Motion to Compel Discovery, asserting that Respondent had not responded to its discovery request, as required by the PHO and the regulations. CRD Dkt. Entry No. 9. On that same date, CTP also filed a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the October 6, 2023 due date for CTP’s pre-hearing exchange . . . .” CRD Dkt. Entry No. 10 at 2. On October 2, 2023, I issued an Order advising Respondent that it had until October 18, 2023, to file a response to CTP’s Motion to Compel Discovery. CRD Dkt. Entry No. 11. I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.” Id. at 2 (emphasis in the original); see also PHO ¶¶ 20-21; 21 C.F.R. § 17.32(c). In my Order, I also extended the pre‑hearing exchange deadlines. CRD Dkt. Entry No. 11 at 2. Respondent failed to respond to CTP’s Motion to Compel Discovery or my October 2, 2023 Order, or otherwise comply with CTP’s Request for Production of Documents.

On November 6, 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 November 22, 2023. I warned:

. . . [F]ailure to comply may result in sanctions, which may include striking its filings, and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty. 21 C.F.R. § 17.35.

CRD Dkt. Entry No. 12 at 2 (emphasis in the original).

On December 4, 2023, CTP filed a Status Report and Motion to Impose Sanctions. CRD Dkt. Entry No. 14. CTP advised that Respondent had not complied with the PHO or my

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November 6, 2023, Order Granting CTP’s Motion to Compel. Id. at 1-2. CTP argued that sanctions against Respondent for its repeated non-compliance 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 $6,397 civil money penalty. Id. at 2. On December 4, 2023, CTP also filed a Motion to Extend Deadlines. CRD Dkt. Entry No. 15.

On December 5, 2023, I issued an Order giving Respondent until December 21, 2023, to file a response to CTP’s Motion to Impose Sanctions. CRD Dkt. Entry No. 16. The December 5, 2023, Order also extended the parties’ pre-hearing exchange deadlines. Id. at 2.

To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or the December 5, 2023, Order.

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

(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:

• the regulation at 21 C.F.R. § 17.23(a) and paragraph 4 of the PHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• my November 6, 2023 Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by November 22, 2023.

I also find that 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 October 2, 2023, Order; and

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• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my December 5, 2023, Order.

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, 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 regulatory requirements and two judicial orders, despite my explicit warnings that its failure to do so could result in sanctions. See CRD Dkt. Entry No. 12 at 2; see also PHO ¶ 21. Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding. In fact, after initially admitting all of the violations alleged in the Complaint, Respondent has not participated in this action in any meaningful fashion since filing its Answer. Accordingly, 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).

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, pursuant to the provisions of 21 C.F.R. § 17.11(a). Specifically:

• On June 28, 2022, CTP initiated a previous civil money penalty action, CRD Docket Number T-22-607, FDA Docket Number FDA-2022-H-1335, against Respondent for at least three violations of the Act. CTP alleged those violations to have occurred at Respondent’s business establishment, 106 Sisson Avenue, Hartford, Connecticut 06106, on July 14, 2021, and May 11, 2022;
• The previous action concluded when Respondent admitted the allegations contained in the Complaint issued by CTP, and paid the agreed upon monetary penalty in settlement of that claim. Further, “Respondent expressly waived its right to contest such violations in subsequent actions”;
• At approximately 10:44 AM on January 4, 2023, at Respondent’s business establishment, 106 Sisson Avenue, Hartford, Connecticut 06106, an FDA - commissioned inspector conducted a subsequent -inspection.

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During the inspection, a person younger than 21 years of age was able to purchase a JUUL Menthol e-liquid product. 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;³

These facts establish Respondent Sam’s Food Stores 1036 / Citgo’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. Part 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 $6,397 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $6,397 against Respondent, S Brothers LLC d/b/a Sam’s Food Stores 1036 / Citgo. 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 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).

² CTP did not include violations that occurred outside the relevant timeframe for this Complaint. Complaint ¶ 1 fn.1.

³ The identification violations alleged by CTP on May 11, 2022, and January 4, 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 has not been updated to reflect the age change. See Complaint ¶¶ 13.b, 15.b; see also supra fn.1.