OM Sai News Inc. d/b/a Murry Hill Mini Mart, DAB TB7930 (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, OM Sai News Inc. d/b/a Murry Hill Mini Mart, at 520 3rd Avenue, New York, New York 10016, 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 Murry Hill Mini Mart, for three violations of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. Part 1140¹, within a 24-month period.

Page 2

On September 20, 2023, Respondent, through its authorized representative, filed a timely Answer to CTP’s Complaint.  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). 

I. Procedural History

On August 23, 2023, CTP served the complaint on Respondent Murry Hill Mini Mart by United Parcel Service Next Day Air.  Civil Remedies Division (CRD) Docket (Dkt.) Entry No. 1b (Proof of Service).  On September 20, 2023, Respondent filed a timely Answer to CTP’s complaint.  CRD Dkt. Entry Nos. 3; 3a (Answer – Doc 1 and Doc 2).  In its Answer, Respondent denied the allegations, asserted some defenses, and requested a reduction of the civil money penalty on the basis that the inspector made an error.  Id.   

On October 3, 2023, I issued an Acknowledgment and Pre-Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery. CRD Dkt. Entry No. 4.  I 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).  I warned that pursuant to 21 C.F.R. § 17.35, I may impose sanctions if a party fails 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 (RFP) on November 3, 2023.  CRD Dkt. Entry Nos 8a; 8b (CTP Exhibits A and B - Supporting Documents/Exhibits).

On December 8, 2023, CTP filed a Motion to Compel Discovery, asserting that Respondent did not respond to its discovery request, as required by the APHO and regulations.  CRD Dkt. Entry No. 8 (CTP’s Motion to Compel Discovery at 1-2).

Page 3

On that same date, CTP also filed a Motion to Extend Deadlines.  CRD Dkt. Entry No. 9.  On December 13, 2023, I issued an Order granting CTP’s motion to extend prehearing exchange deadlines and advising Respondent that it had until December 29, 2023, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 10.  See also 21 C.F.R. § 17.32(c); APHO ¶ 20.  Respondent failed to respond to CTP’s Motion to Compel Discovery or my December 13, 2023 Order, or otherwise comply with CTP’s Request for Production of Documents. 

On January 3, 2024, I issued an Order granting Complainant’s Motion to Compel Discovery (Order) and ordered Respondent to produce responsive documents to CTP’s Request for Production of Documents by January 16, 2024.  CRD Dkt. Entry No. 11.  I also ordered Respondent to notify CTP in writing if it did not have documents responsive to CTP’s request.  In that Order, I specifically warned Respondent 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. . 21 C.F.R. § 17.35.

Id. at 2.  (emphasis in the original). 

On February 8, 2024, 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.  CRD Dkt. Entry No. 12.  CTP argued that sanctions against Respondent for its repeated non-compliance were an appropriate remedy.  Id. at 1-2.  Specifically, CTP asked that I 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, imposing the requested civil money penalty of $638.  Id. at 2.  On February 8, 2024, CTP also filed a Motion to Extend Deadlines.  CRD Dkt. Entry No. 13. 

On February 12, 2024, I issued an Order granting CTP’s motion to extend prehearing exchange deadlines and informed Respondent that it had until February 27, 2024, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 14.  I warned Respondent that if it failed to file a response, “I may grant CTP’s motion in its entirety”, pursuant to 21 C.F.R. § 17.35.  Id. at 2. 

On March 12, 2024, I issued an Order sua sponte, further extending the parties’ prehearing exchange deadlines, pursuant to 21 C.F.R. § 17.19(b)(17).  CRD Dkt. Entry No. 15.

To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions.  

Page 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;

(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 APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• my January 3, 2024 Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by January 16, 2024.

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 January 3, 2024 Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my February 12, 2024 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 a procedural rule (21 C.F.R. § 17.23(a)), and two judicial orders, despite my numerous explicit warnings that its failure to do so could result in sanctions.  See January 3, 2024 Order at 2; see also APHO ¶ 21.  Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding.  In fact, after initially denying 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).

Page 5

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).  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, CTP alleges the following facts in its complaint:

• At approximately 7:46 PM on September 8, 2021, at Respondent’s business establishment, 520 3rd Avenue, New York, New York 10016, an FDA commissioned inspector conducted an inspection. During this inspection, a person younger than 21 years of age was able to purchase a Puff Plus Banana Ice electronic nicotine delivery system (ENDS) product.
• In a warning letter dated November 2, 2021, CTP informed Respondent of the inspector’s September 8, 2021 documented violation, and that such action violates federal law. The letter further warned that Respondent’s failure to correct its violation could result in a civil money penalty or other regulatory action.
• At approximately 5:05 PM on May 7, 2023, at Respondent’s business establishment, 520 3rd Avenue, New York, New York 10016, an FDA commissioned inspector conducted a subsequent inspection. During this inspection, a person younger than 21 years of age was able to purchase an Air Bar Diamond Watermelon Bombe 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. ²

These facts establish Respondent Murry Hill Mini Mart’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 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

Page 6

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, OM Sai News Inc. d/b/a Murry Hill Mini Mart.  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 identification violation alleged by CTP on May 7, 2023, is 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; see also supra fn.1.