Multani Brothers Inc. d/b/a Deepwater Truck Stop / Conoco, DAB TB8048 (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 (Complaint) on Respondent, Multani Brothers Inc. d/b/a Deepwater Truck Stop / Conoco, at 455 Shell Road, Penns Grove, NJ 08069, 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 $2,559 civil money penalty against Respondent for four 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.

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The Complaint alleges CTP previously initiated a civil money penalty against Respondent Deepwater Truck Stop / Conoco.  The prior action concluded when a default judgment was entered against Respondent Deepwater Truck Stop / Conoco for two violations of the Act.  Specifically, Respondent was found to have sold a regulated tobacco product to an underage purchaser and failed to verify, by means of photo identification containing a date of birth, that the purchaser was 21 years of age or older.  The Complaint further alleges that Respondent Deepwater Truck Stop / Conoco subsequently committed two additional violations of the Act.  Specifically, that Respondent sold a regulated tobacco product to an underage purchaser and failed to verify, by means of photo identification containing a date of birth, that the purchaser was 21 years of age or older, thereby violating the Act.  Therefore, CTP seeks a $2,559 civil money penalty against Respondent Deepwater Truck Stop / Conoco for a total of four violations within a 24-month period.²

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.

I. Procedural History

On October 19, 2023, CTP served the Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  Civil Remedies Division (CRD) Docket (Dkt.) Entry No. 1b (Proof of Service).  On November 20, 2023, Respondent’s representative registered for DAB E-File.  On that same date, Respondent’s representative filed a timely answer to CTP’s Complaint.  CRD Dkt. Entry No. 3.     

On November 22, 2023, I issued an Acknowledgment and Pre-Hearing Order (APHO) setting deadlines for the parties’ filings and exchanges, including a schedule for discovery.  CRD Dkt. Entry No. 4.  In the APHO, among other things, I directed that a

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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.

APHO ¶ 21. 

On February 1, 2024, 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. 8 (Motion to Compel Discovery).  On that same date, CTP also filed a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the February 16, 2024, due date for CTP’s pre-hearing exchange . . . .”  CRD Dkt. Entry No. 7 at 2 (Motion to Extend Deadlines).  On February 2, 2024, I issued an Order advising Respondent that it had until February 20, 2024, 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.  Respondent failed to respond to CTP’s Motion to Compel Discovery or my February 2, 2024, Order, or otherwise comply with CTP’s Request for Production of Documents. 

On February 28, 2024, 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 March 8, 2024.  I warned:

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 and imposing a civil money penalty.

CRD Dkt. Entry No. 10 at 1-2.  In the same Order, I also extended the parties’ pre-hearing exchange deadlines.  Id. at 2.

On March 13, 2024, CTP filed a Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 11.  CTP advised that Respondent had not complied with the APHO or my February 28, 2024, Order Granting CTP’s Motion to Compel.  Id.  at 2.  CTP argued that sanctions against Respondent are an appropriate remedy, “as it is unlikely that more time or additional orders . . . will encourage the Respondent to follow the ALJ’s orders or to defend its case.”  Id.  Specifically, CTP asked that I strike Respondent’s Answer as a sanction and issue an Initial Decision and Default Judgment finding Respondent liable for

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the violations listed in the Complaint and imposing a $2,559 civil money penalty.  Id.  On March 13, 2024, CTP also filed a Motion to Extend Deadlines.  CRD Dkt. Entry No. 12. 

On March 15, 2024, I issued an Order giving Respondent until April 1, 2024, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 13 at 2.  The March 15, 2024, Order also extended the parties’ pre-hearing exchange deadlines.  Id.  To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or my March 15, 2024, 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, 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
• my February 28, 2024, Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by March 8, 2024.

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 February 2, 2024, Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my March 15, 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.

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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.  See CRD Dkt. Entry Nos. 9 at 2, 13 at 2; see also APHO ¶ 21.  Additionally, Respondent failed to respond to any of CTP’s motions.  See CRD Dkt. Entry Nos. 10 at 1, 13 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.”).   

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. Id.  Specifically:   

• On March 22, 2022, CTP initiated a previous civil money penalty action, CRD Docket Number T-22-119, FDA Docket Number FDA-2022-H-0366, against Respondent for two violations of the Act. CTP alleged those violations to have occurred at Respondent’s business establishment, 455 Shell Road, Penns Grove, New Jersey 08069, on December 8, 2021;
• The previous action concluded when an Initial Decision and Default Judgment was entered by an Administrative Law Judge, “finding that all of the violations alleged in the Complaint occurred”;
• An FDA-commissioned inspector conduced a subsequent inspection on August 1, 2023, at approximately 10:19 AM, at Respondent’s business establishment located at 455 Shell Road, Penns Grove, New Jersey 08069. During the inspection, a person younger than 21 years of age was able to purchase a package of Newport

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• Box cigarettes. 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 Deepwater Truck Stop / Conoco’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.

Respondent having failed to file an answer and taking the alleged above facts as true, a $2,559 civil money penalty is permissible under 21 C.F.R. § 17.2.

ORDER

For these reasons, I enter default judgment in the amount of $2,559 against Respondent Multani Brothers Inc. d/b/a Deepwater Truck Stop / Conoco.  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 any prior violations that occurred outside of the relevant timeframe in the Complaint.  Complaint ¶ 1 fn.1.

³  The identification violations alleged by CTP on December 8, 2021, and August 1, 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(a)(2)(i), which have not been updated to reflect the age change.  See Complaint ¶¶ 13.b, 15.b; see also supra fn.1.