RJS Property, LLC d/b/a RJ Market, DAB TB9777 (2025)

ORDER GRANTING COMPLAINANT’S MOTION TO IMPOSE SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

On October 22, 2024, the Center for Tobacco Products (CTP) served a complaint on Respondent, RJS Property, LLC d/b/a RJ Market, at 1002 York Street, Newport, Kentucky 41071.  A copy of the complaint was also filed with the Food and Drug Administration’s (FDA) Division of Dockets Management.  CTP seeks to impose a $6,892 civil money penalty against Respondent for at least five 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 36-month period.

On November 22, 2024, Respondent, through its representative, filed an answer to the complaint.  Since filing its answer, however, Respondent has repeatedly disregarded my orders and has been non-responsive to CTP’s requests.  Specifically, Respondent failed to respond to CTP’s request for production of documents, failed to respond to CTP’s motion to compel discovery, failed to comply with my order granting CTP’s motion to compel discovery, and failed to respond to the present Motion to Impose Sanctions.

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Currently before me is CTP’s Motion to Impose Sanctions, which requests that I impose sanctions against Respondent for its repeated noncompliance.  As a sanction for Respondent’s conduct, CTP asks me to strike Respondent’s answer and issue a default judgment against Respondent pursuant to 21 C.F.R. § 17.35(c)(3).  For the reasons stated below, I find that the requested sanctions are warranted and appropriate under the circumstances.  Therefore, I grant CTP’s Motion to Impose Sanctions, strike Respondent’s answer, and issue this decision of default judgment imposing the requested civil money penalty against Respondent.

I. Relevant Procedural History

On October 22, 2024, CTP served an administrative complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  Civil Remedies Division (CRD) Docket (Dkt.) Entry Numbers (Nos.) 1, 1b.  Respondent’s answer to the complaint was due by November 21, 2024.  See 21 C.F.R. § 17.9.

On November 22, 2024, Respondent filed an untimely answer to the complaint.  CRD Dkt. Entry Nos. 3, 4.1  After CTP stated it had no objections to the late filing, I accepted Respondent’s untimely answer.  See CRD Dkt. Entry Nos. 5, 6, 7.

On December 4, 2024, I issued an Acknowledgment and Pre-Hearing Order (APHO).  The APHO outlined the procedures governing this case, provided various instructions and directives, and established deadlines for the parties to complete discovery and file pre-hearing exchanges.  CRD Dkt. Entry No. 7.  With respect to discovery, the APHO stated that a party is required to produce any requested documents no later than 30 days after receiving a request for documents from the opposing party.  APHO ¶ 4; see also 21 C.F.R. § 17.23(a).  I also warned the parties as follows: 

I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.  21 C.F.R. § 17.35.

CRD Dkt. Entry No. 7 ¶ 21. 

On December 30, 2024, CTP filed a joint status report indicating that the parties had been unable to reach a settlement in this case.  CRD Dkt. Entry No. 9 at 1.  Subsequently, on January 2, 2025, Respondent filed a separate status report advising that a settlement had not been reached by the parties and further discussions would be pursued.  CRD Dkt. Entry Nos. 10, 11.  

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On January 9, 2025, Respondent filed a copy of its request for production of documents.  CRD Dkt. Entry No. 12.  On January 17, 2025, CTP filed a Motion for Protective Order, seeking to limit the disclosure of certain documents requested by Respondent.  CRD Dkt. Entry No. 13 at 1.  On February 7, 2025, CTP filed a Memorandum in Support of its Motion for a Protective Order, accompanied by nine exhibits.  CRD Dkt. Entry Nos. 15, 15a-15i.  Respondent did not file a response to the Motion for Protective Order or to the supporting Memorandum.  Therefore, on April 29, 2025, after considering CTP’s arguments and exhibits, I granted the Motion for Protective Order.  CRD Dkt. Entry No. 16.  I also adjusted the pre-hearing deadlines to account for the discovery issue.  Id.

On May 16, 2025, CTP filed a Motion to Compel Discovery, stating that it served document requests on Respondent on December 31, 2024, but Respondent failed to respond.  CRD Dkt. Entry No. 17.  On that same date, CTP also filed a motion requesting a 30-day extension of all pre-hearing deadlines.  CRD Dkt. Entry No. 18 at 2. 

On May 23, 2025, I issued an Order advising Respondent that it had until June 6, 2025, to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 19 at 1; see also CRD Dkt. Entry No. 7 ¶¶ 20-21; 21 C.F.R. § 17.32(c).  I also granted CTP’s motion to extend the pre-hearing deadlines.  Id. at 2.

Respondent did not respond to CTP’s Motion to Compel Discovery.  Accordingly, on June 26, 2025, after considering CTP’s statements and arguments, I granted the motion and ordered Respondent to produce all documents responsive to CTP’s document requests by July 11, 2025.  CRD Dkt. Entry No. 21.  I also extended the parties’ pre-hearing exchange deadlines.  Id. at 2.  In the order, I specifically warned Respondent:

[F]ailure to comply with this Order may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the [c]omplaint and imposing a civil money penalty.  21 C.F.R. § 17.35. 

Id. at 2.

On July 14, 2025, CTP filed the present Motion to Impose Sanctions.  CRD Dkt. Entry No. 22.  In the motion, CTP states Respondent failed to comply with my June 26, 2025, Order granting CTP’s Motion to Compel Discovery and has not produced any responsive documents.  Id. at 2.  CTP asks that I sanction Respondent by striking its answer and issuing an Initial Decision and Default Judgment imposing the requested $6,892 civil money penalty.  Id.  CTP also filed a separate motion asking me to stay all deadlines pending resolution of its Motion to Impose Sanctions.  CRD Dkt. Entry No. 23.

On July 16, 2025, I issued an Order advising Respondent that it had until August 1, 2025, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 24 at 2.  I

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also granted CTP’s request to stay all deadlines pending resolution of CTP’s Motion to Impose Sanctions.  Id. 

To date, Respondent has not filed any response to CTP’s Motion to Impose Sanctions.  Further, Respondent has not produced any documents in response to CTP’s discovery requests or otherwise complied with my Order granting CTP’s Motion to Compel Discovery.

II. Motion to Impose Sanctions

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).

Here, I find that Respondent failed, and continues to fail, to comply with multiple orders and rules, including:

• The requirements in 21 C.F.R. § 17.23(a) and paragraph 4 of the APHO, by failing to respond to CTP’s Request for the Production of Documents within 30 days; and
• My June 26, 2025, Order granting CTP’s Motion to Compel Discovery, by failing to produce documents responsive to CTP’s discovery requests by July 11, 2025.

In addition, I find that Respondent has failed to defend this action.  Specifically, Respondent has not filed a response to CTP’s Motion to Compel Discovery or CTP’s Motion to Impose Sanctions, nor has it taken any action in this matter since filing a copy of its request for production of documents on January 9, 2025.  I also find that Respondent has interfered with the speedy, orderly, and fair conduct of this proceeding by preventing the case from moving forward to adjudication.  Therefore, I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted under the circumstances.

The sanctions I impose must relate to the nature and severity of the misconduct or noncompliance.  21 C.F.R. § 17.35(b).  Here, Respondent’s conduct has caused unnecessary delays and disruptions, interfered with CTP’s ability to prosecute its case, and prevented me from conducting a hearing or issuing a decision on the merits.  Under

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the circumstances, Respondent’s behavior suggests it has abandoned its defense and is no longer interested in participating in this proceeding. 

Based on the severity and ongoing nature of Respondent’s conduct, I find that the appropriate sanction is to strike Respondent’s answer to the complaint.  21 C.F.R. § 17.35(b), (c)(3); see also KKNJ, Inc. d/b/a Tobacco Hut 12, DAB No. 2678 at 10-11 (2016) (concluding administrative law judge did not abuse discretion by striking Respondent’s answer for failure to comply with discovery order).  While I recognize that this is a harsh remedy, I conclude that a lesser sanction would not effectively address Respondent’s repeated noncompliance and failure to defend its case.  Indeed, Respondent’s conduct has effectively brought this proceeding to a standstill.  Therefore, CTP’s Motion to Impose Sanctions is GRANTED and Respondent’s answer to the complaint is hereby STRICKEN from the record.

III. Default Decision

Striking Respondent’s answer leaves the complaint unanswered.  Therefore, I am required to issue an initial decision by default, provided that the complaint is sufficient to justify a penalty.  21 C.F.R. § 17.11(a).  Accordingly, I must determine whether the allegations in the complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the complaint to be true, pursuant to the provisions of 21 C.F.R. § 17.11(a).  Specifically, CTP alleges the following facts in its complaint:   

• Respondent owns RJ Market, an establishment that sells tobacco products and is located at 1002 York Street, Newport, Kentucky 41071.  Complaint ¶¶ 11-12.
• On November 6, 2023, CTP initiated a previous civil money penalty action, CRD Docket Number T-24-448, FDA Docket Number FDA-2023-H-4856, against Respondent for at least three2  violations of the Act.  CTP alleged those violations to have occurred on August 9, 2022, and August 23, 2023.  Complaint ¶ 15.
• 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.”  Complaint ¶ 16.

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• An FDA-commissioned inspector conducted a subsequent inspection on July 11, 2024, at approximately 12:35 PM, at Respondent’s business establishment.  During the inspection, a person younger than 21 years of age was able to purchase a Black & Mild Original cigar.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was 21 years of age or older.  Complaint ¶ 13.

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

Accepting the allegations in the complaint as true, I find that Respondent violated the prohibition against selling regulated tobacco products to purchasers younger than 21 years of age on August 9, 2022, August 23, 2023, and July 11, 2024.  Act § 906(d)(5).  I further find that, on those same dates, Respondent violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age.  Id.; 21 C.F.R. § 1140.14(b)(2)(i).  Therefore, I conclude that CTP has established that Respondent committed at least five violations of the Act within a 36-month period. 

CTP has requested a civil money penalty of $6,892, which is a permissible penalty under 21 C.F.R. § 17.2.  Therefore, I conclude that a civil money penalty of $6,892 is appropriate and impose a penalty in that amount against Respondent.

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ORDER

For these reasons, I enter default judgment in the amount of $6,892 against Respondent RJS Property, LLC d/b/a RJ Market.  Pursuant to 21 C.F.R. § 17.11(b), this order becomes final and binding upon both parties after 30 days of the date of its issuance.