All American Gas Plus Inc. d/b/a All American Gas, DAB TB9149 (2025)

ORDER IMPOSING SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, All American Gas Plus Inc. d/b/a All American Gas1, alleging facts and legal authority sufficient to justify imposing a No-Tobacco-Sale Order (NTSO) against Respondent for a period of 30 consecutive calendar days. 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 repeatedly and impermissibly sold regulated tobacco product to underage purchasers and failed to verify that tobacco product purchasers were of sufficient age, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21

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U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. pt. 1140.

Respondent filed a timely Answer to CTP’s Complaint. However, during the course of this administrative proceeding, Respondent failed to comply with 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 May 9, 2024, CTP served the Complaint on Respondent, located at 10580 Huron Street, Northglenn, Colorado 80234, by United Parcel Service. See 21 C.F.R. §§ 17.5 and 17.7, Civil Remedies Division (CRD) Docket (Dkt.) Entry Nos. 1 (Complaint), 1b (UPS Delivery Notification). On June 10, 2024, Respondent timely filed an Answer to the Complaint. CRD Dkt. Entry No. 4.

On June 17, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of Respondent’s Answer and establishing procedural deadlines for this case. CRD Dkt. Entry No. 5. The APHO ordered CTP to file its pre-hearing exchange by September 6, 2024, and Respondent to file its pre-hearing exchange by September 27, 2024. Id. ¶ 6a-b. Further, the APHO 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 July 6, 2024, Respondent filed a pre-hearing exchange and a declaration. CRD Dkt. Entry Nos. 6-7. On July 15, 2024, CTP filed a Joint Status Report, stating that the parties had been unable to reach a settlement and it intended to proceed to a hearing. CRD Dkt. Entry No. 8.

On August 5, 2024, CTP filed a Motion to Compel asserting that Respondent did not respond to its discovery request as required by the APHO and regulations. CRD Dkt. Entry No. 9. On that same date, CTP also filed a Motion to Extend Deadlines. CRD Dkt. Entry No. 10. I issued an order on August 8, 2024, and informed Respondent that it had a deadline of August 20, 2024, to file a response to CTP’s Motion to Compel Discovery. CRD Dkt. Entry No. 11. I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.” Id. at 1; see also 21 C.F.R. § 17.32(c); CRD Dkt. Entry No. 5 at ¶ 20. Additionally, I held the pre-hearing exchange deadlines in abeyance. CRD Dkt. Entry No. 11 at 2. Respondent failed to file a response to CTP’s Motion to Compel Discovery by the August 20, 2024, deadline.

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On August 29, 2024, I issued an order granting CTP’s Motion to Compel in its entirety and gave Respondent until September 12, 2024, to comply with CTP’s request for production of documents. CRD Dkt. Entry No. 12 at 1. On September 12, 2024, Respondent filed a six-page document including, an employee schedule, an employee policy regarding ID’s, Policy and Procedures for disciplinary actions with signatures, a picture of a window decal of a federal notice about tobacco risk, and a photograph of a sign displaying “WE CARD”. See CRD Dkt. Entry No. 14.

On October 7, 2024, CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief, a list of proposed witnesses and exhibits, and 27 proposed exhibits (CTP Exhibits (Exs.) 1-27) which includes the written direct testimony of two proposed witnesses, Inspector Joshua Ochs (CTP Ex. 9), and Inspector Curt C. Strobel (CTP Ex. 10).

On November 21, 2024, I issued an Amended Order Scheduling Pre-Hearing Conference (PHC)2 to inform the parties that the PHC was scheduled for Wednesday, December 4, 2024, at 2:00 PM Eastern Time and provided the procedures for how to attend the telephone conference. CRD Dkt. Entry No. 20.

On December 1, 2024, Respondent sent an email to Ms. Greenberg,3 the attorney advisor working with me, asking “what time zone the 2:00 PM meeting is at[?]” CRD Dkt. Entry No. 22. Ms. Greenberg replied and confirmed that the pre-hearing conference was set for 2:00 PM Eastern Time. Id.

On December 4, 2024, I held the pre-hearing conference as scheduled. Counsel for CTP, Sarah Rosenberg, appeared at the pre-hearing conference; however, Respondent failed to appear as ordered.4 Following the pre-hearing conference, I issued an Order to Show Cause for Failure to Appear (OSC), giving Respondent until December 16, 2024, to respond. CRD Dkt. Entry No. 21. I warned that failure to respond to the OSC “may result in sanctions, including, but not limited to, striking the Answer, and issuing an

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Initial Decision and Default Judgment against the opposing party.” Id. at 2. To date, Respondent has failed to file a response to the OSC.5 

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:

• My November 21, 2024, Amended Order Scheduling Pre-Hearing Conference, requiring both parties to appear at the pre-hearing conference; and
• My December 4, 2024, OSC requiring Respondent to show cause for its failure to appear at the December 4, 2024, pre-hearing conference.

Respondent also failed to defend its action. 21 C.F.R. § 17.35(a)(2). Specifically:

• Respondent failed to appear at the scheduled pre-hearing conference; and
• Respondent failed to respond to my OSC.

I therefore find that Respondent has abandoned its defense of this case and failed to show cause for its repeated failure to comply with my orders and directives in this administrative proceeding.

Respondent initially failed to comply with my order to appear at the scheduled pre-hearing conference.6  CRD Dkt. Entry No. 20. On December 4, 2024, I issued an OSC

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giving Respondent until December 16, 2024, to explain its failure to appear. Respondent did not file a response to the OSC.

On December 27, 2024, Respondent sent an email to Ms. Greenberg asserting that it did not appear at the pre-hearing conference because it was confused about the time zone. See CRD Dkt. Entry No. 22. I do not find Respondent’s explanation for failing to appear to be persuasive because it was explicitly informed of the time zone in the November 21, 2024, Amended Order Scheduling Pre-Hearing Conference and again by Ms. Greenberg in response to its December 1, 2024, email. See id.; see also CRD Dkt. Entry No. 20. Therefore, Respondent failed to comply with my orders after it was informed and aware of the time and date of the scheduled pre-hearing conference, offered an unpersuasive argument for why it did not comply, and did so after explicit warnings that failure to comply with my Orders could result in sanctions. CRD Dkt. Entry No. 5 ¶ 21; CRD Dkt. Entry No. 20 at 2; CRD Dkt. Entry No. 21 at 2. Accordingly, I find that Respondent failed to comply with the 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 be related to the nature and severity of the misconduct or failure to comply. 21 C.F.R. § 17.35(b).

I also 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); 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). I am also 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. 21 C.F.R. § 17.11(a). Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

• On November 17, 2015, CTP initiated its first civil money penalty action against Respondent for at least three7 violations within a 24-month period. CTP alleged

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those violations to have occurred at Respondent’s business establishment, 10580 Huron Street, Northglenn, Colorado 80234, on May 6, 2014, and July 28, 2015. Complaint ¶¶ 6, 12.

• The first action concluded when an Initial Decision and Default Judgment was entered by the Administrative Law Judge, finding Respondent liable for the May 6, 2014, and July 28, 2015, violations. Complaint ¶ 12.
• On January 25, 2023, CTP initiated its second civil money penalty action, FDA Docket Number FDA-2023-H-0242, CRD Docket Number T-23-902, against Respondent for at least three8 violations on May 20, 2022, and November 2, 2022. Complaint ¶ 13.
• The second action concluded when an Initial Decision and Default Judgment was entered by the Administrative Law Judge, finding Respondent liable for the May 20, 2022, and November 2, 2022, violations. Complaint ¶ 13.
• On September 8, 2023, CTP initiated its third civil money penalty action, FDA Docket Number FDA-2023-H-3824, CRD Docket Number T-23-3633, against Respondent for two additional violations. In addition to the violations alleged in the second civil money penalty action, CTP alleged one violation on June 26, 2023, for selling regulated tobacco products to an underage purchaser and a

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second violation for failing to verify the age of a person with photographic identification. Complaint ¶ 14.

• The third action concluded when an Initial Decision and Default Judgment was entered by the Administrative Law Judge, finding Respondent liable for the June 26, 2023, violations. Complaint ¶ 14.
• At approximately 10:28 AM on June 5, 2019, at Respondent’s business establishment, 10580 Huron Street, Northglenn, Colorado 80234, an FDA commissioned inspector conducted an inspection.9 During this inspection, a person younger than 18 years of age was able to purchase a JUUL Mint e-liquid product. Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was 18 years of age or older. Complaint ¶ 9.
• In a warning letter dated July 11, 2019, CTP informed Respondent of the inspector’s June 5, 2019, 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. Complaint ¶ 10.
• At approximately 12:36 PM on January 4, 2024, at Respondent’s business establishment, 10580 Huron Street, Northglenn, Colorado 80234, 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 Camel Blue cigarettes. 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. Complaint ¶ 7.

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 sold or distributed 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.

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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); see also 89 Fed. Reg. 70,486 (Aug. 30, 2024) (amending references to persons younger than 18 to younger than 21 and 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. Prior to December 20, 2019, the regulations prohibited the sale of regulated tobacco products to any person younger than 18 years of age, 21 C.F.R. § 1140.14(a)(1), 21 C.F.R. § 1140.14(b)(1), and required retailers to verify, by means of photographic identification containing the purchaser’s date of birth, that no regulated tobacco product purchasers were younger than 18 years of age, 21 C.F.R. § 1140.14(a)(2)(i), 21 C.F.R. § 1140.14(b)(2)(i).

Under 21 U.S.C. § 333(f)(8), a No-Tobacco-Sale Order is permissible for at least five repeated violations under section 906(d) of the Act and the regulations at 21 C.F.R. pt. 1140 over a 36-month period. The maximum period of time for the first No‑Tobacco‑Sale Order received by a retailer is 30 calendar days. See Food & Drug Admin., Determination of the Period Covered by a No-Tobacco-Sale Order and Compliance with Order at 3-4, available athttps://www.fda.gov/media/93328/download (Revised Mar. 2023); Civil Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers at 5‑6, available at http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/UCM252955.pdf (Revised Aug. 2023).

Taking the above alleged facts as true, Respondent had seven repeated violations of section § 906(d)(5) of the Act and the regulations found at 21 C.F.R. pt. 1140 within a 36-month period.10  Respondent originally violated the prohibition against selling regulated tobacco products to persons younger than 21 years of age, Act § 906(d)(5), on May 20, 2022, and repeated the violation on November 2, 2022, June 26, 2023, and January 4, 2024. Respondent originally violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that purchasers of a regulated tobacco product are 21 years of age or older, 21 C.F.R. § 1140.14(a)(2)(i) on May 6, 2014,11  and repeated the violation on June 26, 2023, and January 4, 2024.

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Respondent originally violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that regulated tobacco product purchasers are 21 years of age or older, 21 C.F.R. § 1140.14(b)(2)(i), on June 5, 2019,12  and repeated the violation on May 20, 2022, and November 2, 2022. Therefore, Respondent’s actions constitute violations of law that merit a No-Tobacco-Sale Order.

ORDER

For these reasons, I enter default judgment against Respondent All American Gas Plus Inc. d/b/a All American Gas, in the form of a No-Tobacco-Sale Order, for a period of 30 consecutive calendar days. See 21 C.F.R. § 17.11(a)(1), (a)(2). During this period of time, Respondent shall stop selling cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and covered tobacco products regulated under the Federal Food, Drug, and Cosmetic Act. 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.