Charles Helmka d/b/a C & E Market, DAB TB9231 (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, Charles Helmka d/b/a C & E Market, at 6975 West Division Street, Cadillac, Michigan 49601, and by filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that C & E Market impermissibly sold regulated tobacco products to underage purchasers and failed to verify, by means of photo identification containing a date of birth, that a purchaser was 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.  CTP seeks a civil money penalty of $687 against Respondent C & E Market, for three violations within 24-month period.1

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During the course of this administrative proceeding, Respondent failed to comply with multiple judicial orders and procedures governing this proceeding and failed to defend its actions, which severely 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.  After carefully considering the entire record, I grant CTP’s Motion to Impose Sanctions.  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 23, 2024, CTP served an Administrative Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  See Civil Remedies Division (CRD) Docket (Dkt.) Entry Nos. 1 (Complaint), No. 1b (Proof of Service).  On May 30, 2024, the attorney advisor2 assigned to the case participated in a phone conversation with Respondent which was followed with an electronic mail message; the attorney advisor provided Respondent with information regarding how to file a timely answer, how to file a waiver to the DAB E-file requirement, and CTP’s contact information to discuss settlement.  See CRD Dkt. Entry 3.

As no answer had been received, on July 23, 2024, Administrative Law Judge Marla Y. Johnson,3 issued an Initial Decision and Default Judgment imposing a civil money penalty of $687 against Respondent.  CRD Dkt. Entry Nos. 4 and 4a; see also CRD Dkt. Entry No. 6 at 2.

On July 26, 2024, Respondent emailed the attorney advisor assigned to this case indicating that its answer was mailed on June 3, 2024, to CTP attorney Jill Atencio and CRD.  Id.; see also CRD Dkt. Entry No. 5.  Judge Johnson presumed Respondent’s July 26, 2024, email to be a Motion to Reopen and issued an order allowing Respondent to formally request a waiver to the DAB E-file requirements and resubmit the motion by August 14, 2024.  CRD Dkt. Entry No. 6 at 2.  In the same Order, CTP was also given an August 28, 2024, deadline to respond to Respondent’s Motion to Reopen.  Id.

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On July 30, 2024, CRD received Respondent’s June 3, 2024,4 Answer after it was forwarded from CTP to CRD.  CRD Dkt. Entry Nos. 7, 8 at 1.  On August 7, 2024, Judge Johnson issued an Order Withdrawing Initial Decision and Default Judgment and Acknowledgment and Pre-Hearing Order (APHO).  CRD Dkt. Entry No. 8.  The APHO required CTP to file its pre-hearing exchange (PHE) by October 23, 2024, and required the Respondent to file its PHE by November 14, 2024.  Id.  The APHO informed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  Id.; APHO ¶ 4; see also 21 C.F.R. § 17.23(a).  The APHO warned:

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.

APHO ¶ 21.

On August 11, 2024, Respondent electronically filed its PHE consisting of a declaration form with “Motion to Dismiss” written on it, documents5 including one exhibit, and its Informal Brief.  CRD Dkt. Entry Nos. 9, 9a-9b, 10, 10a-10h, 11, 11a-11w.6  In its PHE, Respondent admitted to the August 24, 2023, violation but denied the January 23, 2024, violation, stating that, it has no record of a tobacco transaction occurring at that date and time.  See CRD Dkt. Entry 10c.  On August 19, 2024, CRD received Respondent’s August 18, 2024, PHE which was mailed on August 18, 2024.7  CRD Entry No. 13.

On August 20, 2024, I issued an Order giving CTP an opportunity to respond to Respondent’s August 11, 2024, filing by September 5, 2024, and staying the deadlines in this case pending resolution of Respondent’s August 11, 2024, filing.  CRD Dkt. Entry No. 14 at 2.  On September 5, 2024, CTP filed its Memorandum in Opposition to Respondent’s August 11, 2024, Motion to Dismiss.  CRD Dkt. Entry No. 15.  On September 11, 2024, I issued an Order Denying Respondent’s Motion to Dismiss.  CRD Dkt. Entry No. 16.

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On September 13, 2024, I issued an Order re-establishing the procedural deadlines for this case.  CRD Dkt. Entry No. 17.  The Order instructed the parties to file Notices of Entry of Appearance by September 23, 2024, a joint status report by November 6, 2024, and serve requests for documents by October 7, 2024.  The Order also established that CTP’s PHE to Respondent was due by November 22, 2024, and Respondent’s PHE to CTP was due by December 16, 2024.  Id. at 1-2.

On November 6, 2024, CTP filed a timely status report.  See id. at 1.  The status report indicated that the parties had been unable to reach a settlement, CTP remained willing to engage in settlement discussions but intended to proceed to a hearing, and that CTP attempted to contact Respondent who authorized CTP to file the report.  CRD Dkt. Entry No. 19.

On November 12, 2024, CTP filed a Motion to Compel Discovery, asserting that Respondent had not responded to CTP’s discovery request as required by paragraph 4 of the APHO and the correlating regulations.  CRD Dkt. Entry No. 20; APHO ¶ 4.  On that same date, CTP also filed a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the November 22, 2024 due date for CTP’s pre-hearing exchange . . . .”  CRD Dkt. Entry No. 21 at 2.  CTP indicated that it attempted to contact Respondent to discuss its Motions to Extend Deadlines and Compel Discovery but that CTP had been unable to reach Respondent.  Id.

On November 14, 2024, I issued an Order advising Respondent that it had until November 29, 2024, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 22 at 2.  I also warned that if Respondent failed to respond “ . . . I may grant CTP’s motion in its entirety.”  Id.; see also APHO ¶¶ 20-21; 21 C.F.R. § 17.32(c).  In my November 14, 2024, Order, I held all PHE deadlines in abeyance pending resolution of CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 22 at 2.  Respondent did not respond to my November 14, 2024, Order.

On December 3, 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 18, 2024.  CRD Dkt. Entry No. 23 at 1-2.  I warned that:

Failure to do so 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.

Id. at 2.

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On December 31, 2024, CTP filed Complainant’s Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 24.  CTP advised that Respondent had not complied with my APHO or my December 3, 2024, Order granting CTP’s Motion to Compel.  Id. at 1-2.  CTP argued that sanctions against Respondent for its repeated non-compliance are an appropriate remedy.  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 $687 civil money penalty.  Id. at 2‑3.

On January 2, 2025, I issued an Order giving Respondent until January 20, 2025,8 to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 25.  Respondent was warned that:

[I]f it fails to respond, I may grant CTP’s Motion to Impose Sanctions and impose the requested civil money penalty amount of $687, pursuant to 21 C.F.R. § 17.35.

Id. at 2.

On January 8, 2025, Respondent filed what appeared to be a previously submitted document purporting to show various transactions that occurred on January 22, 2024, and January 23, 2024.  CRD Dkt. Entry No. 26.9  It was unclear what Respondent’s January 8, 2024, filing was intended to be as it added no new information.  Thus, in my January 29, 2025, Order, I gave Respondent until February 14, 2025, to indicate in writing whether the January 8, 2025, filing was the only responsive document that Respondent had in response to CTP’s Request for Production of Documents.  CRD Dkt. Entry No. 27 at 2.  I again warned Respondent that its failure to comply with my Order may:

[R]esult in sanctions, which may include striking its Answer and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty of $687.

Id.

To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or my January 29, 2025, Order.

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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 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 it failed to respond to CTP’s Request for  Production of Documents within 30 days;
• my November 14, 2024, Order when it failed to submit documents responsive to CTP’s Request for the Production of Documents by November 29, 2024; and
• my January 29, 2025, Order when it failed to indicate, by February 14, 2025, in writing, whether its January 8, 2025, filling was the only responsive document that it had, and wished to file, in response to CTP’s Request for Production of Documents.

CRD Dkt. Entry Nos. 8, 22 and 27.

Additionally, Respondent also failed to defend its actions.  21 C.F.R. § 17.35(a)(2).  Specifically, despite my January 2, 2025, and January 29, 2025, Orders informing Respondent of such opportunities to respond and warning of the consequences, Respondent failed to file responses as ordered.  CRD Dkt. Entry Nos. 25, 27.  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, in the end, 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 its case, and, as a result, severely interfered with the speedy, orderly, and fair conduct of this proceeding.  Therefore, I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

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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 regulatory requirements and multiple judicial orders, despite my explicit warnings that its failure to do so could result in sanctions.  See CRD Dkt. Entry Nos. 22, 23, 25, and 27; see also APHO ¶ 21.

Respondent has continuously failed to comply with APHO ¶ 4 which created continuous and severe delays in this proceeding and barred CTP of the ability to defend its case and file its PHE.  Respondent’s repeated misconduct severely interfered with the speedy, orderly, or fair conduct of this proceeding.  Accordingly, 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.”).

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:

• At approximately 11:45 AM on August 24, 2023, at Respondent’s business establishment, 6975 West Division Street, Cadillac, Michigan 49601, 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 Grizzly Long Cut Wintergreen smokeless tobacco;
• In a warning letter dated September 21, 2023, CTP informed Respondent of the inspector’s August 24, 2023, documented violation, and that such action violates federal law.  The letter further warned that Respondent’s failure to correct its violation could result in a civil money penalty or other regulatory action;
• At approximately 9:11 AM on January 23, 2024, at Respondent’s business establishment, 6975 West Division Street, Cadillac, Michigan 49601, an FDA commissioned inspector conducted a subsequent inspection.  During this

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inspection, a person younger than 21 years of age was able to purchase a package of Marlboro 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.

These facts establish Respondent C & E Market’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. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  The Secretary 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 alleged above facts as true, I find that Respondent violated the prohibition against selling regulated tobacco products to underage purchasers and failed to verify that a purchaser was 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 $687 under 21 C.F.R. § 17.2.

ORDER

For these reasons, I enter default judgment in the amount of $687 against Respondent, Charles Helmka d/b/a C & E Market.  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.