Ismael Herrera d/b/a El Jakalito Pechocho's Drive Thru, TB8521 (2024)

ORDER GRANTING COMPLAINANT’S MOTION TO IMPOSE SANCTIONS AND

On June 26, 2023, the Center for Tobacco Products (CTP) served an Administrative Complaint (Complaint) on Respondent, Ismael Herrera d/b/a El Jakalito Pechocho’s Drive Thru, 1213 Hooks Avenue, Donna, Texas 78537, and filed 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 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 1140,1 within a 48-month period.

Page 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), 17.35(e).

I. Procedural History

On June 26, 2023, CTP served an Administrative 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 Nos. 1, 1b.  An Answer to CTP’s Complaint was due on July 26, 2023.  On August 7, 2023, Respondent’s Answer was forwarded to this office via electronic mail.  However, it was dated July 20, 2023, and was received by CTP on July 28, 2023, as evidenced by CTP’s internal date stamp.  CRD Dkt. Entry Nos. 3, 3a.  After examining the record, I deemed Respondent’s Answer to be timely filed.  See 21 C.F.R. § 17.31(a)(4).  In its Answer, Respondent admitted the allegations alleged in the Complaint, explained the extent of its employee trainings, and stated that the civil money penalty is too high for their small business.  CRD Dkt. Entry No. 3a at 2.

On August 14, 2023, an Acknowledgment and Status Report Order (ASRO) issued setting a deadline for the parties to submit a joint status report regarding the status of the case not later than October 13, 2023.  CRD Dkt. Entry No. 4.  On October 13, 2023, CTP filed the joint status report indicating that the parties were unable to reach a settlement in this case and intended to proceed to a hearing.  CRD Dkt. Entry No. 6.

On October 17, 2023, I issued a Pre-Hearing Order.  CRD Dkt. Entry No. 7 (PHO).  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 must provide the requested documents within 30 days of the request.  Id. ¶ 4; see also 21 C.F.R. § 17.23(a).  The PHO warned:

Page 3

I may impose sanctions including, but not limited to, dismissal of the [C]omplaint 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.

Id. ¶ 21.

On November 6, 2023, CTP filed an Unopposed Motion to Extend Deadlines and Notice of Pending Settlement (Unopposed Motion).  CRD Dkt. Entry No. 8.  The Unopposed Motion requested that all deadlines in the case be extended for 30 days.  Id. at 1.The Unopposed Motion also indicated that the parties have agreed to settle this matter and that payment is forthcoming from Respondent.  Id.  On November 8, 2023, I issued an order granting CTP’s Unopposed Motion.  CRD Dkt. Entry No. 9.

On January 24, 2024, CTP filed a second Unopposed Motion to Extend Deadlines stating that parties have agreed to settle this matter and Respondent has requested additional time to pay the agree-upon civil money penalty.  CRD Dkt. Entry No. 10 (2nd Unopposed Motion).  CTP also stated that Respondent agreed to pay the CMP by March 26, 2024. Id. at 1.  CTP requested that all deadlines in this case be extended for 60 days.  Id.  Also, on January 24, 2024, I issued an order granting CTP’s 2nd Unopposed Motion.  CRD Dkt. Entry No. 11.

On April 2, 2024, CTP filed a Motion to Compel Discovery, stating that Respondent had not responded to its discovery request, as required by the PHO and the regulations.  CRD Dkt. Entry No. 13.  On that same date, CTP also filed a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the April 8, 2024 deadline for CTP’s Pre-Hearing Exchange . . . .”  CRD Dkt. Entry No. 14.

On April 5, 2024, I issued an Order advising Respondent that it had until April 19, 2024, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 15.  I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  Id. at 1 (emphasis in the original); see also PHO ¶¶ 20-21.  In my Order, I also extended the pre‑hearing exchange deadlines.  Id. at 2.  Respondent failed to respond to either CTP’s Motion to Compel Discovery or my April 19, 2024 Order, or otherwise comply with CTP’s Request for Production of Documents.

On April 30, 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 May 20, 2024.  CRD Dkt. Entry No. 16.  Again, I warned:

. . . [F]ailure to comply may result in sanctions, which may include striking its filings, and issuing an Initial Decision and Default Judgment

Page 4

finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.  21 C.F.R. § 17.35.

Id. at 1 (emphasis in the original).

On May 24, 2024, CTP filed a Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 17.  CTP advised that Respondent had not complied with the PHO or my April 30, 2024 Order Granting CTP’s Motion to Compel.  Id.  CTP argued that sanctions against Respondent for its repeated non-compliance are an appropriate remedy.  Id. at 2. 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 $12,794 civil money penalty.  Id.  On May 24, 2024, CTP also filed a Motion to Stay Deadlines.  CRD Dkt. Entry No. 18.

On May 31, 2024, I issued an Order giving Respondent until June 20, 2024, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 19.  The May 31, 2024 Order also stayed the parties’ pre-hearing exchange deadlines and warned Respondent that if it failed to file a response, “I may grant CTP’s Motion to Impose Sanctions in its entirety.”  Id. (emphasis in original).  To date, Respondent has not filed any response.

II. Striking Respondent’s Answer

I may sanction a party for:

1. (1) Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;
2. (2) Failing to prosecute or defend an action; or
3. (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 May 20, 2024.

Page 5

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 April 5, 2024, Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my May 31, 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 regulatory requirements and two judicial orders, despite my explicit warnings that its failure to do so could result in sanctions.  See CRD Dkt. Entry Nos. 16, 19; 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).

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.

Specifically, CTP alleges the following facts in its Complaint:

• On March 25, 2022, CTP initiated a previous civil money penalty action, CRD Docket Number T-22-132, FDA Docket Number FDA-2022-H-0446, against Respondent for at least four violations of the Act. CTP alleged those violations to

Page 6

• have occurred at Respondent’s business establishment, 1213 Hooks Avenue, Donna, Texas 78537, on December 7, 2019, and December 11, 2021.
• 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”;
• An FDA-commissioned inspector conducted a subsequent inspection on March 4, 2023, at approximately 11:49 AM, at Respondent’s business establishment at 1213 Hooks Avenue, Donna, Texas 78537. During this inspection, a person younger than 21 years of age was able to purchase a package of Camel Crush 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. 2

These facts establish Respondent El Jakalito Pechocho’s Drive Thru’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.  For violations prior to December 20, 2019, regulated tobacco products may not be sold to any person younger than 18 years of age, 21 C.F.R. § 1140.14(a)(1), 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 18 years of age, 21 C.F.R. § 1140.14(a)(2)(i).

Page 7

Order

For these reasons, I enter default judgment in the amount of $12,794 against Respondent, Ismael Herrera d/b/a El Jakalito Pechocho’s Drive Thru.  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.