2022 MBEAN, LLC d/b/a Drive Thru, DAB TB8651 (2024)

ORDER GRANTING COMPLAINANT’S MOTION TO IMPOSE SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, 2022 MBEAN, LLC d/b/a Drive Thru, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $638. CTP began this case by serving a Complaint on Respondent and filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management. The Complaint alleges that Respondent’s staff sold regulated tobacco products to underage purchasers and failed to verify 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. CTP seeks a civil money penalty of $638 for three violations of the regulations within a 24-month period.

During the course of these administrative proceedings, Respondent failed to comply with multiple judicial orders and procedures governing this proceeding and failed to defend its

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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 strike Respondent’s Answer and issue this decision of default judgment.

I. Procedural History

On February 2, 2024, CTP served the Complaint and supporting documents 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, 1a, 1b. On March 6, 2024, Respondent timely filed its Answer to CTP’s Complaint. CRD Dkt. Entry No. 4.

On March 8, 2024, I issued an Acknowledgment and Status Report Order that set deadlines for the parties to file a joint status report regarding possible settlement discussions and the status of the case. CRD Dkt. Entry No. 5.

On May 7, 2024, I issued a Pre-Hearing Order (PHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery. CRD Dkt. Entry No. 8. I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request. CRD Dkt. Entry No. 8 at ¶ 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. CRD Dkt. Entry No. 8 at ¶ 21.

On June 3, 2024, Respondent filed its pre-hearing brief. CRD Dkt. Entry No. 9. On July 3, 2024, CTP filed a Motion to Extend Deadlines and a Motion to Compel Discovery asserting that Respondent did not respond to its discovery request as required by my PHO and regulations. CRD Dkt. Entry Nos. 12, 13. By Order of July 5, 2024, I informed Respondent of its deadline to file a response to CTP’s Motion to Compel Discovery, and warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.” CRD Dkt. Entry No. 14 at 1 (emphasis added); see also 21 C.F.R. § 17.32(c); CRD Dkt. Entry No. 8 at ¶ 20. Additionally, I held the pre-hearing exchange deadlines in abeyance. Respondent did not respond to the July 5, 2024, Order.

On August 2, 2024, I issued an Order Granting Motion to Compel in which I granted CTP’s motion and ordered Respondent to produce documents responsive to CTP’s discovery request by September 6, 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.

CRD Dkt. Entry No. 15 at 1 (emphasis in original).

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On September 9, 2024, CTP filed a Motion to Stay Deadlines and a Status Report and Motion to Impose Sanctions. CRD Dkt. Entry Nos. 17, 18. CTP advised that Respondent did not produce responsive documents in compliance with my Order Granting Motion to Compel. CRD Dkt. Entry No. 17 at 2. By Order of September 10, 2024, I informed Respondent of its deadline to file a response to CTP’s motion and warned Respondent that if it failed to file a response, “I may grant CTP’s Motion to Impose Sanctions and impose the requested civil money penalty of $638, pursuant to 21 C.F.R. § 17.35.” CRD Dkt. Entry No. 19 at 2 (emphasis in original). 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 August 2, 2024, Order Granting Motion to Compel when it failed to submit the documents responsive to CTP’s Request for Production of Documents by September 6, 2024.

Respondent also failed to defend its action despite my July 5, 2024, and September 10, 2024, orders informing Respondent of such opportunities and warning of consequences. 21 C.F.R. § 17.35(a)(2).

I find that Respondent failed to comply with multiple judicial 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.

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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 regulation governing this proceeding. Respondent failed to comply with two of my orders, despite my explicit warnings that its failure could result in sanctions. I specified that those sanctions may include “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 Nos. 8 at ¶ 21, 15 at 1. Respondent also failed to defend its actions, despite my orders expressly reminding Respondent of the opportunity to do so. Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding.

I find that Respondent’s actions are sufficient to warrant striking its Answer and issuing a decision by default, without further proceedings. 21 C.F.R. § 17.35(b), (c)(3). Accordingly, I strike Respondent’s Answer, and issue this Initial Decision and Default Judgment, assuming the facts alleged in CTP’s Complaint to be true. 21 C.F.R. §§ 17.35(c)(3), 17.11(a).

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 [C]omplaint 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:

• At approximately 1:52 PM on June 18, 2023, at Respondent’s business establishment, 4102 North International Boulevard, Weslaco, Texas 78596, an FDA commissioned inspector conducted an inspection.¹ During this inspection, a person younger than 21 years of age was able to purchase a package of two Swisher Sweets Mango Lemonade cigars. Additionally, Respondent’s staff failed

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to verify, by means of photographic identification containing a date of birth, that the purchaser was 21 years of age or older;²

• In a warning letter dated July 18, 2023, CTP informed Respondent of the inspector’s June 18, 2023, 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 2:00 PM on October 8, 2023, at Respondent’s business establishment, 4102 North International Boulevard, Weslaco, Texas 78596, 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 two Swisher Sweets Classic Grape cigars. 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 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); 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.

Taking the above alleged facts as true, I find that Respondent violated the prohibition against selling regulated tobacco products to underage purchasers and failed to verify 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. Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty in the amount of $638 as permissible under 21 C.F.R. § 17.2.

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ORDER

For these reasons, I enter default judgment in the amount of $638 against Respondent, 2022 MBEAN, LLC d/b/a 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.

¹ The complaint alleges two violations on June 18, 2023, and two on October 8, 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).

² The identification violations alleged by CTP on June 18, 2023, and October 8, 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)(2)(i), which has not been updated to reflect the age change. See Complaint ¶¶ 13.b, 14.b; see also supra fn.1.