Fair Brothers Inc. d/b/a Quick Mart, DAB TB4857 (2020)

Decision

Found:

1. Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), on July 7, 2018, as charged in the Complaint; and
2. Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1),1 on June 14, 2015, and  21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), on May 27, 2017, and March 5, 2018, as charged in prior complaints; and
3. Respondent committed seven violations in a 48-month period as set forth hereinabove; and
4. Respondent is hereby assessed a civil money penalty in the amount of $11,182.

Glossary:

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I. JURISDICTION

I have jurisdiction to hear this case pursuant to my appointment by the Secretary of Health and Human Services and my authority under the Administrative Procedure Act (5 U.S.C. §§ 554-556), 5 U.S.C.A. § 3106, 21 U.S.C. § 333(f)(5), 5 C.F.R. §§ 930.201 et seq. and 21 C.F.R. Part 17.3

II. PROCEDURAL BACKGROUND

The Center for Tobacco Products (CTP or Complainant) filed a Complaint dated September 24, 2018, against Fair Brothers Inc. d/b/a Quick Mart (Quick Mart or Respondent), alleging that FDA documented seven violations within a 48-month period. CTP seeks a civil money penalty (CMP) in the amount of $11,182. CRD Docket Number (Dkt. No.) 1.

Respondent was served with process on September 27, 2018. Dkt. No. 1b. Respondent did not file a timely Answer by the October 29, 2018 regulatory deadline. See 21 C.F.R. 17.9(a). On November 8, 2018, CTP filed a Motion for Default Judgment

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requesting that I enter a default judgment imposing the $11,182 CMP sought. Dkt. No. 6. On November 20, 2018, I issued an Order Granting Motion for Default and Order to Show Cause to Respondent (OSC). Dkt. No. 7. My OSC specified that Respondent had until close of business on November 26, 2018, to show cause why Judgment of Default should not be entered in favor or CTP. On November 20, 2018, through the DAB E-File System (DAB E-File) and in response to my November 20, 2018 OSC, Respondent filed a submission captioned "Letter in Response to FDA Warning to be in Compliance," which among other things states:

We are in Receipt of your Communication dated: July 7-2018 Compliance check . . . & FDA Warning letter regarding violation dated: Sep/26/2018.

Dkt. No. 8 (emphasis in original). Respondent's November 20, 2018 OSC submission appears to be Respondent's untimely Answer and I infer it as such. 

On November 26, 2018, I issued a Pre-Hearing Order (PHO) setting a schedule for filings and procedures, including a December 27, 2018 deadline to request documents from the opposing party. Dkt. No. 9. The PHO further set forth that, pursuant to 21 C.F.R. § 17.23(a), any documents requested must be provided to the opposing party within 30 days of the request. See PHO ¶ 3. The PHO also instructed that a party may move to compel or for sanctions if requested documents are not received within 30 days. Id. Further, the PHO established a February 25, 2019 simultaneous pre-hearing exchange filing deadline.

On January 8, 2019, by DAB E-File, Respondent submitted a one-page document acknowledging "Receipt of your Communication dated: Nov-26-2018." See Dkt. No. 10.

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I infer the document to be Respondent's pre-hearing exchange submission. I note that the filing did not include a proposed witness and exhibit list, any written direct testimony of any proposed witnesses, or any proposed exhibits. See Dkt. No. 9 ¶ 4.

On January 10, 2019, CTP filed a Motion to Compel Discovery indicating Respondent failed to respond to CTP's Request for Production of Documents (Request for Production or RFP), which was delivered to Respondent's retail location on December 5, 2018. Dkt. Nos. 11, 11b. On January 18, 2019, I issued an Order instructing Respondent to show cause why the Motion to Compel should not be granted in favor of Complainant, by January 23, 2019. Dkt. No. 12. I also stayed all outstanding deadlines, including the February 25, 2019 pre-hearing exchange filing deadline, pending resolution of the pending discovery issue. Id. at 2.

On January 23, 2019, via the DAB E-File System, Respondent filed a response to CTP's Motion to Compel (MTC Response) and my January 18, 2019 Order. Dkt. No. 13. In its response, Respondent stated, in part:

What kind of proof should I provide you instead of all the corrective actions I have taken.

Id. at 2. Based on Respondent's statement, I concluded that Respondent failed to comply with CTP's December 4, 2018 Request for Production and issued an order granting CTP's Motion to Compel Discovery. Dkt. No. 14. Respondent was given until March 15, 2019 to comply with CTP's RFP. Id. at 2. I warned "[f]ailure to [comply] may result in sanctions, including issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money

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penalty." Id. The Order also continued the stay on all outstanding deadlines previously established in the November 26, 2018 PHO. Id.

On May 31, 2019, a letter issued by my direction was sent to the parties noting, "neither party has provided this office with a status update with regard to Respondent's production of the requested documents to CTP." Dkt. No. 15, at 2. The letter further informed the parties that they had until June 14, 2019, to file a joint report advising of the status of the case. Id. On June 14, 2019, CTP submitted a joint status report confirming receipt of financial and other documents from Respondent responsive to the Request for Production of Documents. Dkt. No. 19; see also Dkt. Nos. 16, 17, 17a, 17b, 18. On June 17, 2019, I issued a second PHO which re-established, among other things, a September 16, 2019 simultaneous pre-hearing exchange filing deadline. See Dkt. No. 20.

On September 16, 2019, CTP filed its pre-hearing exchange, containing an Informal Brief of Complainant (CTP Br.), a List of Proposed Witnesses and Exhibits, and 15 exhibits (CTP Exs. 1-15). Dkt Nos. 21, 21a-p. The exhibits included the written direct testimony of two proposed witnesses, Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 5) and FDA-commissioned Inspector Michael Woida (CTP Ex. 6).   Respondent failed to file its pre-hearing exchange or propose any witnesses which complied with my directives set forth at paragraph 4 of the June 17, 2019 PHO.

On September 18, 2019, I issued an Order Scheduling Telephone Hearing setting the hearing date for December 12, 2019, at 1:00 PM Eastern Time. Dkt. No. 22. The Order Scheduling Telephone Hearing instructed that, at least 15 days before the hearing date, the parties must indicate which witnesses, if any, they wish to cross-examine at the

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hearing. Id. at 1. I warned that I will cancel the hearing and proceed to a written decision on the record if neither party seeks to cross-examine the opposing party's witness. Id. On October 17, 2019, due to the Court's scheduling conflict, I issued an Order Rescheduling Telephone Hearing (Rescheduling Order) resetting the hearing date for January 7, 2020, at 1:00 PM Eastern Time. Dkt. No. 23. The Rescheduling Order also stated "[a]ll outstanding directives stated in my September 18, 2019 Order Scheduling Telephone Hearing remain in effect." Id. at 1.

Respondent failed to indicate which CTP's witness it wished to cross-examine at the hearing by the December 23, 2019 deadline. Accordingly, on December 27, 2019, I issued an Order canceling the hearing and indicating that I would decide this case based on the written record. Dkt. No. 24. The December 27, 2019 Order directed both parties to move by written motion to admit their proposed exhibits into evidence for my consideration within 10 days of the Order. Id. at 2.

On December 31, 2019, CTP moved to admit into evidence its Informal Brief of Complainant, List of Proposed Witnesses and Exhibits, and CTP Exs. 1 -15, filed on September 16, 2019. Dkt. No. 25. Respondent did not file a Motion to Admit Evidence or file any objections to the admission of CTP's proposed documentation into evidence.

This matter is now ready for decision. 21 C.F.R. § 17.45(c). I admit into evidence CTP's proposed exhibits 1 through 15 and decide this case based on the written record. 21 C.F.R. § 17.19(b)(11), (17).

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III. BURDEN OF PROOF

As the petitioning party, CTP has the burden to prove, by a preponderance of the evidence, that Respondent is liable and that the proffered CMP is appropriate. 21 C.F.R. § 17.33.

IV. LAW

21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i).

V. ISSUES

a. Did Respondent violate 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), as alleged in the Complaint?

b. If so, is a CMP in the amount of $11,182 appropriate?

VI. ALLEGATIONS

A. Complainant's Recitation of Facts

In its Complaint, CTP alleged that Respondent owns an establishment doing business under the name of Quick Mart, located at 2003 East 46th Street, Indianapolis, Indiana 46205. CTP also alleged that Respondent's establishment received tobacco products in interstate commerce and held them for sale after shipment in interstate commerce.

CTP's Complaint further alleged that on July 7, 2018, an FDA-commissioned inspector conducted an inspection of Quick Mart, and documented Respondent committing the following violations:

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a. Selling cigarettes to a minor, in violation of 21 C.F.R. § 1140.14(a)(1). Specifically, a person younger than 18 years of age was able to purchase a package of Marlboro cigarettes on July 7, 2018, at approximately 1:24 PM; and

b. Failing to verify the age of a person purchasing cigarettes by means of photographic identification containing the bearer's date of birth, as required by 21 C.F.R. § 1140.14(a)(2)(i). Specifically, the minor's identification was not verified before the sale, as detailed above, on July 7, 2018, at approximately 1:24 PM.

B. Respondent's Recitation of Facts

In its Answer, Respondent appears to admit the allegations alleged in the Complaint and stated:

We have taken all the necessary measures to ensure our customers well-being safety. We agree that a sound quality System is the result of effective management commitment, dedicated employees, and sound processes and practices. The action item is going to take some time to implement, state what will be done in the interim to be compliant with GMPS. [F]irst of all immediately upon receiving the warning from FDA my hiring officer issued a letter to the clerk on that shift and we find it was just a filler clerk that day that wasn't gone through the training process so we have to fire him the same day.
We have already taken the immediate corrective actions to remediate potential urgent concerns.
Corrective actions have already taken in Place.
As stated earlier it all happened due to a Temp Worker was on shift for only a day and lack of training and awareness resulted [in] this. Again I personally feel sorry about all this and rests assure its not going to result again.
At this moment[,] we want to waive off any penalty that the result of this FDA warning. We rest assure its going to be very strict rule and store policy to ID every tobacco customer . . . .

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Dkt. No. 8. In its Answer, Respondent also requested "[p]lease do not impose any [Civil] penalty on this business and give us a relief from this." Id.

Subsequently, on January 8, 2019, and January 23, 2019, Respondent filed additional submissions, which appear to retract Respondent's November 20, 2018 admission to the allegations alleged and stated, in part:

I deny from the allegations of selling cigarettes to minor.
This is a false allegation actually two stores right opposite to [Q]uick [M]art are selling loose cigarettes and also selling cigarettes to minor.

Dkt. No. 13; see also Dkt. No. 10.

VII. PRIOR VIOLATIONS

On March 15, 2018, CTP initiated a previous civil money penalty action, CRD Docket Number T-18-1644, FDA Docket Number FDA-2018-H-1133 (see also CRD Docket Number T-17-5020, FDA Docket Number FDA-2017-H-3923), against Respondent for five4 violations of 21 C.F.R. pt. 1140 within a 36-month period. See CTP Ex. 3 ¶ 1. CTP asserted those violations to have occurred at Respondent's business establishment, 2003 East 46th Street, Indianapolis, Indiana 46205, on June 14, 2015, May 27, 2017, and March 5, 2018. Id. ¶¶ 5, 9.

The previous CMP action concluded when Respondent admitted the allegations contained in the Complaint and paid the agreed upon monetary penalty in settlement of

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that claim. CTP Ex. 4. Further, Respondent expressly waived its right to contest such violations in subsequent actions. Id.

VIII. FAMILY SMOKING PREVENTION AND TOBACCO CONTROL ACT

The "relevant statute" in this case is actually a combination of statutes and regulations: The Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111‑31, 123 Stat. 1776 (2009) (TCA), amended the Food, Drug, and Cosmetic Act (21 U.S.C.A. Chap. 9) (FDCA) and created a new subchapter of the FDCA that dealt exclusively with tobacco products, (21 U.S.C. §§ 387-387u), and it also modified other parts of the FDCA explicitly to include tobacco products among the regulated products whose misbranding can give rise to civil, and in some cases criminal, liability. The 2009 amendments to the FDCA contained within the TCA also charged the Secretary of Health and Human Services with, among other things, creating regulations to govern tobacco sales. The Secretary's regulations on tobacco products appear in Part 1140 of Title 21, Code of Federal Regulations.

Under the FDCA, "[a] tobacco product shall be deemed to be misbranded if, in the case of any tobacco product sold or offered for sale in any State, it is sold or distributed in violation of regulations prescribed under section 387f(d)." 21 U.S.C. § 387c(a)(7)(B) (2012). Section 387a‑1 directed FDA to re-issue, with some modifications, regulations previously passed in 1996. 21 U.S.C. § 387a-1(a) (2012). These regulations were passed pursuant to section 387f(d), which authorizes FDA to promulgate regulations on the sale and distribution of tobacco products; 75 Fed. Reg. 13,225 (Mar. 19, 2010), codified at 21 C.F.R. Part 1140 (2015); 21 U.S.C. § 387f(d)(1) (2012). Accordingly, 21 C.F.R.

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§ 1140.1(b) provides that "failure to comply with any applicable provision in this part in the sale, distribution, and use of cigarettes and smokeless tobacco renders the product misbranded under the act."

Under 21 U.S.C. § 331(k), "[t]he alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, tobacco product, or cosmetic, if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded" is a prohibited act under 21 U.S.C. § 331. Thus, when a retailer such as Respondent misbrands a tobacco product by violating a requirement of 21 C.F.R. Part 1140, that misbranding in turn violates the FDCA, specifically 21 U.S.C. § 331(k). FDA may seek a CMP from "any person who violates a requirement of this chapter which relates to tobacco products." 21 U.S.C. § 333(f)(9)(A) (2012). Penalties are set by 21 U.S.C. § 333 note and 21 C.F.R. § 17.2. Under current FDA policy, the first time FDA finds violations of 21 C.F.R. Part 1140 at an establishment, FDA only counts one violation regardless of the number of specific regulatory requirements that were actually violated, but if FDA finds violations on subsequent occasions, it will count violations of specific regulatory requirements individually in computing any CMP sought. This policy is set forth in detail, with examples to illustrate, at U.S. Food & Drug Admin., Guidance for Industry and FDA Staff, Civil Money Penalties and No-Tobacco-Sale Orders for Tobacco Retailers, Responses to Frequently Asked Questions (Revised) (2016), available at http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/U

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CM447310.pdf [hereinafter Guidance for Industry], at 13-14. So, for instance, if a retailer sells a tobacco product on a particular occasion to a minor without checking for photographic identification, in violation of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), this will count as two separate violations for purposes of computing the CMP, unless it is the first time violations were observed at that particular establishment. This policy of counting violations has been determined by the HHS Departmental Appeals Board to be consistent with the language of the FDCA and its implementing regulations. See Orton Motor Co. d/b/a Orton's Bagley v. HHS, 884 F.3d 1205 (D.C. Cir. 2018).

IX. SUMMARY OF TESTIMONY AND EVIDENCE

A. Complainant's Case

Complainant submitted CTP's Exhibits 1-15, which included photos and written direct testimony from CTP's witnesses, Inspector Woida and Ms. Sternberg. Respondent did not object to the admission of Complainant's exhibits, and, as indicated above, I admitted CTP's Exhibits 1-15 into evidence.

1. Senior Regulatory Counsel Laurie Sternberg

Witness Laurie Sternberg, Senior Regulatory Counsel in the Office of Compliance and Enforcement, CTP, FDA, provided written direct testimony on behalf of Complainant. CTP Ex. 5. In her declaration, Ms. Sternberg testified that the Marlboro cigarettes purchased during the July 7, 2018 inspection "are manufactured, prepared, compounded, or processed for commercial distribution . . . in Virginia." CTP Ex. 5 ¶¶ 7-8; see also CTP Ex. 15. Ms. Sternberg further noted that the manufacturer of Marlboro

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cigarettes does not have any registered tobacco production facilities in the state of Indiana. CTP Ex. 5 ¶ 9.

2. Inspector Michael Woida

Inspector Woida, the FDA-commissioned inspector who conducted the July 7, 2018 inspection at issue, provided written direct testimony on behalf of Complainant. CTP Ex. 6.

In his declaration, Inspector Woida testified that on July 7, 2018, at approximately 1:24 PM, he and a confidential minor (Minor A) performed a follow-up UB (undercover buy) compliance check inspection at Respondent's establishment, Quick Mart, located at 2003 East 46th Street, Indianapolis, Indiana 46205. CTP Ex. 6 ¶ 8.

Prior to the inspection, Inspector Woida confirmed that Minor A did not possess "his/her photographic identification in his/her possession" and that "Minor A was under the age of 18 when he/she participated in the inspection . . . ." CTP Ex. 6 ¶ 8; see also CTP Ex. 7 (showing Minor A's date of birth as May 26, 2001). According to Inspector Woida's declaration, "[m]inors are also trained not to carry photographic identification with them during an inspection, and that they must tell the truth if they are asked about their age or whether they have identification." CTP Ex. 6 ¶ 7. Additionally, before the inspection, Inspector Woida "confirmed that Minor A did not have any tobacco products in his/her possession." CTP Ex. 6 ¶ 8.

Inspector Woida then parked his car near Quick Mart, he exited the vehicle, and entered Respondent's establishment. CTP Ex. 6 ¶ 9. Minor A entered Quick Mart a few minutes after Inspector Woida. Id. Inspector Woida noted: "[f]rom my location, I had a

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clear, unobstructed view of the sales counter and Minor A. During the inspection, I observed Minor A purchase a package of cigarettes from an employee at the establishment." Id. Inspector Woida observed that Minor A neither presented identification prior to the purchase, nor received a receipt after the purchase. Id.

After exiting Respondent's establishment, Inspector Woida and Minor A returned to the vehicle. CTP Ex. 6 ¶ 10. Immediately upon entering the vehicle, Minor A handed the inspector the package of Marlboro cigarettes. Id. Inspector Woida labeled the cigarettes as evidence, photographed the packaging (CTP Exs. 10 and 11), and "processed the evidence in accordance with standard procedures at the time of the inspection." Id.

Shortly thereafter, Inspector Woida recorded the inspection in the FDA's Tobacco Inspection Management System (TIMS) (CTP Ex. 9), and created a Narrative Report (CTP Ex. 8). CTP Ex. 6 ¶ 11. Both TIMS and Narrative Report describe the employee who sold cigarettes to Minor A on July 7, 2018 as an adult male with black/dark brown hair, and a mustache and beard. See CTP Ex. 8 ¶ 15; CTP Ex. 9 ¶ 16. In his written direct testimony, Inspector Woida testified that "Exhibits 8 and 9 are true and accurate redacted copies of the Narrative Report and the TIMS Assignment Form" and "Exhibits 10 and 11 are true and accurate copies of photographs [he] took during the inspection." CTP Ex. 6 ¶¶ 11-12.

B. Respondent's Case

Respondent failed to submit written direct testimony or other documentary evidence in accordance with my PHO dated June 17, 2019. However, while Respondent

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submitted financial and other documentation (Dkt. Nos. 16, 17, 17a, 17b, 18) on June 10 and 13, 2019 through DAB E-File, Respondent never moved to admit them into evidence as his exhibits, in accordance with my December 27, 2019 Order. Therefore, the documents at Dkt. Nos. 16, 17, 17a, 17b, and 18 are excluded as evidence, but will remain a part of the administrative record.

It is Respondent's position that: (1) Respondent did not sell cigarettes to a minor on July 7, 2018; (2) the allegations alleged by CTP are false; (3) it is in fact two stores near Respondent's establishment which sell loose cigarettes and sell cigarettes to minors; and (4) "immediate corrective actions to remediate potential urgent concerns . . . have already taken in [sic] Place." Dkt. No. 10. Respondent offered no evidence in support of its statements.

X. ANALYSIS OF EVIDENCE AND TESTIMONY

A. Complainant's Case

Complainant offered and I have admitted into evidence CTP Exhibits 1-15. Pursuant to 21 C.F.R. § 17.33(b), in order to prevail, CTP must prove Respondent's liability and the appropriateness of the penalty under the applicable statute by a preponderance of the evidence.

I must determine whether the allegations in the Complaint are true, and if so, whether Respondent's actions identified in the Complaint violated the law. 21 C.F.R. § 17.45(b)(1).

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B. Respondent's Case

Pursuant to 21 C.F.R. § 17.33(c), Respondent must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence. As indicated above, Respondent did not offer any evidence for inclusion into the record.

C. Analysis

1. I find and conclude that CTP has shown by a preponderance of the evidence that Respondent violated 21 C.F.R. § 1140.14(a)(1) when it impermissibly sold cigarettes to Minor A on July 7, 2018, at approximately 1:24 PM.

Respondent's establishment received tobacco products in interstate commerce, including Marlboro cigarettes, and held them for sale after shipment in interstate commerce. CTP Ex. 5 ¶¶ 8-9; see also CTP Ex. 15.

On July 7, 2018, Inspector Woida conducted a follow-up UB compliance check inspection at Respondent's establishment, Quick Mart, with Minor A.  CTP Ex. 6 ¶ 8. Prior to the inspection, Inspector Woida confirmed that Minor A was under the age of 18, did not have his/her birth certificate in his/her possession, and did not have any tobacco products in his/her possession. Id.

Inspector Woida entered Respondent's establishment, and Minor A followed behind a few minutes later. Inspector Woida positioned himself so he "had a clear, unobstructed view of the sales counter and Minor A." CTP Ex. 6 ¶ 9. During the inspection, Inspector Woida "observed Minor A purchase a package of cigarettes from an employee at the establishment." Id. Inspector Woida observed that Minor A did not receive a receipt after the purchase. Id.

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After Inspector Woida and Minor A exited Respondent's establishment, they returned to the vehicle. CTP Ex. 6 ¶ 10. Immediately upon entering the vehicle, Minor A tendered the package of Marlboro cigarettes to the inspector. Id. Inspector Woida labeled the cigarettes as evidence, photographed the packaging, and "processed the evidence in accordance with standard procedures at the time of the inspection." Id.

Inspector Woida's testimony was further supported by physical evidence. CTP submitted a redacted copy of Minor A's State of Indiana birth certificate, listing the date of birth as May 26, 2001, showing that Minor A was 17 years old at the time of the July 7, 2018 inspection. CTP Ex. 7. CTP also submitted copies of the photographs that Inspector Woida took of the Marlboro cigarette package. CTP Exs. 10, 11. CTP submitted a contemporaneously-created Narrative Report (CTP Ex. 8) and TIMS form (CTP Ex. 9). Inspector Woida's observations and the physical evidence that was obtained on July 7, 2018, were, in and of themselves, adequate to prove CTP's case. I, therefore, find that in conjunction with the corroborating physical evidence (e.g., photographs and Minor A's birth certificate showing Minor A was 17 years old at the time of the inspection) and Ms. Sternberg's declaration, Inspector Woida's testimony is sufficient to satisfy CTP's burden of proving that Respondent violated 21 C.F.R. § 1140.14(a)(1) on July 7, 2018, at approximately 1:24 PM, by a preponderance of the evidence.

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2. I find and conclude that CTP has shown by a preponderance of the evidence that Respondent violated 21 C.F.R. § 1140.14(a)(2)(i) when it failed to verify the age of Minor A by means of photographic identification containing his/her date of birth, on July 7, 2018, at approximately 1:24 PM.

On July 7, 2018, Inspector Woida conducted a follow-up UB compliance check inspection at Respondent's establishment, Quick Mart, with Minor A. Prior to the inspection, Inspector Woida confirmed that Minor A was under the age of 18 and did not have in his/her possession photographic identification. CTP Ex. 6 ¶ 8. Prior to the sale of cigarettes, Inspector Woida observed that Minor A did not present his/her identification to Respondent's employee.CTP Ex. 6 ¶ 9.

I find Inspector Woida's testimony to be credible and unbiased. Indeed, it is reasonable to infer that a store employee failed to check the minor's identification on July 7, 2018. It is undisputed that Minor A was 17 years old at the time of the inspection on July 7, 2018. Consistent with the training procedures, Inspector Woida confirmed that Minor A did not possess his/her photographic identification when he/she entered the establishment on July 7, 2018. Nonetheless, according to Inspector Woida's declaration, Minor A was able to purchase a package of cigarettes. It is also unrefuted that Inspector Woida observed that Minor A did not present his/her photographic identification to Respondent's employee when purchasing cigarettes on July 7, 2018. I therefore find that, in conjunction with the corroborating documentary evidence (e.g., Minor A's birth certificate), Inspector Woida's testimony is sufficient to satisfy CTP's burden of proving that Respondent violated 21 C.F.R. § 1140.14(a)(2)(i) on July 7, 2018, at approximately 1:24 PM, by a preponderance of the evidence.

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3. Respondent offered no affirmative proof to rebut the evidence of noncompliance on July 7, 2018, presented by CTP.

In its January 8, 2019, and January 23, 2019 submissions, Respondent maintains that it did not sell cigarettes to a minor on July 7, 2018, and that the allegations asserted by CTP are false. Dkt. Nos. 10, 13. However, Respondent failed to submit any evidence whatsoever in support of its position.

Respondent has not provided any evidence to rebut the documentation submitted by CTP or the testimony of Inspector Woida. Therefore, I conclude that Respondent has not proved any affirmative defense by a preponderance of the evidence.

XI. LIABILITY

When a retailer such as Respondent is found to have "misbranded" a tobacco product in interstate commerce, it can be liable to pay a CMP. 21 U.S.C. §§ 331, 333.

Based on the executed settlement agreements (CTP Exs. 2 and 4), Respondent previously admitted to five violations of 21 U.S.C. § 331, specifically three violations of 21 C.F.R. § 1140.14(a)(1) on June 14, 2015, May 27, 2017, and March 5, 2018, and two violations of 21 C.F.R. § 1140.14(a)(2)(i) on May 27, 2017 and March 5, 2018, as set forth in prior complaints. Thus, the prior five violations are administratively final.

Based on the evidence presented, I find and conclude that Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1), in that a person younger than 18 years of age was able to purchase a package of Marlboro cigarettes on July 7, 2018, at approximately 1:24 PM.

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I further find and conclude that, based on the evidence presented, Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(2)(i), on that same date, in that Respondent failed to verify, by means of photo identification containing a purchaser's date of birth, that no cigarette purchaser is younger than 18 years of age.

The conduct on July 7, 2018 set forth above counts as two violations under the FDA policy for purposes of computing the CMP in the instant case. See Guidance for Industry, at 13-14. Accordingly, I find and conclude that Respondent is liable for seven violations of the FDCA and its implementing regulations within a 48-month period.

XII. PENALTY

As Respondent is liable under the relevant statute, I must now determine the amount of penalty to impose. In its Complaint, CTP sought to impose the maximum penalty amount, $11,182, against Respondent for seven violations of the FDCA and its implementing regulations within a 48-month period. In its Informal Brief, CTP asserts that an $11,182 CMP is appropriate for seven violations within a 48-month period. CTP Br. 11-13.  Specifically, CTP argues that "[u]nder 45 C.F.R. § 102.3, the maximum penalty for seven violations in a forty-eight month period is $11,182. CTP believes that, for Respondent's seven violations in a forty-eight month period an assessment of an $11,182 penalty is appropriate." Id. at 11.

Respondent failed to file a pre-hearing brief which complied with the directives in my PHO issued on June 17, 2019. However, Respondent submitted an Answer, which admitted the allegations alleged in the Complaint (see Dkt. No. 8), and subsequent statements, which appear to retract Respondent's initial admission. In its subsequent

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filings, Respondent denied responsibility for the violations contending that it did not sell cigarettes to minors, and that it has "already taken the immediate corrective actions to remediate potential urgent concerns.  Corrective actions have already taken in [sic] Place." Dkt. No. 10; see Dkt. No. 13.

Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a CMP not to exceed the amounts listed in FDA's CMP regulations at 21 C.F.R. § 17.2. I, however, "may compromise, modify, or remit, with or without conditions, any civil penalty which may be assessed under [21 U.S.C. § 333(f)(1), (2), (3), (4), or (9)]." 21 U.S.C. § 333(f)(5)(C). When determining the amount of a CMP, I am required to take into account "the nature, circumstances, extent, and gravity of the . . . violations and, 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).

A. The nature, circumstances, extent, and gravity of the violations

I have found that Respondent committed four violations of selling tobacco products to minors, and three violations for failure to verify, by means of photo identification containing a purchaser's date of birth, that no tobacco product purchasers are younger than 18 years of age, totaling seven violations of the tobacco regulations. The regulations governing the sale of tobacco products are set forth to protect public health, in particular the health of minors. The repeated inability of Respondent to comply with federal tobacco regulations is serious in nature and demand a proportional CMP amount.

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B. Respondent's ability to pay and effect of the CMP on ability to do business

CTP is seeking an $11,182 CMP against Respondent asserting that an $11,182 CMP will not affect Respondent's ability to do business, because "Respondent may continue to sell tobacco products and other products at the establishment." CTP Br. at 12. Respondent submitted federal income tax returns for tax years 2016, 2017, and 2018. However, as discussed above, I have not admitted these documents into evidence and will not consider them in rendering my decision.

Therefore, Respondent has not presented any evidence that it does not have the ability to pay the $11,182 civil money penalty sought by CTP.

C. History of prior violations

The current action is the third CMP action brought against Respondent for violations of the FDCA and its implementing regulations. The first $559 CMP action, CRD Docket Number T-17-5020, FDA Docket Number FDA-2017-H-3923, was brought against Respondent for violations of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i). See CTP Ex. 1. Respondent settled the first complaint with CTP for an undisclosed penalty amount. See CTP Ex. 2.

The second $5,591 CMP action, CRD Docket Number T-18-1644, FDA Docket Number FDA-2018-H-1133, was brought against Respondent for two additional violations on March 5,2018—one violation of 21 C.F.R. § 1140.14(a)(1) and one violation of 21 C.F.R. § 1140.14(a)(2)(i). See CTP Ex. 3. Respondent settled the second complaint with CTP for an undisclosed penalty amount. See CTP Ex. 4. The current $11,182 CMP action was brought against Respondent for violations of 21 C.F.R.

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§ 1140.14(a)(1) and (a)(2)(i) on July 7, 2018, when Respondent sold cigarettes to a minor and failed to verify the identification of the purchaser.

I agree with CTP that "[t]hese repeat violations show an unwillingness or inability to sell tobacco products in accordance with federal tobacco regulations." CTP Br. at 12. While Respondent has already paid for its previous violations, its continued inability to comply with the federal tobacco regulations calls for a more severe penalty.

D. Degree of culpability

Respondent admitted to five violations of the FDCA and its implementing regulations in the settlement agreements of the prior actions. In addition, based on the evidence presented, I found Respondent committed the two most recent violations in the current Complaint. Therefore, I hold Respondent fully culpable for seven violations of the FDCA and its implementing regulations.

E. Matters as justice may require / Additional mitigating factors

Mitigation is an affirmative defense for which Respondent bears the burden of proof. See 21 C.F.R. § 17.33(c). I do not find any mitigating factors. Respondent has not provided any evidence or witnesses that have been admitted into evidence, which refute the evidence submitted by CTP.

I find and conclude there is no reason to consider mitigation of the penalty herein.

F. Penalty

Based on the foregoing reasoning, I conclude a penalty amount of $11,182 is appropriate under 21 U.S.C. § 333(f)(5)(B) and 333(f)(9).

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XIII. CONCLUSION

Respondent committed seven violations of the FDCA and its implementing regulations within a 48-month period. Respondent is liable for a CMP of $11,182. See 21 C.F.R. § 17.2.

WHEREFORE, evidence having been read and considered it be and is hereby ORDERED as follows:

1. I find Respondent was served with process herein and is subject to this forum;
2. I find and conclude that the evidentiary facts support a finding that Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i) on July 7, 2018, in that Respondent sold a package of Marlboro cigarettes to a person younger than 18 years of age and failed to verify the age of the person purchasing cigarettes by means of photographic identification containing the bearer's date of birth, as set forth in the Complaint;
3. I find and conclude that the evidentiary facts support a finding that Respondent: (1) violated 21 C.F.R. § 1140.14(a)(1) on June 14, 2015, May 27, 2017, and March 5, 2018, in that Respondent sold cigarettes or smokeless tobacco to persons younger than 18 years of age; and (2) violated 21 C.F.R. § 1140.14(a)(2)(i) on May 27, 2017, and March 5, 2018, in that Respondent failed to verify the age of the persons purchasing cigarettes or smokeless tobacco by means of photographic identification containing the bearer's date of birth, as stipulated in the settlement agreements of the prior actions;
4. I find and conclude Respondent committed seven violations of the FDCA and its implementing regulations within a 48-month period; and
5. I assess a monetary penalty in the amount of $11,182.

1. On August 8, 2016, the citations to certain tobacco violations changed. For more information see: https://federalregister.gov/a/2016-10685.
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2. See 5 C.F.R. § 930.204.
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3. See also Butz v. Economou, 438 U.S. 478, 513 (1978); Marshall v. Jerrico, Inc., 446 U.S. 238 (1980); Fed. Maritime Com'n v. S.C. State Ports Auth., 535 U.S. 743, 744 (2002).
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4. One violation was documented on June 14, 2015, two on May 27, 2017, and two on March 5, 2018. In accordance with customary practice, CTP counted the violations at the initial inspection as a single violation, and all subsequent violations as separate individual violations.
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