FHM Fuel, Inc. d/b/a Marathon, DAB TB10977 (2026)

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

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, FHM Fuel, Inc. d/b/a Marathon, alleging facts and legal authority sufficient to justify imposing a No-Tobacco-Sale Order (NTSO) against Respondent for a period of 30 consecutive calendar days.  CTP began this case by serving a Complaint on Respondent and filing a copy of the Complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The Complaint alleges that Respondent’s staff impermissibly sold regulated tobacco products to underage purchasers and failed to verify that the tobacco product purchasers were of sufficient age, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. Part 1140.

Currently, CTP’s Status Report and Motion to Impose Sanctions (Motion to Impose Sanctions) is pending before me.  CTP’s Motion to Impose Sanctions requests that I

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strike Respondent’s Answer as a sanction for failing to respond to CTP’s discovery requests and issue a default judgment against Respondent.  During the course of these proceedings, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend this action, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).  Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I strike Respondent’s Answer and issue this decision of default judgment.

I.      Procedural History

On October 1, 2025, CTP served the 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 Number (No.) 1b.  In the Complaint and accompanying cover letter, CTP explained that within 30 days, Respondent should file an answer or request an extension of time within which to file an answer.  CRD Dkt. Entry Nos. 1, 1a.  CTP warned Respondent that if it failed to take one of these actions within 30 days an Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue an initial decision imposing a No-Tobacco-Sale Order against Respondent.  CRD Dkt. Entry No. 1a at 1.  On October 10, 2025, CTP forwarded Respondent’s timely filed answer, via email, to the Departmental Appeal Board, Civil Remedies Division.  CRD Dkt. Entry Nos. 3, 3a.

On October 21, 2025, I issued an Acknowledgment and Pre-Hearing Order (Pre-Hearing Order), acknowledging receipt of Respondent’s Answer and establishing deadlines for the parties’ filings and exchanges, including a schedule for discovery.  CRD Dkt. Entry No. 4.  The Pre-Hearing Order directed that a party receiving a discovery request must provide the requested documentation within 30 days of the request.  Id. ¶  4; see also 21 C.F.R. § 17.23(a).  The Pre-Hearing Order warned:

.  .  .  [the presiding ALJ] 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.

Id. ¶ 21.

On November 19, 2025, CTP filed a Joint Status Report advising that the parties were unable to reach a settlement in this case and intended to proceed to a hearing.  CRD Dkt. Entry No. 5 at 1.

In accordance with the deadlines set forth in the Pre-Hearing Order, CTP served Respondent with its Request for Production of Documents on November 20, 2025.  See CRD Dkt. Entry Nos. 6a, 6b.  On December 29, 2025, CTP filed a Motion to Compel

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Discovery asserting that Respondent had not responded to its discovery request.  CRD Dkt. Entry No. 6.  On that same date, CTP also filed an Unopposed Motion to Extend Deadlines.  CRD Dkt. Entry No. 7.  On December 31, 2025, I issued an Order advising Respondent that it had until January 14, 2026 to file a response to CTP’s Motion to Compel Discovery.  CRD Dkt. Entry No. 8; see also 21 C.F.R. § 17.32(c); CRD Dkt. Entry No. 4 20.  My December 31, 2025 Order also extended the parties’ pre-exchange deadlines.  CRD Dkt. Entry No. 8.  Respondent failed to submit a response to CTP’s Motion to Compel Discovery or the December 31, 2025 Order, or otherwise comply with CTP’s Request for Production of Documents.

On February 4, 2026, I issued an Order granting CTP’s Motion to Compel Discovery and ordered Respondent to produce responsive documents to CTP’s Request for Production of Documents by February 18, 2026.  I warned:

.   .  . [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 Complaint .  .  .  .

CRD Dkt. Entry No. 9 at 2.

On February 23, 2026, CTP filed a Status Report and Motion to Impose Sanctions.  CRD Dkt. Entry No. 10.  CTP advised that Respondent had not complied with the Pre-Hearing Order or my February 4, 2026 Order requiring Respondent to produce documents responsive to CTP’s Request for Production of Documents by February 18, 2026.  Id. at 1-2.  CTP argued that sanctions against Respondent for its repeated non-compliance are an appropriate remedy.  Specifically, CTP asked that I strike Respondent’s Answer as a sanction and issue an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and impose a No-Tobacco-Sale Order.  Id. at 2.  On February 23, 2026, CTP also filed a Motion to Stay Deadlines pending resolution of its Motion to Impose Sanctions.  CRD Dkt. Entry No. 11.     

On February 27, 2026, I issued an Order giving Respondent until March 16, 2026, to file a response to CTP’s Motion to Impose Sanctions.  CRD Dkt. Entry No. 12.  The February  27, 2026 Order also stayed all deadlines pending resolution of CTP’s Motion to Impose Sanctions.  Id.  To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or the February 27, 2026 Order.

II.    Striking Respondent’s Answer

I may sanction a party for:

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(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).

Respondent failed to comply with multiple judicial orders and directives.  Specifically, Respondent has not complied with:

• the regulation at 21 C.F.R. § 17.23(a) and paragraph 4 of the Pre-Hearing Order, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with my February 4, 2026 Order, when it failed to submit documents responsive to CTP’s Request for Production of Documents by February 18, 2026.

Additionally, Respondent failed to defend this action.  21 C.F.R. § 17.35(a)(2).  Specifically:

• Respondent did not file a response to CTP’s Motion to Compel Discovery, as permitted by the regulations and my December 31, 2025 Order; and
• Respondent did not file a response to CTP’s Motion to Impose Sanctions, as permitted by the regulations and my February 27, 2026 Order.

Respondent’s failure to respond to CTP’s motions, to comply with multiple orders, and to fulfill its discovery obligations suggests that Respondent has abandoned its defense in this case.

In the absence of any explanation from Respondent, I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend this action, and, as a result, interfered with the speedy, orderly, and fair conduct of this proceeding.  I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, 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 two of my orders, despite my explicit warnings that its failure could result in sanctions.  CRD Dkt. Entry Nos. 4 ¶  21; 9 at 2.  Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding.  I find that Respondent’s actions are sufficient to warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3).  Accordingly, I

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strike Respondent’s Answer, and issue this Initial Decision and Default Judgment, assuming the facts alleged in CTP’s Complaint to be true.  21 C.F.R. §§ 17.35(c)(3), 17.11(a).

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. 

Specifically, CTP alleges the following facts in its Complaint:

• Respondent owns Marathon, an establishment that sells tobacco products and is located at 3311 South Saginaw Street, Burton, Michigan 48529.  Complaint ¶ 6.
• On June 27, 2022, CTP initiated the first civil money penalty action, CRD Docket Number T-22-605, FDA Docket Number FDA-2022-H-1333, against Respondent for violations of the Act.  CTP alleged those violations to have occurred on July 6, 2021 and March 21, 2022.1  Complaint ¶ 10.
• The first action concluded when Respondent “admitted all of the allegations in the Complaint and paid the agreed upon penalty.”  Further, “Respondent expressly waived its rights to contest such violations in subsequent actions.”  Complaint ¶ 10.

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• On August 9, 2024, CTP initiated its second civil money penalty action, FDA Docket Number FDA-2024-H-3775, CRD Docket Number T-24-4038, against Respondent for two additional violations on May 17, 2024.  Complaint ¶ 11.
• The second action concluded when Respondent “admitted all of the allegations in the Complaint and paid the agreed upon penalty.”  Further, “Respondent expressly waived its rights to contest such violations in subsequent actions.”  Complaint ¶ 11.
• On December 26, 2024, CTP initiated its third civil money penalty action, FDA Docket Number FDA-2024-H-5903, CRD Docket Number T-25-1000, against Respondent for two additional violations on October 9, 2024.  Complaint ¶ 12.
• The third action concluded when Respondent “admitted all of the allegations in the Complaint and paid the agreed upon penalty.”  Further, “Respondent expressly waived its rights to contest such violations in subsequent actions.”  Complaint ¶ 12.
• At approximately 2:58 PM on May 23, 2025, an FDA-commissioned inspector documented Respondent’s staff selling a Breeze Pro Blue Raspberry electronic nicotine delivery system (ENDS) product to a person younger than 21 years of age.  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 ¶ 7.

These facts establish Respondent Marathon’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 identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age.

Under 21 U.S.C. § 333(f)(8), a No-Tobacco-Sale Order is permissible for at least five repeated violations under section 906(d) of the Act and the regulations at 21 C.F.R. Part 1140 over a 36-month period.  The maximum period of time for the first No-Tobacco-Sale Order received by a retailer is 30 calendar days.  See Food & Drug

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Admin., Determination of the Period Covered by a No-Tobacco-Sale Order and Compliance with Order at 3-4, available at https://www.fda.gov/media/93328/download (Revised Mar. 2023); Civil Money Penalties and No-Tobacco-Sale Orders For Tobacco Retailers at 5-6, available at http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsG… (Revised Aug. 2023).

Taking the above alleged facts as true, Respondent had six repeated violations of section § 906(d)(5) of the Act and the regulations found at 21 C.F.R. Part 1140 within a 36-month period.  Respondent originally violated the prohibition against selling regulated tobacco products to persons younger than 21 years of age, Act § 906(d)(5), on July 6, 2021.  Respondent repeated those violations on May 17, 2024, October 9, 2024, and May 23, 2025.  Respondent originally 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 on March 21, 2022.  Act § 906(d)(5).  Respondent repeated those violations on May 17, 2024, October 9, 2024, and May 23, 2025.  Therefore, Respondent’s actions constitute violations of law that merit a No-Tobacco-Sale Order.

ORDER

For these reasons, I enter default judgment against Respondent, FHM Fuel, Inc. d/b/a Marathon, in the form of a No-Tobacco-Sale Order, for a period of 30 consecutive calendar days.  See 21 C.F.R. § 17.11(a)(1), (a)(2).  During this period of time, Respondent shall stop selling cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco, and covered tobacco products regulated under the Federal Food, Drug, and Cosmetic Act.  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.