Aladdin Tobacco and Vape, LLC d/b/a Aladdin Smoke Shop, DAB TB7774 (2024)

ORDER GRANTING COMPLAINANT’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 on Respondent, Aladdin Tobacco and Vape, LLC d/b/a Aladdin Smoke Shop, at 166 Danbury Road, New Milford, Connecticut 06776, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that Aladdin Smoke Shop impermissibly sold regulated tobacco products to underage purchasers and failed to verify, by means of photo identification containing a date of birth, that the 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. 1140.¹  CTP seeks a $638 civil

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money penalty against Respondent Aladdin Smoke Shop, for at least three² 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 grant CTP’s Motion to Impose Sanctions, 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 July 26, 2023, CTP served the complaint on Respondent Aladdin Smoke Shop by United Parcel Service.  On August 25, 2023, Respondent filed a timely Answer to CTP’s complaint admitting to all allegations. Docket (Dkt.) Entry No. 3.  On August 29, 2023, I issued an Acknowledgment and Status Report Order (ASRO) that set a deadline for the parties’ joint status report due to the Respondent’s admissions.  ASRO ¶ 4.  On October 30, 2023, CTP filed a Status Report stating that the parties were unable to reach a settlement in this case and that CTP was unable to reach Respondent.  Dkt. Entry No. 6.

On October 31, 2023, I issued a Pre-Hearing Order (PHO) 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.  PHO ¶ 4; 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 PHO.  PHO ¶ 21.

On December 27, 2023, CTP filed a Motion to Compel Discovery, asserting that Respondent did not respond to its discovery request as required by my PHO and regulations.  Dkt. Entry No. 8.  By Order of December 28, 2023, I informed Respondent of its deadline to file a response and warned that if Respondent failed to respond, “I may

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grant CTP’s motion in its entirety.”  Order at 1-2, December 28, 2023.  See also 21 C.F.R. § 17.32(c); PHO ¶ 21.  Respondent did not respond.

On January 16, 2024, I issued an Order Granting Motion to Compel in which I ordered Respondent to produce documents responsive to CTP’s discovery request by January 26, 2024.  I warned Respondent that, “Failure to do so 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 Granting Motion to Compel at 1-2 (emphasis removed).

On February 1, 2024, CTP filed a 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 in compliance with my Order Granting Motion to Compel.  Dkt. Entry No. 12.  On February 1, 2024, CTP also moved to extend the February 21, 2024 pre-hearing exchange deadline by 30 days – until March 22, 2024.  Dkt. Entry No. 13.  By Order of February 2, 2024, I informed Respondent that it had until February 12, 2024, to file a response to CTP’s Motion to Impose Sanctions.  I warned Respondent that if it failed to file a response, “I may grant CTP’s motion in its entirety.”  Order at 2, February 2, 2024 (emphasis in original).  I also extended all the pre-hearing deadlines.  To date, Respondent has not responded.

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 the following orders and procedures governing this proceeding:

• Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 4 of my PHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with my Order Granting Motion to Compel when it failed to produce documents responsive to CTP’s Request for Production of Documents by January 26, 2024.

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Respondent also failed to defend its action, despite my Orders dated December 28, 2023, and February 2, 2024, informing Respondent that it may file a response to CTP’s motions 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 of my orders (PHO ¶ 4; Order Granting Motion to Compel), despite my explicit warnings that its failure to do so could result in sanctions (PHO ¶ 21; Order Granting Motion to Compel at 1-2; Order at 1-2, February 2, 2024).  I specified that, “Failure to do so 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 Granting Motion to Compel at 1-2 (emphasis removed).  Respondent also failed to defend its actions, under 21 C.F.R. § 17.35(a)(2), despite my orders expressly reminding Respondent that it may file a response.  Order at 1-2, December 28, 2023; Order at 1-2, February 2, 2024.  In fact, Respondent has not participated in this action in any meaningful fashion since filing its Answer in which it admitted all of the allegations in the Complaint.  Respondent’s repeated 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.

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Specifically, CTP alleges the following facts in its complaint:

• At approximately 11:59 AM on September 1, 2021, at Respondent’s business establishment, 166 Danbury Road, New Milford, Connecticut 06776, an FDA‑commissioned inspector conducted an inspection. During this inspection, a person younger than 21 years of age was able to purchase a Luto Xtra Puffs Banana Mango Lush electronic nicotine delivery system (ENDS) 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
• In a warning letter dated October 26, 2021, CTP informed Respondent of the inspector’s September 1, 2021 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 11:33 AM on May 1, 2023, at Respondent’s business establishment, 166 Danbury Road, New Milford, Connecticut 06776, an FDA‑comissioned inspector conducted a subsequent inspection. During this inspection, a person younger than 21 years of age was able to purchase a Vuse Originals Rich Tobacco 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.

These facts establish Respondent Aladdin Smoke Shop’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 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.

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Under 21 C.F.R. § 17.2, a $638 civil money penalty is permissible for three violations within a 24-month period.

Order

For these reasons, I enter default judgment in the amount of $638 against Respondent, Aladdin Tobacco and Vape, LLC d/b/a Aladdin Smoke Shop.  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  The complaint alleges two violations were committed on September 1, 2021, and two on May 1, 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).

³  I note that the identification violations alleged by CTP on September 1, 2021, and May 1, 2023, are governed by section 906(d) of the Act, which went into effect on 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.