Roshan, Inc. d/b/a One Stop, DAB TB9450 (2025)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a civil money penalty (CMP) against Roshan, Inc. d/b/a One Stop (Respondent) for 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. pt. 1140.  Specifically, CTP alleges that Respondent impermissibly sold regulated tobacco products to underage purchasers and failed to verify that a purchaser was 21 years of age or older.  CTP seeks a $345 CMP against Respondent for two violations of the Act within a 12-month period.

For the reasons discussed below, I find Respondent violated the Act as alleged by CTP and that a reduced CMP in the amount of $300 is appropriate.

I.     Background and Procedural History

CTP began this matter by serving an Administrative Complaint (Complaint) on Respondent at 780 Walker Road, Dover, Delaware 19904 by United Parcel Service, and

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by filing a copy of the Complaint with the FDA’s Division of Dockets Management.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Number (Nos.) 1 (Complaint), 1b (Proof of Service).

On May 16, 2024, Respondent timely filed its Answer and an mp4 video file that Respondent purports to be surveillance video of the alleged sale of a tobacco product to an underage purchaser on February 15, 2024.  CRD Dkt. Entry Nos. 3 (Answer), 3a (Respondent’s Video).  In its Answer, Respondent denies the allegations in the Complaint and asserts multiple defenses.1  CRD Dkt. Entry No. 3.  Specifically, Respondent states that “[o]n February 15th, 2024, the store employee [] followed the necessary procedure of underage verification for selling tobacco products by scanning the [purchaser’s identification] presented at the [point of sale] [(]POS[)] system.”  Id. at 3.  Respondent further states that “the POS system will not approve the sale of any electronic cigarettes without valid [i]dentification, regardless of the age[,]” and that “the employees have been fully trained to prevent sale of tobacco products to minors under the age of 21.”  Id.  In its Answer, Respondent also requests that the case be dismissed and the CMP be waived.  Id.

On May 21, 2024, I issued an Acknowledgment and Pre-Hearing Order establishing procedural deadlines for this case.  CRD Dkt. Entry No. 4 (APHO).

On May 24, 2024, Respondent prematurely filed its pre-hearing exchange, consisting of: a pre-hearing brief; the written direct testimony of Mr. Vijay Fernandes, the owner of Respondent’s establishment; a screenshot image of the alleged underage tobacco product transaction occurring on February 15, 2024; a copy of Respondent’s Video file; and an undated letter reiterating the arguments set forth in Respondent’s May 16, 2024 Answer, signed by Mr. Fernandes.2  CRD Dkt. Entry Nos. 5 at 14-15, 5b-5d, 6.  As noted in footnote 1 below, in its pre-hearing brief, Respondent admits the August 1, 2023 allegations of selling a tobacco product to a person younger than 21 years of age and failure to verify the age of a person purchasing a tobacco product.  See CRD Dkt. Entry No. 5b at 4, 6 (Respondent’s pre-hearing brief).  However, Respondent reiterates its denial of the February 15, 2024 allegation of selling a tobacco product to a person

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younger than 21 years of age.  See id. at 4.  In its pre-hearing brief, Respondent also checked the box indicating that, if found liable, Respondent agrees that the $345 proposed CMP is appropriate.  See id. at 7.

On May 31, 2024, CTP filed an Unopposed Motion to Seal Respondent’s Video docketed at entries 3a and 5d.  CRD Dkt. Entry No. 8 (Unopposed Motion to Seal).  In its motion, CTP asserted that the video shows “a young female purchasing a tobacco product[,]” and that the video should “be withheld from public disclosure because it contains sensitive information, and to protect the identity of the individual purchasing a tobacco product.”  Id.  On June 20, 2024, I granted CTP’s Unopposed Motion to Seal.  CRD Dkt. Entry No. 9.

On June 21, 2024, CTP filed a Joint Status Report stating that the parties were unable to reach a settlement and intended to proceed to a hearing.  CRD Dkt. Entry No. 10 (Joint Status Report).

On August 12, 2024, CTP timely filed its pre-hearing exchange, consisting of: a pre-hearing brief; a list of proposed witnesses and exhibits; and nineteen proposed exhibits (CTP Exhibits (Exs.) 1-19).  CRD Dkt. Entry Nos. 11, 11a-11t.  With its pre-hearing exchange, CTP proposed the direct written testimony of two witnesses: James Bowling, the Deputy Division Director for the Division of Enforcement and Manufacturing, Office of Compliance and Enforcement, CTP, FDA (CTP Ex. 3); and Andrew Peruchi, an FDA-commissioned Inspector (CTP Ex. 4).  CRD Dkt. Entry Nos. 11d, 11e.

On October 8, 2024, I conducted a pre-hearing conference (PHC) in this case.  CRD Dkt. Entry No. 13 (Order Following PHC).  During the PHC, we discussed the allegations in the Complaint, the CMP requested by CTP, Respondent’s Answer, the issues to be decided in this case, the burdens of proof, the purpose of conducting a hearing, the procedural history, the administrative record, and the parties’ pre-hearing exchanges and proposed witnesses.  Id. at 1-2.  During the PHC, neither party objected to the opposing party’s proposed exhibits.  Thus, I admitted CTP Exs. 1-19 and Respondent’s exhibits at docket entries 5a-5d, and 6 (R. Exs. 1-5).3  During the PHC, Mr. Fernandes stated that he wished to cross-examine CTP’s witness Inspector Andrew Peruchi.  See CRD Dkt. Entry No. 13 at 2.  Thus, I scheduled the hearing in this case for November 20, 2024.  Id.  During the PHC, I also I reminded the parties that any cross-examination and re-direct examination at the hearing must be relevant to the case and questions would be limited to the information in the sworn declaration.  Id.

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On November 20, 2024, I conducted a hearing for the purpose of allowing Respondent to cross-examine CTP’s witness Inspector Andrew Peruchi.  See CRD Dkt. Entry No. 18 (Transcript (Tr.)).  During the hearing, I also received into evidence CTP’s Exs. 1-19 and R. Exs. 1-5.  Tr. at 8.

On February 25, 2025, I issued an Order establishing a deadline for the parties to submit corrections to the Hearing transcript and an April 17, 2025 deadline for the parties to submit post-hearing briefs.  CRD Dkt. Entry No. 17 (Post-Hearing Order).

On April 4, 2024, CTP filed a Motion to Extend Deadlines, and on April 9, 2025, I issued an Order extending the deadline for the parties to submit their post-hearing briefs to May 19, 2025.  CRD Dkt. Entry Nos. 19, 20.

On May 16, 2025, Respondent filed its post-hearing brief.  CRD Dkt. Entry No. 21 (Respondent’s post-hearing brief).  On May 19, 2025, CTP also filed its post-hearing brief and two exhibits.  CRD Dkt. Entry Nos. 22 (CTP’s post-hearing brief), 22a-22b.

I will consider the full administrative record in deciding this case.  The administrative record contains the exhibits and other evidence admitted as well as all documents and requests filed in this proceeding.  21 C.F.R. § 17.41(b).

II.     The Declaration of Mr. Vijay Fernandes and His Statements of Direct Testimony Made at the Hearing

1. The Declaration of Mr. Vijay Fernandes (CRD Dkt. Entry No. 5 at 14-15)

During the PHC, the Declaration of Mr. Vijay Fernandes was not specifically addressed.  See generally CRD Dkt. Entry No. 13.  However, given that the written direct testimony of Mr. Vijay Fernandes was submitted with Respondent’s pre-hearing exchange on May 24, 2024 and is in the administrative record, although inconspicuously, I will determine its administrability.  See CRD Dkt. Entry No. 5 at 14-15; 21 C.F.R. § 17.19(b)(11).  Under 21 C.F.R. Part 17, Administrative Law Judges (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.

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(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.

Although Respondent, who is unrepresented by counsel, should have filed the Declaration of Mr. Vijay Fernandes as a separate exhibit in the record, so that it is clearly identified as such, I find that Mr. Vijay Fernandes’ Declaration is admissible, given that it is sworn under penalty of perjury, as well as relevant and material to the issues of Respondent’s liability and the appropriateness of the CMP proposed by CTP.  21 C.F.R. § 17.39(a), (c).  In addition, I also find that the probative value of Mr. Vijay Fernandes’ Declaration is not substantially outweighed by the danger of unfair prejudice to CTP.  21 C.F.R. § 17.39(d).  Thus, I ADMIT the Declaration of Mr. Vijay Fernandes into the administrative record as R. Ex. 6.  21 C.F.R. § 17.19(b)(11).

2. Mr. Vijay Fernandes’ Statements of Direct Testimony Made at the Hearing (Tr. at 13; 7-14, 17; 9-14)

During the November 20, 2024 hearing, while cross-examining Inspector Andrew Peruchi and toward the conclusion of the Hearing, Mr. Fernandes made statements of direct testimony.  See Tr. at 13; 7-14, 17; 9-14.  Regarding Mr. Fernandes’ statement located at page 13, lines 7-14 of the hearing transcript, counsel for CTP raised an objection stating that “there wasn’t a question at the end to ask the inspector.”  Tr. at 13; 15-16.  At the Hearing, I sustained CTP’s objection.  Tr. at 13; 17.  In its post-hearing brief, CTP requests that I exclude the statements made by Mr. Fernandes at the Hearing, arguing:

In support of the “proposed findings of fact,” “affirmative defenses,” and “mitigating factors” raised in Respondent’s Post-Hearing Brief, Respondent relies almost exclusively on statements made by its owner, Mr. Vijay Fernandes, during the November 20, 2024, hearing. Id.  The ALJ should exclude these statements as testimonial evidence, because Respondent failed to list Mr. Fernandes as a witness in its pre-hearing exchange and has failed to demonstrate that extraordinary circumstances justify such failure. 21 C.F.R. § 17.25(a)-(b).

CRD Dkt. Entry No. 22 at 1.

CTP also asserts that “Respondent failed to exchange a list of proposed witnesses, or any written witness testimony as required by 21 C.F.R § 17.25(a) and paragraph 4(c) of the APHO . . . .”  Id. at 3.

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The regulation at 21 C.F.R. § 17.25(a) provides, “[a]t least 30 days before the hearing, or by such other time as is specified by the presiding officer, the parties shall exchange witness lists, copies of prior written statements of proposed witnesses, and copies of proposed hearing exhibits, including written testimony.”  In addition, the regulation at 21 C.F.R. § 17.37(b) provides, “[d]irect testimony shall be admitted in the form of a written declaration submitted under penalty of perjury.  Any such written declaration must be provided to all other parties along with the last known address of the witness.  Any prior written statements of witnesses proposed to testify at the hearing shall be exchanged as provided in § 17.25(a).”

On May 24, 2024, although inconspicuously filed in the record, Respondent submitted the sworn, written direct testimony of Mr. Fernandes.  See CRD Dkt. Entry No. 5 at 14.  Thus, I disagree with CTP’s assertion that Respondent failed to exchange “any written witness testimony.”  CRD Dkt. Entry No. 22 at 3.  However, given that I find Mr. Fernandes’ statements at the Hearing, which were outside the scope of his cross-examination questions for Inspector Andrew Peruchi, were direct testimony and not made under oath, those statements should be excluded because they were not “in the form of a written declaration submitted under penalty of perjury.”  21 C.F.R. § 17.37(b).  Thus, Respondent’s direct testimony located at page 13, lines 7-14, and page 17, lines 9-14 of the Hearing transcript are hereby EXCLUDED from the administrative record.  21 C.F.R. §§ 17.19(b)(11), 17.37(b); see also Tr. at 13; 7-14, 17; 9-14.

III.     Issues

1. Whether Respondent sold regulated tobacco products to underage purchasers on August 1, 2023 and February 15, 2024, in violation of section 905(d)(5) of the Act, and failed to verify, by means of photographic identification, that a regulated tobacco product purchaser was 21 years of age or older on August 1, 2023, in violation of 21 C.F.R. § 1140.14(b)(2)(i), as charged in the Complaint; and, if so,
2. Whether the $345 CMP proposed by CTP is appropriate, considering any mitigating or aggravating factors I find in this case.  21 C.F.R. §17.45(b).

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IV.     Findings of Fact and Conclusions of Law

1. CTP has demonstrated by a preponderance of the evidence that Respondent sold regulated tobacco products to underage purchasers on August 1, 2023 and February 15, 2024, in violation of section 905(d)(5) of the Act, and failed to verify, by means of photographic identification, that a regulated tobacco product purchaser was 21 years of age or older on August 1, 2023, in violation of 21 C.F.R. § 1140.14(b)(2)(i).

To prevail, CTP must prove Respondent’s liability by a preponderance of the evidence.  The U.S. Supreme Court has described the preponderance of the evidence standard as requiring that the trier-of-fact believe that the existence of a fact is more probable than not before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  In re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe and Prods. of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993).

CTP has the burden to prove Respondent’s liability and appropriateness of the penalty by a preponderance of the evidence.  21 C.F.R. § 17.33(b).  Respondent has the burden to prove any affirmative defenses and any mitigating factors likewise by a preponderance of the evidence.  21 C.F.R. § 17.33(c).

1.       Violations

CTP seeks to impose a civil money penalty against Respondent pursuant to the authority conferred by the Act and implementing regulations at Part 21 of the Code of Federal Regulations.  The Act prohibits misbranding of a 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. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016); 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.  Act § 906(d)(5); 21 C.F.R. § 1140.14(b)(2)(i).  FDA and its agency, CTP, may seek civil money penalties from any person who violates the Act’s requirements as they relate to the sale of tobacco products.  21 U.S.C. § 333(f)(9).

1.     Respondent’s Admissions

In its pre-hearing brief, Respondent concedes that on August 1, 2023 it sold a regulated tobacco product to an underage purchaser and failed to verify, by means of photographic

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identification, that the regulated tobacco product purchaser was 21 years of age or older, in violation of section 905(d)(5) of the Act and 21 C.F.R. § 1140.14(b)(2)(i), as charged in the Complaint.  See CRD Dkt. Entry No. 5b at 4, 6.  Thus, I conclude that the violations CTP alleges Respondent committed on August 1, 2023 occurred, and Respondent is liable.

2.     February 15, 2024 Allegation

CTP’s Complaint also alleges that at approximately 4:15 PM on February 15, 2024, at Respondent’s business establishment, located at 780 Walker Road, Dover, Delaware 19904, Respondent sold a JUUL Menthol e-liquid product to a person younger than 21 years of age.  See CRD Dkt. Entry No. 1 ¶ 13.

CTP’s case against Respondent relies on the testimony of Deputy Division Director Bowling and Inspector Peruchi, who conducted the February 15, 2024 inspection, and is supported by CTP’s corroborating evidence including: Inspector Peruchi’s narrative report; a TIMS Assignment Form; and photographs.  CRD Dkt. Entry Nos. 11d, 11e, 11h-11j, 11o-11r, 11t.  Mr. Bowling is the Deputy Division Director for the Division of Enforcement and Manufacturing in the Office of Compliance and Enforcement, CTP, FDA.  CRD Dkt. Entry No. 11d (Deputy Division Director Bowling’s Declaration).  Deputy Division Director Bowling testified that the JUUL Menthol e-liquid product purchased at Respondent’s establishment on February 15, 2024 was manufactured, prepared, compounded, or processed for commercial distribution at JUUL Labs, Inc.’s facilities in Wisconsin and/or North Carolina.  CRD Dkt. Entry No. 11d ¶ 10.  Deputy Division Director Bowling further testified that JUUL Labs, Inc. does not have any registered tobacco production facility in the state of Delaware.  Id. ¶ 11.

Inspector Peruchi is an FDA-commissioned Inspector commissioned to conduct undercover buy (UB) inspections with an underage purchaser (UP) in the state of Delaware, to determine whether a retailer complies with the age and photo identification requirements when selling tobacco products.  CRD Dkt. Entry No. 11e at ¶¶ 2-6 (Inspector Peruchi’s Declaration).  Inspector Peruchi testified that he conducted a follow-up inspection of Respondent’s establishment on February 15, 2024, at approximately 4:15 PM, accompanied by UP A.  Id. ¶ 12.  During the inspection, he observed UP A purchase an e-liquid product from Respondent.  Id. ¶ 13.

Inspector Peruchi testified that, prior to the inspection at issue, he verified that UP A carried photographic identification that included UP A’s true age.  Id. ¶ 12.  Inspector Peruchi also verified that UP A did not have any tobacco products in their possession.  Id.  Inspector Peruchi testified that, during the inspection, he parked his car near One Stop (Respondent’s establishment) and Inspector Peruchi and UP A exited the vehicle.  Id. ¶ 13.  Inspector Peruchi testified that moments after watching UP A enter the establishment, he entered the establishment and positioned himself in a location that had

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a clear, unobstructed view of the sales counter and UP A.  Id.  The inspector testified that he observed UP A purchase an e-liquid product directly from an employee at the establishment.  Id.  Inspector Peruchi testified that the employee did not provide UP A with a receipt after the purchase.  Id.

Inspector Peruchi testified that, after UP A completed its purchase, UP A and Inspector Peruchi returned to the vehicle, where UP A immediately handed Inspector Peruchi the e-liquid product.  Id. ¶ 14.  Inspector Peruchi testified that he observed that the product was a JUUL Menthol e-liquid product.  Id.  Inspector Peruchi labeled the JUUL Menthol e-liquid product as evidence and photographed all of the panels of the package.  Id.  Inspector Peruchi then processed the evidence in accordance with standard procedures at the time of the inspection, which entailed completing the TIMS Form and creating a Narrative Report.  Id. ¶¶ 14-16.

UP A’s redacted identification and Inspector Peruchi’s contemporaneous photographs and reports were admitted into evidence and corroborate Inspector Peruchi’s testimony.  CRD Dkt. Entry Nos. 11e, 11h-11j, 11o-11r, 11t.

Respondent does not challenge Deputy Division Director Bowling’s testimony that the JUUL Menthol e-liquid product was manufactured in Wisconsin and/or North Carolina, and traveled in interstate commerce prior to the alleged sale on February 15, 2024.  Thus, I find that the JUUL Menthol e-liquid product that CTP alleges Respondent sold to an underage purchaser on February 15, 2024 traveled in interstate commerce.

Throughout these proceedings, Respondent has consistently denied the allegation of selling a regulated tobacco product to an underage purchaser on February 15, 2024.  Specifically, in its Answer, Respondent argues:

On February 15th, 2024, the store employee has followed the necessary procedure of underage verification for selling tobacco products by scanning the [purchaser’s identification] presented at the POS system.

Moreover, at this location the POS system will not approve the sale of any electronic cigarettes without valid Identification, regardless of the age.

Further, all the employees have been fully trained to prevent sale of tobacco products to minors under the age of 21.

CRD Dkt. Entry No. 3 at 3 (Respondent’s Answer).

With its Answer, Respondent submitted an mp4 video file showing what Respondent asserts is the February 15, 2024 tobacco product transaction involving CTP’s UP.  Id.; CRD Dkt. Entry No. 3a (Respondent’s Video).  In the video, the UP presents

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identification bearing a photograph to the cashier conducting the sale.  The cashier scans the identification presented by the UP and then proceeds to complete the transaction without providing the UP with a receipt for the sale.  See id.  With its pre-hearing exchange, Respondent also submitted a screenshot photograph showing the transaction.  CRD Dkt. Entry No. 5c (Transaction Screenshot).  The photograph shows the UP standing in front of the store counter while the cashier faces the register’s monitor, holding the UP’s identification.  See id.

Respondent challenges the testimony of Inspector Peruchi, and argues that the “store video surveillance confirms that the cashier scanned the purchaser’s [identification] prior to completing the transaction,” that “[t]he point-of-sale system is programmed to block any E-Cig and E-Liquid sale unless the scanned [identification] confirms the purchaser is 21 or older,” and that cross-examination at the Hearing revealed that “[Inspector] Peruchi did not personally observe the [identification] scan nor could he confirm the identity of the [identification] that was scanned.”  CRD Dkt. Entry No. 21 at 2, ¶¶ 2-4 (Respondent’s post-hearing brief).

On cross-examination at the Hearing, Mr. Fernandes asked Inspector Peruchi to explain how it can be determined that the photographic identification of UP A that was submitted by CTP as CTP Ex. 9 “is the same” photographic identification that was scanned by Respondent’s cashier during the February 15, 2024 inspection.  Tr. at 12: 10-12.  In response to Mr. Fernandes’ question, Inspector Peruchi explained:

Before I go into the store I verify, first of all, that they have a true [identification], identifying their actual date of birth in this case, and I also confirm that they’re under the age of 21 before entering the store.  And in addition to that, we verify that they have no tobacco products in their possession.  So I can verify that the undercover minor was indeed under the age of 21 just by the steps that I take before performing the inspection.

Tr. at 12: 22-25, 13: 1-4.

In its post-hearing brief, CTP asserts “as the ALJ noted during the Hearing, CTP is only alleging that an underage person was able to purchase a tobacco product, not that Respondent failed to verify their identification, which is a separate and distinct violation.”  CRD Dkt. Entry No. 22 at 5.  In addition, CTP asserts that “Respondent’s intention to not violate the Act and implementing regulations is not a valid defense,” and that “before the February 15, 2024, inspection, Inspector Peruchi confirmed that UP A possessed a true and accurate photographic identification, they were under the age of 21, and did not possess any tobacco products.”  Id. at 6, 7.

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After considering all of the evidence admitted in the administrative record, I find that, based on the preponderance of the evidence standard, Inspector Peruchi’s sworn, written direct testimony and responses on cross-examination at the Hearing, as corroborated by CTP’s exhibits, sufficiently support the assertion that the UP that purchased the regulated tobacco product at Respondent’s establishment on February 15, 2024 was under the age of 21 years old.  CTP Exs. 4, 7, 9, 14-16; R. Exs. 1-6.  Thus, Respondent was in violation of the Act.  Act § 906(d)(5).  In addition, I also find that Respondent’s affirmative defense, asserting that “store video surveillance confirms that the cashier scanned the purchaser’s [photographic identification] prior to completing the transaction[,]” is not meritorious, given that the allegation in CTP’s Complaint is “selling tobacco products to a person under 21 years of age, in violation of Section 906(d)(5) of the Act[,]” and Respondent has not presented compelling evidence that would show that Respondent’s POS system was used properly by the cashier during the alleged transaction, and that Respondent’s POS system was functioning correctly at the time of the alleged transaction, in order to ensure that the alleged underage tobacco sale would not be completed.  CRD Dkt. Entry No. 21 at 2; CRD Dkt. Entry No. 1 ¶ 13.  Whether Respondent’s POS worked properly or not is not relevant here as CTP is not alleging a violation for failure to verify identification and more importantly the video shows CTP’s undercover purchaser leave the counter with a tobacco product.  In fact, Respondent’s video of the transaction actually confirms CTP’s allegation that a person under 21 was able to purchase a tobacco product from Respondent’s establishment on February 15, 2024.

2.     Conclusion

By a preponderance of the evidence, I find that the violations alleged in the Complaint occurred, and I conclude that Respondent is liable under the Act.  Accordingly, CTP is entitled to a civil money penalty from Respondent. 21 U.S.C. § 333(f)(9).

2. Respondent has demonstrated by a preponderance of the evidence the existence of mitigating circumstances to support a reduced CMP.

I determined that Respondent violated the prohibition against selling regulated tobacco products to a person under 21 years of age, in violation of section 906(d)(5) of the Act.  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 must consider any aggravating or mitigating circumstances and the factors listed in the Act.  21 C.F.R. § 17.34(a)-(b).  Specifically, I am required to take into account “the nature, circumstances, extent and gravity of the violations and, with respect to the violator, ability to pay, effect on ability to do business, any history of prior such violations, the degree of culpability, and such

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other matters as justice may require.”  21 U.S.C. § 333(f)(5)(B); 21 C.F.R. § 17.45(b)(1)-(3).

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

The Family Smoking Prevention and Tobacco Control Act (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).  Respondent is in the business of selling a highly regulated and dangerous product.  See generally 21 U.S.C. § 387 note (Findings and Purpose).  In addition, Respondent admits that on August 1, 2023 it sold a regulated tobacco product to a person under 21 years of age, and failed to verify the age of a person purchasing covered tobacco products.  See CRD Dkt. Entry No. 5b at 4, 6.  I also find that on February 15, 2024, Respondent sold a regulated tobacco product to a person under 21 years of age.  The inability of Respondent to comply with federal tobacco law is serious in nature and demands a proportional CMP amount.

2. Respondent’s Ability to Pay and Effect on Ability to Do Business

Respondent has not argued that it does not have the ability to pay the $345 CMP proposed by CTP.  Further, Respondent has not presented any evidence that the penalty will affect its ability to continue to do business.

3. History of Prior Violations

There is no indication in the record of any prior violations of section 906(d)(5) of the Act or 21 C.F.R. § 1140.14(b)(2)(i) resulting in the imposition of a CMP.  However, CTP argues that there is a history of prior violations because Respondent was notified in the August 31, 2023 Warning Letter that “[a] person under 21 years of age was able to buy a VUSE Originals Menthol e-liquid product on August 1, 2023, at approximately 5:30 PM in [Respondent’s] establishment.”  See CRD Dkt. Entry No. 11 at 15; CTP Ex. 1 at 1.  CTP also argues that Respondent’s actions demonstrate an “unwillingness or inability to sell tobacco products in accordance with federal tobacco regulations.”  CRD Dkt. Entry No. 11 at 15.  However, I disagree with CTP’s contentions that Respondent’s repeated violations in this case were based on an unwillingness or inability to comply with the law.  Respondent’s video of the transaction shows that Respondent has an age verification system installed in its POS.  While it is undisputed that the age verification system did not work in this case, the fact that Respondent has an age verification system, and the cashier scanned the identification in the video shows Respondent is not unwilling to abide by federal tobacco regulations.  Therefore, contrary to CTP’s arguments, I find the record does not demonstrate Respondent’s unwillingness or inability to comply with tobacco laws and regulations based on its history of violations.

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4. Degree of Culpability

Based on my finding that Respondent committed the violations alleged in the Complaint, I hold Respondent fully culpable for its violation of the Act.  The Act places a heavy burden on retailers who choose to sell tobacco products because of their highly dangerous and addictive nature.   See 21 U.S.C. § 387 note (Findings and Purpose).

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).  Mitigation is an affirmative defense for which Respondent bears the burden of proof by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  Respondent has participated in this matter from its onset.  Further, Respondent has provided what it deemed as sufficient evidence and arguments to support its position.  In his sworn Declaration, Mr. Fernandes testifies that during the February 15, 2024 inspection:

The buyer’s [identification] was verified and scanned [by] the POS system at the store.

R. Ex. 6, CRD Dkt. Entry No. 5 at 14-15 (Declaration of Mr. Vijay Fernandes).

I find Mr. Fernandes’ testimony to be credible and reliable regarding the question of whether Respondent has a POS system in place to assist in preventing the sale of regulated tobacco products to underage purchasers.  However, as discussed above, the lack of effectiveness regarding Respondent’s safeguards to prevent underage tobacco sales is certainly problematic.  That said, I find Respondent’s effort to comply with federal law to be a mitigating factor.  The civil money penalties are in place to ensure retailers uphold the regulations that aid the FDA in its efforts to protect youth from the adverse health effects associated with tobacco use.

Based on the foregoing reasoning, I find a reduction of the penalty amount is appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 21 C.F.R. § 17.45(b)(1)-(3).  After considering the record evidence, applicable law, and mitigating circumstances in this case, and after full evaluation of the relevant factors, I find that a reduced CMP of $300 is appropriate.

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V.     Conclusion

For the reasons set forth above, I impose a civil money penalty against Respondent, Roshan, Inc. d/b/a One Stop, in the amount of $300 for two violations of the Act within a 12-month period.  Pursuant to 21 C.F.R. § 17.45(d), this order becomes final and binding upon both parties after 30 days of the date of its issuance.