Sultan Grocery LLC d/b/a Sultan Food Mart, DAB TB9251 (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, Sultan Grocery LLC d/b/a Sultan Food Mart, at 8302 Sultan Drive, Houston, Texas 77078, 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 $2,757 civil money penalty against Respondent for at least four 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 24-month period.

I.    Procedural History

On July 15, 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).

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On August 12, 2024, Respondent filed a timely answer to CTP’s Complaint.  CRD Dkt. Entry No. 3.  In its Answer Respondent admits to the allegations in the Complaint, states that “the mental health of the staff involved and the financial hardship caused by the damage related to beryl hurricane” had a significant impact in its ability to address the situation and, that the penalty is appropriate.  Id.

On August 15, 2024, I issued an Acknowledgment and Status Report Order.  CRD Dkt. Entry No. 4.  On October 11, 2024, CTP filed a Status Report indicating the parties were unable to reach a settlement and attempts to contact Respondent were unsuccessful.  See CRD Dkt. Entry No. 6.

On October 16, 2024, I issued a Pre-Hearing Order (PHO) setting deadlines for the parties’ filings and exchanges, including a schedule for discovery.  CRD Dkt. Entry No. 7.  In the PHO, among other things, I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  Id. at ¶ 4; see also 21 C.F.R. § 17.23(a).  The PHO further 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.

Id. at ¶ 21.

On December 3, 2024, CTP filed its Motion to Compel Discovery, asserting that Respondent had not responded to its discovery request as required by the PHO and the regulations.  CRD Dkt. Entry No. 9.  On that same date, CTP also filed a Motion to Extend Deadlines requesting a 30-day extension of “any deadlines, including the January 6, 2025, due date for CTP’s pre-hearing exchange . . . .”  CRD Dkt. Entry No. 10 at 2.

On December 6, 2024, I issued an Order advising Respondent that it had until December 23, 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. 11 at 1; see also CRD Dkt. Entry No. 7 at ¶¶ 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, my December 6, 2024, Order, nor did it otherwise comply with CTP’s Request for Production of Documents.  On January 31, 2025, I issued an Order Granting Complainant’s Motion to Compel Discovery and ordered Respondent to produce responsive documents to CTP’s Request for Production of Documents by February 14, 2025.  CRD Dkt. Entry No. 13.

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I warned:

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.

In the same Order, I also extended the parties’ pre-hearing exchange deadlines.  Id. 

On February 18, 2025, CTP filed Complainant’s Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 14 (Motion to Impose Sanctions).  CTP advised that Respondent had not complied with the PHO or my January 31, 2025, Order Granting CTP’s Motion to Compel.  Id.  at 1-2.  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. at 2.  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 $2,757 civil money penalty.  Id.  On February 18, 2025, CTP also filed Complainant’s Motion to Stay Deadlines.  CRD Dkt. Entry No. 15. 

On February 20, 2025, I issued an Order giving Respondent until March 12, 2025, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 16 at 2.  The February 20, 2025, Order also stayed “all the pre-hearing deadlines in this case, pending resolution of CTP’s Motion to Impose Sanctions.”  Id. at 3.  To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or my February 20, 2025, Order. 

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).

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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 PHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• my January 31, 2025, Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by February 14, 2025.

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 December 6, 2024, Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my February 20, 2025, 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 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. 7 ¶ 21, 13 at 2.  Additionally, Respondent failed to respond to any of CTP’s motions.  See CRD Dkt. Entry Nos. 9 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.”).

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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).  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:   

• An FDA-commissioned inspector conducted an inspection on June 21, 2023, at approximately 12:14 PM, at Respondent’s business establishment located at 8302 Sultan Drive, Houston, Texas 77078.  During the inspection, a person younger than 21 years of age was able to purchase a package of two White Owl Tropical Twist cigars.  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;
• In a Warning Letter dated July 20, 2023, CTP informed Respondent of the inspector’s June 21, 2023, 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;
• An FDA-commissioned inspector conducted a subsequent inspection on April 13, 2024, at approximately 10:12 AM, at Respondent’s business establishment located at 8302 Sultan Drive, Houston, Texas 77078.  During the inspection, a person younger than 21 years of age was able to purchase an individual Newport cigarette.  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.  Further, Respondent’s staff opened a package of cigarettes for the sale of individual cigarettes.

These facts establish Respondent Sultan Food Mart’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

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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, failed to verify that the purchasers were 21 years of age or older, and opened a package of cigarettes for the sale of individual cigarettes, 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 $2,757 under 21 C.F.R. § 17.2.

ORDER

For these reasons, I enter default judgment and impose a civil money penalty in the amount of $2,757 against Respondent, Sultan Grocery LLC d/b/a Sultan Food Mart.  Pursuant to 21 C.F.R. § 17.11(b), this order becomes final and binding upon both parties 30 days after the date of its issuance.