Quicksshop LLC d/b/a Quick Stop, DAB TB8729 (2024)

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

On March 6, 2024, the Center for Tobacco Products (CTP) served an Administrative Complaint (Complaint) on Respondent, Quicksshop LLC d/b/a Quick Stop, at 161 Union Avenue, Irvington, New Jersey 07111, and on March 7, 2024, CTP filed a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management. CTP seeks to impose a $6,892 civil money penalty against Respondent for five 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, within a 36-month period.

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 also failed to defend its case, which interfered with the speedy, orderly, or fair conduct of this proceeding. 21 C.F.R. § 17.35(a).

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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).

I. Procedural History

On March 6, 2024, CTP served a 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 (Complaint), 1a (Cover Letter), 1b (Proof of Service). On March 18, 2024, Respondent filed a timely Answer to CTP’s Complaint by United States Postal Service. CRD Dkt. Entry No. 3. In its Answer, Respondent denied the allegations, asserted some defenses, and indicated that the civil money penalty was too high. Id., at 3-4.

On March 21, 2024, Administrative Law Judge (ALJ) Marla Y. Johnson1 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 April 29, 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). She also 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.

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 June 11, 2024, and

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Respondent’s deadline to file its pre-hearing exchange and serve a copy on CTP was July 2, 2024. Id. ¶ 6.

On April 18, 2024, CTP filed an Unopposed Motion to Extend Deadlines and Notice of Pending Settlement requesting a 30-day extension of all deadlines, including request for documents and the pre-hearing exchange deadlines. CRD Dkt. Entry No. 5. On April 19, 2024, ALJ Marla Y. Johnson granted the requested 30-day extension, extending each party’s request for documents from the opposing party to May 29, 2024, CTP’s pre- hearing exchange deadline to July 11, 2024, and Respondent’s pre-hearing exchange deadline to August 1, 2024. CRD Dkt. Entry No. 6.

On July 3, 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 an Unopposed Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the July 11, 2024 due date for CTP’s pre-hearing exchange” CRD Dkt. Entry No. 9 at 2 (Unopposed Motion to Extend Deadlines).

On July 9, 2024, ALJ Marla Y. Johnson issued an Order advising Respondent that it had until July 25, 2024, to file a response to CTP’s Motion to Compel Discovery. CRD Dkt. Entry No. 10. In that Order, she also extended the pre-hearing exchange deadlines. CRD Dkt. Entry No. 10 at 2.

Respondent failed to respond to CTP’s Motion to Compel Discovery or the July 9, 2024 Order, or otherwise comply with CTP’s Request for Production of Documents.

On July 31, 2024, ALJ Marla Y. Johnson 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 August 9, 2024. She warned:

Failure to comply with this Order 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. 11 at 2 (emphasis in the original).

On August 2, 2024, ALJ Marla Y. Johnson issued an Order, sua sponte, extending the parties’ pre-hearing exchange deadlines, respectively, by an additional thirty days. CRD Dkt. Entry No. 12.

On August 26, 2024, CTP filed a Status Report and Motion to Impose Sanctions. CRD Dkt. Entry No. 14. CTP advised that Respondent had not complied with the APHO or

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the July 31, 2024 Order Granting CTP’s Motion to Compel. Id. at 1-2. CTP argued that sanctions against Respondent for its repeated non-compliance are an appropriate remedy. 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 impose a $6,892 civil money penalty. Id. at 2. On August 26, 2024, CTP also filed a Motion to Stay Deadlines. CRD Dkt. Entry No. 15.

On August 28, 2024, I issued an Order (Order Granting Motion to Extend Deadlines Pending a Ruling on Complainant’s Motion to Impose Sanctions) extending the parties’ prehearing exchange deadlines. CRD Dkt. Entry 16. I did not rule on the Motion to Impose Sanctions in that order, pursuant to 21 C.F.R. § 17.32(c), to allow Respondent an opportunity to file a response to the said motion, and established a September 12, 2024 deadline for Respondent to do so. Id. Respondent again failed to respond.

On September 23, 2024, I issued an Order, sua sponte, staying the parties’ prehearing exchange deadlines, pending resolution of CTP’s Motion to Impose Sanctions. CRD Dkt. Entry No. 17.

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:

• 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
• the July 31, 2024 Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by August 9, 2024.

I also find that Respondent failed to defend this action, despite the July 31, 2024 Order and my August 28, 2024 Order, informing Respondent of the due dates to file its responses to CTP’s motions and warning Respondent of the consequences if it failed to do so.

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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 explicit warnings that its failure to do so could result in sanctions. CRD Dkt. Entry No. 11 at 2; CRD Dkt. Entry No. 16 at 2; see also APHO ¶ 21. Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding. In fact, after initially denying all of the violations alleged in the Complaint, Respondent has not participated in this action in any meaningful way 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). 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:

• On May 31, 2023, CTP initiated a previous civil money penalty action, CRD Docket Number T-23-2366, FDA Docket Number FDA-2023-H-2167, against Respondent for at least three violations of the Act. CTP alleged those violations to have occurred at Respondent’s business establishment, 161 Union Avenue, Irvington, New Jersey 07111, on March 19, 2022, and May 8, 2023;
• 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”;
• At approximately 12:00 PM on December 21, 2023, at Respondent’s business establishment, 161 Union Avenue, Irvington, New Jersey 07111, an FDA- commissioned inspector conducted a subsequent inspection. During the inspection, a person younger than 21 years of age was able to purchase a

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• Black & Mild Original cigar. 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 Quick Stop’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.

A $6,892 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $6,892 against Respondent, Quicksshop LLC d/b/a Quick Stop. 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.