Romba LLP (2025), DAB 3208

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Romba LLP d/b/a Freddie Grocery & Deli (Respondent) appeals an Initial Decision and Default Judgment by an Administrative Law Judge (ALJ) of the Civil Remedies Division (CRD) of the Departmental Appeals Board, and the ALJ’s subsequent Order Denying Respondent’s Motion to Reopen.  Romba LLP d/b/a Freddie Grocery & Deli, DAB TB9283 (2025) (Initial Decision); CRD Docket No. T-25-1331 Filing #10a (Denial Order).  We affirm the Initial Decision and the Denial Order for the reasons stated below.

Legal Background

To protect public health, the Federal Food, Drug, and Cosmetic Act (FDC Act) restricts the sale, distribution, and use of tobacco products.  See 21 U.S.C. §§ 301, 331(b), 331(k), 387a(a)-(b), 387c(a)(7)(B), 387f(d).  The FDC Act authorizes a civil money penalty (penalty) against “any person who violates a requirement of [the FDC Act] which relates to tobacco products.”  21 U.S.C. § 333(f)(9)(A).  The implementing regulations concerning penalties at 21 C.F.R. Part 17 and 45 C.F.R. § 102.3 establish a schedule of maximum penalty amounts based on the number of violations committed and the period over which they have occurred.  See 21 C.F.R. § 17.2 (citing 45 C.F.R. § 102.3 (table)).

When the Center for Tobacco Products (CTP) serves an administrative complaint alleging a violation of the FDC Act, the respondent may request a hearing before an ALJ “by filing an answer.”  21 C.F.R. § 17.9(a); see also id. §§ 17.5, 17.7.  The respondent must file the answer “within 30 days of service of the complaint.”  Id. § 17.9(a).

The regulations provide for an ALJ’s entry of a default judgment against a respondent that does not file a timely answer.  21 C.F.R. § 17.11.  “If the respondent does not file an answer within” 30 days after proper service of the complaint, the ALJ “shall assume the facts alleged in the complaint to be true, and, if such facts establish liability under the relevant statute,” the ALJ shall issue an initial decision imposing a penalty.  Id.  Within 30 days after issuance of that initial decision and default judgment, a respondent may move “to reopen on the grounds that extraordinary circumstances prevented the

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respondent from filing an answer,” and the ALJ shall stay the initial decision while the motion is pending.  Id. § 17.11(b)-(c).  If the respondent demonstrates “extraordinary circumstances,” the ALJ may withdraw the previously issued decision and “grant the respondent an opportunity to answer the complaint.”  Id. § 17.11(d).  However, if the ALJ “decides that the respondent’s failure to file an answer in a timely manner is not excused,” the ALJ “shall affirm the decision.”  Id. § 17.11(e).

A respondent “may appeal an [ALJ’s] initial decision, including a decision not to withdraw a default judgment,” to the Board, which “will issue a decision on the appeal.”  21 C.F.R. § 17.47(a), (j).

Case Background

This case arises from an Administrative Complaint for Civil Money Penalty that CTP served on Respondent on March 14, 2025 and filed with the CRD on March 17, 2025.  CRD Filing #1 (Complaint); see also Initial Decision at 1; CRD Filing #1b.  The Complaint alleged that Respondent violated Section 906(d)(5) of the FDC Act “and/or” applicable “tobacco regulations.”  Complaint at 1.  The Complaint warned that “[f]ailure to file an Answer within 30 days after service of the Complaint may result in a default order imposing the proposed civil money penalty.”  Id. at 6 (underlining replaced with italics).  On March 18, 2025, the CRD issued Guidance Establishing Procedures that stated, “Respondent must file an answer by April 14, 2025,” and included a “blank form answer” that Respondent could use for that purpose.1  CRD Filing # 2 (CRD Guidance), at 1 (boldface replaced with italics).  The CRD Guidance also instructed, “After you are granted access to the case, click on the link titled ‘Tobacco Cases’ to file an answer or view any documents previously filed in the case.”  Id. at PDF p. 9 (some emphasis omitted; boldface replaced with italics).   

Respondent did not file an answer or request an extension of time before the April 14, 2025 deadline expired, so the ALJ issued an Initial Decision on May 12, 2025 assuming the truth of the facts alleged in the Complaint and entering default judgment against Respondent for $709.  Initial Decision at 2-3.  

On May 16, 2025, Respondent filed a Motion to Reopen a Case.  CRD Filing # 5 (Motion to Reopen).  Respondent alleged that it “did file a timely answer on 3/20/2025 but due to an error, the answer was not received.”  Motion to Reopen at 1.  Respondent argued that its “failure to respond in a timely manner was due to excusable neglect,” that Respondent “filed the answer and sent it online [but] did not know it was not received,” and “no party will be unduly prejudiced if the case is reopened.”  Id.  Along with its motion Respondent filed a partially completed standard form answer dated March 20, 2025.  CRD Filing 

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# 5a.  On May 20, 2025, per 21 C.F.R. § 17.11(c), the ALJ issued an Order staying the decision and allowing CTP to file a response.  CRD Filing # 7.   

CTP opposed Respondent’s Motion to Reopen.  CRD Filing #9 (CTP Opp’n).  CTP argued that Respondent had “ample notice of the deadline for responding to the Complaint,” had “access to detailed instructions as to where and how to answer,” and “could have looked at the case docket any time before the answer was due to confirm” successful filing.  Id. at 5.  CTP asserted that “Respondent’s ‘excusable neglect’ was not an extraordinary circumstance” and so, “pursuant to 21 C.F.R. § 17.11, the ALJ should deny the Respondent’s Motion to Reopen.”  Id. at 6.

On June 12, 2025, the ALJ ruled that “Respondent has not demonstrated the extraordinary circumstances necessary to excuse its failure to file an Answer in a timely manner and required to reopen an initial decision pursuant to the regulatory requirements.”  Denial Order at 3 (citing 21 C.F.R. § 17.11(c)-(e)).  The ALJ explained:

The regulations do not define the term “extraordinary circumstances” but, clearly, that term must mean something more than a simple error or omission.  An “extraordinary circumstance” would normally constitute some event or events beyond a Respondent’s ability to control that acted to prevent Respondent from filing timely. At the very least, the term would preclude reopening where ordinary negligence is the cause of a Respondent’s failure to file a timely Answer.

Id. at 2.  The ALJ stated that the CRD Guidance told Respondent “it must file an answer” by April 14, 2025 and also included detailed filing instructions.  Id. at 2-3.  Though Respondent allegedly tried to file an Answer on March 20, 2025, the ALJ found that “Respondent did not confirm its Answer was filed” by checking the electronic docket after submission or ask the CRD for technical assistance “at any time” before the filing deadline.  Id. at 3.  The ALJ thus ruled that “Respondent’s admitted ‘excusable neglect’ is akin to ordinary negligence and does not rise to the level of an ‘extraordinary circumstance’” that would excuse Respondent’s failure to file a timely answer.  Id.

Respondent timely filed a Notice of Appeal and Appeal Brief (R. Br.) with the Board.  CTP timely filed a Memorandum in Opposition to Respondent’s Appeal (CTP Br.).  Respondent did not file a reply.  The record now is closed.

Standard of Review

We apply established standards of review.  “The standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record.”  21 C.F.R. § 17.47(k).  “The standard of review on a disputed issue of law is whether the initial decision is erroneous.”  Id.  The standard of review for an ALJ’s ruling 

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on a motion seeking to reopen under section 17.11(c) is whether the ALJ committed an abuse of discretion.  Shesh Narayan LLC, DAB No. 3137, at 6-7 (2024).

Analysis

Respondent argues that the ALJ interpreted “extraordinary circumstances” too narrowly, the ALJ’s conclusion was “inconsistent with case law and regulatory intent,” and “equitable relief may be appropriate.”  R. Br. at 2.  Respondent claims its conduct was diligent and in good faith because Respondent “made a timely attempt to file its Answer, acted immediately when the issue was discovered,” and committed “a technical error” that caused “no prejudice” to CTP.  Id.  Respondent also asserts the public policy argument that “[d]efault judgments should not be used to punish good faith errors where no prejudice has resulted” and the “interest of justice is better served by allowing this matter to proceed on its merits.”  Id.

CTP argues that the Board should affirm the Initial Decision and Denial Order “because they were supported by substantial evidence and are free of legal error,” and the ALJ “properly determined that Respondent failed to demonstrate that extraordinary circumstances excused its failure to timely answer” the Complaint.  CTP Br. at 1.  CTP states that “the ALJ’s finding that a mistake within Respondent’s own control is not an ‘extraordinary circumstance’ is consistent with applicable case law and the clear meaning of [21 C.F.R § 17.11],” and the Board cannot grant requests for equitable relief.  Id. at 7.

After reviewing the record and the parties’ arguments, we affirm the Initial Decision and Denial Order because Respondent has shown no error or abuse of discretion by the ALJ.

1. I. The ALJ’s Initial Decision and entry of default judgment against Respondent was factually supported and not legally erroneous.

Substantial evidence supports the ALJ’s decision to enter default judgment against Respondent.  Initial Decision at 1-2 (summarizing factual findings).  On March 14, 2025, CTP served on Respondent a Complaint that contained factual allegations supporting Respondent’s liability under the FDC Act and warned that failure to file an answer within 30 days could result in a default order imposing the proposed penalty.  Id.; Complaint at 6.  Respondent does not dispute the ALJ’s finding that Respondent “neither filed an answer within the time prescribed, nor requested an extension of time within which to file an answer.”  Initial Decision at 2; see R. Br. at 1 (stating that before the deadline “Respondent attempted to file an Answer electronically” that “was not received” though Respondent “believed” it was).

Respondent establishes no legal error in the ALJ’s conclusions that the facts alleged in CTP’s Complaint “establish [Respondent’s] liability under the [FDC] Act” and a $709 penalty is permissible.  Initial Decision at 1-2.  Respondent’s untimely partial Answer 

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denied some of the Complaint’s factual allegations but left blank the fields for stating any other “Defenses” or disputing the “Appropriateness of [the] Penalty.”  CRD Filing #5a, at 1-2; see 21 C.F.R. § 17.9(b)(2)-(3) (stating that an answer “[s]hall state all defenses on which the respondent intends to rely” and “all reasons why the respondent contends that the penalties and assessments should be less than the requested amount”).  In any event, because the Answer was untimely, “we conclude that the ALJ did not err in treating the allegations set out in CTP’s Complaint as true and proceeding to apply the relevant law to those facts, as section 17.11(a) requires.”  Shesh Narayan LLC at 11.  Therefore, the ALJ lawfully issued the Initial Decision imposing a $709 penalty.

1. II. The ALJ’s denial of Respondent’s Motion to Reopen was not an abuse of discretion.

An ALJ’s decision whether to withdraw a default judgment and allow late filing of an answer is discretionary.  Per 21 C.F.R. § 17.11(d), an ALJ “may” withdraw a default judgment decision if the respondent demonstrates “extraordinary circumstances” that excuse an untimely answer.  See KKNJ, Inc., DAB No. 2678, at 7 (2016) (stating that the Board has long interpreted use of “may” in regulations as conferring discretion).

In reviewing an ALJ’s exercise of discretion, the Board’s role “is not to substitute our judgment for that of the ALJ.”  Retail LLC, DAB No. 2660, at 14 (2015); see also Joshua Ranjit Inc., DAB No. 2758, at 7 (2017).  Instead, we “consider only whether the decision maker has articulated a reasonable basis for the decision under review, not whether it was the only reasonable decision.”  Retail LLC at 10 (emphasis omitted); see also Ranjit at 7.

The Denial Order was not an abuse of discretion because the ALJ articulated a reasonable basis for deciding that Respondent did not establish “that extraordinary circumstances prevented the respondent from filing an answer” on time per 21 C.F.R. § 17.11.  The ALJ explained that the regulatory phrase “extraordinary circumstances” normally signifies “some event or events beyond a Respondent’s ability to control” and “must mean something more than a simple error or omission” or “ordinary negligence.”  Denial Order at 2.  The ALJ reasoned that Respondent was accountable for its own failures to seek available technical assistance for filing the Answer and to confirm successful filing by checking the electronic docket afterwards.  Id. at 3.  The ALJ thus supportably found that “Respondent’s admitted ‘excusable neglect’ is akin to ordinary negligence and does not rise to the level of an ‘extraordinary circumstance.’”  Id.  The ALJ’s assessment aligns with Board precedent that “at minimum, the ‘extraordinary circumstances’ test requires proof of circumstances outside of Respondent’s ability to control and an absence of negligence.”  Shesh Narayan LLC at 8 (italics substituted for boldface). 

Respondent’s arguments establish no abuse of discretion.  The ALJ’s interpretation of “extraordinary circumstance” was not, as Respondent contends, “inconsistent with case law and regulatory intent.”  See R. Br. at 2.  The ALJ’s decision was consistent with the 

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Supreme Court’s holding that “equitable tolling does not apply” when timely filing “was blocked not by an obstacle outside [a litigant’s] control, but by the [litigant’s] mistaken belief,” in which case “there were no extraordinary circumstances.”  See Menominee Indian Tribe of Wis. v. United States, 577 U.S. 250, 251, 257, 259 n.5 (2016); see also R. Br. at 2 (referencing Respondent’s “belief that it filed its Answer – based on a filing mistake”).  The ALJ’s assessment also is consistent with the regulatory intent, as the Food and Drug Administration, when adopting 21 C.F.R. § 17.11, expressly rejected an “excusable neglect” standard and chose the stricter “‘extraordinary circumstances’ test,” which was “justified by the need to encourage respondents to respond in a timely fashion.”  60 Fed. Reg. 38,612, 38,617 (July 27, 1995).  We construe Respondent’s remaining arguments – that its conduct was diligent, in good faith, and non-prejudicial, and that public policy favors resolution on the merits – “as a request for equitable relief from the ALJ’s entry of default judgment,” which we cannot grant.  See Carolina Cigar of Delray, LLC, DAB No. 3134, at 10-11 (2024).  “We, like the ALJ, cannot ignore binding regulations on equitable grounds, and, moreover, we find no unfairness in the ALJ Decision in this case.”  Kwik Gas Inc., DAB No. 2852, at 7 (2018).

The ALJ reasonably found that Respondent did not meet its burden to establish that “extraordinary circumstances” prevented Respondent from timely filing its Answer to CTP’s Complaint.  Therefore, the ALJ did not commit an abuse of discretion in denying Respondent’s Motion to Reopen and affirming the Initial Decision.

Conclusion

We affirm the Initial Decision and the Denial Order.