108 Express Mini Mart, Inc. d/b/a 108 Express Mini-Mart, DAB TB9281 (2025)

DECISION

On February 7, 2025, I issued a Summary of February 4, 2025 Pre-Hearing Conference and Order Scheduling In-Person Hearing.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Number (No.) 23.  In that Order, among other things, I directed Respondent, 108 Express Mini Mart Inc. d/b/a 108 Express Mini-Mart, to file any motions to exclude or objections to the Center for Tobacco Products' (CTP's) proposed exhibits not later than February 21, 2025.  Id. at 2.  On February 20, 2025, Respondent, through counsel, filed Respondent's Motion to Exclude CTP's Exhibits and Objections (Motion to Exclude).  CRD Dkt. Entry No. 24.  Specifically, Respondent raises objections to CTP's List of Proposed Witnesses and Exhibits, and CTP's Proposed Exhibits (Exs.) 1-7.  Id. at 2-5.

On February 21, 2025, I issued an Order giving CTP until March 10, 2025 to file a response to Respondent's Motion to Exclude.  CRD Dkt. Entry No. 25.  On March 10, 2025, CTP filed Complainant's Motion for Summary Decision, a Memorandum in Opposition to Respondent's Motion to Exclude CTP's Exhibits and Objections and in Support of Complainant's Motion for Summary Decision, and a proposed order for summary decision.  CRD Dkt. Entry Nos. 26, 27-27a.

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On March 13, 2025, I issued an Order giving Respondent until March 25, 2025 to file a response to CTP's Motion for Summary Decision.  CRD Dkt. Entry No. 28.  On March 25, 2025, Respondent filed Respondent's Objection to Complainant's Motion for Summary Decision.  CRD Dkt. Entry No. 29.  On March 26, 2025, CTP filed a Reply in Support of Complainant's Motion for Summary Decision.  CRD Dkt. Entry No. 30.

The Motion to Exclude and the Motion for Summary Decision are now ripe for decision.

I.  Respondent's Motion to Exclude Evidence

1. Respondent's Arguments

In its Motion to Exclude, Respondent raises objections and asks that I exclude CTP Exs. 17a-17h.1  CRD Dkt. Entry No. 24.  Specifically, Respondent objects to:

CTP Ex. 17a – CTP's List of Proposed Witnesses and Exhibits
OBJECTION:  To the extent that the document is simply a witness list, 108 Express Mini Mart does not object but does OBJECT to the narratives and documents on grounds listed below, and requests that same be stricken.

CTP Ex. 17b - Declaration of James Bowling.
OBJECTION: Lack of Foundation/Authentication. Document makes self-initiated proclamations of background and offers legal argument. As such the document lacks foundation.

CTP Ex. 17c - Declaration of Inspector Benjamin B. Williams.
OBJECTION: Lack of Foundation/Authentication. Document makes self-initiated proclamations of background and offers legal argument. As such the document lacks foundation.

CTP Ex. 17d - Narrative Report of Benjamin B. Williams.
OBJECTION: Purports to be a narrative, but contrary to the nature of a narrative, sets out in outline form, bullet point like conclusions, conclusions not based in any way on a substantiating narrative. The averred proponent's name is typed at the bottom of the bullet points but even under relaxed post Covid-19 practices, the document bears no actual signature and therefore

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lacks authentication. There is no certification as set forth as a requirement for admissibility under Federal Rules of Evidence, Rule 902 (2), (4) or (13).

The presiding officer may apply the "Federal Rules of Evidence" when appropriate, as clearly stated in the rules governing this procedure to exclude unreliable evidence. 21 C.F.R. § 17.39 (b). Where the tribunal is a fair unbiased administrative body providing 108 Express Mini Mart a fair, transparent adjudication deserving of public trust and confidence, the unsigned but only typed name of the averred proponent fails to authenticate the document as same should be excluded.

CTP Ex. 17e - Inspection Details (TIMS Printout) of Benjamin B. Williams:
OBJECTION: Lack of Foundation/Authentication. Even under the more relaxed verification standards following COVID-19 this document is unsigned and carries no verification or assurance to the reader that same was generated by the Inspector or was generated by the department from a standard "fill-in-the-blank" form.

108 Express Mini Mart incorporates by reference the full objection to Exhibit 17D stated above. Where Exhibit 17D exhibits a bare typed in name of the proponent, Exhibit 17E fails even to have any signature block or acknowledgment at the bottom. Therefore, the document should be excluded.

CTP Ex. 17f - Supporting Documents/Exhibits. Two Photographs.
OBJECTION: Lack of Foundation/Authentication. Although the photographs are referred to in the inspector's "report", the tags, white lettering in the upper right corners, and black labels at the bottom right corners, do not portray the actual metadata generated by a digital camera and instead appear to have been edited in at some later time by the action of human hands.

CTP Ex. 17g - Supporting Documents/Exhibits.
OBJECTION: Lack of Foundation/Authentication/Relevance. Although referred to a previous report, a given handwritten date is ambiguous as to whether it is the date of the document, the date of the inspection as to a present or future inspection and therefore calls into question whether the document is probative of any fact. "The presiding officer shall exclude evidence that is not relevant or material." 21 CFR 17.39 (c). To the extent that the document is ambiguous, "Department adjudicators shall read genuine statutory or regulatory ambiguities (as understood in Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019)[)] related to administrative or

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regulatory violations and penalties in favor of the subject of enforcement. Therefore, the document should be excluded.

CTP Ex. 17h - June 8, 2023 Warning Letter.
OBJECTION: Lack of Foundation/Authentication. The purported signatory to the document, to wit, "Ann Simoneau. J.D., Director, Office of Compliance and Enforcement, Center of Tobacco Products" has not been placed on the witness list in this matter. Therefore, the exhibit is not subject to fair cross examination by 108 Express Mini Mart. 108 Express Mini Mart incorporates by reference the objection stated above in 17D.

Finally, as stated in the quote from the Fairness in Administrative Enforcement and Adjudications Memorandum set fort at the beginning of this document a "[d]epartment adjudicator should supply a reasoned explanation if he or she decides not to apply the Federal Rules of Evidence.["] 108 Express Mini Mart has, in its analysis herein provided citation to the said Rules of Evidence, and at this time respectfully requests a reasoned explanation if the said Federal Rules of Evidence are deemed not to apply.

CRD Dkt. Entry No. 24 at 2-5 (Motion to Exclude).

In the Motion to Exclude, Respondent concedes that I am not bound by the Federal Rules of Evidence (FRE).  See Motion to Exclude at 1-2.  Notwithstanding this concession, Respondent's argues that the Federal Rules of Evidence should be applied in this case.  To support this contention, Respondent relies on a memorandum dated January 12, 2021, from Alex M. Azar II, former Secretary, Department of Health & Human Services, to "Operating Division Heads and Office Directors" captioned "Fairness in Administrative Enforcement and Adjudication" (Azar Memo).  The Azar Memo states, in part:

(a) Unless contrary to statute or legislative regulation, Department adjudicators should seek to apply the Federal Rules of Evidence and relevant parts of Federal Rules of Civil Procedure in civil enforcement actions.  Where a regulation governing the civil enforcement action provides that the Department adjudicator can, but need not, apply the Federal Rules of Evidence, the Department adjudicator should apply a reasoned explanation if he or she decides not to apply the Federal Rules of Evidence.

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Azar Memo at IV(a).2  Relying on the Azar Memo, Respondent argues that the Federal Rules of Evidence should govern and that a reasoned explanation should be provided if I decline to apply the Federal Rules of Evidence.

2. CTP's Arguments

In its opposition to Respondent's Motion to Exclude (CTP's Opposition), CTP argues that in spite of Respondent's failure to file a pre-hearing exchange, Respondent now wants to exclude all exhibits submitted by CTP based on the language of the Azar Memo, which directs "department adjudicators" to apply the Federal Rules of Evidence or, in the alternative, provide a "reasoned explanation" for not applying the FRE.  CTP's Opposition at 5.

CTP contends that the regulations at 21 C.F.R. Part 17 govern proceedings involving civil money penalties.  Id. at 3.  Specifically, CTP references 21 C.F.R. § 17.39 pertaining to the applicability of the Federal Rules of Evidence in civil money proceedings.  CTP notes:

Part 17 also dictates that "parties shall exchange witness lists, copies of prior written statements of proposed witnesses, and copies of proposed hearing exhibits, including written testimony."  21 C.F.R. § 17.25(a); see id. § 17.37(b).  And any such documents "exchanged in accordance with section 17.37(a) . . . will be deemed to be authentic for the purpose of admissibility at the hearing," unless the opposing party objects, id. § 17.25(c), with the presiding officer determining admissibility, id., § 17.39(a).  "Direct testimony shall be admitted in the form of a written declaration submitted under penalty of perjury."  Id. § 17.37(b).

CTP's Opposition at 3, 4.  Further, CTP argues that its pre-hearing exchange submission, which consisted of a pre-hearing brief; a list of proposed witnesses and exhibits; and seven proposed exhibits, including the written direct testimony of Deputy Division Director James Bowling and FDA-commissioned Inspector Benjamin B. Williams, were submitted consistent with the governing regulations and paragraphs 6 through 10 of the Acknowledgment and Pre-Hearing Order ("APHO") issued on February 27, 2024.  Id. at 4.

3. Analysis

I have considered the contentions presented by the parties.  Based on the following, I find Respondent's assertions to be unpersuasive.

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At the outset, I refer to the regulation at 21 C.F.R. § 17.19(c).  The regulation expressly provides that presiding officers "do not have the authority to find Federal statutes or regulations invalid."  Further, an appellate panel of the Departmental Appeals Board (the Board) held "[n]either the ALJs nor this Board are empowered to ignore or overturn applicable statutes or regulations."  J. Peaceful, L.C. d/b/a Town Market, DAB No. 2742 at 15 (2016) (quoting 21 C.F.R. § 17.19(c)); see also Zoom Mini Mart, Inc., DAB No. 2894 at 15 (2018) ("In sum, the ALJ came to his conclusion that a 30-day NTSO was appropriate by following the applicable authority found in the Act and Tobacco Control Act (TCA) authority which we are not allowed to ignore or overturn . . . .").  Therefore, I am bound to make any determination in these tobacco cases based on the applicable authority found in the Act and the TCA.

Under 21 C.F.R. Part 17, ALJs determine the admissibility of evidence and have the discretion to apply the Federal Rules of Evidence when deemed appropriate.  Specifically, the regulation at 21 C.F.R. § 17.39 provides, in part:

(a) The presiding officer shall determine the admissibility of evidence.
(b)Except as provided in this part, the presiding officer shall not be bound by the "Federal Rules of Evidence."  However, the presiding officer may apply the "Federal Rules of Evidence" when appropriate, e.g., to exclude unreliable evidence.
(c) The presiding officer shall exclude evidence that is not relevant or material.
(d) Relevant evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative.

21 C.F.R. § 17.39 (emphasis added).

I have given considerable thought to the Azar Memo, produced by Respondent, as authority for a conclusion that the Federal Rules of Evidence should be applied in this case, as opposed to the applicable regulations at 21 C.F.R. Part 17.  I am not persuaded by Respondent's arguments on several counts.  First and foremost, the document submitted by Respondent is not signed or dated by former Secretary Azar.  Respondent has not provided any evidence to demonstrate that the memo presented is a final work product, approved by former Secretary Azar, and ultimately implemented by the Department of Health & Human Services.  Without such substantiation, or some legislative action to rescind or overturn Part 17, I cannot disregard the regulations applicable to these proceedings.  Thus, my determination as to Respondent's evidentiary objections to CTP's proposed exhibits 17a-h will be in accordance with the regulation at 21 C.F.R. § 17.39.

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As discussed above, with the exception of CTP's proposed List of Proposed Witnesses and Exhibits "[t]o the extent that the document is simply a witness list," Respondent challenges the admissibility of CTP's remaining proposed exhibits and associated testimony.  Motion to Exclude at 2-5.  The parties' arguments were discussed in depth above and, therefore, will not be revisited.  As discussed below, I do not find merit with Respondent's assertions.  Therefore, as to CTP's Exs. 1-7, I find sufficient foundation has been established and the authenticity substantiated.

1. CTP Proposed Exhibits 1, 2 (CRD Dkt. Entry Nos. 17b, 17c)

Respondent objects to the written direct testimony of CTP witnesses Deputy Division Director James Bowling and FDA-commissioned Inspector Benjamin B. Williams.  Motion to Exclude at 2.  In each instance, Respondent alleges that both declarations lack authentication and foundation.  Id.  Respondent states only "[d]ocument makes self-initiated proclamations of background and offers legal argument.  As such the document lacks foundation."  Id.  Respondent does not present a rationale in support of the assertion regarding lack of authentication.

I infer from the phrase "self-initiated proclamations of background" that Respondent is making reference to the witnesses' recitation of professional credentials and experience in their respective positions.  See CRD Dkt. Entry Nos. 17b at 1-3; 17c at 1.  With regard to the assertion regarding "offers legal arguments," Respondent is somewhat vague as to what this refers to.

In each declaration, the witnesses provide a synopsis of their respective professional background and experience, which puts each witness in the position to credibly and reliably assess the occurrence at issue.  The background discussed by each witness demonstrates their respective expertise and provides the requisite foundation for assessing the facts and supporting information in this case.

As to the authentication of each sworn declaration, I note that each document contains a signature for the respective witness.  Deputy Division Director Bowling's signature is an electronic signature.  Inspector Williams' signature appears to be handwritten or, in the alternative, may be an electronic signature as well.  I take judicial notice of the Uniform Electronic Transactions Act (UETA) and the United States Electronic Signatures in Global and National Commerce (ESIGN) Act, which were enacted in 1999 and 2000, respectively.  In essence, each Act grants legal sufficiency to electronic signatures and acknowledges that electronic signatures carry the same legal weight as the traditional handwritten, inked signature.

The written direct testimony of CTP witnesses Bowling and Williams are sworn statements submitted under penalty of perjury.  See CRD Dkt. Entry No. 17b at 5; 17c at 2.

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Therefore, I find the written direct testimony of Deputy Division Director Bowling and Inspector Williams to meet the requirements of 21 C.F.R. § 17.39 and the February 27, 2024 APHO.  Respondent has offered no evidence to support a conclusion that the statements lack foundation or authentication and are not in accordance with 21 C.F.R. § 17.39 or the APHO.

2. CTP Proposed Exhibits 3, 4 (CRD Dkt. Entry Nos. 17d, 17e)

Respondent also questions the authenticity of Inspector Williams' Narrative Report (CRD Dkt. Entry No. 17d) and the authenticity and foundation of the TIMS (Tobacco Inspection Management System) Report (CRD Dkt. Entry No. 17e) of the August 19, 2023 inspection at issue in this case.  Motion to Exclude at 3.  Regarding the Narrative Report, Respondent objects to the formatting of Inspector Williams' report, i.e., it is drafted in "outline" form as opposed to being constructed as a literal narrative statement.  Id.  Respondent also challenges the authenticity of the narrative report in that it does not contain a handwritten, inked signature, as set forth in Rule 902 of the FRE which requires certification of a document for it to be deemed admissible.  Id.  As for the TIMS Report, Respondent not only objects to the "fill-in-the-blank" form of the report, but also questions the lack of Inspector Williams' signature anywhere on the report.  Id.

In response, CTP argues that both the Narrative and TIMS Reports "provide a straight-forward account of the inspection."  CTP's Opposition at 8.  CTP further asserts that substantiation and authentication of both documents are attested to at paragraph 7 of Inspector Williams' sworn declaration.  Id.

As previously discussed, in my capacity as the administrative law judge presiding over this proceeding, the admissibility of evidence in this matter is governed by the regulation at 21 C.F.R. § 17.39 and will not be determined in accordance with the FRE.

I am persuaded by CTP's arguments.  As I noted in my discussion regarding the authentication of the written direct testimony for CTP witnesses Bowling and Williams, the UETA and ESIGN Acts both recognize an electronic signature as valid under United States law.  Further, with regard to the TIMS Report, I note that the document in the record is a printout from the FDA's internal data system which tracks inspection data.  See CTP Ex. 4.  The TIMS Report identifies relevant information regarding the August 19, 2023 inspection, such as documenting Inspector Williams as the inspector who conducted the inspection, the date/time of the inspection, and the content of the inspection itself.  CRD Dkt. Entry No. 17e at 1.  Further, as expressed by CTP, the authenticity and foundation for the Narrative and TIMS Reports are attested to "under penalty of perjury" by Inspector Williams.  See CRD Dkt. Entry No. 17c at 2.

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Therefore, I conclude that Inspector Williams, through his sworn testimony, has authenticated the Narrative Report and TIMS Report and has provided sufficient foundation for the admission of the Narrative and TIMS Reports as evidence.

3. CTP Proposed Exhibit 5 (CRD Dkt. Entry No. 17f)

Respondent also disputes two photographs submitted by CTP of the Esco Bars Mango Guava Ice ENDS product on display in Respondent's establishment during the August 19, 2023 inspection.  Motion to Exclude at 4.  While Respondent does not take issue with the actual content of each photograph, Respondent does question their authenticity with regard to the multiple markings on each photograph and suggests that neither set of markings "portray the actual metadata generated by a digital camera and instead appear to have been edited in at some later time by the action of human hands."  Id.

In its objections, CTP explains:

. . . The exhibit was prepared in accordance with paragraph 8 of the APHO [Acknowledgment and Pre-Hearing Order], which requires exhibits to be identified with the docket number of the case, an abbreviated designation for the party offering the exhibit, and "a specific, unique, and whole identifying number . . . that is used to identify the document in the party's brief . . . The stamps on the upper right were placed on the photos pursuant to these instructions.  The stamps on the lower right were placed on the photos when the inspection was completed . . . .

CTP's Opposition at 8-9.

CTP's explanation accurately reflects the directives set forth in the APHO, regarding preparation and marking of proposed exhibits.  See CRD Dkt. Entry No. 6 ¶ 8.  Further, I find that CTP has provided a plausible explanation for the second set of markings at the lower right bottom of each photograph.  Respondent has not provided a contrary theory aside from a broad assertion that the photos were edited at some subsequent point in time.  Finally, again, the authenticity of the photographs are attested to as "true and accurate" under penalty of perjury by Inspector Williams at paragraph 8 of his sworn declaration.  See CRD Dkt. Entry No. 17c at 2.

Therefore, I conclude that Inspector Williams, through his sworn testimony, has authenticated the photographs and has provided sufficient foundation for the admission of the photographs.

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4. CRD Proposed Exhibit 6 (CRD Dkt. Entry No. 17g)

Respondent also disputes the foundation, authentication, and relevance of CTP Ex. 6; specifically, Form FDA 482 – Notice of Inspection.  CRD Dkt. Entry No. 17g.  Respondent appears to call the handwritten "8-19-23" date on the notice "ambiguous," as it questions whether the date purports to represent the date of the inspection or some other inspection date in the future.  Motion to Exclude at 4.  Respondent goes on to conclude that, based on the lack of clarity on this issue, the document is not material to these proceedings and should be excluded.  Id.

CTP observes that the Notice of Inspection was produced by Respondent in its response to CTP's request for production of documents.  CTP Opposition at 9; see also CRD Dkt. Entry No. 14a at 1.  Also, CTP states that the Notice of Inspection not only provides an explanation of the inspection process, but also displays Inspector Williams' signature and printed name, and the date of the inspection, which was August 19, 2023 – and which is verified by the date of inspection alleged in CTP's Complaint (CRD Dkt. Entry No. 1), the markings on the two photographs of the ENDS products display (CRD Dkt. Entry No. 17f), Inspector Williams' sworn declaration (CRD Dkt. Entry No. 17c), and the Narrative and TIMS Reports (CRD Dkt. Entry Nos. 17d, 17e).  Further, again, the authenticity of the Notice of Inspection is attested to as "true and accurate" under penalty of perjury by Inspector Williams at paragraph 5 of his sworn declaration.  See CRD Dkt. Entry No. 17c at 2.  If Respondent thought that the Form FDA 482 – Notice of Inspection was not relevant to this proceeding, it would not have produced the form in discovery.3  Accordingly, I find that Respondent has not shown that Form FDA 482 – Notice of Inspection lacks foundation, authentication, or relevance.

Therefore, I conclude that Inspector Williams, through his sworn testimony, has authenticated the Notice of Inspection and has provided sufficient foundation for the admission of the Notice of Inspection as evidence.

5. CRD Proposed Exhibit 7 (CRD Dkt. Entry No. 17h)

Lastly, Respondent objects to the June 8, 2023 Warning Letter for lack of foundation and authentication.  Motion to Exclude at 4-5.  Respondent contends that the signator on the correspondence, Ann Simoneau, at that time the Director of the Office of Compliance and Enforcement, CTP, FDA, was not included on CTP's witness list for cross-examination purposes and, thus, the Warning Letter "is not subject to fair cross

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examination by [Respondent]."  Id. at 4.  Respondent also "incorporated by reference the objection stated above in 17D," presumably the assertion regarding the applicability of the FRE in this case.  Based on Respondent's contentions, I presume that the crux of Respondent's objection is that, based on the FRE, without presenting Ann Simoneau as a witness for cross-examination at a hearing, the Warning Letter lacks foundation and is therefore not admissible.

CTP notes that while Respondent denies any knowledge regarding the May 22, 2023 inspection, referenced in the Warning Letter, in its Answer to the Complaint, Respondent in fact responded to the Warning Letter on June 22, 2023, conceding the violation alleged in the Warning Letter occurred.  CTP's Opposition at 9-10 (comparing CRD Dkt. Entry No. 4¶ 20 with CRD Dkt. Entry No. 14a at 2).  CTP acknowledges that the June 22, 2023 response letter from Respondent to CTP was not included in its exhibits/witness list.  CTP's Opposition at 10.  However, in the interest of full disclosure, CTP asks this tribunal to "consider Respondent's June 22, 2023 letter response in determining the admissibility of the Warning Letter."  Id.

I have considered the objection presented by Respondent, as well as the response set forward by CTP.  Again, for the reasons articulated above, I am not bound by the FRE in these proceedings.  I find no issue with Ann Simoneau being the signator on the Warning Letter.  CTP is not required to present Ann Simoneau as a witness as CTP presented other proposed witnesses and CTP's case does not solely rely on the Warning Letter.  In fact, had CTP provided the testimony of Ann Simoneau, I would likely be required to exclude her testimony as it would not be relevant to whether Respondent is liable as alleged in CTP's Complaint.  I find that the Warning Letter is more applicable towards the issue of the appropriateness of the CMP if I find that Respondent is liable for the violation alleged in CTP's Complaint.  The Warning Letter violation is not relevant to the issue of liability that I have to decide, which is whether Respondent violated 21 U.S.C. § 331 and 21 U.S.C. § 387 as alleged in the Complaint on August 19, 2023.  Lastly, Respondent produced a copy of the June 22, 2023 letter in response to the Warning Letter, where it acknowledged the violation.  Therefore, the Warning Letter does not lack foundation or authentication.

4. Conclusion

Under the regulation at 21 C.F.R. § 17.39, I am only required to exclude evidence that is not relevant or material to the issues before me.  21 C.F.R. § 17.39(c).  I may however exclude relevant evidence if I determine that its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative evidence.  21 C.F.R. § 17.39(d).

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I find that CTP's Exs. 17a-17h are relevant to the issues before me: 1) whether Respondent violated 21 U.S.C. § 331 and 21 U.S.C. § 3874 as alleged in the Complaint; and if so; 2) whether the civil money penalty sought by CTP is appropriate, considering any aggravating and mitigating factors.  Thus, I find that the probative value of CTP's Exs. 17a-17h is not substantially outweighed by the danger of unfair prejudice or confusion of the issues.  Therefore, I find that CTP's Exs. 17a-17h are relevant and reliable.  I DENY Respondent's Motion to Exclude and ADMIT CTP's Exs. 17, 17a-17h, inclusive.  21 C.F.R. § 17.39.

II.  CTP's Motion for Summary Decision

1. CTP's Arguments

On March 10, 2025, CTP filed a Motion for Summary Decision and Memorandum in Support of its Motion for Summary Decision.  CRD Dkt. Entry Nos. 26, 27.  In its Memorandum in Support, CTP argues: "Given the lack of colorable challenge to the sworn direct testimony of CTP's two witnesses and exhibits and based on the arguments made in CTP's pre-hearing brief, summary decision on liability on the record in this case is warranted."  CRD Dkt. Entry No. 26 at 10.  CTP also contends that the $20,678 CMP sought is warranted.  Id.  CTP notes Respondent's failure to file a pre-hearing exchange, pursuant to the APHO issued, and failure to produce documents responsive to the July 25, 2023 Order requiring, among other things, financial documentation showing Respondent's assets and income for the period covering 2022 and 2023.  Id.  Lastly, CTP references Respondent's June 22, 2023 letter to CTP in response to the Warning Letter dated June 8, 2023.  Id. at 10-11.  CTP asserts that Respondent's response reflects knowledge of a "history of violating the FDCA's requirements relating to tobacco products."  Id. at 10.

CTP concludes that the violations alleged in the Complaint, as supported by the documentary evidence, are sufficient to establish a basis for issuing a summary decision against Respondent, and imposing based on undisputed facts a civil money penalty of $20,678.  See CRD Dkt. Entry No. 26 at 10.

2. Respondent's Arguments

Respondent, through counsel, filed an Answer to CTP's Complaint, which neither admitted nor denied the allegations listed at paragraphs 15-21 but stated: "Respondent lacks knowledge or information sufficient to form a belief about the truth of the allegation" with regard to the allegations alleged at paragraphs 15-21 of the Complaint.

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Answer ¶¶ 15-21.  In its Answer, Respondent denied paragraphs 12 and 14 stating the following:

Deny. Respondent is of the good faith that Complainant has misstated the penalties set forth in 21 U.S.C. § 333(F)(9)(A).

*  *  *  *  *  *

The averment states a conclusion [i.e. Respondent's establishment receives tobacco products in interstate commerce . . . and delivers or proffers delivery of such tobacco product for pay or otherwise] to which Respondent leaves Complainant to its proof. Deny.

Answer ¶¶ 12, 14.

Respondent also disputes the appropriateness of the CMP sought and asks this tribunal to deny the CMP as excessive.  Answer at 3.  Further, Respondent raises multiple defenses to this civil enforcement action.  See Answer at 3-4.

Subsequently, in its Objection to Complainant's Motion for Summary Decision (R's Objection to Motion for Summary Decision), Respondent relies on the content of two emails, one initiated by Respondent's counsel to CTP, and a response from a paralegal specialist at CTP, both dated March 21, 2024, and an undated letter, labeled as "Defendant's Exhibit A," from Respondent's manager or owner that references the inspections in the Complaint.  CRD Dkt. Entry No. 29 at 1-2, 7.  Counsel's inquiry, via email, to CTP pertains to a request for citations to "D.A.B." cases where mitigating factors were considered and/or applied in cases alleging a violation under 21 U.S.C. § 331(c), to which the paralegal subsequently responded "[t]o date, none of the cases with this code violation have been decided on the merits, or mitigating factors applied, by the DAB . . . ."  Id.  Respondent also now asserts that "at all times during the pendency of this matter . . . it has been clear that respondent does in fact dispute the facts in this case, . . . reserves the right to cross-examine witnesses and maintains it's[sic] crucial right to a hearing to enforce these rights. Therefore, it can not be said in good faith that ‘undisputed facts' entitle Complainant to a summary decision."  Id. at 3.  Finally, Respondent argues that the DAB "has been less than fully forthcoming and compliant with Title VI."  Id.  Respondent contends now as it did in its Answer that "[e]nforcement violated Title VI prohibition on the basis of race, color, or national origin . . . ."  Id.  As support for this argument, counsel refers to the letter attached as "Defendant's Exhibit A" and argues that "[a] plain reading of the letter indicates a language issue . . . ." Id.  The letter essentially argues that an employee present during the August 19, 2023 inspection was not English proficient and may have misunderstood the inspector during the inspection.  See id., Attachment A.

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III.    Analysis

A.  Applicable Law

Summary decision is appropriate in a case "if the pleadings, affidavits, and other materials filed in the record, or matters officially noticed, show that there is no genuine issue as to any material fact and that the moving party is entitled to summary decision as a matter of law."  21 C.F.R. § 17.17(b).  "A dispute of fact is ‘material' if its resolution might affect the case's outcome under the governing law."  Morris View Healthcare Center, DAB No. 3149 at 3 (2024) (citing Logan Healthcare Leasing, DAB No. 3036 at 3 (2021)).  The absence of a genuine issue of material fact may be demonstrated by presenting specific evidence on a particular issue or by pointing out "an absence of evidence to support the non-moving party's case."  Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986)).  "To defeat an adequately supported summary judgment motion, the nonmoving party may not rely on the denials in its pleadings or briefs but must furnish evidence of a dispute concerning a material fact – a fact that, if proven, would affect the outcome of the case under governing law."  Id. at 3-4 (citing Senior Rehab & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010), aff'd, 405 F. App's 820 (5th Cir. 2010)); see also APHO 15 ("A party opposing a motion for summary decision must come forward with evidence of specific facts showing that a dispute exists.  It is never sufficient for a party opposing a motion to aver only that it ‘disputes' alleged facts or that it demands an in-person hearing.").

Further, in examining the evidence for purposes of deciding whether summary decision is appropriate, I must draw all inferences in the light that is most favorable to the party that opposes the motion.  U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962).  An appellate panel of the Departmental Appeals Board (the Board) clarified:

Drawing factual inferences in the light most favorable to the non-moving party does not, however, require that a reviewer draw unreasonable inferences or accept the non-moving party's legal conclusions . . . Inferences based on speculation are not reasonable.

Morris View at 4 (internal citations omitted).

B.  Liability

In the case before me, the material facts are undisputed.  In its Answer, with the exception of paragraphs 12, 13, 14, and 23 of the Complaint,5 Respondent neither affirms nor denies the violations alleged.  See Answer ¶¶ 15-21.  The regulations at 21

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C.F.R.17.9(b)(1) provide that a respondent, in its answer, "[s]hall admit or deny each of the allegations of liability made in the complaint; allegations not specifically denied in the answer are deemed admitted."  See also Sinjil, Inc. d/b/a Sunoco, DAB No. 2920, n.8. (2019) ("Respondent answered that it was ‘unable to confirm or deny' the allegations of liability due to the alleged lack of proper notice, but, as the ALJ properly concluded, ‘allegations [of liability] not specifically denied in the answer are deemed admitted.'").  Additionally, Respondent's Objection to Complainant's Motion for Summary Decision confirms that the material facts are undisputed.  In its Objection, Respondent states "[w]hile true that respondent only denied ¶ 12 and ¶ 14 of the Complaint . . . ."; therefore, Respondent's failure to deny the allegations at paragraphs 15-21 of the Complaint amounts to admissions of those allegations.

With regard to the remaining allegations in which Respondent denied the violations, paragraph 12 of the Complaint states:

Retailers who violate a requirement of the Act which relates to tobacco products shall be liable for a civil money penalty up to $20,678 for each such violation, not to exceed $1,378,541 for all violations adjudicated in a single proceeding.  21 US.C. § 333(f)(9)(A); 21 C.F.R. § 17.2.

CRD Dkt. Entry No. 1 ¶ 12.  Respondent's response is a denial of CTP's statement of legal authority and declares its "good faith belief that Complainant has misstated the penalties set forth in 21 U.S.C. § 333(F)(9)(A)[sic]."  CRD Dkt. Entry No. 4 at 2 ¶ 12.  The Board has held that "[t]he determination of whether a CMP amount is reasonable is a conclusion of law, not a finding of fact."  Rehab at River's Edge, DAB No. 3163 at 10 (2024).  Therefore, Respondent's denial of paragraph 12 of the Complaint does not create a dispute of material fact.

Paragraph 14 alleges:

Respondent's establishment receives tobacco products in interstate commerce, including an Esco Bars Mango Guava Ice ENDS product (hereinafter "Respondent's ENDS product"), and delivers or proffers delivery of such tobacco product for pay or otherwise.

CRD Dkt. Entry No. 1 ¶ 14.  As noted above, Respondent responds: "The averment states a conclusion to which Respondent leaves Complainant to its proof."  CRD Dkt. Entry 4 ¶ 14.  My inference of Respondent's statement is that there is no agreement with CTP's "conclusion," but the ball is being thrown in CTP's court to prove that Respondent received the tobacco products at issue in interstate commerce and delivers or proffers delivery for pay or otherwise.  However, 21 U.S.C. § 379a states that "[i]n any action to enforce the requirements of this chapter respecting a device, tobacco product, food, drug, or cosmetic the connection with interstate commerce required for jurisdiction in such

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action shall be presumed to exist."  Other than a denial of paragraph 14 in its Answer and its Opposition to the Motion for Summary Decision, Respondent has not provided any evidence to rebut CTP's argument and the presumption that Respondent received the tobacco products, referenced in paragraph 14 of the Complaint, in interstate commerce.

According to the February 27, 2025 APHO, Respondent had until June 10, 2024 to file a pre-hearing exchange.  APHO ¶ 6b.  The APHO provides that a pre-hearing exchange includes:

• A pre-hearing brief;
• A list of all proposed exhibits;
• A copy of each proposed exhibit;
• A list of all proposed witnesses, if any, and a brief summary of the proposed testimony;
• The complete written direct testimony of any proposed witness;
• A copy of any prior written statement by any proposed witness even if the party does not intend to offer that statement as an exhibit; and
• Any mitigating or aggravating evidence the parties would like the ALJ to consider.

APHO ¶ 6c.

In this case, as CTP repeatedly noted, Respondent did not submit a pre-hearing exchange by the June 10, 2024 deadline.  Throughout these proceedings, Respondent has asserted many arguments and objections.  However, Respondent has submitted no evidence to support its denials.  Even viewing the evidence in the light that is most favorable to Respondent, I am unable to find in Respondent's favor that there exists a material fact in dispute.  Respondent's denial of paragraph 12 of the Complaint is not a material fact as it is a conclusion of law.  Respondent's denial of paragraph 14 has not been supported with evidence to rebut the presumption of interstate commerce.  Respondent did not submit invoices or other records to support its denial.

Respondent's Objection to Complainant's Motion for Summary Decision does little to rebut CTP's argument that there are no material facts in dispute.  See CRD Dkt. Entry No. 29.  The letter attached to the Opposition seems to raise a constitutional argument about a language issue with Respondent's owner or manager.  Even if I were to accept the argument, Respondent did not submit any evidence showing that it requested language access from CTP or the DAB following the August 19, 2023 inspection.  The letter actually supports CTP's allegation that on August 19, 2023 an inspector observed an Esco Bars Mango Guava Ice ENDS product.  See id. at 7.  Additionally, Respondent has never argued that the inspector did not observe the product at its establishment.  In fact, in its Opposition, Respondent did not deny the allegation in paragraph 15, which is the crux of CTP's Complaint.  Respondent has not proffered any evidence to rebut CTP's

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argument that there is no dispute regarding a material fact.  As discussed above, mere denials without more are insufficient to show a genuine issue of material fact.

Having found that there are no material facts in dispute, I accept the Complaint's allegations.  I find Respondent received an adulterated and misbranded ENDS product in interstate commerce and delivered or offered such product for sale in violation of 21 U.S.C. § 331(c) and 21 U.S.C. § 387b(6)(A).  The following allegations in the Complaint support the motion for summary decision:

• Respondent owns 108 Express Mini-Mart, an establishment that sells tobacco products and is located at 21 South Main Street, Newton, New Hampshire 03858.  CTP's Memo at 2; Complaint ¶ 13.
• Respondent's establishment received tobacco products in interstate commerce, including an Esco Bars Mango Guava Ice electronic nicotine delivery system (ENDS) product, and delivered or proffered delivery of such tobacco product for pay or otherwise.  Complaint ¶ 14.
• On June 8, 2023, although there is no statutory requirement for FDA to do so, CTP issued a Warning Letter to Respondent, stating that, among other things, the new tobacco products that Respondent sells and/or distributes are adulterated and misbranded because they lack the required FDA marketing authorization.  Complaint ¶ 20.
• The Warning Letter stated that failure to correct any violations of the Act may result in a civil money penalty action or other regulatory action by FDA. The Warning Letter also stated that it was the responsibility of 108 Express Mini-Mart to ensure compliance with the law and that the letter was not intended as an exhaustive list of violations.  Complaint ¶ 21.
• On August 19, 2023, an FDA-commissioned inspector conducted an inspection of Respondent's establishment, during which the inspector observed an Esco Bars Mango Guava Ice ENDS product for sale at Respondent's establishment.  Complaint ¶ 15.
• Respondent's ENDS product is a "new tobacco product" because it was not commercially marketed in the United States as of February 15, 2007.  Complaint ¶ 16.
• Respondent's ENDS product does not have a Marketing Granted Order in effect under 21 U.S.C. § 387j(c)(1)(A)(i) and it is, therefore, adulterated under 21 U.S.C. § 387b(6)(A).  Complaint ¶ 17.

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• Neither an SE report nor an abbreviated report has been submitted for Respondent's ENDS product, and it is, therefore, misbranded under 21 U.S.C. § 387c(a)(6).  Complaint ¶ 18.
• Respondent received the adulterated and misbranded ENDS product in interstate commerce and delivered or proffered delivery thereof for pay or otherwise, in violation of 21 U.S.C. § 331(c).  Complaint ¶ 19.

The evidence in the record, including the testimony of the inspector, the contemporaneous Narrative Report and TIMS Report from the August 19, 2023 inspection, the photographs of the ENDS product, and the Warning Letter, supports granting CTP's Motion for a Summary Decision on the issue of liability.

C. Civil Money Penalty

I have found no genuine dispute of material facts on the issue of liability and determined Respondent violated the prohibition against receiving and offering for sale a new tobacco product that was adulterated and misbranded.  21 U.S.C. § 331(c) and 21 U.S.C. § 387b(6)(A).  The remaining issue in this case is whether the civil money penalty sought by CTP is appropriate, considering any aggravating and mitigating factors.  The Board has held that "[t]he determination of whether a CMP amount is reasonable is a conclusion of law, not a finding of fact."  Rehab at River's Edge, DAB No. 3163 at 9 (2024) (citing Cedar Lake Nursing Home, DAB No. 2344 at 12 (2010); accord Southpark Meadows Nursing & Rehab. Ctr., DAB No. 2703 at 13, n.6 (2016)).

Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a CMP not to exceed the amounts listed in FDA's CMP regulations at 21 C.F.R. § 17.2; see also 45 C.F.R. § 102.3.  When determining the appropriate amount of a CMP, I am required to consider any "circumstances that mitigate or aggravate the violation" and "the factors identified in the statute under which the penalty is assessed . . . ."  21 C.F.R. § 17.34(a), (b).  Specifically, I must consider "the nature, circumstances, extent and gravity of the violations and, with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require."  21 U.S.C. § 333(f)(5)(B).  Respondent must prove any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).

Here, CTP is proposing a CMP in the amount of $20,678, which is the maximum penalty permitted by the regulations.  CRD Dkt. Entry No. 1, ¶ 1; 21 C.F.R. § 17.33(a); 45 C.F.R. § 102.3 (2022); 87 Fed. Reg. 15,100, 15,103 (March 17, 2022).  CTP contends the maximum penalty is appropriate because Respondent received "an adulterated and misbranded tobacco product in interstate commerce and deliver[ed] or proffer[ed] delivery of that product for pay or otherwise."  CRD Dkt. Entry No. 17 at 8.

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In its Answer, Respondent argues that the alleged violation "was merely a Minor Violation pursuant to 21 C.F.R. 17.3(a)(3) and no more."  CRD Dkt Entry No. 4 at 4.  Respondent also contends the maximum penalty is inappropriate and imposition should be declined as excessive.  CRD Dkt. Entry Nos. 4 at 3; 29 at 2-3.

For the reasons discussed below, after considering aggravating and mitigating factors and the underlying facts and circumstances in this case, I conclude that a CMP of $20,678 is appropriate.  21 C.F.R. §§ 17.33(a), (c); 17.34(a)-(c).

1. Nature, Circumstances, Extent and Gravity of the Violations

The Family Smoking Prevention and Tobacco Control Act was enacted for the purpose of authorizing regulation of tobacco products for the "protection of the public health."  21 U.S.C. § 387f(d).  There is no dispute that Respondent was in the business of selling a highly regulated and dangerous product.  See generally 21 U.S.C. § 387 note (Findings and Purpose).

CTP argues Respondent's violation is particularly serious because CTP previously issued a Warning Letter to Respondent on June 8, 2023 for offering for sale ENDS products that lacked the required marketing authorization.  CRD Dkt. Entry No. 17 at 8-9; see also CTP Ex. 7.  The Warning Letter notified Respondent that during an inspection on May 22, 2023, an FDA inspector observed Respondent offering for sale ENDS products lacking premarket authorization.  CTP Ex. 7 at 1.  Specifically, the letter stated Respondent offered for sale "Elfbar Rainbow Cloudz and Esco Bars Bubblegum Ice ENDS products."  Id.  The letter explained the sale of such products was prohibited and warned Respondent to take action to correct the violation.  Id. at 1-3.

In its pre-hearing brief, CTP notes that the Warning Letter specifically advised Respondent that future violations could result in enforcement action, "including, but not limited to, civil money penalties, seizure, and/or injunction by FDA."  CRD Dkt. Entry No. 17 at 9.  CTP also notes the letter stated that "all new tobacco products on the market without the statutorily required premarket authorization are marketed unlawfully and are subject to enforcement action at FDA's discretion."  Id.  CTP contends that by continuing to sell prohibited ENDS products after receiving the letter, Respondent has demonstrated an "unwillingness or inability to correct the violations."  Id.

Respondent, while not affirmatively admitting to receipt of the Warning Letter, provided a letter dated June 22, 2023 as part of its production during the discovery process that appears to be responsive to the June 8, 2023 Warning Letter.  See CRD Dkt. Entry No. 14a at 2.  Also in its discovery production, Respondent disclosed an undated letter from Respondent addressed "to whom it may concern."  Id. at 3.  The undated letter, in part, notes that on the date of the first inspection, there may have been a language barrier between the employee on site at the time and the inspector.  Id.  In its opposition to

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summary decision, Respondent asserts "Respondent in its answer, stated that Enforcement violated Title VI prohibition on the basis of race, color, or national origin including but not limited to inspector's communication with Respondent's agents, servants, or employee's at the premises."  CRD Dkt. Entry No. 29 at 3.

I am not persuaded by Respondent's explanation regarding the Warning Letter.  Respondent is ultimately responsible for any duties or obligations delegated to its agents or employees and cannot shift the blame for disregarding CTP's prior warning to its employee.  CTP's Warning Letter referred Respondent to an FDA website, https://www.fda.gov/TobaccoProducts, which included information to help retailers understand and comply with FDA tobacco laws and regulations.  CRD Dkt. Entry No. 17 at 9.  I am also not persuaded by Respondent's argument that the violation is "merely a Minor Violation pursuant to 21 C.F.R. 17.3(a)(3) and no more."  21 C.F.R. § 17.3 states "minor violations, for the purposes of interpreting 21 U.S.C. 333(f)(1)(B)(ii), means departures from requirements that do not rise to a level of a single major incident or a series of incidents that are collectively consequential."  21 C.F.R. § 17.3(a)(3).  Respondent appears to mistakenly apply "Minor violations," which applies to 21 U.S.C. § 333(f)(1) to "Civil Money Penalties for Violation of Tobacco Product Requirements," which are governed by 21 U.S.C. § 333(f)(9).

After reviewing the parties' submissions, I find that CTP has shown Respondent continued marketing and selling unauthorized ENDs products in violation of the Act, even after being previously warned about similar conduct and the potential consequences.  Based on this finding, I conclude that CTP has demonstrated aggravating circumstances which support the imposition of a substantial CMP in this case.

2. Ability to Pay and Effect on Ability to Continue to Do Business

Respondent states that the $20,678 CMP sought by CTP should be denied as excessive and lists a number of purported defenses in support of its argument.  CRD Dkt. Entry No. 4 at 3.  With regard to imposition of a CMP, Respondent's defenses include, in part:

• At all times, Respondent acted in good faith;

*  *  *  *  *  *

• In the event the Board finds that Respondent is responsible, mitigation factors exist to reduce or eliminate any penalty.

Id. at 3-4.

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However, Respondent failed to file any evidence to support these claims.6  I am limited to the evidence in the administrative record.  Without evidence demonstrating the financial state of Respondent's business, such as tax returns, bank statements, profit and loss statements, or other financial records, I am unable to make any findings concerning Respondent's ability to pay the proposed CMP or the potential impact of the penalty on Respondent's ability to continue doing business.  Therefore, I find that Respondent has failed to establish mitigating circumstances with respect to its ability to pay or continue doing business.

3. History of Prior Violations

In its pre-hearing brief, CTP argues that Respondent "has a history of violating the Act's requirements" based on the previously discussed June 8, 2023 Warning Letter.  CRD Dkt. Entry No. 17 at 10.  CTP contends the maximum penalty of $20,678 is appropriate in this case because Respondent's history demonstrates an "unwillingness or inability" to comply with the law.  Id.

As discussed above, I have already found that the Warning Letter constitutes an aggravating factor.  An additional aggravating factor is in the form of Respondent's June 22, 2023 letter.  CRD Dkt. Entry No. 14a at 2.  In Respondent's letter, which notes Reference Number "23NH045623A-B,"7  Respondent states:

In response to this letter, we recognize that we were in violation of the Federal Food, Drug, and Cosmetic Act . . . regarding the sale and/or distribution of ENDS products.  We have decided to discontinue the sale and distribution of the following products:  Elfbar Rainbow Cloudz and Esco Bars Bubblegum Ice.

Id.

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In sum, while I acknowledge this is Respondent's first violation resulting in a CMP, I consider Respondent's June 22, 2023 admission significant enough of an aggravating factor to not support a reduction of the proposed CMP.

4. Degree of Culpability

Based on my finding that Respondent committed the violation alleged in the Complaint, I find Respondent fully culpable for offering for sale a new tobacco product that was adulterated and misbranded, in violation of the Act.  The Act places a heavy burden on retailers who choose to sell prohibited tobacco products because of their highly dangerous and addictive nature.  See 21 U.S.C. § 387 note (Findings and Purpose).  Although Respondent's counsel represents that, at all times, Respondent acted in "good faith" (see CRD Dkt Entry No. 4 at 3), that good faith does not absolve Respondent of its responsibility as a retailer of tobacco products.

5. Other Matters as Justice May Require

The Act gives me discretion to consider any other evidence or arguments to mitigate the amount of the CMP. 21 U.S.C. § 333(f)(5)(B).  The purpose of a CMP is to ensure retailers comply with the Act and its implementing regulations with the overarching goal of protecting the health of the American people.  However, the tobacco regulations are not intended to unjustly and disproportionately penalize manufacturers and retailers who made an earnest attempt to comply with law.  When a party earnestly attempts to comply with the law or correct its wrongdoing, imposing the maximum CMP for a single violation is unnecessarily punitive and does not encourage compliance or accountability.

Based on the record evidence, the applicable law, and the aggravating and mitigating factors outlined in this decision, I conclude that a penalty amount of $20,678 is appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

IV.  Conclusion

For the reasons discussed above, I DENY Respondent's Motion to Exclude Evidence in its entirety.  Further, CTP's Motion for Summary Decision is hereby GRANTED as to liability, and I find that the $20,678 penalty amount sought by CTP is appropriate.

IT IS SO ORDERED.