Kum and Go Geismar LLC d/b/a Mobil / Big Boss / On Your Way, DAB TB9197 (2025)

ORDER IMPOSING SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, Kum and Go Geismar LLC d/b/a Mobil / Big Boss / On Your Way, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $687.  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 impermissibly sold regulated tobacco products to underage purchasers and failed to verify that the purchasers were of 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. pt. 1140.  CTP seeks a civil money penalty of $687.

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During the course of these administrative proceedings, Respondent failed to comply with judicial 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 June 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 July 15, 2024, Respondent timely filed its Answer to CTP’s Complaint.  CRD Dkt. Entry No. 3.  In its Answer, Respondent admitted to the allegations on March 23, 2024 and December 29, 2024 but was not clear about the counting of violations.  Id.  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 September 16, 2024.  CRD Dkt. Entry No. 4.

On September 16, 2024, CTP filed a Status Report stating that parties were unable to reach a settlement.  CRD Dkt. Entry No. 6 at 1.  On September 20, 2024, I issued a Pre-Hearing Order (PHO) establishing procedural deadlines for this case. CRD Dkt. Entry No. 7.  The PHO ordered the parties to serve requests for documents no later than October 21, 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. at 11, ¶ 21, citing 21 C.F.R. § 17.35.

On November 18, 2024, CTP filed a Motion to Compel Discovery and a Motion to Extend Deadlines.  CRD Dkt. Entry Nos. 9, 10.  CTP stated that it served its Request for Production of Documents on Respondent on October 11, 2024, but CTP had not received a response.  CRD Dkt. Entry No. 9 at 1.  On November 21, 2024, I issued an Order instructing Respondent to file a response to CTP’s Motion to Compel Discovery by December 5, 2024.  CRD Dkt. Entry No. 11 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; see also 21 C.F.R. § 17.32(c); PHO ¶ 21.

On December 18, 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 January 8, 2025 to comply with CTP’s Request for Production of Documents.  CRD Dkt. Entry No. 12 at 1-2.  Respondent was again warned that:

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Failure to comply with this Order may result in sanctions, which may include striking its filings and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.  21 C.F.R § 17.35.

Id. at 2.

On January 10, 2025, CTP filed Complainant’s Status Report and Motion to Impose Sanctions and Complainant’s Motion to Stay Deadlines.  CRD Dkt. Entry Nos. 13, 14.  In its Status Report and Motion to Impose Sanctions, CTP advised that Respondent did not produce responsive documents in compliance with the December 18, 2024 Order Granting Motion to Compel Discovery.  Id. at 1-2.  On January 15, 2025, I issued an Order giving Respondent until January 31, 2025 to respond to CTP’s Motion to Impose Sanctions and stayed all deadlines as requested.  CRD Dkt. Entry No. 15.  My January 15, 2025 Order also warned Respondent that if it failed to file a response, “I may grant CTP’s Motion to Impose Sanctions and impose the requested civil money penalty of $687, pursuant to 21 C.F.R. § 17.35.”  Id. at 2.  To date, Respondent has not responded.

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 21 C.F.R. § 17.23(a) and paragraph 4 of my PHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with my December 18, 2024 Order Granting Motion to Compel Discovery when it failed to submit the documents responsive to CTP’s Request for Production of Documents by January 8, 2025.

Respondent also failed to defend its action despite my November 21, 2024 and January 15, 2025 orders informing Respondent of such opportunities and warning of consequences.  21 C.F.R. § 17.35(a)(2).

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I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly, or fair conduct of this 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 a regulation governing this proceeding.  Respondent also failed to comply with two of my orders, despite my explicit warnings that its failure could result in sanctions.  I specified that those sanctions may include “the issu[ance of] an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.”  December 18, 2024 Order Granting Motion to Compel Discovery at 1; PHO ¶ 21.  Respondent also failed to defend its actions, despite my orders expressly reminding Respondent of the opportunity.  Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding.

I find that Respondent’s actions are sufficient to warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3).  Accordingly, I strike Respondent’s Answer, and issue this Initial Decision and Default Judgment, assuming the facts alleged in CTP’s Complaint to be true.  21 C.F.R. §§ 17.35(c)(3), 17.11(a).

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 Mobil / Big Boss / On Your Way, an establishment that sells tobacco products and is located at 13496 Highway 73, Geismar, Louisiana 70734.  Complaint ¶¶ 11-12.
• An FDA-commissioned inspector conducted an inspection of Respondent’s establishment on December 29, 2022, at approximately 3:27 PM, during which “a person younger than 21 years of age was able to purchase an Air Bar Box Strawberry Mango electronic nicotine delivery system (ENDS) product . . . .” 

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Additionally, “the underage purchaser’s age was not verified before the sale . . . .”  Complaint ¶ 15.

• On January 26, 2023, CTP issued a Warning Letter to Respondent regarding the December 29, 2022, inspection.  The letter explained that the inspector documented violations of federal law, and that the named violations were not necessarily intended to be an exhaustive list of all violations at the establishment.  The Warning Letter also stated that if Respondent failed to correct the violations, regulatory action by the FDA or a civil money penalty action could occur and that it is Respondent’s responsibility to comply with the law.  Complaint ¶¶ 15-16.
• An FDA-commissioned inspector conducted a subsequent inspection of Respondent’s establishment on March 23, 2024, at approximately 3:39 PM, during which “a person younger than 21 years of age was able to purchase a Bidi Stick Summer Blueberry and Pomegranate electronic nicotine delivery system (ENDS) product . . . . ”  Additionally, “the underage 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 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 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 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).  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 December 29, 2022 and March 23, 2024.  Act § 906(d)(5).  On those same dates, 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 purchasers are younger than 21 years of age.  Act § 906(d)(5); 21 C.F.R. § 1140.14(b)(2)(i).  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty.

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CTP has requested a civil money penalty of $687, which is a permissible penalty under U.S.C. § 333(f)(9) and 21 C.F.R. § 17.2.  Therefore, I find that a civil money penalty of $687 is warranted and so order one imposed.