The Deli at First & Fifty Ninth Inc. d/b/a Blue & Gold Deli, DAB TB9160 (2025)

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

The Center for Tobacco Products (CTP) began this matter by serving an Administrative Complaint (Complaint) on Respondent, The Deli at First & Fifty Ninth Inc. d/b/a Blue & Gold Deli, at 1075 1st Avenue, New York, New York 10022, and by filing 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 at least 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.

The Complaint alleges CTP previously initiated a civil money penalty against Respondent Blue & Gold Deli.  The prior action concluded after Respondent Blue &

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Gold Deli admitted to at least three violations1 of the Act.  Specifically, the Complaint alleges that Respondent admitted that it 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.  The Complaint further alleges that Respondent Blue & Gold Deli subsequently committed two additional violations of the Act.  Specifically, that Respondent sold a regulated tobacco product to an underage purchaser and failed to verify, by means of photo identification containing a date of birth, that the purchaser was 21 years of age or older, thereby violating the Act.  Therefore, CTP seeks a $6,892 civil money penalty against Respondent Blue & Gold Deli for a total of five violations within a 36-month period.

Respondent’s representative filed an Answer to the Complaint.  However, during the course of this administrative proceeding, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend this action, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).

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.  Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I strike Respondent’s Answer and issue this decision of default judgment.

Procedural History

On July 17, 2024, CTP served the Complaint 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), 1b (Proof of Service).  On August 12, 2024, Respondent’s representative filed a timely answer to CTP’s Complaint.  CRD Dkt. Entry Nos. 3, 4.2

On August 15, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO) setting deadlines for the parties’ filings and exchanges, including a schedule for discovery.  CRD Dkt. Entry No. 5.  In the APHO, among other things, I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  Id. ¶ 4; see also 21 C.F.R. § 17.23(a).  The APHO further warned:

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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.

Id. ¶ 21. 

On October 21, 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 a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the November 4, 2024, due date for CTP’s pre-hearing exchange . . . .”  CRD Dkt. Entry No. 9 at 2 (Motion to Extend Deadlines). 

On October 25, 2024, I issued an Order advising Respondent that it had until November 8, 2024, to file a response to CTP’s Motion to Compel Discovery.  I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  CRD Dkt. Entry No. 10 at 2; see also CRD Dkt. Entry No. 5 ¶¶ 20-21; 21 C.F.R. § 17.32(c).  In my Order, I also extended the pre-hearing exchange deadlines.  Id.  Respondent failed to respond to CTP’s Motion to Compel Discovery or my October 25, 2024, Order, nor did it otherwise comply with CTP’s Request for Production of Documents. 

On November 25, 2024, I 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 December 10, 2024.  I warned:

Failure to [comply] 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.  In the same Order, I also extended the parties’ pre-hearing exchange deadlines.  Id.

On December 11, 2024, CTP filed Complainant’s Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 12.  CTP advised that Respondent had not complied with the APHO or my November 25, 2024, Order Granting CTP’s Motion to Compel.  Id.  at 2.  CTP argued that sanctions against Respondent are an appropriate remedy, as “it is unlikely that more time or additional orders . . . will change the status quo.”  Id.  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 imposing a $6,892 civil money penalty.  Id.  On December 11, 2024, CTP also filed a Motion to Stay Deadlines.  CRD Dkt. Entry No. 13.

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On December 16, 2024, I issued an Order giving Respondent until December 30, 2024, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 14 at 2.  The December 16, 2024, Order also stayed “all deadlines as requested pending resolution of CTP’s Motion to Impose Sanctions.”  Id.  To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or my December 16, 2024, Order. 

I.    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, Respondent has not complied with:

• 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
• my November 25, 2024, Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by December 10, 2024.

Additionally, Respondent failed to defend this action.  21 C.F.R. § 17.35(a)(2).  Specifically:

• Respondent did not file a response to CTP’s Motion to Compel Discovery, as permitted by the regulations and my October 25, 2024, Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my December 16, 2024, Order.

Respondent’s failure to respond to CTP’s motions, to comply with my multiple orders, and to fulfill its discovery obligations suggests that it has abandoned its defense in this case.

In the absence of any explanation from Respondent, I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend this action, and, as a result, interfered with the speedy, orderly, and fair conduct of this

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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 two of my orders, despite my explicit warnings that its failure could result in sanctions.  See CRD Dkt. Entry Nos. 5 ¶ 21, 11 at 2.  Additionally, Respondent failed to respond to any of CTP’s motions.  See CRD Dkt. Entry Nos. 10 at 2, 14 at 1-2.  Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding.  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); 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.”).

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. Id.  Specifically:

• On December 29, 2023, CTP initiated a previous civil money penalty action, CRD Docket Number T-24-1112, FDA Docket Number FDA-2023-H-5713, against Respondent for at least three violations of the Act.  CTP alleged those violations to have occurred on March 21, 2023, and October 21, 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;”
• An FDA-commissioned inspector conducted a subsequent inspection on April 18, 2024, at approximately 9:00 PM, at Respondent’s business establishment located at 1075 1st Avenue, New York, New York 10022.  During the inspection, a person younger than 21 years of age was able to purchase a package of Newport Box 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.

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These facts establish Respondent Blue & Gold Deli’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 of the U.S. Department of Health and Human Services issued the regulations at 21 C.F.R. Part 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); 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. 

Respondent, having failed to file an answer and taking the above alleged facts as true, violated the prohibition against selling regulated tobacco products to purchasers younger than 21 years of age and failed to verify that the purchasers were 21 years of age or older, thereby violating the Act, 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140.  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty in the amount of $6,892 under 21 C.F.R. § 17.2.

ORDER

For these reasons, I enter default judgment in the amount of $6,892 against Respondent The Deli at First & Fifty Ninth Inc. d/b/a Blue & Gold Deli.  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.