Twin Peaks Drive Thru, LLC d/b/a Twin Peaks Drive, DAB TB9266 (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, Twin Peaks Drive Thru, LLC d/b/a Twin Peaks Drive Thru / Convenience Store, at 645 Milpa Verde,1 Brownsville, Texas 78521, and by filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The Complaint alleges that Twin Peaks Drive Thru / Convenience Store impermissibly sold a regulated tobacco product on May 18, 2024, in violation of a No-Tobacco-Sale Order (NTSO) that was in effect and issued pursuant to 21 U.S.C. § 333(f)(8) of the Federal Food, Drug, and Cosmetic Act (Act).  CTP seeks a 

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civil money penalty of $20,678 against Respondent Twin Peaks Drive Thru / Convenience Store, for violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. pt. 1140.

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 initial decision of default judgment.

I. Procedural History

On November 22, 2024, CTP served an Administrative Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  See CRD Dkt. Entry Nos. 1 (Complaint), 1b (Proof of Service).2  On December 19, 2024, Respondent timely filed its Answer stating that it was proceeding through an attorney, denied the allegation, stated that it “took all reasonable efforts to comply with the NTSO,” and that the civil money penalty requested was “not proportionate with the Respondent’s financial abilities, income and revenues and considering the efforts of Respondent to abide by the NTSO and Federal tobacco laws.”  CRD Dkt. Entry No. 3 at 2.

On December 31, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of Respondent’s Answer and establishing the procedural deadlines for this case.  CRD Dkt. Entry No. 4.  Among other things, the APHO ordered CTP to file its pre-hearing exchange by March 24, 2025, and ordered Respondent to file its pre-hearing exchange by April 14, 2025.  Id. ¶¶ 6a, 6b.  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 

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• interferes with the speedy, orderly, or fair conduct of the hearing.  21 C.F.R. § 17.35.

APHO ¶ 21.

On February 25, 2025, CTP filed a Motion to Compel Discovery and a Motion to Extend Deadlines.  CRD Dkt. Entry Nos. 8, 9, respectively.  CTP stated that it served its Request for Production of Documents on Respondent on January 17, 2025, but CTP had not received a response.  CRD Dkt. Entry No. 8 at 1-2.  On February 26, 2025, I issued an Order instructing Respondent to file a response to CTP’s Motion to Compel Discovery by March 13, 2025.  CRD Dkt. Entry No. 10 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. 

On March 19, 2025, 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 March 28, 2025, to comply with CTP’s Request for Production of Documents.  CRD Dkt. Entry No. 11 at 1.  Respondent was again warned that:

• Failure to [respond] 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.

On April 1, 2025, CTP filed Complainant’s Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 12.  In its Status Report and Motion to Impose Sanctions, CTP advised that Respondent had not produced responsive documents in compliance with the March 19, 2025, Order Granting its Motion to Compel Discovery.  Id. at 1-2.  Also, on April 1, 2025, CTP filed a Motion to Stay Deadlines pending the resolution of its Motion to Impose Sanctions.  CRD Dkt. Entry No. 13.

On April 2, 2025, I issued an Order giving Respondent until April 16, 2025, to file a response to CTP’s Motion to Impose Sanctions and stayed all deadlines as requested.  CRD Dkt. Entry No. 14.  My April 2, 2025, Order also warned Respondent that if Respondent failed to timely respond, I may grant CTP’s motion in its entirety.”  Id. at 2.

To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or my April 2, 2025, Order. 

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On April 4, 2025, CTP filed Motion to Extend Deadlines.  CRD Dkt. Entry No. 15.  My Order on April 2, 2025, stayed all deadline in this case.  See CRD Dkt. Entry No. 14.  Therefore, I find the Motion to Extend Deadlines to be moot.

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 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; and
• Respondent failed to comply with the March 19, 2025, Order Granting Motion to Compel Discovery, requiring Respondent to comply with CTP’s Request for Production of Documents.

CRD Dkt. Entry Nos. 4, 11.

Additionally, Respondent failed to defend its actions.  21 C.F.R. § 17.35(a)(2).  Specifically, despite my February 26, 2025, and April 2, 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. 10, 14.  Respondent’s failure to respond to CTP’s motions, to comply with 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 

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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.

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. 10, 11, 14; see also APHO ¶ 21.

Respondent has continuously failed to comply with APHO ¶ 4 which created continuous delays in this proceeding and barred CTP of the ability to defend its case and file its pre-hearing exchange.  Respondent’s repeated misconduct 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:   

• Respondent owns Twin Peaks Drive Thru / Convenience Store, an establishment that sells tobacco products and is located at 645 Milpa Verde, Brownsville, Texas 78521.  Complaint ¶ 5.
• On April 23, 2024, an Administrative Law Judge (ALJ) issued a No-Tobacco-Sale Order Closing Case pursuant to 21 U.S.C. § 333(f)(8).  Complaint ¶ 4.  The imposed NTSO prohibited Respondent from selling cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and covered tobacco products during the period beginning at 12:00 am3 on May 11, 2024, and remained in effect 

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• through 11:59 pm on May 31, 2024.  Complaint ¶ 4; see also Cover Letter at 7, citing Notice of Settlement Agreement for No-Tobacco-Sale Order ¶ 1.  Respondent expressly waived its right to contest the agreed-to violations and any subsequent actions.  Id.; see also Cover Letter at 8.
• On May 18, 2024, an FDA-commissioned inspector conducted an inspection of Twin Peaks Drive Thru / Convenience Store to determine whether Respondent was complying with the agreed-upon NTSO.  During this inspection, at approximately 1:17 PM, Respondent sold a package of two Swisher Sweets Classic Gold cigars to the inspector.  Complaint ¶ 6.

These facts establish Respondent Twin Peaks Drive Thru / Convenience Store’s liability under the Act.  The Act prohibits the sale of tobacco products in violation of a NTSO issued under 21 U.S.C. § 333(f)(8).  21 U.S.C. § 331(oo).  The Secretary may impose a NTSO for repeated violations of the regulations found at 21 C.F.R. part 1140.  21 U.S.C. § 333(f)(8).  See also FDA Civil Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers, available at https://www.fda.gov/media/80888/download (August 2023); Determination of the Period Covered by a No-Tobacco-Sale Order and Compliance with Order, available at https://www.fda.gov/media/93328/download (March 2023).  The Act prohibits the sale of tobacco products in violation of a NTSO and provides that such a violation is subject to a civil money penalty.  21 U.S.C. § 331(oo); 21 U.S.C. § 333(f)(9)(A); 21 C.F.R. § 17.2; 45 C.F.R. § 102.3. 

Respondent’s Answer having been stricken as a sanction pursuant to 21 C.F.R. § 17.35(c)(3) and taking the alleged above facts as true, I find that Respondent impermissibly sold a regulated tobacco product on May 18, 2024, in violation of a No-Tobacco-Sale Order (NTSO) that was in effect and was issued pursuant to 21 U.S.C. § 333(f)(8) of the Act.  Therefore, Respondent’s actions constitute a violation of law that merits a civil money penalty in the amount of $20,678.  21 U.S.C. §§ 331(oo); 333(f)(9)(A).

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ORDER

For these reasons, I enter default judgment in the amount of $20,678 against Respondent, Twin Peaks Drive Thru, LLC d/b/a Twin Peaks Drive Thru / Convenience Store.  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.