Aha, Inc. d/b/a Plum Convenience, DAB TB9128 (2025)

ORDER IMPOSING SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, Aha, Inc. d/b/a Plum Convenience, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $13,785.  The Complaint alleges that Respondent impermissibly sold regulated tobacco products to persons under the legal age and, failed to verify that the purchasers were of sufficient age, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. pt. 1140.  CTP seeks a civil money penalty of $13,785.

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

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§ 17.35, I strike Respondent’s Answer and issue this decision of default judgment.

I.     Procedural History

On May 31, 2024, CTP served the Complaint on Respondent, located at 7615 Saltsburg Road, Pittsburgh, Pennsylvania 15239, 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), 1b (Proof of Service).  On June 25, 2024, CRD received Respondent’s timely filed Answer.  CRD Dkt. Entry No. 3a.  In its Answer, Respondent neither admitted nor denied the allegations but discussed a payment plan to resolve the matter citing the penalty being large for a small business.  See CRD Dkt. Entry No. 3a at 1-2.  Based on Respondent’s representations, I inferred that the parties may not have intended to proceed to a hearing in this case and issued an Acknowledgment and Status Report Order (ASRO) ordering the parties to file a joint status report by August 26, 2024.  CRD Dkt. Entry No. 4.

On August 26, 2024, CTP filed a Status Report stating that parties were unable to reach a settlement and that CTP attempted to contact Respondent to discuss the filing of a Joint Status Report but was unable to reach Respondent.  CRD Dkt. Entry No. 8 at 1.  On August 27, 2024, I issued a Pre-Hearing Order (PHO) establishing procedural deadlines for this case. CRD Dkt. Entry No. 9.  The PHO ordered the parties to file a joint status report by October 3, 2024, to serve requests for documents no later than October 10, 2024, and ordered the parties receiving the request to provide the requested documents no later than 30 days after the request was made.  Id. at ¶¶ 3, 4.  Further, the PHO warned the parties that “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 this hearing.” Id. ¶ 21, citing 21 C.F.R. § 17.35.

On November 15, 2024, CTP filed a Motion to Compel Discovery and a Motion to Extend Deadlines.  CRD Dkt. Entry Nos. 11-12.  CTP stated that it served its Request for Production of Documents on Respondent on October 10, 2024, but CTP had not received a response.  CRD Dkt. Entry No. 11 at 1.  On November 19, 2024, I issued an Order instructing Respondent to file a response to CTP’s Motion to Compel Discovery by December 3, 2024.  CRD Dkt. Entry No. 13 at 1-2.  Respondent was warned “that if it fail[ed] to respond, I may grant CTP’s motion in its entirety.”  Id. at 2.

On December 10, 2024, as Respondent had not responded to CTP’s Motion to Compel Discovery, as instructed, I issued an order granting CTP’s Motion to Compel Discovery and gave Respondent until December 20, 2024, to comply with CTP’s Request for Production of Documents.  CRD Dkt. Entry No. 14 at 1.  Respondent was again warned that:

Failure to do so may result in sanctions, including the issuance of an Initial

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Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

Id.

Also on December 10, 2024, shortly after my order granting CTP’s Motion to Compel Discovery was issued, Respondent filed a document entitled “Letter” in which Respondent stated “While I acknowledge the request for production of documents and evidence, including video footage … it has been some time since the events in question, I am actively working with the camera company that previously provided surveillance services . . . .”  Respondent also stated that “the entity that is listed as the respondent in this case, no longer exists.  The corporation has been dissolved and terminated, and therefore no longer operates at the business address . . . .”  CRD Dkt. Entry No. 15.

On January 2, 2025, CTP filed Complainant’s Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 16.  In its Status Report and Motion to Impose Sanctions, CTP advised that Respondent did not produce responsive documents in compliance with the December 10, 2024 Order Granting its Motion to Compel Discovery.  Id. at 1-2.  Also, on January 2, 2025, CTP filed a Motion to Stay Deadlines pending the resolution of its Motion to Impose Sanctions.  CRD. Dkt. Entry No. 17.  On January 3, 2025, I issued an Order giving Respondent until January 21, 2025, to respond to CTP’s Motion to Impose Sanctions and stayed all deadlines as requested.  CRD Dkt. Entry No. 18.  My January 3, 2025 Order also warned Respondent that if it failed to file a response, “I may grant CTP’s motion in its entirety.”  Id. at 2.  Lastly, my January 3, 2025 Order instructed CTP to address Respondent’s assertions in Respondent’s December 10, 2024 filing.  Id. at 2.

On January 21, 2025, CTP filed Complainant’s Response to Respondent’s Assertions in Letter stating that Respondent “did not provide Articles of Dissolution … or any other objective evidence confirming the corporation is dissolved.  CRD Dkt. Entry No. 19 at 2.  Further, CTP stated that dissolution does not preclude the ALJ from finding Respondent committed the violations nor does it prevent the ALJ from imposing a penalty.  Id.; see also F and S Investment of Triad, d/b/a The Vape Emporium, CRD No. TB8629 (H.H.S. Oct. 3, 2024) (finding dissolved corporation’s actions violated the law and merited civil money penalty).  As I am striking Respondent’s Answer and issuing a default judgment, I find no reason to rule on Respondent’s arguments concerning dissolution of its business and if this matter can proceed after dissolution.

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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 paragraph 4 of the August 27, 2024 PHO, when it failed to respond to CTP’s Request for Production of Documents; and
• Respondent failed to comply with the December 10, 2024 Order Granting Motion to Compel Discovery, requiring Respondent to comply with CTP’s Request for Production of Documents.

Respondent also failed to defend its action.  21 C.F.R. § 17.35(a)(2).  Specifically, Respondent failed to file a timely1 response to the November 19, 2024 Order, giving it an opportunity to respond to CTP’s Motion to Compel Discovery and failed to file a response to my January 3, 2025 Order, giving it an opportunity to file a response to CTP’s Motion to Impose Sanctions.  This leads me to conclude that Respondent has abandoned its defense of this case.

In the absence of any sufficient explanation from Respondent, I find no basis to excuse Respondent’s continued failure to comply with various orders in this administrative proceeding.  Despite explicit warnings that failure to comply with Orders could result in sanctions, Respondent did not comply with two Orders. See CRD Dkt. Entry Nos. 9 ¶ 21; 14.  Accordingly, I find that Respondent failed to comply with judicial orders and procedures governing this proceeding, failed to defend its case, and, as a result, engaged in a pattern of misconduct that interfered with the speedy, orderly, and fair conduct of the hearing.  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).

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I find that Respondent’s actions are sufficiently egregious and 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.”).

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:

• Respondent owns Plum Convenience, located at 7615 Saltsburg Road, Pittsburgh, Pennsylvania 15239.  Complaint ¶ 11.
• On October 13, 2023, CTP initiated a prior civil money penalty action, CRD Docket T-24-133, FDA Docket FDA-2023-H-4470, against Respondent for violations of the Act, five2 of which occurred during the 48-month period relevant in the current Complaint.  Complaint ¶ 15.
• The previous action concluded when Respondent admitted all the allegations in the Complaint and paid the agreed upon monetary penalty.  Further, “Respondent expressly waived its right to contest such violations in subsequent actions.”  Complaint ¶ 16.
• An FDA-commissioned inspector conducted a subsequent inspection of Respondent’s establishment on March 10, 2024, at approximately 2:44 PM, during which “a person younger than 21 years of age was able to purchase a package of three Swisher Sweets Leaf Original cigars . . . .”  Additionally, “the underage

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purchaser’s age was not verified before the sale . . . .”  Complaint ¶ 13.

These facts establish that Respondent is liable under the Act.  The Act prohibits misbranding of a tobacco product.  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).  The Secretary of the U.S. Department of Health and Human Services issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see also 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 89 Fed. Reg. 70,483, 70,485 (Aug. 30, 2024).  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, Respondent violated the prohibition against selling regulated tobacco products to persons younger than 21 years of age on September 23, 2021, June 30, 2022, July 26, 2023, and March 10, 2024.  Act § 906(d)(5).  On September 23, 2021, June 30, 2022, July 26, 2023, and March 10, 2024, Respondent also violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that no regulated tobacco product purchaser was younger than 21 years of age.  Act § 906(d)(5); 21 C.F.R. § 1140.14(a)(2)(i); 21 C.F.R. § 1140.14(b)(2)(i).  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty. 

CTP has requested a civil money penalty of $13,785, which is a permissible penalty under 21 U.S.C. § 333(f)(9) and 21 C.F.R. § 17.2.  Therefore, I find that a civil money penalty of $13,785 is warranted and so order one imposed.