Ramji LLC d/b/a AM PM / ARCO, DAB TB8718 (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, Ramji LLC d/b/a AM PM / ARCO, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $687. 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

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regulations, 21 C.F.R. pt. 1140. CTP seeks a civil money penalty of $687 for three violations of the regulations within a 24-month period.1

Respondent filed an answer in this matter but failed to comply with multiple judicial orders and procedures governing this proceeding and failed to defend its 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 April 23, 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. 1-1b. Respondent timely filed its Answer to CTP’s Complaint on May 22, 2024. CRD Dkt. Entry No. 3.

On May 22, 2024, the previously assigned Administrative Law Judge, Kourtney LeBlanc, 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. Judge LeBlanc directed that a party receiving a discovery request must provide the requested documents within 30 days of the request. CRD Dkt. Entry No. 4 at ¶ 4; see 21 C.F.R. § 17.23(a). Judge LeBlanc warned that sanctions may be imposed if a party failed to comply with any order, including the APHO. CRD Dkt. Entry No. 4 at ¶ 21. On July 3, 2024, this case was reassigned to me.
On July 23, 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 the APHO and regulations. CRD Dkt. Entry Nos. 8-8b, 9. By Order of July 24, 2024, I informed Respondent of its August 23, 2024, 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. 10 at 1 (emphasis added); see also 21 C.F.R. § 17.32(c); CRD Dkt. Entry No. 4 at ¶ 20. Additionally, I held the pre-hearing exchange deadlines in abeyance. Respondent did not respond to the July 24, 2024, Order.

On August 24, 2024, Respondent filed what appears to be a photograph of a “WE CHECK ID” sign, and two employee pay stubs. See CRD Dkt. Entry Nos. 11-11b.

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On September 4, 2024, I issued an Order Granting Complainant’s Motion to Compel, finding Respondent’s August 24, 2024, filing was an untimely and insufficient response to Complainant’s Motion to Compel. Additionally, I ordered Respondent to produce documents responsive to CTP’s discovery request by September 10, 2024, and 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. 12 at 1 (emphasis added).

On September 11, 2024, CTP filed a Status Report and Motion to Impose Sanctions and a Motion to Stay Deadlines. CRD Dkt. Entry Nos. 13, 14. CTP advised that Respondent did not produce responsive documents in compliance with my Order Granting Complainant’s Motion to Compel. CRD Dkt. Entry No. 13 at 2.

On September 11, 2024, I issued an Order informing Respondent of that it had until September 27, 2024, to file a response to CTP’s Motion to Impose Sanctions 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 $687, pursuant to 21 C.F.R. § 17.35.” CRD Dkt. Entry No. 15 at 2 (emphasis in original). To date, Respondent has not responded to my September 11, 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 the following orders and procedures governing this proceeding:

• Respondent failed to comply with 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

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• Respondent failed to comply with my September 4, 2024, Order Granting Complainant’s Motion to Compel when it failed to submit the documents responsive to CTP’s Request for Production of Documents by September 10, 2024.

Respondent also failed to defend its action despite my July 24, 2024, and September 11, 2024, Orders informing Respondent of such opportunities and warning of consequences. 21 C.F.R. § 17.35(a)(2). 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.

Therefore, 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.

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. 4 at ¶ 21, 12 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); 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.”).

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

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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 1:48 PM on July 10, 2023, at Respondent’s business establishment, 710 15th Avenue, Longview, Washington 98632, an FDA commissioned inspector conducted an 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;
• In a warning letter dated August 8, 2023, CTP informed Respondent of the inspector’s July 10, 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 12:25 PM on February 12, 2024, at Respondent’s business establishment, 710 15th Avenue, Longview, Washington 98632, 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 Diamonds 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 AM PM / ARCO’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.

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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 $ 687 as permissible under 21 C.F.R. § 17.2.

ORDER

For these reasons, I enter default judgment in the amount of $687 against Respondent Ramji LLC d/b/a AM PM / ARCO. 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.