Dania Foodmart Ltd. d/b/a Dania Food Mart / Gulf, DAB TB8783 (2024)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a $6,397 civil money penalty (CMP) against Respondent, Dania Foodmart Ltd. d/b/a Dania Food Mart / Gulf.  CTP alleges that Dania Food Mart / Gulf impermissibly sold regulated tobacco products to underage purchasers and failed to verify, by means of photo identification containing a date of birth, 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. Part 1140, at least five times within a 36-month period.1

For the reasons discussed below, I find that Respondent violated the Act, as alleged in the Complaint, and conclude that a CMP of $6,397 is appropriate.

Page 2

I.        Background

CTP began this matter by serving a Complaint on Respondent at 7000 Post Road, North Kingstown, Rhode Island 02852 by United Parcel Service, 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 21, 2023, Respondent, through counsel, registered for the Departmental Appeals Board (DAB) E-Filing system and filed a timely Answer.  CRD Dkt. Entry No. 3a (Answer).  In its Answer, with regard to the allegations contained in paragraphs 2-10, 13a-13b, and 17-18, Respondent asserts that it is without sufficient information to either admit or deny the allegations and leaves the Complainant to their proof thereof.  Id., at 1-2.  Respondent admits the allegations contained in paragraphs 11-12, 15-16.  Id., at 2. Respondent admits that CTP issued a Notice of Compliance Check, but asserts that, with regard to all other allegations in paragraph 14, Respondent is without sufficient information to either admit or deny the allegations and leaves the Complainant to their proof thereof.  Id.  As defenses, Respondent asserts that it is unaware of any offenses as outlined in the Complaint, that if any offenses have been committed, they were committed by an employee that has since been fired, and that Respondent has taken additional restorative steps to ensure compliance with the laws relating to sales to underage purchasers.  Id.  Further, Respondent argues that the CMP is too high based on the reasons set forth above.  Id., at 2-3.

On December 28, 2023, I issued an Acknowledgment and Pre-Hearing Order acknowledging receipt of Respondent’s Answer and establishing procedural deadlines for this case.  CRD Dkt. Entry No. 4 (APHO).

On March 5, 2024, CTP filed a Motion to Compel Discovery, two exhibits, and a Motion to Extend Deadlines.  CRD Dkt. Entry Nos. 7-8b.

On March 6, 2024, I issued an Order providing Respondent with a March 21, 2024 deadline to respond to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 9.  The March 6, 2024 Order also extended the parties’ pre-hearing exchange deadlines.  Id., at 2.

On March 25, 2024, I issued an Order Granting Complainant’s Motion to Compel Discovery.  CRD Dkt. Entry No. 10.  The March 25, 2024 Order also extended the parties’ pre-hearing exchange deadlines.  Id., at 3.

On March 28, 2024, Respondent filed its Response to Request for Production of Documents, which included as attachments Respondent’s Employee Training Guidelines, and a photograph of Respondent’s in-store signage regarding tobacco sales.  CRD Dkt. Entry No. 11.

Page 3

On May 17, 2024, CTP timely filed its pre-hearing exchange consisting of the Informal Brief of Complainant (CTP Br.), Complainant’s List of Proposed Witnesses and Exhibits, and fourteen proposed exhibits.  CRD Dkt. Entry Nos. 12-12o.  CTP’s exchange included the written direct testimony of two proposed witnesses: 1) James Bowling, Deputy Division Director, Office of Compliance and Enforcement, CTP Exhibit (Ex.) 3; and 2) Christopher Dempsey, FDA-commissioned inspector for the State of Rhode Island, CTP Ex. 4.  CRD Dkt. Entry Nos. 12d-12e.

Counsel for Respondent did not file a pre-hearing exchange by the June 7, 2024 deadline, as permitted by the APHO and my March 25, 2024 Order Granting Complainant’s Motion to Compel Discovery.  See CRD Dkt. Entry No. 4, at 6b; CRD Dkt. Entry No. 10, at 3.

On July 18, 2024, I conducted the pre-hearing conference (PHC) in this case.  During the PHC, I explained the issues before me, the parties’ respective burdens of proof, and we discussed CTP’s pre-hearing exchange submissions.  CRD Dkt. Entry No. 16 (Order Following PHC).  I asked counsel for Respondent if he objected to the admission of CTP’s fourteen proposed exhibits into the record, and counsel stated that he did not object.  Id., at 2.  Counsel for Respondent also stated that he did not intend to cross-examine CTP’s proposed witnesses.  Id.  Accordingly, during the PHC, I explained to the parties that I will decide this case based on the written administrative record.  Id.; 21 C.F.R. § 17.45(a).

My July 23, 2024 Order established an August 22, 2024 deadline for the parties to file final briefs, and September 6, 2024 deadline for the parties to file any response briefs. CRD Dkt. Entry No. 16, at 3.  Neither party filed a final brief in this case.

With regard to Respondent’s Employee Training Guidelines and the photograph of Respondent’s in-store tobacco signage filed as attachments to Respondent’s Response to Request for Production, Respondent’s counsel has not moved for me to admit those two attachments as evidence in the record.  Furthermore, paragraph 4 of the APHO states:

Neither the request for production of documents, nor the documents provided in response to a request, should be filed with the Civil Remedies Division except if the parties want these documents considered as evidence.  If a party would like documents provided during discovery to the other party considered as evidence, the documents must be resubmitted as exhibits with the pre-hearing exchange.  See paragraphs 6 and 8 below.

CRD Dkt. Entry No. 4, ¶ 4.

As previously stated, Respondent’s counsel did not file a pre-hearing exchange, and therefore did not resubmit the documents as exhibits, in accordance with the requirements

Page 4

set forth in the APHO.  Id.  Accordingly, Respondent’s Employee Training Guidelines and the photograph of Respondent’s in-store signage regarding tobacco sales are excluded from evidence.  21 C.F.R. § 17.19(b)(11).

The administrative record is now complete and closed, and this matter is ready for a decision.  I will consider the full administrative record in deciding this case, with the exception of any excluded evidence.  21 C.F.R. §§ 17.41(b), 45(a).

II.       Issues

1. Whether Respondent sold regulated tobacco products to an underage purchaser on September 25, 2023, and failed to verify, by photo identification, that the regulated tobacco product purchaser was 21 years of age or older, on that same date, in violation of section 906(d)(5) of the Act; and, if so,
2. Whether the $6,397 CMP is appropriate, considering any mitigating or aggravating factors that I find in this case.  21 C.F.R. § 17.45.

III.     Findings of Fact and Conclusions of Law

In order 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).

CTP seeks to impose a CMP against Respondent pursuant to the authority conferred by the Act and its implementing regulations at Part 21 of the Code of Federal Regulations. Complaint ¶¶ 2-10.  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,

Page 5

that a regulated tobacco product purchaser is 21 years of age or older are violations of the Act and its implementing regulations.  Act § 906(d)(5); 21 U.S.C. § 387f(d)(5).

1. Violations

1.  Prior Violations

This is the third CMP action CTP has brought against Respondent.  CTP Ex. 1; CRD Dkt. Entry No. 1; see CRD Docket Number T-19-4422 (FDA Docket Number FDA-2019-H-4104); see also CRD Docket Number T-23-640 (FDA Docket Number FDA-2022-H-3273).  The most recent prior Complaint alleged: (1) selling regulated tobacco products to purchasers younger than 21 years of age on January 28, 2022, and October 6, 2022, in violation of section 906(d)(5) of the Act; and (2) failing to verify photographic identification of the regulated tobacco product purchasers on those same dates, in violation of 21 C.F.R. § 1140.14(b)(2)(i).  CTP Ex. 1; Complaint ¶ 15.  The previous action concluded when Respondent admitted the allegations contained in the Complaint issued by CTP and paid the agreed upon CMP in settlement of that claim.  Complaint ¶ 16; CTP Ex. 2.

Respondent has not contested these prior violations, and they are administratively final. 21 C.F.R. § 17.15(b) (stating that a “settlement agreement shall be filed in the docket and shall constitute complete or partial resolution of the administrative case as so designated by the settlement agreement.”).  Accordingly, I conclude that Respondent has at least three prior violations2 of the Act and implementing regulations.

2. Current Violations

In addition to the prior violations, CTP alleges that Respondent committed two additional violations on September 25, 2023.  Complaint ¶ 13.  To support its claims, CTP submitted the declarations of James Bowling, Deputy Division Director for the Division of Enforcement and Manufacturing in the Office of Compliance and Enforcement, CTP, FDA and FDA-commissioned Inspector Christopher Dempsey.  CTP Exs. 3, 4.  CTP also submitted corroborating evidence, which includes reports, photographs, and other documentation.  CTP Exs. 5-14.  In its Answer, Respondent asserts that it is without sufficient information to either admit or deny the allegations and leaves the Complainant to their proof thereof.  See CRD Dkt. Entry No. 3a.

Page 6

James Bowling (Bowling) testified that, in his official capacity, he gained personal knowledge regarding how CTP enforces certain provisions of the Act and other laws enforced by the FDA, and gained personal knowledge regarding the processes used by the FDA regarding the establishment of registration and product listing requirements. CTP Ex. 3, ¶ 3.  Bowling testified that the Garcia y Vega Game Mango cigars purchased on September 25, 2023 at Respondent’s establishment were manufactured by SCMI Holdings, Inc./Swedish Match cigars, Inc.  Id., ¶ 6.  Bowling further testified that, according to the label, Garcia y Vega Game Mango cigars are manufactured in the Dominican Republic, that according to the information provided to the FDA by the manufacturer, the Garcia y Vega Game Mango cigars may have also been prepared, compounded, packaged or processed for commercial distribution at Swedish Match Cigars, Inc.’s facility in Alabama, and that Swedish Match Cigars, Inc. does not have a facility in the State of Rhode Island.  Id., ¶¶ 7-9.

In its Answer, Respondent admits the allegations set forth in paragraph 12 of the Complaint.  Further, Respondent does not dispute Bowling’s testimony.  See CRD Dkt. Entry No. 3a, at 2.  Accordingly, I find that Respondent’s establishment received the Garcia y Vega Game Mango cigars in interstate commerce, and held them for sale on September 25, 2023, after shipment in interstate commerce.

Inspector Dempsey is an FDA-commissioned officer whose duties primarily include determining whether retailers are in compliance with the age and photo identification requirements relating to the sale of regulated tobacco products.  CTP Ex. 4, ¶¶ 2, 3. Inspector Dempsey’s inspections entail accompanying underage purchasers who attempt to purchase tobacco products from retail establishments, such as the one operated by Respondent.  Id., ¶ 2-6.

Inspector Dempsey testified that, before the inspection, he confirmed that Underage Purchaser A (UP A) did not have any tobacco products in their possession and possessed an accurate photographic identification of their date of birth.  Id., ¶ 7; see also CTP Ex. 7. Inspector Dempsey testified that, during the inspection, he parked his car near Respondent’s establishment and UP A exited the vehicle.  Id., ¶ 8.  Inspector Dempsey testified that he remained in his vehicle because he felt that his presence would compromise the undercover nature of the inspection.  Id.  Inspector Dempsey testified that, minutes later, UP A returned to the vehicle after the purchase and immediately handed Inspector Dempsey the package of cigars.  Id., ¶ 9.  Inspector Dempsey testified that he observed that the cigars were Garcia y Vega Game Mango cigars.  Id.  Inspector Dempsey testified that UP A reported to him that UP A was able to purchase the Garcia y Vega Game Mango cigars directly from an employee of Respondent’s establishment, that prior to the purchase UP A did not present identification to the employees, and that UP A did not have a receipt for the purchase.  Id.

Page 7

Inspector Dempsey testified that after driving to a secure location, he labeled the cigars as evidence and photographed the front and back of the package.  Id., ¶ 9.  Inspector Dempsey then processed the evidence in accordance with standard procedures at the time of the inspection, which entailed completing the Tobacco Inspection Management System (TIMS) Form and creating a Narrative Report.  Id., ¶¶ 9-10.  UP A’s redacted identification and Inspector Dempsey’s contemporaneous photographs and reports were admitted into evidence and corroborate Inspector Dempsey’s testimony.  CTP Exs. 5-9; see also CTP Ex. 10 (Notice of Compliance Check Inspection).

Respondent waived its right to cross-examine or otherwise impeach Inspector Dempsey’s testimony concerning the inspection on September 25, 2023.  I find Inspector Dempsey’s testimony persuasive.  It is supported by corroborating evidence documenting that the September 25, 2023 allegations for selling regulated tobacco products to an underage purchaser and failing to verify the age of the purchaser before the sale actually occurred.

3. Respondent’s Defenses

I find that Respondent has failed to prove any affirmative defenses or to rebut CTP’s evidence regarding the September 25, 2023 violations for selling a regulated tobacco product to an underage purchaser, and failing to verify the purchaser’s age with photographic identification.  In its Answer, Respondent argues, as defenses, that:

1. Respondent is unaware of any offenses as outlined in the Complaint.
2. If any offenses were in fact committed, they were committed by an employee that has since been fired.
3. Respondent has taken additional, restorative steps to ensure compliance with the laws relating to sales to minors.

CRD Dkt. Entry No. 3a, at 2.

I have considered Respondent’s arguments and find them unpersuasive.  There is nothing in the administrative record that has been admitted into evidence that supports Respondent’s arguments.

In summary, the evidence in the record establishes that the two violations alleged in the Complaint in fact occurred on September 25, 2023, in violation of section 906(d)(5) of the Act.  Additionally, Respondent failed to prove any affirmative defenses to liability.  Further, Respondent previously admitted to committing violations of section 906(d)(5) of the Act and 21 C.F.R. § 1140.14(b)(2)(i) on January 28, 2022, and October 6, 2022, for a total of at least three prior violations.  CTP Exs. 1, 2.  Accordingly, CTP is entitled to a CMP from Respondent.  21 U.S.C. § 333(f)(9).

Page 8

2. Civil Money Penalty

I have found that Respondent committed five violations of the Act and its implementing regulations within a 36-month period.  Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a CMP not to exceed the amounts listed in FDA’s civil money penalty regulations at 21 C.F.R. § 17.2.  See also 45 C.F.R. § 102.3.

When determining an appropriate penalty, I am required to evaluate any “circumstances that mitigate or aggravate the violation” and “the factors identified in the statute under which the penalty is assessed . . . .”  21 C.F.R. § 17.34(a), (b).  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).  Also, “for purposes of mitigating a civil penalty . . . [I] shall consider the amount of any penalties paid by the retailer to a State for the same violation and whether the retailer has an ‘approved training program.”  21 U.S.C. § 333 note (Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act), Pub. L. 111-31, div. A, title I, § 103(q)(2)(C)).

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).  

In the Complaint, CTP seeks to impose the maximum penalty amount of $6,397 against Respondent.  Complaint, ¶ 1.  In its Answer, Respondent asserts that:

1. The civil money penalty CTP requests in the Complaint is too high because Respondent is unaware of any offenses as outlined in the Complaint and if any offenses were in fact committed, they were committed by an employee that has since been fired.
2. Respondent has taken additional, restorative steps to ensure compliance with the laws relating to sales to minors.

CRD Dkt. Entry No. 3a, at 2-3.

For the reasons explained below, I find that a CMP of $6,397 is appropriate.

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

Respondent committed five violations of selling regulated tobacco products to underage purchasers and failing to verify, by means of photo identification containing a date of birth, that the purchasers were of sufficient age.  The most recent violations, on

Page 9

September 25, 2023, are particularly serious because Respondent, for the third time in a 36-month period sold regulated tobacco products to an underage purchaser, and failed to verify the age of the purchaser, and committed these violations despite warnings from FDA that additional violations would result in more serious consequences. CTP Br., at 13; see also CTP Ex. 12.

Respondent’s repeated inability to comply with federal tobacco regulations is serious in nature and the CMP amount should be set accordingly.

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

Respondent argues that the $6,397 CMP sought by CTP “is too high because Respondent is unaware of any offenses outlined in the Complaint . . . .”  Answer at 3.  However, there is no evidence in the record to show Respondent’s inability to pay the $6,397 CMP.  Nor is there any evidence in the record to show that the $6,397 CMP will affect Respondent’s ability to continue to do business.

3. History of Prior Violations

As noted above, Respondent previously admitted to at least three violations of the prohibitions against selling regulated tobacco products to underage purchasers and failing to verify, by means of photo identification containing a date of birth, that the purchasers were of under 21 years of age.  CTP Exs. 1, 2.  Despite previous CMP actions, Respondent committed two additional violations, resulting in five violations within a 36-month period.  Act § 906(d)(5); 21 C.F.R. § 1140.14(b)(2)(i).  Respondent’s history of prior violations warrants a progressively larger CMP.  Respondent’s “repeated violations show an unwillingness or inability to sell tobacco products in accordance with federal tobacco laws.”  CTP Br., at 15.  Respondent’s continued inability to comply with FDA tobacco regulations supports the imposition of a CMP.

4. Degree of Culpability

As previously discussed, Respondent failed to prove any affirmative defenses. Respondent previously admitted to violations of the Act and its implementing regulations in the settlement agreements of the prior actions.  See CTP Ex. 2.  In addition, based on the evidence presented, Respondent committed the two most recent violations in the current Complaint.  Therefore, I find Respondent fully culpable for five violations of the Act and its implementing regulations, as alleged in the Complaint.

5. Employer Training Program

On March 28, 2024, Respondent’s counsel filed Respondent’s Employee Training Guidelines as an attachment to Respondent’s Response to CTP’s Request for Production.

Page 10

See CRD Dkt. Entry No. 11, at 5.  However, as discussed above, Respondent’s counsel did not file a pre-hearing exchange, and did not move for me to admit Respondent’s Employee Training Guidelines into evidence.  Furthermore, Respondent’s counsel did not resubmit the documents as exhibits, in accordance with the requirements set forth in the APHO.  See CRD Dkt. Entry No. 4, ¶ 4.  Therefore, I will not consider whether Respondent’s Employee Training Guidelines is an approved training program that complies with standards developed by the Food and Drug Administration. 21 U.S.C. § 333 (quoting Tobacco Control Act § 103(q)(2)(A)-(B)); see also 45 C.F.R. § 102.3.

6. State Penalties

Respondent has not alleged or presented evidence that it has paid any penalty to the State of Rhode Island for the same violations.  21 C.F.R. § 17.34(b).

7. Other Matters as Justice May Require

The Act gives me discretion to consider any other evidence or arguments to mitigate the amount of the CMP.  21 U.S.C. § 333(f)(5)(B).  

After reviewing the administrative record, I do not find any evidence to support any additional mitigating circumstances.  Respondent failed to prove that the requested CMP is too high and should be reduced or not assessed.  Respondent did not present any persuasive evidence to support that it is not fully culpable or cannot afford the proposed CMP.

Based on the foregoing, I find a CMP in the amount of $6,397 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 CMP of $6,397 against Respondent, Dania Foodmart Ltd. d/b/a Dania Food Mart / Gulf, for five violations within a 36-month period.  Pursuant to 21 C.F.R. §§ 17.11(b), 17.45(d), this decision becomes final and binding upon both parties after 30 days of the date of its issuance.