Lotto Plus Corporation d/b/a Top Deli and Grill, DAB TB9686 (2025)

INITIAL DECISION AND DEFAULT JUDGMENT

On September 26, 2024, the Center for Tobacco Products (CTP) served an Administrative Complaint (Complaint) on Respondent, Lotto Plus Corporation d/b/a Top Deli and Grill, at 139 Lake Avenue, Yonkers, New York 10703, and filed a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  CTP seeks to impose a $13,785 civil money penalty against Respondent for at least six violations of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. Part 1140, within a 48-month period.1

Respondent filed an Answer to the Complaint in this matter.  However, during the course of this administrative proceeding, Respondent failed to comply with multiple judicial

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orders, directives and procedures and failed to defend its case, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).  Therefore, after careful consideration of the entire record, I strike Respondent’s Answer as a sanction and issue this default decision, pursuant to the provisions of 21 C.F.R. §§ 17.35(a), (b).

I. Procedural History

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on September 26, 2024, CTP served the Complaint on Respondent by United Parcel Service.  CRD Dkt. Entry Nos. 1, 1b.  On October 24, 2024, Respondent timely filed its Answer to CTP’s Complaint.2  CRD Dkt. Entry No. 3.  In its Answer, Respondent does not specifically deny the allegations in the Complaint.  See id.  Therefore, pursuant to 21 C.F.R. § 17.9(b)(1), allegations not specifically denied are deemed admitted.  In its Answer, Respondent asserts remedial measures it purports to have implemented in order to prevent future violations and submitted a photograph of signs informing customers of the “21 or older” age requirement for purchase of tobacco products.  See CRD Dkt. Entry No. 3 at 3.

On October 25, 2024, based on Respondent’s representations in its Answer, Judge Mary M. Kunz, the Administrative Law Judge previously assigned to this case, inferred that the parties may not intend to proceed to a hearing, and issued an Acknowledgment and Status Report Order (ASRO).  See CRD Dkt. Entry No. 5.

On December 20, 2024, in compliance with Judge Kunz’s ASRO, CTP timely filed its status report.  CRD Dkt. Entry No. 7.  The status report indicated the parties were unable to reach a settlement and that CTP was unable to reach Respondent to file a Joint Status Report.  Id.

On December 23, 2024, Judge Kunz issued a Pre-Hearing Order (PHO) setting a schedule for discovery, establishing requirements and deadlines for the parties to file their pre-hearing exchanges, and explaining the potential consequence of failing to appear at a scheduled pre-hearing conference or failure to otherwise comply with the PHO.  See CRD Dkt. Entry No. 8 ¶¶ 4, 6, 16.

Regarding the filing of Respondent’s pre-hearing exchange, the directive in the PHO states:

After reviewing CTP’s exchange, Respondent must file its pre-hearing exchange and serve its pre-hearing exchange on CTP no later than April 1, 2025.  Do not submit your pre-hearing exchange before receiving and reviewing CTP’s

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pre-hearing exchange. Respondent is directed NOT to file as proposed exhibits any documents that CTP has already filed among its proposed exhibits. If Respondent does not have any proposed exhibits or witnesses, Respondent must file a letter stating there are no documents to file.

CRD Dkt. Entry No. 8 ¶ 6.b.

The PHO also explained that the presiding Administrative Law Judge would convene a pre-hearing conference via the Microsoft Teams platform in order to resolve certain issues and schedule a hearing in the case.  Id. ¶ 16.  The PHO warned:

In accordance with 21 C.F.R. § 17.35, failure to appear at the Microsoft Teams pre-hearing conference or failure to otherwise comply with this Order may result in sanctions, including, but not limited to, dismissing the Complaint, striking the Answer, or issuing a decision against the opposing party.

Id.

On January 21, 2025, in compliance with paragraph 3 of the PHO, CTP timely filed its second status report.  CRD Dkt. Entry No. 9.  The status report indicated the parties were unable to reach a settlement and that CTP was unable to reach Respondent to file a Joint Status Report.  Id. at 1.

On March 11, 2025, CTP timely filed it pre-hearing exchange consisting of the Informal Brief of Complainant, Complainant’s List of Proposed Witnesses and Exhibits, and eighteen proposed exhibits.  CRD Dkt. Entry Nos. 10, 10a-10s.

The deadline for Respondent to file its pre-hearing exchange, or a letter stating that it does not have any documents to file, was April 1, 2025.  See CRD Dkt. Entry No. 8 ¶ 6.b. To date, Respondent has not filed a pre-hearing exchange, nor has Respondent filed a letter stating that it does not have any documents to file.

On April 11, 2025, the parties were advised that this case had been transferred to me for adjudication.  See CRD Dkt. Entry No. 11.

On April 15, 2025, after Respondent failed to file a pre-hearing exchange, or file a letter stating that it did not have any documents to file, I issued an Order to Show Cause (April 15, 2025 Order to Show Cause), directing Respondent to file a response by April 30, 2025.  See CRD Dkt. Entry No. 12 at 1.  My April 15, 2025 Order to Show Cause also directed Respondent to file its pre-hearing exchange documents, or confirm in writing

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that it has no documents to submit, and to show good cause for its failure to comply with the PHO.  Id.  My April 15, 2025 Order to Show Cause warned:

If Respondent fails to respond to this Order, I may conclude that Respondent has abandoned its hearing request. Accordingly, I will dismiss the hearing request and enter an Initial Decision and Default Judgment in favor of CTP as authorized under 21 C.F.R. §§ 17.19(19) and 17.35(e).3

Id.

On May 28, 2025, the Director of the Civil Remedies Division – Tobacco Cases issued a letter to the parties advising them that a different attorney advisor had been assigned to assist me with this case and, by my direction, “advise[d] the parties that [I] [had] decided to proceed with scheduling a telephone pre-hearing conference in this case.”  Dkt. Entry No. 13 at 1-2.  Lastly, the Director advised the parties that the newly assigned attorney advisor would “.  .  .  be reaching out to the parties, via email, with potential dates and times for scheduling the telephone pre-hearing conference.”  Id. at 2.

On June 3, 2025, the attorney advisor emailed the parties with potential dates and times for scheduling the pre-hearing conference and asked the parties to confer and advise the attorney advisor, no later than Tuesday, June 10, 2025, of a mutually agreed-upon date and time.  See CRD Dkt. Entry No. 14.  On June 10, 2025, as instructed, counsel for CTP emailed Respondent’s authorized representative, Himyar Alayah, requesting Respondent’s availability for attending the pre-hearing conference.  See CRD Dkt. Entry No. 17a at 1.  On that same date, Himyar Alayah replied to CTP’s counsel’s email indicating availability for a pre-hearing conference on “Wednesday, July 16 11 AM,” which coincided with one of the three dates offered.  Id.  Subsequently, on June 10, 2025, counsel for CTP advised the attorney advisor that the parties “respectfully request that the pre-hearing conference in this matter be scheduled for Wednesday[,] July 16, 2025, at 11 AM.”  CRD Dkt. Entry No. 15 at 1 (emphasis omitted).  Respondent’s authorized representative was copied on that email.  Id.

On June 18, 2025, I issued an Order Scheduling Pre-hearing Conference, in which I ordered the parties to appear at a telephone pre-hearing conference via the Microsoft Teams platform, or by telephone, on July 16, 2025, at 11:00 AM Eastern Time.  See CRD Dkt. Entry No. 16.  Among the issues to resolve at the pre-hearing conference were Respondent’s failure to submit a pre-hearing exchange by the established deadline and

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Respondent’s failure to respond to my April 15, 2025 Order to Show Cause.  CRD Dkt. Entry No. 16 at 1-2; see also CRD Dkt. Entry Nos. 8, 12.

On July 16, 2025, at 11:00 AM Eastern Time, I held the telephone pre-hearing conference call via Microsoft Teams, as scheduled.  See CRD Dkt. Entry No. 18 at 1. Counsel for CTP appeared at the pre-hearing conference.  Id. at 2.  However, Respondent did not appear at the pre-hearing conference call, as ordered, nor did Respondent file any response to the Order that scheduled the telephone pre-hearing conference.  Id.

On July 17, 2025, inferring that Respondent may have abandoned its hearing request given its failure to appear at the pre-hearing conference, along with Respondent’s failure to respond to my April 15, 2025 Order to Show Cause, I issued a second Order to Show Cause (July 17, 2025 Order to Show Cause) directing that:

Respondent [had] until July 28, 2025, to show cause for its failure to comply with my June 18, 2025 Order and failure to defend this case. 21 C.F.R. § 17.35(a). I warn[ed] Respondent that failure to do so may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

CRD Dkt. Entry No. 18 at 2.

To date, Respondent has not responded to either my April 15, 2025 Order to Show Cause or my July 17, 2025 Order to Show Cause.

II. Striking Respondent’s Answer

I may sanction a party for:

(1) Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;
(2) Failing to prosecute or defend an action; or
(3) Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.

21 C.F.R. § 17.35(a).

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Respondent failed to comply with multiple judicial orders, directives and procedures governing this proceeding.  Specifically:

• Respondent failed to comply with paragraph 6.b. of the PHO when it failed to timely file a pre-hearing exchange or file a letter stating that it has no documents to file;
• Respondent failed to respond to and comply with my April 15, 2025 Order to Show Cause;
• Respondent failed to comply with my June 18, 2025 Order Scheduling Pre-Hearing Conference when it failed to appear by phone or online at the Microsoft Teams pre-hearing conference for this case scheduled for Wednesday, July 16, 2025, at 11:00 AM Eastern Time; and
• Respondent failed to respond to and comply with my July 17, 2025 Order to Show Cause.

I find that Respondent failed to comply with multiple judicial orders, directives and procedures governing this proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly, or fair conduct of this proceeding.  Therefore, I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35(a) 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 four judicial orders, despite multiple explicit warnings that its failure to do so could result in sanctions.  See CRD Dkt. Entry No. 8 ¶¶ 16, 21; see also CRD Dkt. Entry Nos. 12, 18.  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(a), (b).

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.

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Specifically, CTP alleges the following facts in its Complaint:

• Respondent owns Top Deli and Grill, an establishment that sells tobacco products and is located at 139 Lake Avenue, Yonkers, New York 10703;
• On October 23, 2023, CTP initiated a previous civil money penalty action, CRD Docket Number T-24-248, FDA Docket Number FDA-2023-H-4619, against Respondent for three violations4 of the Act.  CTP alleged those violations to have occurred at Respondent’s business establishment on January 15, 2022, and August 5, 2023;
• The previous action concluded when Respondent admitted the allegations contained in the Complaint issued by CTP, and paid the agreed upon monetary penalty in settlement of that claim.  Further, “Respondent expressly waived its right to contest such violations in subsequent actions”; and
• On June 8 and 19, 2024, a two-part inspection was conducted at Respondent’s establishment.  Specifically, on June 8, 2024, at approximately 8:02 PM, an FDA-commissioned inspector conducted an inspection at Respondent’s business establishment located at 139 Lake Avenue, Yonkers, New York 10703.  During this inspection, a person younger than 21 years of age was able to purchase a package of two Garcia y Vega Game Blue cigars.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was 21 age or older.  Further, on June 19, 2024, the inspector observed an open package of Marlboro cigarettes for sale in the establishment.  The employee on duty stated that the establishment sells single cigarettes.

CRD Dkt. Entry No. 1 ¶¶ 11-16.

These facts establish Respondent Top Deli and Grill’s liability under the Act.  The Act prohibits misbranding of a regulated tobacco product.  21 U.S.C. § 331(k).  A regulated tobacco product is misbranded if sold or distributed in violation of regulations issued under section 906(d) of the Act.  21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  The Secretary of the U.S. Department of Health and Human Services issued the regulations at 21 C.F.R. Part 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see also 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016); 89 Fed. Reg. 70,483, 70,485 (Aug. 30, 2024).  Under section 906(d)(5) of the Act, no retailer may sell regulated tobacco products to any person younger than 21 years of age and retailers must verify, by means of photographic

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identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age.  Under the provisions of 21 C.F.R. § 1140.14(a)(4), no retailer may break or otherwise open any cigarette or smokeless tobacco product to sell or distribute individual cigarettes.

A $13,785 civil money penalty is permissible under 21 C.F.R. § 17.2.

ORDER

For these reasons, I enter default judgment and impose a civil money penalty in the amount of $13,785 against Respondent, Lotto Plus Corporation d/b/a Top Deli and Grill. Pursuant to 21 C.F.R. § 17.11(b), this order becomes final and binding upon both parties 30 days after the date of its issuance.