Awad and Iba, LLC d/b/a Food Spot 1, DAB TB5252 (2020)

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks a civil money penalty (CMP) against Respondent, Awad and Iba, LLC d/b/a Food Spot 1, located at 7400 Southwest 57th Avenue, South Miami, Florida 33143, for at least six 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. pt. 1140, within a 48-month period.  Specifically, CTP alleges that Respondent violated the Act by impermissibly selling regulated tobacco products to a minor and failing to verify, by means of photo identification containing a date of birth, that the purchaser was 18 years of age or older.  For the reasons discussed below, I find in favor of CTP and impose a reduced CMP in the amount of $10,000 against Respondent.

Background and Procedural History

CTP began this case by serving an administrative complaint seeking an $11,410 civil money penalty on Respondent on September 24, 2019, at 7400 Southwest 57th Avenue,

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South Miami, Florida 33143, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  On October 19, 2019, Respondent timely answered CTP’s Complaint.  CRD Docket (Dkt.) Entries 3-3c.  In its answer, Respondent denied the allegations.  CRD Dkt. Entry 3 (Respondent’s Letter of Appeal); CRD Dkt. Entry 3a (Answer) at 1.

On October 31, 2019, I issued an Acknowledgment and Pre-Hearing Order (APHO), which established the procedures and deadlines in this case.  On November 2, 2019, Respondent filed its Informal Brief, accompanied by a video clip, and one photograph.  CRD Dkt. Entries 5-5b.  Subsequently, on December 7, 2019, Respondent filed an additional supplemental submission consisting of three documents.  CRD Dkt. Entries 8, 9, 10.  On January 14, 2020, CTP filed a Motion to Seal CRD Docket Entry 5a (Motion to Seal), requesting to seal and withhold from public disclosure Respondent’s video clip submission.  Specifically, CTP argued that “[t]he exhibit shows a video that includes what appears to be a young male purchasing a tobacco product” and should be withheld “because [the exhibit] contains sensitive information, and to protect the identity of the individual purchasing a tobacco product.”  CRD Dkt. Entry 11 at 1; citing CTP v. Mansour Bros., Enters. d/b/a Hyde Park Food Mart / Metro Market, CRD Docket Number T-17-4293, FDA Docket Number FDA-2017-R-3134; CTP v. Beach Steil Inc. d/b/a 7-Eleven Store 32781, CRD Docket Number T-17-2221, FDA Docket Number FDA-2017-H-0835.

On January 16, 2020, a letter by my direction was issued, giving Respondent until February 3, 2020 to file a response to CTP’s Motion to Seal.  CRD Dkt. Entry 12.  On February 9, 2020, via DAB E-File, Respondent filed its response to CTP’s Motion to Seal, accompanied by two photographs.  CRD Dkt. Entry 14-14b.  In that the Respondent’s response was filed six days after the established February 3, 2020 deadline, on February 12, 2020, I issued an order finding the response was filed untimely and granting CTP’s motion, sealing from public disclosure CRD Docket Entry 5a “until further order.”  CRD Dkt. Entry 15.

On January 21, 2020, CTP filed its pre-hearing exchange.  CTP’s pre-hearing exchange included a pre-hearing brief and 15 numbered exhibits (CTP Exs. 1-15), including the written direct testimony of two proposed witnesses, Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 5) and Inspector Edgar Diaz (CTP Ex. 6), who conducted the inspection at issue.  On February 9, 2020, Respondent filed a pre-hearing statement  (CRD Dkt. Entry 14) and two photographs (CRD Dkt. Entries 14a-14b), which were not marked as exhibits in accordance with the directives set forth in my October 31, 2019 APHO.  See APHO ¶ 6.  Respondent did not file any written direct testimony.    

On March 12, 2020, I held a pre-hearing telephone conference (PHC) in this case.  During the PHC, I explained that the sole purpose of a hearing under the applicable regulations was to allow for the cross-examination and re-direct of any witnesses who

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had provided sworn testimony in pre-hearing exchanges, and only if the opposing party elected to cross-examine the witness.  Respondent noted his intent to cross-examine Inspector Diaz only.  As Respondent did not submit the written direct testimony of any witnesses, the testimony at the hearing was limited to the cross-examination and re-direct examination of Inspector Diaz.  See CRD Dkt. Entry 18 at 1. 

On June 23, 2020, I held a telephone hearing in this case.1   During the hearing, I admitted CTP Exs. 1-15.  Hearing Transcript (Tr.) at 3.  Respondent cross-examined Inspector Diaz.  Tr. at 4-8.  CTP then conducted re-direct examination of Inspector Diaz. Id. at 9-10.

On July 15, 2020, I informed the parties that the Court had received the transcript of the hearing and set the deadline for the parties’ post-hearing brief submission as August 14, 2020.  Also, the parties were given until August 14, 2020 to file any corrections to the transcript.  CRD Dkt. Entry 23.  On August 11, 2020, Respondent submitted a two-page “Closing Statement.”  CRD Dkt. Entry 24.  On August 14, 2020, via email transmission to the Civil Remedies Division, CTP advised of its intent not to file a post-hearing brief.  CRD Dkt. Entry 25.  As the post-hearing briefing period has expired, I now render my decision.

Issues

1. Whether Respondent sold covered tobacco products to a minor on July 3, 2019, in violation of 21 C.F.R. § 1140.14(b)(1).

2. Whether the civil money penalty of $11,410 that CTP seeks is an appropriate amount, pursuant to the provisions of 21 C.F.R. § 17.33(a).

Analysis

In order to prevail, CTP must prove Respondent’s liability by a preponderance of the evidence.  The U.S. Supreme Court has described the preponderance of the evidence standard as requiring that the trier-of-fact believe that the existence of a fact is more

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probable than not before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  In re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe and Products of California, Inc. v. Construction Laborers, 508 U.S. 602, 622 (1993).

CTP has the burden to prove Respondent’s liability by a preponderance of the evidence.  21 C.F.R. § 17.33(b).  Respondent has the burden to prove any affirmative defenses and any mitigating factors, likewise by a preponderance of the evidence.  21 C.F.R. § 17.33(c). 

As detailed below, I find that based on the evidence of record, it is more likely than not that, on the date and time in question, Respondent sold covered tobacco products to a minor, in violation of 21 C.F.R. § 1140.14(b)(1).

I.  Violations, Parties’ Contentions, and Findings of Fact

A. Violations

CTP seeks a CMP against Respondent pursuant to the authority conferred by the Act and implementing regulations at Part 21 of the Code of Federal Regulations.  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).  A tobacco product is misbranded if distributed or offered for sale in any state 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).  FDA and its agency, CTP, may seek civil money penalties from any person who violates the Act’s requirements as they relate to the sale of tobacco products.  21 U.S.C. § 331(f)(9). 

The sale of regulated tobacco products to an individual who is under the age of 18 years is a violation of implementing regulations.  21 C.F.R. § 1140.14(a)(1), 1140.14(b)(1).  The failure to verify, by means of photo identification containing the bearer’s date of birth, that no regulated tobacco product purchaser is younger than 18 years of age is also a violation of implementing regulations.  21 C.F.R. § 1140.14(a)(2)(i), 1140.14(b)(2)(i).

1. Prior Violations

This is the third civil money penalty action CTP has brought against Respondent.  CTP Exs. 1, 3; Complaint; see CRD Docket Number T-18-1465 (FDA Docket Number FDA-2018-H-0897); CRD Docket Number T-18-2593 (FDA Docket Number FDA-2018-H-2329).  The most recent prior complaint alleged:  (1) selling regulated tobacco products to a minor on August 2, 2017, February 10, 2018, and June 9, 2018, in violation of 21 C.F.R. § 1140.14(a)(1) and 1140.14(b)(1); and (2) failing to verify photographic identification of the regulated tobacco product purchaser on August 2, 2017, February 10, 2018, and June 9, 2018, in violation of 21 C.F.R. § 1140.14(a)(2)(i) and 1140.14(b)(2)(i).  CTP Exs. 1, 3; Complaint ¶ 11.  The previous action resulted in settlement and concluded

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after Respondent admitted to five violations of the regulations and paid the agreed upon penalty.  Complaint ¶ 12; CTP Ex. 3 ¶ 12; CTP Ex. 4. 

In settling the prior complaints, Respondent expressly waived its right to contest these violations in subsequent actions.  See CTP Ex. 3 ¶ 12; CTP Exs. 2, 4.  These actions are now administratively final. 

2. Current Violation

I now turn to whether the remaining allegation in the Complaint is true and, if so, whether Respondent’s action constitutes a violation of law.  21 C.F.R. § 17.45(b).

Accordingly, I must determine whether on July 3, 2019, at approximately 6:41 PM, Respondent:

• Sold a package of two Dutch Atomic Fusion Fire cigars to a minor in violation of 21 C.F.R. § 1140.14(b)(1).

B. Parties’ Contentions and Evidence

1. CTP’s Position

To support the July 3, 2019 allegation, CTP submitted the declaration of Inspector Edgar Diaz who conducted the inspection, Inspector Diaz’s narrative report of the inspection, and photographs of the package of Dutch Atomic Fusion Fire cigars allegedly purchased on July 3, 2019.  CTP Exs. 6, 7, 8, 10, 11. 

In his declaration, Inspector Diaz stated that on July 3, 2019, at approximately 6:41 PM, he conducted a follow-up UB (undercover buy) compliance check inspection at Respondent’s location at 7400 Southwest 57th Avenue, South Miami, Florida 33143.  CTP Ex. 6 ¶ 8.  Inspector Diaz further stated:

During the inspection, I parked my car near the Food Spot 1 and Minor A exited the vehicle.  I watched Minor A enter Food Spot 1.  I remained outside of the establishment in my vehicle because I felt my presence would compromise the undercover nature of the inspection.  From my location, I could see the sales counter and Minor A through the glass front doors of the establishment.  During the inspection, I observed Minor A purchase a package of cigars from an employee at the establishment.  The employee did not provide Minor A a receipt after the purchase.

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Id. ¶ 9.  After the inspection, Inspector Diaz retrieved the cigar package from Minor A, which he observed were Dutch Atomic Fusion Fire cigars.  Inspector Diaz stated that he then labeled the cigars as evidence, photographed all of the panels of the package, and processed the evidence in accordance with standard procedures at the time of the inspection.  Id.

2. Respondent’s Position

In its multiple statements (CRD Dkt. Entries 3, 3a, 5, 14, 24), Respondent denies the allegations and argues that:  (1) Respondent’s employee in fact checked Minor A’s identification on the date at issue prior to selling the cigars to the minor; and (2) Inspector Diaz could not have seen the sales transaction from a viewing position in the parking lot outside the establishment, or from sitting in his car.  More specifically, Respondent asserts:

As per the surveillance recording, on July 3, 2019, at approximately 6:41 PM, a tobacco product was sold to a customer . . . .  The allegations by CTP contains a lack of evidence.  There was neither a witness present on July 3, 2019 at approximately 6:41 PM nor a copy of the legal identification of the supposed underage person.

CRD Dkt. Entry 5 at 2; see also CRD Dkt. Entry 14 at 1.

Also, while not expressly presenting the argument, Respondent appears to argue that identification presented by Minor A to the sales clerk during the July 3, 2019 inspection did not indicate that the purchaser was a minor, which resulted in the sale of the covered tobacco product to Minor A.  See CRD Dkt. Entry 24.

Finally, Respondent asserted that a receipt from the July 3, 2019 transaction is absent from the record, presumably to imply that there was no sale.  CRD Dkt. Entry 3.

3. Hearing Testimony

Respondent cross-examined Inspector Diaz at the June 23, 2020 hearing.  See Tr. at 4-8.  During the hearing, Respondent’s cross-examination of Inspector Diaz focused solely on questions regarding the vantage point from which the inspector witnessed the sales transaction to Minor A on July 3, 2019. 

Inspector Diaz stated that before the inspection at Food Spot 1, he confirmed that Minor A had photographic identification showing his actual date of birth.  Tr. at 8; CTP Ex. 6 ¶ 8; CTP Ex. 7 ¶ 7.  During the cross-examination, Inspector Diaz testified that he verified

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Minor A’s identification.  Tr. at 8.  Below is the relevant testimony excerpt of Inspector Diaz’s testimony during cross-examination:

Q:  . . . But you say you saw the entire transaction, right?  The person walking in - -
A:  Yes.
Q:  And you were able to see that the employee checked the ID or not?
A:  What I remember seeing, because obviously - - because I am seeing through your glass door, I am seeing Minor A standing in front of the counter, so I am seeing his left side of his body.  And I am seeing him introduce - - or produce his driver’s license - - a Florida driver’s license, that I already had checked prior to the inspection of being valid, in the cashier - - or your employee.
Q:  And that, that - - and his age - - he was underage, right?
A:  Yes, sir.
Q:  As per your statement?
A:  Yes, sir.  He’s under the age of 18.

Id.

On re-direct examination by CTP counsel, describing how he was “able to see the sales counter” from his location outside of the establishment, Inspector Diaz further testified:

. . . I came in and I parked.  The minor exited the vehicle and went to the front door.  As he walks to the front door, he turns to his left.  Now he’s facing the . . . cashier where all the cigarettes and tobacco products - - where everything is at the register . . .

I saw the minor produce his driver’s license and buy the cigarettes - - well, this case, it was [a] cigar.  And then the minor - - I saw the minor turn around, exit the same door he came in, and walk to the car.  And once he walked to the car, that’s where I was able to see what he had exactly purchased.  Then gave it to me, then I put it in the evidence . . . .

Tr. at 9.

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C. Findings of Fact

Respondent has made a number of arguments throughout this proceeding, all of which have been considered.  Initially, it is noted that Respondent has consistently argued that the sales clerk verified Minor A’s identification prior to selling the tobacco product to the minor on July 3, 2019.  CRD Dkt. Entry 3 at 1; CRD Dkt. Entry 3a at 1, 2; CRD Dkt. Entry 5 at 2; CRD Dkt. Entry 24.  The same argument was made in the post-hearing brief, with Respondent asserting that “the security camera clearly shows that the employee asks for the subject’s ID.”  CRD Dkt. Entry 24.  However, this issue was never in dispute.  In the July 2019 Narrative Report, Inspector Diaz stated that he “observed that the minor provided his/her ID to the employee upon request.”  CTP Ex. 7 ¶ 12.  At the hearing, Inspector Diaz testified that “. . . I am seeing his left side of the body.  And I am seeing him introduce - - or produce his driver’s license - - a Florida driver’s license, that I already had checked prior to the inspection of being valid, to the cashier - - or your employee.”  Tr. at 8.  For these reasons, CTP’s Complaint did not allege a violation of failure to verify, by means of photographic identification, the age of a person purchasing cigars (21 C.F.R. § 1140.14(b)(2)(i)) for the inspection conducted on July 3, 2019.  See CRD Dkt. Entry 1.  The Complaint alleged only that, on July 3, 2019, “Respondent committed a violation of 21 C.F.R. § 1140.14(b)(1) . . . .”  Complaint ¶ 9. 

Also, while not directly argued, Respondent appears to contend that the identification presented by Minor A to Respondent’s sales clerk during the July 3, 2019 inspection did not show that the purchaser was a minor.  See CRD Dkt. Entry 24 (“the security camera footage clearly shows that the employee asks for the subject’s ID, verified the subject is a legal age to buy the product, and then sells them.”); see also CRD Dkt. Entry 3.  However, neither prior to nor during the hearing did Respondent object to any of CTP’s proposed exhibits; specifically, CTP Exhibit 9, which is a redacted copy of Minor A’s Florida state-issued driver’s license,2 showing a date of birth of March 26, 2002.  See Tr. at 2-3.  Inspector Diaz testified that he validated the minor’s driver’s license prior to the inspection.  Tr. at 8; CTP Ex. 6 ¶ 8; see also CTP Ex. 7 ¶ 7.  Thus, the record does not support a conclusion that the purchaser of the cigar on July 3, 2019, at Respondent’s establishment, was not a minor or that the identification presented to the sales clerk was not a valid representation of Minor A’s age.

Respondent’s contention regarding the absence of a receipt in the record for the July 3, 2019 transaction (see CRD Dkt. Entry 3) is also without merit.  Clearly, a receipt would be evidence that a sale had occurred.  However, Respondent essentially concedes this point by noting that its employee asked “for the subject’s ID, verifies the subject is a legal age to buy the product, and then sells the product.”  CRD Dkt. Entry 24.  Moreover, while the receipt would be evidence that the transaction occurred, Inspector Diaz’s

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credible observations of the transaction and the physical evidence that he obtained on July 3, 2019 are, in and of themselves, adequate to prove that a sale, in fact, occurred.    

Respondent’s primary argument is that it would have been impossible for the inspector to see the customer and cashier “due to window and doors sign/posters.”  CRD Dkt. Entry 24.  It asserted:

. . . (p)reviously, submitted store photo and video of the store inside and outside, there is absolutely NO way Officer Diaz can see the Minor A and cashier making sales transaction at the same time outside from his car.  The video previously submitted clearly show front door and at the mentioned time there wasn’t any one standing at the front door.  The customer side window is blocked by an ATM machine and digital lottery sign.  The cashier side of the window has a clear view to outside but it is a side walk that it is not a parking neither the camera show any illegally car parked.

Regretfully, in lieu of all the photographs and surveillance, cash register location and view from parking prove that officer Diaz from outside in his car or in the parking lot could not have seen any activity happen at the cash register.  

CRD Dkt. Entry 14 at 1. 

Respondent provided photographs to support this argument.  CRD Dkt. Entries 14a, 14b.

While I have reviewed the photos submitted by Respondent, I do not find them to be a reliable source for evaluating the credibility of the inspector’s testimony.  There are too many unknown variables, such as the exact position of the inspector, the lighting at the time of the inspection, and even visual acuity to base any assessment on my own viewing of the photos.  Moreover, a cursory review of the photos submitted in this matter suggests that there may have been some changes in the signage on the door between the time of the inspection and when the photos were taken by Respondent, including a sign regarding hiring and one entitled “Ordering Made Easy”, which do not appear to have been present at the time of the inspection.  Compare CRD Dkt. Entry 14b, with CTP Ex. 12 at 1; see also CRD Dkt. Entry 1a at 11.  Respondent’s photographs are also incomplete in that they show only a portion of one of Respondent’s two glass doors.  Id.  As a result, the photos are given little weight in my evaluation.

Rather, I have considered Respondent’s arguments in the context of the testimony of Inspector Diaz.  In his earlier written statements, he reported he was outside the store and observed the sale, noting that the ID was checked.  CTP Ex. 7 at 1.  In the TIMS

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Assignment Form, Inspector Diaz stated he observed an employee sell the tobacco product directly to the minor with the comment: “Glass door.”  CTP Ex. 8 at 1.  And, in the sworn declaration, he stated that “(f)rom my location, I could see the sales counter and Minor A through the glass front doors of the establishment.”  CTP Ex. 6 at 3 ¶ 9.

At the hearing, Inspector Diaz provided very detailed descriptions of how he entered the parking lot, where he was parked, and what he observed.  He noted that he could only see the left side of the minor but this was sufficient to observe the sale.  Tr. at 8.  His testimony was corroborated, in part, by statements from Respondent that Minor A’s identification was checked at the time of the sale.  If he, in fact, could not see into the store, he would not have been able to verify that the identification was checked prior to the sale.  There would be little reason for Inspector Diaz to lie about his observations.  He testified under oath at the hearing that neither he nor the minor receive any financial incentive for finding a violation.  Tr. at 9.

Respondent offered no evidence to rebut Inspector Diaz’s statements regarding the sale of the tobacco products, in this case a package of two Dutch Atomic Fusion Fire cigars.  For example, Respondent did not submit the written direct testimony of the sales clerk involved in the July 3, 2019 sale to Minor A in support of its assertion that Minor A’s identification reflected that he was 18 years of age at the time of the July 3, 2019 inspection.  In addition, it is undisputed that Inspector Diaz did not witness the alleged transaction from within Respondent’s establishment on July 3, 2019.  Tr. at 4, 8; CTP Ex. 6 ¶¶ 9, 10.  Inspector Diaz stated that he had a clear view of the transaction from the window outside of the establishment.  Tr. at 8, 9.  To counter the inspector’s statement, Respondent submitted exterior photographs of the establishment to show the obstructed views from the entrance door and windows and, thus, the inspector’s inability to witness the July 3, 2019 sales transaction.  See CRD Dkt. Entries 14a, 14b.  However, as discussed above, I did not find the photographs to be reliable evidence.  Rather, I must determine whether - based on a preponderance of the evidence - the allegations are true, and, if so, whether these actions constitute a violation of law.  21 C.F.R. §§ 17.33, 17.45.

I find Inspector Diaz’s testimony, supported by corroborating evidence, to be credible.  I find that CTP has provided sufficient evidence to support its allegation that Respondent sold a package of two Dutch Atomic Fusion Fire cigars to Minor A on July 3, 2019, in violation of 21 C.F.R. § 1140(b)(1).  I find that Respondent failed to provide evidence to rebut CTP’s allegation.   

Therefore, I find that, based on the facts and evidence as outlined above, CTP has met its burden to establish that Respondent Awad and Iba, LLC d/b/a Food Spot 1 violated the regulations on July 3, 2019.  21 C.F.R. § 1140.14(b)(1).   

I also find that CTP has met its burden to establish Respondent’s liability under the Act for six violations within a 48-month period.

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II.  Civil Money Penalty

I have found that Respondent committed six violations of the Act and its implementing regulations within a 48-month period.  The FDA, and its CTP, may seek civil money penalties from any person who violates the Act’s requirements as they relate to the sale of tobacco products.  21 U.S.C. § 333 (f)(9).  In its Complaint, CTP sought the maximum penalty amount, $11,410, against Respondent.  Complaint ¶ 1.  Accordingly, I now turn to whether an $11,410 civil money penalty is appropriate.

When determining the amount of a civil money penalty, I am required to take into account “the nature, circumstances, extent, and gravity of the violation or 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); see also 21 C.F.R. § 17.34.

A. Nature, Circumstances, Extent and Gravity of the Violations

Respondent has failed to comply with the Act and its implementing regulations at least six times.  The repeated inability of Respondent to comply with federal tobacco regulations is serious in nature and the civil money penalty amount should be set accordingly.

B. Respondent's Ability to Pay and Effect on Ability to do Business

Respondent asserts that the $11,410 CMP sought by CTP is “unreasonable and harsh for a small convenience store business owner because it would result in the business shutting down and the layoff of all of the employees who provide for their families.”  CRD Dkt. Entry 5 at 3.  I note that Respondent has not provided any specific information about its current financial situation.  It did provide a copy of a sales tax report.  CRD Dkt. Entry 9.  But the report does not provide any information about the overall financial condition of the business.  While the record does not include specific evidence to show the effects of an $11,410 CMP on Respondent’s small business, I find Respondent to be sincere and credible on this issue, and a CMP in this amount will likely have a significant effect on Respondent’s ability to pay and its ability to do business, particularly in light of the current economic conditions triggered by the COVID-19 pandemic.  Moreover, the purpose of the penalty is to promote compliance and deter future violations by penalizing for non-compliance, but not to put a retailer out of business or threaten its viability.  See 21 U.S.C. § 387 (explaining that one of the purposes of the Tobacco Control Act is “to continue to permit the sale of tobacco products to adults in conjunction with measures to ensure that they are not sold or accessible to underage purchasers.”).

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C. History of Prior Violations

As noted, Respondent has six times violated the federal tobacco regulations.  Specifically, Respondent has violated the prohibition against selling regulated tobacco products to persons younger than 18 years of age, and failed to verify, by means of photo identification containing a purchaser's date of birth, that no regulated tobacco product purchasers are younger than 18 years of age.  21 C.F.R. § 1140.14(a)(l); 21 C.F.R § 1140.14(a)(2)(i); 21 C.F.R. § 1140.14(b)(l); 21 C.F.R § 1140.14(b)(2)(i).  Respondent’s continued unwillingness or inability to comply with the federal tobacco regulations calls for a more severe penalty.

D. Degree of Culpability

Respondent is culpable for six violations of the Act 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.  Respondent must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  Respondent asserts that it has taken measures to prevent sales to minors, including digital calendars, installation of a surveillance system, posting signs on the premises, providing employee training, and biweekly reminders to check identification.  CRD Dkt. Entries 3 at 1; 3a at 2; 5 at 3-4; 14 at 1; 24 at 1.  While commendable, this has not stopped the sale of tobacco products to minors. 

However, I am sympathetic to the adverse effects of COVID-19 on small business retailers.  I find that a large penalty amount will place a financial strain on Respondent’s small business.  The circumstances surrounding the COVID-19 pandemic and other possible community restrictions have likely affected Respondent’s financial situation.  I have considered statutory factors, most of which support imposition of a civil money penalty.  In particular, Respondent has a history of violations of tobacco regulations.  An initial warning from CTP and a previous CMP action did not curtail Respondent’s behavior to prevent the current violation.  However, at least one statutory factor, as discussed above, suggest a somewhat lower penalty amount would be sufficient.  For these reasons, after considering all statutory factors, I find a reduced civil money penalty amount of $10,000 to be appropriate under 21 U.S.C. § 333(f)(5)(B), (f)(5)(C), and (f)(9).

F. Penalty

Based on the foregoing reasoning, I find a reduction in the civil money penalty sought by CTP, in the amount of $10,000, to be appropriate under 21 U.S.C. § 303(f)(5)(B) and 333(f)(9).

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Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $10,000 against Respondent, Awad and Iba, LLC d/b/a Food Spot 1, for six 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. pt. 1140, within a 48-month period.  Pursuant to 21 C.F.R. § 17.45(d), this order becomes final and binding upon both parties after 30 days of the date of its issuance.

1. On April 2, 2020, the hearing originally scheduled for April 14, 2020 was postponed.  CRD Dkt. Entry 19.  I advised the parties: . . . Given the current circumstances associated with the COVID-19 pandemic, this hearing is hereby POSTPONED until further ORDER of the Administrative Law Judge . . . All parties will be notified when the hearing is rescheduled. Id.
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2.  Review of CTP Exhibit 9 discloses Minor A’s date of birth as March 26, 2002, which would have made him 17 years of age at the time of the July 3, 2019 inspection.
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