4 Brother Mini Market 2 Inc. d/b/a 4 Brother Mini Market 2, DAB TB8519 (2024)

ORDER IMPOSING SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint on Respondent, 4 Brother Mini Market 2 Inc. d/b/a 4 Brother Mini Market 2, at 942 Forrester Avenue, Darby, Pennsylvania 19023, 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 $12,794 civil money penalty against Respondent 4 Brother Mini Market

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2, for six 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 48-month period.²

Respondent 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 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).

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 30, 2023, CTP served a Complaint and supporting documents on Respondent, 4 Brother Mini Market 2 Inc. d/b/a 4 Brother Mini Market 2 by United Parcel Service. Civil Remedies Division (CRD) Docket (Dkt.) Entry Nos. 1 (Complaint), 1a (Cover Letter), 1b (Proof of Service).

On November 27, 2023, Manuel Torres, Respondent's representative, registered for the Departmental Appeals Board (DAB) E-Filing System and electronically filed a timely answer on behalf of Respondent. CRD Dkt. Entry No. 3 (Answer). In its Answer, Respondent denied all the allegations, asserted some defenses, and stated that the requested civil money penalty (CMP) amount was too high. Id. at 1-2.

On November 30, 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, ¶¶ 1-6. A deadline of January 8, 2024 was established for the parties to request documents from the opposing party. The APHO explained that a party must provide the requested documents no later than 30 days after the request has been made. The APHO also explained that a party may file a motion for a protective order with CRD within 10 days of receiving a request for the production of documents. Id. ¶ 4; see also 21 C.F.R. §§ 17.23(a), (d). I also warned:

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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.

CRD Dkt. Entry No. 4 ¶ 21.

In addition, the APHO set filing deadlines for pre-hearing exchanges. CTP's deadline to file its pre-hearing exchange and serve a copy on Respondent was February 20, 2024, and Respondent's deadline to file its prehearing exchange and serve a copy on CTP was March 12, 2024. Id. ¶ 6.

On January 2, 2024, CTP filed a Notice of Appearance, and a Status Report, and through the latter, advised that the parties have been unable to reach a settlement. CRD Dkt. Entry Nos. 5, 6.

On February 7, 2024, CTP filed a Motion to Compel Discovery, stating 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). As an attachment, CTP included its Request for Production of Documents (RFP), which was sent to the Respondent on January 2, 2024 and also served on Respondent by United Parcel Service as part of the discovery process, on January 3, 2024. CRD Dkt. Entry Nos. 8a, 8b (CTP Exhibit A and Exhibit B). Also on February 7, 2024, CTP filed a Motion to Extend Deadlines, requesting a 30-day extension of "any deadlines, including the February 20, 2024, due date for CTP's pre-hearing exchange . . . ." CRD Dkt. Entry No. 7 at 2 (Motion to Extend Deadlines).

On February 9, 2024, I issued an Order advising Respondent that it had until February 26, 2024, to file a response to CTP's Motion to Compel Discovery. CRD Dkt. Entry No. 9. In my Order, I also extended the pre-hearing exchange deadlines. CTP's pre-hearing exchange was extended to March 21, 2024. Respondent's pre-hearing exchange was extended to April 11, 2024. Id. at 2. Respondent failed to respond to CTP's Motion to Compel Discovery or my February 9, 2024, Order.

On March 6, 2024, I issued an Order granting Complainant's Motion to Compel Discovery (Order Granting Motion to Compel Discovery) and ordered Respondent to produce documents responsive to CTP's Request for Production of Documents or submit a written response to CTP stating that it does not have any documents to produce, by March 21, 2024. CRD Dkt. Entry No. 10. In that Order, I specifically warned Respondent:  

Failure to comply with this Order may result in sanctions, including the issuance of an Initial Decision and Default

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Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

Id. at 2. (emphasis in original).

On April 22, 2024, CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief, a list of proposed witnesses and exhibits (CRD Dkt. Entry Nos. 12, 12a.) and sixteen proposed exhibits (CTP Exhibits (Exs.) 1-16), including the written direct testimony of two proposed witnesses, CTP Regulatory Counsel Loretta Chi (CTP Ex. 5), and Inspector Betty Wade (CTP Ex. 6). CRD Dkt. Entry Nos. 12b – 12q.

Respondent, on the other hand, did not file a pre-hearing exchange.

On May 24, 2024, I issued an Order Scheduling Pre-Hearing Conference (PHC). CRD Dkt. Entry No. 13 (PHC Order). I informed the parties that the PHC was scheduled for Wednesday, June 12, 2024 at 2:00 PM Eastern Time. Id. On June 12, 2024, I held a pre-hearing conference as scheduled. Counsel for CTP appeared at the pre-hearing conference. However, Respondent's representative failed to appear as ordered.

On June 18, 2024, I issued an Order to Show Cause for Failure to Appear (OSC), giving Respondent until June 25, 2024 to show cause for its failure to appear at the pre-hearing conference. CRD Dkt. Entry No. 14. I warned that failure to respond to the OSC "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." Id. at 1 (emphasis in original).

To date, Respondent has failed to respond to the OSC.

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:

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• the regulation at 21 C.F.R. § 17.23(a) and paragraph 4 of my November 30, 2023 APHO, when Respondent failed to respond to CTP's Request for Production of Documents within 30 days;
• my March 6, 2024 Order when it failed to file its pre-hearing exchange by May 13, 2024;
• my May 24, 2024 Order Scheduling Pre-Hearing Conference, requiring the parties to appear at the pre-hearing conference.

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 9, 2024 Order;
• Respondent failed to appear at the pre-hearing conference as ordered; and
• Respondent failed to comply with my June 18, 2024 OSC requiring it to show cause for its failure to appear at the pre-hearing conference.

Respondent's failure to respond to CTP's motions and to comply with my multiple orders 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 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 three of my orders, despite numerous explicit warnings that its failure to do so could result in sanctions. CRD Dkt. Entry No. 13 at 1; CRD Dkt. Entry No. 14 at 2; see also CRD Dkt. Entry No. 4 ¶ 21.

Respondent's repeated failures interfered with the speedy, orderly, or fair conduct of this proceeding. In fact, after initially denying the violations alleged in the Complaint and asserting some defenses, 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); 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.").

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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:

• On May 4, 2022, CTP initiated a prior civil money penalty action, CRD Docket Number T-22-260, FDA Docket Number FDA-2022-H-0726, against Respondent for violations of the Act, four of which occurred during the 48-month period³ relevant in the current Complaint. CTP alleged those violations to have occurred at Respondent's business establishment, 942 Forrester Avenue, Darby, Pennsylvania 19023, on January 8, 2020 and January 22, 2022;
• 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";
• At approximately 4:40 PM on August 11, 2023, at Respondent's business establishment located at 942 Forrester Avenue, Derby, Pennsylvania 19023, an FDA commissioned inspector conducted a subsequent inspection. During this inspection, a person younger than 21 years of age was able to purchase a package of Newport 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.⁴

These facts establish Respondent 4 Brother Mini Market 2'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

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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.

A $12,794 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $12,794 against Respondent, 4 Brother Mini Market 2 Inc. d/b/a 4 Brother Mini Market 2. 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.

³  CTP did not include violations that occurred outside the relevant timeframe for this complaint.

⁴  The sale to a minor violation alleged by CTP on January 8, 2020, and the identification violations alleged by CTP on January 8, 2020, January 22, 2022, and August 11, 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)(1), (a)(2)(i), (b)(2)(i), which has not been updated to reflect the age change. See Complaint ¶¶ 13.b, 15.b; see also supra fn.1.