Chau Long Corporation d/b/a Aaron Beer Distributor, DAB TB10310 (2026)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a $6,892 civil money penalty (CMP) against Respondent, Chau Long Corporation d/b/a Aaron Beer Distributor for at least five violations within a 36-month period 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 (Tobacco Regulations).  Respondent concedes that it violated the Act and Tobacco Regulations,1 but contends that the requested CMP should be reduced.  For the reasons discussed below, I conclude that a CMP of $6,892 is appropriate.

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I.       Background and procedural history

CTP began this case by serving the Complaint on Respondent at 770 Garrett Road, Upper Darby, Pennsylvania 19082, and filing a copy of the Complaint with the Departmental Appeals Board (DAB), CRD.  CRD Dkt. Entry Nos. 1 (Complaint), 1b (Proof of Service).  The Complaint alleges that Respondent impermissibly sold regulated tobacco products to underage purchasers and failed to verify the purchasers were 21 years of age or older, thereby violating the Act and Tobacco Regulations.  CTP seeks a civil money penalty of $6,892 against Respondent for at least five violations of the Act and Tobacco Regulations within a 36-month period.  Complaint ¶ 1.

On December 12, 2024, Respondent electronically and timely filed its Answer via the DAB E-file system.  CRD Dkt. Entry No. 3.  In its Answer, Respondent admitted the allegations and stated that:

We have taken further steps to prevent any future violations including but not limited to staff changes, retraining of old and new staff, and increasing the age to verify the age of those to be 40 years of age or younger.

Id. at 2.

On December 17, 2024, I issued an Acknowledgment and Status Report Order acknowledging receipt of Respondent’s Answer and ordering the parties to file a joint status report by February 18, 2025.2  CRD Dkt. Entry No. 4.  On February 14, 2025, CTP filed a Joint Status Report stating that the parties intended to engage in further settlement discussions and that CTP would notify the DAB if the parties agreed to a settlement. CRD Dkt. Entry No. 6.

On February 26, 2025, I issued a Pre-Hearing Order (PHO) establishing procedural deadlines for this case, including a deadline of March 31, 2025 for the parties to file a joint status report.  CRD Dkt. Entry No. 7 ¶ 3.  On March 31, 2025, CTP filed a Joint Status Report stating that the parties intended to engage in further settlement discussions and that CTP would notify the DAB if the parties agreed to a settlement.  CRD Dkt. Entry No. 8.  On April 4, 2025, CTP filed a Motion to Extend Deadlines requesting a 30-calendar day extension due to a “significant reduction in force” that occurred on April 1,

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2025.  CRD Dkt. Entry No. 9.  On April 8, 2025, I issued an Order granting Complainant’s Motion to Extend Deadlines for 30 days.  CRD Dkt. Entry No. 10.

On May 28, 2025, Respondent filed documents that appeared to be in response to CTP’s Request for the Production of Documents.  CRD Dkt. Entry Nos. 11, 11a-11d.  These documents included a federal law summary, employee signed company policy, a We Card order receipt, and a We Card delivery confirmation.  Id.

On June 20, 2025, CTP filed a Motion for Leave to Amend Complaint along with its timely filed pre-hearing exchange consisting of the Informal Brief of Complainant (CTP Br.), Complainant’s List of Proposed Witnesses and Exhibits, and thirteen proposed exhibits.  CRD Dkt. Entry Nos. 12, 12a, 13, 13a-n.  CTP’s exchange included the written direct testimony of two proposed witnesses: 1) James Bowling, Deputy Division Director, Office of Compliance and Enforcement, CTP Exhibit (Ex.) 3; and 2) Betty Wade, FDA-commissioned officer for the State of Pennsylvania, CTP Ex. 4.  CRD Dkt. Entry Nos. 13d-e.

On June 24, 2025, I issued an Order reminding Respondent of its opportunity to file a response to CTP’s Motion for Leave to Amend Complaint.  CRD Dkt. Entry No. 14.  On July 15, 2025, as Respondent had not responded to CTP’s Motion for Leave to Amend Complaint, I issued an Order granting CTP’s Motion.  CRD Dkt. Entry No. 15.  On July 16, 2025, CTP filed the amended documents.  CRD Dkt. Entry Nos. 16, 16a-16b.

On September 10, 2025, I held a telephonic pre-hearing conference (PHC) via Microsoft Teams.  CRD Dkt. Entry No. 22 (PHC Order); see 21 C.F.R. §§ 17.19, 17.21, 17.33. During the PHC, I explained my role as an impartial Administrative Law Judge, the issues to be decided in this case, and the parties’ respective burdens of proof.  Id. at 1. With respect to liability, Respondent confirmed that it admits liability, as alleged in the Complaint and as stated in its Answer.  Id.; see also Answer ¶ 1.  Further, as Respondent did not object to the admission of CTP’s Exhibits, I admitted CTP Exs. 1-13 into the record.  Respondent did not file a pre-hearing exchange and did not propose any witnesses.  See PHO ¶¶ 6-13; Order Scheduling Pre-Hearing Conference at 1; PHC Order at 2.

Additionally, during the PHC, I explained that the sole remaining issue is the appropriateness of the civil money penalty, considering any aggravating or mitigating factors.  CRD Dkt. Entry No. 22 at 1.  I explained to the parties that the purpose of conducting a hearing is to allow for the cross-examination of witnesses that have provided sworn direct testimony, as submitted in the parties’ respective pre-hearing exchanges.  Respondent stated that it did not wish to cross-examine CTP’s witnesses.  As Respondent waived its right to a hearing, I found a hearing to not be necessary. Accordingly, I am deciding this case based on the evidence in the record.  Id. at 2; see PHO ¶ 17.

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Lastly, I set a schedule for the submission of the parties’ final briefs on the issue of the appropriateness of the civil money penalty and informed the parties that I would issue a decision on the written record after the record was closed.  CRD Dkt. Entry No. 22 at 2.

On October 10, 2025, CTP filed a Notice of Waiver of Final Brief and Respondent filed its Final Brief.3  CRD Dkt. Entry Nos. 23, 24, respectively.  CTP did not file a reply brief.

The administrative record is now complete and closed, and this matter is ready for a decision.  I will consider the full administrative record in deciding this case.  21 C.F.R. §§ 17.41(b), 45(a).

II.      Issue

The issue in this case is whether a CMP in the amount of $6,892 is appropriate, considering any mitigating or aggravating factors that I find in this case.  21 C.F.R. § 17.45.

III.     Analysis, findings of facts, and conclusions of law

1. Legal standard

The Act prohibits the misbranding of tobacco products while they are held for sale after shipment in interstate commerce.  21 U.S.C. § 331(k).  Tobacco products are misbranded if they are sold or distributed in violation of the Act or applicable regulations issued under section 906(d) of the Act.  21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). Section 906(d)(5) of the Act prohibits the sale of regulated tobacco products to any person younger than 21 years of age.  21 U.S.C. § 387f(d)(5); see also 21 C.F.R § 1140.14.  The Tobacco Regulations, codified at 21 C.F.R. Part 1140, require retailers to verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchaser is younger than 21 years of age.  21 U.S.C. § 1140.14(a)(2)(i); 21 C.F.R § 1140.14(b)(2)(i).

CTP has authority to seek a CMP from any person who violates a requirement of the Act related to tobacco products, subject to the maximum amounts authorized by the Act, as adjusted for inflation.  21 U.S.C. §§ 333(f)(5)(A), 333(f)(9)(A); see also 21 C.F.R § 17.2; 45 C.F.R. § 102.3.  Section 103(q)(2) of the Act establishes progressively increasing maximum CMPs for subsequent tobacco violations that occur within prescribed timeframes.  21 U.S.C. § 333 note (Guidance); see also 45 C.F.R. § 102.3 (Table 1: Civil Monetary Penalty Authorities Administered by HHS).  All violations observed during an initial failed inspection are counted as a single violation, and each separate violation

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observed during subsequent failed inspections count as a discrete violation.  See Orton Motor, Inc., 884 F.3d at 1214 (upholding FDA’s methodology of counting tobacco violations).

CTP has the burden to prove, by a preponderance of the evidence, the appropriateness of the proposed CMP assessed against Respondent.  21 C.F.R. § 17.33(b).  Respondent has the burden to prove any mitigating factors, likewise by a preponderance of the evidence. 21 C.F.R. § 17.33(c).  The Supreme Court of the United States 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 its nonexistence before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  Concrete Pipe and Prods. Of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993) (citing In re Winship, 397 U.S. 358, 371-72 (1970) (Harlan, J., concurring)).

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); 17.34(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).  Also, “for purposes of mitigating a civil penalty .  .  .  [I] shall consider the amount of any penalties paid by the retailer to a State for the same violation” and whether the retailer has an “approved training program.”  21 U.S.C. § 333 note.

2. Appropriateness of the CMP

As explained above, Respondent conceded liability for violating the Act and Tobacco Regulations by selling regulated tobacco products to persons younger than 21 years of age and failing to verify the age of purchasers on December 12, 2021, August 18, 2022 and August 14, 2024.  Answer ¶ 1; PHC Order at 1; see also 21 U.S.C. § 387f(d)(5); 21 C.F.R. § 1140.14 4(a)(2)(i).  Consequently, Respondent is liable for five violations of the Act and Tobacco Regulations within a 36-month period.  Orton Motor, Inc., 884 F.3d at 1214.  In its Complaint and pre-hearing brief, CTP argues that imposing the maximum penalty amount of $6,892 against Respondent is appropriate.  CRD Dkt. Entry No. 16 (Amended Complaint) ¶ 1; CTP Br. at 10.  In the Answer and Final Brief, Respondent argues that the CMP should be reduced due to the alleged mitigating factor that the previous actions were resolved by settlement and the current action “arises from a single inspection event on August 14, 2024.”4  Answer; R. Br. at 2-3.  For the reasons explained below, I find that a CMP of $6,892 is appropriate.

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1. Nature, circumstances, extent, and gravity of the violations

Respondent committed at least five violations of the Act and Tobacco Regulations within a 36-month period.  On December 12, 2021, August 18, 2022, and August 14, 2024, Respondent sold regulated tobacco products to underage purchasers and failed to verify, by means of photo identification containing a date of birth, that the purchasers were of sufficient age.  CTP seeks the maximum CMP of $6,892.  Amended Complaint ¶ 1; CTP Br. at 11; see 21 U.S.C. § 387f(d)(5); see also 45 C.F.R. § 102.3 (Table 1 to § 102.3 – Civil Monetary Penalty Authorities Administered by HHS); see also 89 Fed. Reg. 64,815 (eff. Aug. 8, 2024) (final rule establishing the 2024 annual inflation adjustment amounts for Table 1).

Respondent argues that ALJs have “exercised discretion to reduce penalties where Respondents demonstrated genuine corrective actions, financial hardship, and good-faith cooperation with regulatory authorities.”  R. Br. at 3.  However, Respondent cites to no similarly situated Respondents or specific prior decisions for its position.  Further, I note that Respondent only implemented corrective actions after its fourth and fifth violations and a third inspection and failed to demonstrate financial hardship.

Respondent has not shown that the nature, circumstances, extent or gravity of the violations warrant a reduction in the requested CMP.  Respondent argues that it “has implemented comprehensive and sustained corrective measures that are more robust than previous efforts and are designed to ensure lasting compliance .  .  .  and no further violations have occurred” since August 2024.  R. Br. at 3.  However, Respondent’s continued inability to comply with federal tobacco regulations is serious in nature, and the CMP amount should be set accordingly.  The requested CMP of $6,892 is proportionate to the facts and circumstances of the violations.

2. Respondent’s ability to pay and effect on ability to do business

In its Answer, Respondent argues that the CMP requested “would place an undue financial burden that would severely impact [its] financial stability and [its] ability to operate in the near term” and requested leniency.  Answer ¶ 3.  Interestingly, Respondent additionally states that “our sales of tobacco products far exceeds [sic] the amount requested.”  Id.  However, Respondent has not submitted any financial documents or other evidence supporting its argument that the requested CMP would have an impact on its financial stability or ability to continue operations.  Similarly, Respondent has not

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submitted any sales records to demonstrate the penalty is out of proportion with their tobacco revenue.  Thus, I am unable to find any mitigating factors that support Respondent’s arguments and do not find that Respondent is unable to pay the requested CMP of $6,892 nor that paying the requested CMP would affect Respondent’s ability to do business.

3. History of prior violations

Respondent admitted to at least five violations occurring on December 12, 2021, August 18, 2022, and August 14, 2024.  Answer ¶ 1; PHC Order at 1.  Clearly, Respondent has a history of prior violations and has admitted to all previous and current violations.  Id.

Therefore, I find that the history of violations in this case is significant.  I understand that since Respondent’s last violation, it has implemented retraining for its employees. Answer ¶ 2.  However, this prospective action does not diminish the seriousness of Respondent’s history of violations.

As Respondent admitted to the violations alleged in the Amended Complaint, I hold it fully culpable for at least five violations of the Act and Tobacco Regulations.  I recognize that Respondent has taken corrective action after the latest violations on August 14, 2024. If these corrective actions are effective, then Respondent should not have any additional violations.

Also, Respondent argues that the “present action arises from a single inspection event on August 14, 2024” and took action in response to that violation.  R. Br. at 3.  However, Respondent also waived its right to contest the prior violations in subsequent actions. Amended Complaint ¶ 16.  Therefore, Respondent understood in its previous settlements that these violations could be counted in future violations.

An appropriate civil money penalty must take into consideration the history of prior violations and, in this case, there were at least five violations before Respondent took corrective action.  Thus, I find the requested CMP of $6,892 to be appropriate for Respondent’s history of violations.

4. Degree of Culpability

I find Respondent violated the prohibitions against selling regulated tobacco products to underage purchasers, and failed to verify, by means of photo identification containing a date of birth, that the purchasers were 21 years of age or older on multiple occasions. Respondent does not dispute liability.  R. Br. at 2.  As such, I find Respondent fully culpable for the violations listed in the Amended Complaint.

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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).  Respondent has taken accountability for at least five violations, expressed a sincere desire to comply with the Act and Tobacco Regulations, and insists that necessary measures will be taken to avoid future violations. R. Br. at 1.  Respondent argues that ALJs have “exercised discretion to reduce penalties where Respondents demonstrated genuine corrective actions, financial hardship, and good-faith cooperation with regulatory authorities.”  R. Br. at 3.  However, Respondent’s corrective actions did not prevent the recurrence of violations and were only implemented after all of the violations at issue occurred.  As noted above, financial hardship was not demonstrated.  In sum, failing to check identification and selling tobacco products to underage purchasers are serious violations.

In summary, Respondent violated the regulations on three separate occasions, constituting at least five violations within a 36-month period, and failed to prove mitigating circumstances by a preponderance of evidence.  I find no basis for reducing the CMP sought by CTP, which I find proportional and appropriate in this case.  Based on the foregoing reasoning, I find the penalty amount of $6,892 to be appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

IV.     Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter a judgment in the amount of $6,892 against Respondent, Chau Long Corporation d/b/a Aaron Beer Distributor for at least five violations of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq., and its implementing regulations, 21 C.F.R. Part 1140, within a 36-month period.  Pursuant to 21 C.F.R. §§ 17.11(b), 17.45(d), this decision becomes final and binding upon both parties after 30 days of the date of its issuance.