One Stop Fillup V Inc. d/b/a Arco / AM PM, DAB TB8760 (2024)

INITIAL DECISION

The Center for Tobacco Products (“CTP”), of the United States Food and Drug Administration (FDA), seeks a civil money penalty against Respondent, One Stop Fillup V Inc. d/b/a Arco / AM PM, for 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. pt. 1140.  CTP alleges that Respondent impermissibly sold regulated tobacco products to underage purchasers and failed to verify that the purchasers were 21 years of age or older. Therefore, CTP seeks a $638 civil money penalty against Respondent for three violations of the Act within a 24-month period.  For the reasons discussed below, I find the Respondent liable for the three violations alleged in the Complaint and conclude that a reduced civil money penalty (CMP) of $450 against Respondent is appropriate in this case.

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Background and Procedural History

CTP began this matter by serving an administrative complaint on Respondent, at 1124 4th Street, Marysville, Washington 98270, by United Parcel Service (UPS), and by filing a copy of the complaint with the FDA’s Division of Dockets Management.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Nos. 1 (Complaint), 1b (Proof of Service).

On December 26, 2023, Respondent timely filed its Answer to CTP’s complaint.  CRD Dkt. Entry No. 3 (Answer).  In its Answer, Respondent denied the September 20, 2023 allegations, stating CTP did not inform Respondent that the violation occurred after the inspection and all of Respondent’s employees were compliant.  Id. at ¶ 1.  Respondent’s Answer also included examples of measures Respondent has in place to ensure its employees are following the regulations, such as a photo of a document that lists the consequences employees may face if they sell to underage purchasers with multiple signatures and photos of the register’s software requiring birth entry to verify the age of a person buying tobacco.  Id. at 1-4.

On January 3, 2024, Administrative Law Judge LeBlanc1 issued an Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of Respondent’s Answer and establishing procedural deadlines in this case.  CRD Dkt. Entry No. 4 (APHO).  On January 23, 2024,2 Respondent filed its pre-hearing brief, which consisted of Respondent’s responses to the brief outline that was sent to Respondent with the January 3, 2024 APHO along with documents that mirror those attached to Respondent’s Answer. CRD Dkt. Entry No. 5 (R.’s Brief).  Respondent asserted some arguments, defenses, and contested the appropriateness of the civil money penalty sought by CTP.  Id.  Respondent asserted that CTP’s allegations regarding the sale of regulated tobacco products and the failure to verify the age of the purchasers were untrue because no proof of receipt was provided for the September 20, 2023 allegations and only a letter was provided for the May 7, 2022 allegations.  Id. at 4, 6.

On March 11, 2024, CTP filed a Motion to Compel Discovery, asserting that Respondent had not responded to CTP’s Request for Production of Documents.  CRD Dkt. Entry Nos. 8, 8a-b.  On that same date, CTP also file an Unopposed Motion to Extend Deadlines, requesting that the pre-hearing exchange deadlines be extended by 30 days. CRD Dkt. Entry No. 9.

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On March 12, 2024, Judge LeBlanc issued an Order, which advised Respondent that it had until April 2, 2024 to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 10 at 2.  The Order also granted CTP’s Unopposed Motion to Extend Deadlines.  Id.

On April 3, 2024, after Respondent failed to file a response to the March 12, 2024 Order, Judge LeBlanc granted CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 11. The April 3, 2024 Order directed Respondent to provide responsive documents to CTP’s Request for Production of Documents by April 23, 2024.  Id. at 2.  The April 3, 2024 Order also extended the parties’ pre-hearing exchange deadlines.  Id.

On April 8, 2024, Respondent submitted a letter stating, “we are working to gather the requested information” and the “[r]equested information will be submitted to the appeal board before the due date of April 24, 2024.”  CRD Dkt. Entry No. 12.  On April 23, 2024, Respondent filed three documents in response to CTP’s Request for Production of Documents and the April 3, 2024 Order.  CRD Dkt. Entry Nos. 13-15.

On May 24, 2024, CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief (CTP’s Br.), list of two proposed witnesses and 20 proposed exhibits (CTP Exhibits (Exs.) 1-20).  CRD Dkt. Entry Nos. 16, 16a-u.  Specifically, the exhibits included the written direct testimony of two proposed witnesses, Deputy Division Director for the Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, CTP, FDA James Bowling (CTP Ex. 3), and FDA-Commissioned Inspector Ilya Kluchnikov (CTP Ex. 4).  CRD Dkt. Entry Nos. 16d, 16e.

By Order dated July 10, 2024, I scheduled a pre-hearing conference for August 7, 2024, at 11:00 AM Eastern Time.  CRD Dkt. Entry No. 19 (Order Scheduling Pre-Hearing Conference).  On August 7, 2024, I held a telephone pre-hearing conference (PHC) call via Microsoft Teams.  See CRD Dkt. Entry No. 20 (Post PHC Order).  During the PHC, I discussed the procedural history of the case, the record, and the parties’ pre-hearing submissions, the issues before me, the parties’ respective burdens of proof, and the purpose of a formal hearing.  Id. at 1-2.

Furthermore, during the PHC, I apprised Respondent of CTP’s proposed witnesses, James Bowling, Deputy Division Director for the Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, CTP, FDA, and Inspector Ilya Kluchnikov, FDA-commissioned Inspector with the state of Washington.  I specifically asked Respondent of its intent to cross-examine one or both witnesses.  Respondent confirmed it did not need to cross-examine Mr. Bowling or Inspector Kluchnikov.  Id. at 2.  Both parties waived their right to a hearing and agreed to proceed with a decision based on the written record.  Id.

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During the PHC, I admitted CTP’s Exhibits 1-20 into the record without objection.  CRD Dkt. Entry No. 20 at 2.  I also admitted Respondent’s Exhibit 13 into the record without objection.  Id.

In the Post PHC Order, I set a deadline for the parties’ simultaneous supplemental briefs as September 9, 2024.  Id.  On September 9, 2024, CTP filed Complainant’s Notice of Waiver of Final Brief.  CRD Dkt. Entry No. 21.  Respondent did not file a supplemental brief prior to the close of the briefing period.

As previously discussed, the parties waived the right to a hearing in this case and agreed that the matter could be decided based on the written record.  Accordingly, the record is now closed, and I am issuing a decision on the record in this case.

Issues

1. Whether Respondent sold regulated tobacco products to underage purchasers and failed to verify, by means of photographic identification, that regulated tobacco product purchasers were of sufficient age on May 7, 2022, and September 20, 2023, in violation of section 905(d)(5) of the Act and 21 C.F.R. § 1140.14(b)(2)(i) as charged in the Complaint; and, if so,
2. Whether the civil money penalty amount of $638 that CTP seeks is an appropriate penalty.

Analysis, Findings of Fact and Conclusions of Law

To prevail, CTP must prove Respondent’s liability by a preponderance of the evidence. The U.S. Supreme Court has described the preponderance of the evidence standard as requiring that the trier-of-fact believe that the existence of a fact is more probable than not before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  In re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe and Prods. of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993).

CTP has the burden to prove Respondent’s liability and appropriateness of the penalty by a preponderance of the evidence.  21 C.F.R. § 17.33(b).  Respondent has the burden to prove any affirmative defenses and any mitigating factors likewise by a preponderance of the evidence.  21 C.F.R. § 17.33(c).

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I.     Violations

CTP determined to impose a civil money penalty against Respondent pursuant to the authority conferred by the Act and implementing regulations at Part 21 of the Code of Federal Regulations.  The Act prohibits the misbranding of tobacco products while they are held for sale after shipment in interstate commerce.  21 U.S.C. § 331(k).  A tobacco product is misbranded if distributed or offered for sale in any state in violation of regulations issued under Section 906(d) of the Act.  21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  FDA and its agency, CTP, may seek civil money penalties from any person who violates the Act’s requirements as they relate to the sale of tobacco products.  21 U.S.C. § 333(f)(9).

The sale of regulated tobacco products to an individual who is under the age of 21 and failure to verify, by means of photo identification containing the bearer's date of birth, that a regulated tobacco product purchaser is of sufficient age are violations of implementing regulations.  Act, Section 906(d)(5); 21 U.S.C. § 387f(d)(5).

Respondent’s Admissions

Respondent concedes to being the Vice President of One Stop Fillup V Inc., the corporation that owns Arco / AM PM, located at 1124 4th Street, Marysville, Washington 98270.  CRD Dkt. Entry No. 5 at ¶¶ 1, 2 (R.’s Brief).  Respondent admitted that it sells tobacco products at its establishment.  CRD Dkt. Entry No. 5 at ¶ 3.

May 7, 2022 Allegations

CTP's Complaint alleges that Respondent committed two violations:

1) At approximately 10:00 AM on May 7, 2022, at Respondent’s business establishment, 1124 4th Street, Marysville, Washington 98270, Respondent sold a JUUL Menthol e-liquid product to a person younger than 21 years of age.
2) Respondent failed to verify, the purchaser’s age, by means of photographic identification containing the purchaser’s date of birth, prior to the sale of the JUUL Menthol e-liquid product.

CTP’s case against Respondent rests on the testimony of Mr. Bowling and Inspector Kluchnikov, who conducted the inspection at issue and is supported by corroborating evidence including a narrative report, Tobacco Inspection Management System (TIMS) Assignment Form, and photographs.  CRD Dkt. Entry Nos. 16d, 16e-g, 16j-n, 16t.  Mr. Bowling is the Deputy Division Director for the Division of Enforcement and Manufacturing in the Office of Compliance and Enforcement, CTP, FDA.  CRD Dkt. Entry No. 16d.  Mr. Bowling testified that the JUUL Menthol e-liquid product purchased at Respondent’s establishment on May 7, 2022 was manufactured, prepared,

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compounded, or processed for commercial distribution at JUUL Labs, Inc.’s facility in Wisconsin.  CRD Dkt. Entry No. 16d at ¶ 7.

Inspector Kluchnikov is an FDA-commissioned Inspector with the state of Washington. CRD Dkt. Entry No. 16e at ¶¶ 1-4 (Inspector Kluchnikov’s Declaration).  His duties include using undercover buy (UB) inspections with an Underage Purchaser (UP) to determine whether a retailer complies with the age and photo identification requirements when selling tobacco products.  Id.  Inspector Kluchnikov testified that he conducted such an inspection of Respondent’s establishment on May 7, 2022, at approximately 10:00 AM, while accompanied by UP A.  Id. at ¶ 7.  During the inspection, he observed UP A purchase an e-liquid product from Respondent.  Id. at ¶ 8.

Inspector Kluchnikov testified that, prior to the inspection at issue, he verified that UP A carried photographic identification that included UP A’s true age.  Id. at ¶ 7.  Inspector Kluchnikov also verified that UP A did not have any tobacco products in their possession. Id.  Inspector Kluchnikov testified that, during the inspection, he parked his car near Arco / AM PM (Respondent’s establishment) and Inspector Kluchnikov and UP A exited the vehicle.  Id. at ¶ 8.  Moments after watching UP A enter the establishment, the inspector entered the establishment and positioned himself in a location that had a clear, unobstructed view of the sales counter and UP A.  Id. at ¶ 8.  The inspector testified that he observed UP A purchase an e-liquid product directly from an employee at the establishment.  Id.  Inspector Kluchnikov testified that prior to the purchase, he observed that UP A did not present any identification to the employee, and the employee did not provide UP A with a receipt after the purchase.  Id.

Inspector Kluchnikov testified that, after UP A completed the purchase, UP A and Inspector Kluchnikov returned to the vehicle, where UP A immediately handed Inspector Kluchnikov the e-liquid product.  Id. at ¶ 9.  Inspector Kluchnikov testified that he observed that the product was a JUUL Menthol 5.0% e-liquid product.  Id.  After driving to a nearby secure location, Inspector Kluchnikov labeled the JUUL Menthol 5.0% e-liquid product as evidence and photographed all of the panels of the package.  Id. Inspector Kluchnikov then processed the evidence in accordance with standard procedures at the time of the inspection, which entailed completing the TIMS Form and creating a Narrative Report.  Id. at ¶¶ 9-11.

UP A’s redacted identification and Inspector Kluchnikov’s contemporaneous photographs and reports were admitted into evidence and corroborate Inspector Kluchnikov’s testimony.  CRD Dkt. Entry Nos. 16e-g, 16j-n, 16t; see also CRD Dkt. Entry No. 16m (May 2022 Notice of Compliance Check Inspection # 22WA062272).

Respondent did not acknowledge the May 7, 2022 violations in its Answer.  In Respondent’s Brief, Respondent checked the box stating the May 7, 2022 sale to a person younger than 21 years of age was untrue.  In its brief, Respondent’s sole argument was

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“[f]or May 7, 2022, no information available other than the letter.”  CRD Dkt. Entry No. 5 at 4.

In Respondent’s response to CTP’s Request for Production of Documents, Respondent submitted images of a May 2022 group text message between what appears to be its management team. CRD Dkt. Entry No. 13 at 1.  In the images and descriptions surrounding them, Respondent affirms that the cashier involved in the sale was given a warning for not checking the purchaser’s identification on May 7, 2022, after which, the cashier gave a two week notice on May 16, 2022.  Id. at 1.  This establishes that Respondent was aware of the May 7, 2022 violations despite its arguments that CTP should have notified management at the time of the violations.  It also shows that prior to receiving the Warning Letter on June 21, 2022, Respondent took immediate action to retrain its staff and discipline the employee involved in the May 7, 2022 sale.

Respondent did not challenge, nor specifically deny selling JUUL Menthol 5% e-liquid products, which Mr. Bowling confirmed were manufactured in Wisconsin, and traveled in interstate commerce prior to being held for sale by Respondent.  Therefore, I rely on Mr. Bowling’s testimony that the JUUL Menthol 5% e-liquid product sold to a UP on May 7, 2022 had traveled in interstate commerce

Accordingly, I find Inspector Kluchnikov’s testimony persuasive because it is supported by corroborating evidence documenting the May 7, 2022 violation for selling a regulated tobacco product to a UP and failing to verify the age of the UP prior to the purchase. Additionally, Inspector Kluchnikov’s testimony and corroborating evidence is strengthened by Respondent’s own admission in text messages that employees needed to be retrained and the subsequent resignation of the cashier on duty at the time of the May 7, 2022 inspection.  See CRD Dkt. Entry No. 13 at 1.

September 20, 2023 Allegations

CTP’s Complaint alleges that Respondent committed two additional violations:

1) At approximately 1:54 PM on September 20, 2023, at Respondent’s business establishment, 1124 4th Street, Marysville, Washington 98270, Respondent sold a JUUL Menthol e-liquid product to a person younger than 21 years of age.
2) Respondent failed to verify the purchaser’s age, by means of photographic identification containing the purchaser’s date of birth, prior to the sale of the JUUL Menthol e-liquid product.

CTP’s case against Respondent rests on the testimony of Mr. Bowling and Inspector Kluchnikov, who conducted the inspection at issue and supported by corroborating evidence including a narrative report, TIMS Assignment Form, and photographs.  CRD Dkt. Entry Nos. 16d, 16e, 16h-i, 16o-s, 16u.  Mr. Bowling is the Deputy Division

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Director for the Division of Enforcement and Manufacturing in the Office of Compliance and Enforcement, CTP, FDA.  CRD Dkt. Entry No. 16d.  Mr. Bowling testified that the JUUL Menthol e-liquid product purchased at Respondent’s establishment on September 20, 2023 was manufactured, prepared, compounded, or processed for commercial distribution at JUUL Labs, Inc.’s facility in Wisconsin.  CRD Dkt. Entry No. 16d at ¶ 7.

Inspector Kluchnikov is an FDA-commissioned Inspector with the state of Washington, whose duties include using undercover buy (UB) inspections with an Underage Purchaser (UP) to determine whether a retailer complies with the age and photo identification requirements when selling tobacco products.  CRD Dkt. Entry No. 16e at ¶¶ 12-14 (Inspector Kluchnikov’s Declaration).  Inspector Kluchnikov testified that he conducted a follow-up inspection of Respondent’s establishment on September 20, 2023, at approximately 1:54 PM, accompanied by UP B.  Id. at ¶ 12.  During the inspection, he observed UP B purchase an e-liquid product from Respondent.  Id. at ¶ 3.

Inspector Kluchnikov testified that, prior to the inspection at issue, he verified that UP B carried photographic identification that included UP B’s true age.  Id. at ¶ 12.  Inspector Kluchnikov also verified that UP B did not have any tobacco products in their possession. Id.  Inspector Kluchnikov testified that, during the inspection, he parked his car near Arco / AM PM (Respondent’s establishment) and Inspector Kluchnikov and UP B exited the vehicle.  Id. at ¶ 13.  Moments after watching UP B enter the establishment, the inspector entered the establishment and positioned himself in a location that had a clear, unobstructed view of the sales counter and UP B.  Id.  The inspector testified that he observed UP B purchase an e-liquid product directly from an employee at the establishment.  Id.  Inspector Kluchnikov testified that prior to the purchase, he observed that UP B did not present any identification to the employee, and the employee did not provide UP B with a receipt after the purchase.  Id.

Inspector Kluchnikov testified that, after UP B completed its purchase, UP B and Inspector Kluchnikov returned to the vehicle, where UP B immediately handed Inspector Kluchnikov the e-liquid product.  Id. at ¶ 14.  Inspector Kluchnikov testified that he observed that the product was a JUUL Menthol 3.0% e-liquid product.  Id.  Inspector Kluchnikov labeled the JUUL Menthol 3.0 % e-liquid product as evidence and photographed all of the panels of the package.  Id.  Inspector Kluchnikov then processed the evidence in accordance with standard procedures at the time of the inspection, which entailed completing the TIMS Form and creating a Narrative Report.  Id. at ¶¶ 14-16.

UP B’s redacted identification and Inspector Kluchnikov’s contemporaneous photographs and reports were admitted into evidence and corroborate Inspector Kluchnikov’s testimony.  CRD Dkt. Entry Nos. 16e, 16h-i, 16o-s, 16u.

Respondent’s arguments are that CTP only sent a letter instead of 1) immediately alerting management at the time the violations occurred; 2) retaining a receipt of the tobacco

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product purchase; 3) and taking down the name of the cashier who sold the tobacco product to the UP.  CRD Dkt. Entry No. 5 at 4.  Respondent also argues that it was only made aware of the September 20, 2023 allegations in a letter4 sent by CTP in October 2023 or November 2023.  Id. at 4, 6.  However, CTP issued a Notice of Compliance Check Inspection to Respondent, informing Respondent of the September 20, 2023 inspection and violations. CRD Dkt. Entry No. 16 at 11; CRD Dkt. Entry No. 16r at 1. CTP filed the UPS Delivery Notification that shows the Notice was signed by an individual at Respondent’s establishment on September 26, 2023.  CRD Dkt. Entry No. 16s.

Respondent maintains that the sale to a UP without checking the UP’s age did not occur because it conducted its own “investigation.”  CRD Dkt. Entry No. 5 at 6.  Respondent’s investigation consisted of talking to the cashier on duty.  Id.  Respondent stated that during the conversation with the cashier on duty at the September 20, 2023 inspection, the cashier avowed that it checked every persons’ identification prior to selling tobacco. CRD Dkt. Entry No. 13 at 1.  Respondent then stated that the cashier resigned later, and when the cashier made attempts to rejoin the staff, Respondent did not accept their application.  Id.  Respondent stated that all employees confirmed that they verify identification before selling tobacco to anyone in the store.  CRD Dkt. Entry No. 5 at 6. According to Respondent, none of the employees admitted that they sold tobacco without checking identification.  Id.  Respondent asserted that random audits were conducted, and the employees were asking for identification.  Id.

Respondent’s arguments about how CTP conducts its inspections are not relevant to the issue of Respondent’s compliance with Section 906(d)(5) of the Act and tobacco regulations.  Even if Respondent’s arguments were relevant, I do not have the authority to address them.  Respondent’s internal investigation and compliance check do not replace CTP’s September 20, 2023 inspection.  While I note Respondent’s statements and internal investigation, Respondent’s actions after CTP conducts an investigation do not change the fact that a sale to an underage purchaser without identification verification took place. Respondent stated that none of its employees admitted to the sale and since there is no evidence, it denies the September 20, 2023 violations.  However, CTP has produced ample evidence of violations on September 20, 2023.  Less than 17 months before the September 20, 2023 violations, Respondent was aware that one of its employees sold an almost identical tobacco product to a person younger than 21 years of age without verifying the age of the purchaser.  Although the cashier on duty during the September 20, 2023 inspection resigned after the incident, like the May 7, 2022 cashier, Respondent had an opportunity to rehire this cashier but chose not to.  Respondent’s admission to not

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rehire the cashier leads me to believe that Respondent may have doubted the veracity of the cashier’s account of September 20, 2023.

Respondent has consistently asserted that the sale of a regulated tobacco product to a UP without checking the UP’s age, on September 20, 2023, did not occur.  However, Respondent has not presented any evidence to rebut CTP’s witnesses or evidence. Moreover, Respondent has not provided any evidence in support of its assertion that its employees did not admit to the violations.  Respondent had the opportunity to submit the testimony of its employees as CTP did for Mr. Bowling and Inspector Kluchnikov.  Instead, Respondent provided numerous records of signed training policy documents, and shared measures it has taken to comply with tobacco sale regulations.  These documents do not prove that Respondent’s employees adhered to the training documents and the policies concerning tobacco.  Respondent’s main arguments are limited to mitigating factors, which I will address below.

Further, Respondent did not challenge, nor specifically deny selling a JUUL Menthol 3% e-liquid product, which Mr. Bowling confirmed were manufactured in Wisconsin, and traveled in interstate commerce prior to being held for sale by Respondent.  Therefore, I rely on Inspector Kluchnikov’s observations, reports, and photos, as well as Mr. Bowling’s declaration, that the JUUL Menthol 3% e-liquid product sold to a UP on September 20, 2023 had traveled in interstate commerce.

After considering all of the evidence and the relevant testimony, I find sufficient evidence to support CTP’s allegations that on September 20, 2023, at approximately 1:54 PM, Respondent sold a regulated tobacco product to a UP and failed to verify the age of the UP prior to the purchase.

The evidence of record establishes to my satisfaction that the violations charged in this case in fact took place on the dates in question and I conclude that Respondent is liable under the Act.  Accordingly, CTP is entitled to a civil money penalty from Respondent. 21 U.S.C. § 333(f)(9).

II.   Civil Money Penalty

I have found that Respondent committed three5 violations of the Act and its implementing regulations within a 24-month period.  The FDA, and CTP, may seek civil money penalties from any person who violates the Act’s requirements as they relate to the sale of

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regulated tobacco products.  21 U.S.C. § 333(f)(9).  In its complaint, CTP sought to impose the maximum penalty amount of $638 against Respondent.  See CRD Dkt. Entry No. 1 at ¶ 1.  When determining an appropriate penalty, the presiding officer must evaluate any circumstances that mitigate or aggravate the violation.  21 C.F.R. § 17.34(a). Under the applicable statute, I must “take into account the nature, circumstances, extent, and gravity of the violation or violations and, with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require.”  21 U.S.C. § 333(f)(5)(B); see also 21 C.F.R. § 17.34.

1. Nature, Circumstances, Extent and Gravity of the Violations

I found that Respondent committed three violations of selling regulated tobacco products to underage purchasers and failing to verify, by photographic identification, that the purchasers were of legal age.  The repeated inability of Respondent to comply with federal tobacco regulations is serious in nature and the civil money penalty amount should be set accordingly.

2. Respondent’s Ability to Pay and Effect on Ability to Do Business

Respondent has not argued that it does not have the ability to pay the $638 CMP. Respondent has not presented any evidence that the penalty will affect its ability to continue to do business.  In Respondent’s Brief, Respondent states that the CMP is not appropriate but does not explain beyond providing mitigating circumstances.  CRD Dkt. Entry No. 5 at 7.  Respondent provided no reason as to why it cannot continue to sell tobacco products and other products at its establishment if a $638 CMP is imposed.

3. History of Prior Violations

The current action is the first CMP action brought against Respondent for three violations of the Act and its implementing regulations.

4. Degree of Culpability

It is Respondent’s responsibility to ensure its staff complies with the regulations.  I note that Respondent requires its employees to sign an “Alcohol and Tobacco Policy” but requiring employees to sign a policy does not remove Respondent’s responsibility to ensure its staff complies with the regulations.  Despite Respondent’s statements in numerous filings that its employees denied selling tobacco products to undercover purchasers and failed to verify the identification of the undercover purchasers, I find Respondent fully culpable for all violations of the Act and its implementing regulations.

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5. Additional Mitigating Factors and Other Matters as Justice May Require

Mitigation is an affirmative defense for which Respondent bears the burden of proof. Respondent must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).

Respondent has provided examples of measures it has taken to prevent future violations of the act, including implementing more control measures after receiving the warning letter from CTP following the May 2022 inspection.  See CRD Dkt. Entry No. 5 at 6. After both the inspections, Respondent implemented a refresher training for sales of tobacco products.  Id. at 8.  In its response to CTP’s Request for Production of Documents, Respondent listed the following measures it has implemented since the May 7, 2022, and September 20, 2023 inspections:

• After the May 2022 violations, Respondent trained all employees on liquor and tobacco policy and the consequences for not following it.  Respondent found a gap in their verbal training program, so it added a signed tobacco and liquor policy in its hiring package.
• When Respondent alleges it received notice in October 2023 that there were additional violations, it investigated and was unable to conclude there were additional violations.  Despite the investigation not showing any violations, Respondent added more layers to its training program.  It includes educating employees on legal consequences they may face if they sell tobacco to minors and all employees are required to sign the policy along with refresher training.
• Respondent started annual refresher training on tobacco and liquor policy.
• All tobacco items are stored behind the counter at all the times.  Respondent ensures that all employees are 21 years old and does not hire minors to work in its establishment.  All of Respondent’s job postings specifically ask to meet the minimum age to sell liquor and tobacco.

CRD Dkt. Entry No. 13.

While it is apparent that the safeguards that Respondent implemented after the May 7, 2022 did not prevent the unlawful sale of a tobacco product to an underage purchaser on September 20, 2023, I nevertheless accept Respondent’s assertions that it attempted to put these safeguards in place.  Although Respondent denies the September 20, 2023 violations, Respondent has implemented measures to comply with the regulations after becoming aware of the September 20, 2023 inspection.  In light of Respondent’s actions to try to prevent future violations, I find evidence to reduce the $638 CMP.  I find that a CMP of $450 is appropriate.

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6. Penalty

Based on the foregoing, I find a reduced penalty of $450 to be appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

Conclusion

Pursuant to 21 C.F.R. § 17.45, I impose a civil money penalty amount of $450 against Respondent, One Stop Fillup V Inc. d/b/a Arco / AM PM, for three violations of the Act, within a 24-month period.  Pursuant to 21 C.F.R. § 17.45(d), this decision becomes final and binding upon both parties after 30 days of the date of its issuance.