Wafeeq and Saladdin Brothers, LLC d/b/a Citgo, DAB TB5264 (2020)

INITIAL DECISION

The Center for Tobacco Products (CTP) of the United States Food and Drug Administration (FDA) seeks a civil money penalty (CMP) of $570 against Respondent, Wafeeq and Saladdin Brothers, LLC d/b/a Citgo, for committing at least three 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 24-month period.  CTP alleges that Respondent previously admitted to two violations of the Act.  Specifically, Respondent admitted that it sold covered tobacco products to minors on two occasions and failed to verify, by means of photo identification containing a date of birth, that the purchaser was 18 years of age or older during one of the sales.  CTP further alleges that Respondent subsequently committed one additional violation of the Act when it sold a covered tobacco product to a minor.  Respondent denies all allegations in the Complaint.  For the reasons discussed below, I find Respondent liable for the violations alleged in the Complaint and conclude that a CMP of $570 is appropriate.

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I.  Background and Procedural History

As provided in 21 C.F.R. §§ 17.5 and 17.7, CTP served a Complaint on Respondent Citgo, located at 1301 South Missouri Avenue, Clearwater, Florida 33756, by United Parcel Service, on October 1, 2019.  See DAB E-File Docket (Dkt.) No. T-19-4782, Dkt. Entry No. 1b.  CTP filed the Complaint and proof of service with the Departmental Appeals Board, Civil Remedies Division (CRD) on October 2, 2020.  Dkt. Entry Nos. 1, 1a-1b.  After the hearing, CTP filed and served an Amended Complaint on August 6, 2020.  Dkt. Entry No. 33.  CTP’s Amended Complaint alleges that Respondent committed three violations of the Act and its implementing regulations over a 24-month period.  Amended Complaint ¶ 1.  Specifically, CTP asserts that Respondent previously admitted to two violations of the Act and implementing regulations on December 17, 2017, and October 12, 2018.  Id. ¶¶ 11-12.  CTP also asserts that Respondent subsequently committed one additional violation of the Act.  Specifically, Respondent sold a covered tobacco product to a minor on June 26, 2019, at approximately 3:25 PM.  Id. ¶ 9. 

Respondent timely filed its Answers denying the allegations in the Complaint and the Amended Complaint.  Dkt. Entry Nos. 3, 34 (collectively “Answer”).  On October 25, 2019, I issued an Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of Respondent’s Answer and establishing procedural deadlines for this case.  Dkt. Entry No. 5.

On January 7, 2020, CTP filed a Motion to Compel Discovery asserting that Respondent had not responded to its Request for Production of Documents.  Dkt. Entry No. 9.  On January 7, 2020, CTP also requested an extension of the pre-hearing deadlines, stating that it must have Respondent’s production before CTP could prepare its pre-hearing exchange.  Dkt. Entry No. 8 (Motion to Extend Deadlines).  On January 7, 2020, Respondent filed Respondent’s Response to Request for Production.  Dkt. Entry No. 10.  On January 8, 2020, I issued an Order, directing CTP to indicate whether it still wishes to pursue its Motion to Compel Discovery or, in the alternative, withdraw it.  Dkt. Entry No. 11.  Additionally, I gave Respondent until January 22, 2020, to file a response to CTP’s Motion to Compel Discovery.  Id.  My Order also granted CTP’s Motion to Extend Deadlines.  Id.  On January 9, 2020, CTP filed a Notice of Withdrawal of Motion to Compel Discovery, asserting that it was no longer necessary because CTP received Respondent’s Response to Request for Production.  Dkt. Entry No. 12.

CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief, list of proposed witnesses and exhibits, and 15 exhibits (CTP Exs. 1-15), including the written direct testimony of two proposed witnesses, CTP’s Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 3) and Inspector Jose Ceballos (CTP Ex. 4).  Dkt. Entry Nos. 14, 14a-14p.  Respondent also timely filed its pre-hearing exchange, consisting of a prehearing brief (R. Brief) and the written direct testimony of one proposed witness,

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Golam Amelep, Respondent’s owner (R. Ex. 1).  Dkt. Entry Nos. 15, 15a.  I directed Respondent to supplement its pre-hearing exchange, and Respondent subsequently filed a timely witness list.  Dkt. Entry Nos. 16-17.

On April 22, 2020, I held a pre-hearing conference call.  Dkt. Entry No. 23.  During the pre-hearing conference call, I explained the issues and the parties’ respective burdens of proof, and discussed the parties’ proposed witnesses and exhibits.  Counsel for CTP stated that she did not wish to cross-examine Respondent’s proposed witness, Golam Amelep.  Counsel for Respondent indicated that he did not want to cross-examine CTP witness, Laurie Sternberg, but wished to cross-examine Inspector Jose Ceballos.  Respondent’s counsel also indicated that he wished to cross-examine Minor A, the underage buyer described in the alleged June 26, 2019, violation.  Respondent’s counsel noted that Minor A is over the age of 18 now.  Respondent’s counsel also objected to the admission of CTP Exhibit 8, Minor A’s redacted identification.  I instructed Respondent’s counsel to submit his request to cross-examine Minor A and his objection to the admission of CTP Ex. 8 in writing.  Except for Respondent’s objection to the redaction of CTP Exhibit 8, there were no other objections to CTP’s proffered exhibits.  Accordingly, I admitted the remainder of CTP’s exhibits into evidence as CTP Exhibits 1 through 7 and 9 through 15.  CTP did not object to the admission of Respondent’s exhibit.  Therefore, I admitted Respondent Exhibit 1 into the record.  I scheduled a hearing for July 14, 2020.

On April 30, 2020, Respondent filed its objection to the redaction of CTP’s Exhibits 6 and 8.  Dkt. Entry No. 26.  On May 1, 2020, Respondent filed a copy of its filing in which it corrected the Certificate of Service.  Dkt. Entry No. 27.  Respondent did not file any motions.  In response, on May 13, 2020, CTP filed:  1) Complainant’s Motion for a Protective Order (CTP’s Motion); 2) a Memorandum in Opposition to Respondent’s Objection to Redacted Exhibits, and In Support of Complainant’s Motion for a Protective Order (CTP Memo); 3) a Proposed Order; and 4) three exhibits (CTP Exhibits A-C).  Respondent did not file a response to CTP’s Motion for a Protective Order.  Dkt. Entry Nos. 28, 28a-28e.

In a June 30, 2020, Order, I overruled Respondent’s objection to the redactions of CTP Exhibits 6 and 8, granted CTP’s motion for protective order, confirmed the admission of CTP Exhibit 6 into the record, and admitted CTP Exhibit 8 into the record.  Dkt. Entry No. 29 [hereinafter “June 30, 2020 Order”].  I overruled Respondent’s objection on three grounds: (1) disclosure of the minor’s identity is irrelevant to this proceeding, and Respondent’s request to full disclosure of the redacted information in CTP Exhibits 6 and 8 is unlikely to lead to the discovery of relevant or admissible evidence, (2) disclosure of the information that Respondent seeks would interfere with law enforcement proceedings and risk circumvention of the law, and (3) disclosure of the information which Respondent seeks can reasonably be expected to constitute an unwarranted invasion of personal privacy and endanger the life or physical safety of Minor A.  Accordingly, I

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concluded that Respondent had not established that the identity of Minor A should be disclosed, whereas CTP had shown that this information should remain redacted on CTP Exhibit 6 and CTP Exhibit 8. 

On July 14, 2020, I held a telephone hearing.  During the hearing, Respondent was given the opportunity to cross-examine Inspector Ceballos.  Transcript (Tr.) at 4-7.  On August 3, 2020, I informed the parties that CRD had received the transcript of the hearing, and informed the parties that they could file any proposed corrections to the transcript on or before September 3, 2020.  Dkt. Entry No. 31.  I also set the deadline for the parties’ post-hearing brief submissions as September 18, 2020.  Id.  I set the deadline for the parties post-hearing responsive briefs as October 5, 2020.  Id.  Finally, I reiterated the issues I must decide and advised the parties of settlement procedures.  Id. at 4.

Neither party filed a post-hearing brief or proposed any corrections to the hearing transcript.  The administrative record is complete, and this case is now ripe for a decision.  21 C.F.R. § 17.41(a)-(b).  I decide this case based on the evidence admitted into the administrative record.  21 C.F.R. § 17.45(a).

II.  Issues

The issues in this case are:

1. Whether Respondent sold a covered tobacco product to a minor on June 26, 2019, in violation of 21 C.F.R. § 1140.14(b)(1); and
2. If so, whether the CMP of $570 that CTP seeks is an appropriate amount, pursuant to the provisions of 21 C.F.R. § 17.34(a)-(c).

III.  Applicable Law and Legal Standard

The Act prohibits the misbranding of tobacco products while they are held for sale after shipment in interstate commerce.  21 U.S.C. § 331(k).  A tobacco product is misbranded if it is sold or distributed in violation of section 387f(d) of the Act or implementing regulations.  21 U.S.C. §§ 387c(a)(7)(B) ), 387f(d)(1); see also 21 C.F.R. pt. 1140.  The sale of covered tobacco products to an individual who is under the age of 18 is a violation of the Act and implementing regulations.  21 U.S.C. § 387f (d)(3)(A)(ii); 21 C.F.R. § 1140.14(b)(1).1

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CTP may seek a CMP against any person who violates any requirement of the Act or regulations concerning the sale of tobacco products by filing an administrative complaint.  21 U.S.C. § 333(f)(5) and (f)(9); see also; 21 C.F.R. §§ 17.1(j), 17.5(a).  The Act and implementing regulations provide limitations on the amount of the CMP based on the number of violations within a certain period of time; 21 U.S.C. § 333(f)(9); 21 U.S.C. 333 note (quoting Family Smoking Prevention and Tobacco Control Act, Pub. L. 111–31, div. A, title I, § 103(q)(2)(C)); 21 C.F.R. § 17.2, 45 C.F.R. § 102.3.  All violations observed during the initial failed inspection are counted as a single violation, and each separate violation observed during subsequent failed inspections count as a discrete violation.  Orton Motor, Inc., d/b/a Orton’s Bagley v. U.S. Dep’t of Health & Human Serv.,884 F.3d 1205 (D.C. Cir. 2018).  When determining the appropriate amount of a CMP, I consider any aggravating or mitigating circumstances and the factors listed in the Act.  21 C.F.R. § 17.34(a)-(b).  Specifically, I must “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); 21 C.F.R. § 17.45(b)(1)-(3).  I also must consider whether the respondent has an approved employee training program and has paid a state fine for the same violations.  21 U.S.C. § 333 note.

CTP has the burden to prove Respondent’s liability and the appropriateness of the penalty 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).  The Supreme Court of the United States has described the preponderance of the evidence standard as requiring that the trier-of-fact believe that the existence of a fact is more probable than its nonexistence before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  Concrete Pipe and Prods. of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993) (citing In re Winship, 397 U.S. 358, 371-72 (1970) (Harlan, J., concurring)).

IV.  Analysis

A.  Violations

Upon consideration of the applicable law and evidence of record, I conclude that Respondent committed two previous violations of the Act and implementing regulations on December 17, 2017, and October 12, 2018.  I also find that it is more probable than

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not that Respondent sold a covered tobacco product to a minor on June 26, 2019, in violation of 21 C.F.R. § 1140.14(b)(1).  Consequently, Respondent is liable for committing three violations within a 24-month period.

1. Respondent’s Prior Violations

CTP previously initiated a CMP action, CRD Docket Number T-19-1129, FDA Docket Number FDA-2019-H-0162, against Respondent for two violations of the Act within a 12-month period.  CTP Ex. 1, at 1 (Prior Complaint).  The Prior Complaint alleged that Respondent sold tobacco products to a minor, in violation of 21 C.F.R. § 1140.14(b)(1), on each of the following dates:  December 17, 2017, and October 12, 2018.  Id. at 4-5.  CTP further alleged that Respondent failed to verify the age of a person purchasing covered tobacco products by means of with photographic identification, 21 C.F.R. § 1140.14(b)(2)(i), on December 17, 2017.  Id.  The prior CMP action concluded by settlement, in which Respondent acknowledged that all of the violations in the Prior Complaint occurred and expressly waived its right to contest such violations in subsequent actions.  CTP Ex. 2.  These violations are administratively final.  21 C.F.R. § 17.15(b) (stating that a “settlement agreement shall be filed in the docket and shall constitute complete or partial resolution of the administrative case as so designated by the settlement agreement”).  Accordingly, I conclude that Respondent has two prior violations of the Act and implementing regulations.

2. Evidence and Legal Arguments Regarding the Alleged Current Violation

In addition to Respondent’s prior violations, CTP alleges that Respondent committed one new violation on June 26, 2019.  To support its claims, CTP submitted the declarations of a CTP Senior Regulatory Counsel, Laurie Sternberg, and an FDA-commissioned inspector, Jose Ceballos.  CTP Exs. 3-4.  CTP also submitted reports, photographs, and other documentation.  CTP Exs. 5-15.  Respondent denies the allegations and submitted the declaration of Golam Amelep, Respondent’s owner.  R. Ex. 1. 

Inspector Ceballos testified that he conducted an inspection of Respondent’s establishment located at 1301 South Missouri Avenue, Clearwater, Florida, 33756.  CTP Ex. 4, at 2.  The inspection involved an undercover buy (UB), on June 26, 2019, at approximately 3:25 PM.  Id.  At the time of the inspection, Inspector Ceballos was an FDA-commissioned officer in the state of Florida where his duties included performing UB inspections.  Id. at 1-2.  UB inspections are conducted primarily to determine whether retailers are compliant with the age and photo identification requirements relating to the sale of tobacco products.  Id. at 1.  These inspections entail accompanying undercover minors who attempt to purchase tobacco products from retail establishments, such as the one operated by Respondent.  Id.  In order to be eligible to participate in an UB inspection, minors must be 16 to 17 years old, possess a valid state issued photographic

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identification card or driver’s license, and complete required training.  Id.  During training, minors are instructed to dress in age-appropriate attire when working, to carry photographic identification during the UB inspection, and to tell the truth if asked about their age or whether they have identification.  Id.

Before the inspection, Inspector Ceballos confirmed that Minor A possessed an accurate photographic identification of his/her date of birth and was under the age of 18.  Id. at 2.  He also confirmed that Minor A did not have any tobacco products in his/her possession.  Id.  During the inspection, Inspector Ceballos testified that he parked his car near Respondent’s establishment and watched Minor A exit his vehicle and enter the establishment.  Id. at 3.  Inspector Ceballos entered the establishment shortly after.  Id.   Inspector Ceballos had a clear, unobstructed view of the establishment’s sales counter and Minor A, and observed Minor A purchase a package of cigars from an employee at the establishment.  Id.  Inspector Ceballos observed Minor A present his/her identification to an employee at the establishment prior to the purchase.  Id.

Inspector Ceballos testified that he and Minor A exited the establishment and returned to the Inspector’s vehicle where Minor A immediately handed him the package of cigars.  Inspector Ceballos observed the package of cigars were Swisher Sweets Classic cigars.  Id.  Inspector Ceballos labeled the cigars as evidence, photographed the panels of the package, and processed the evidence in accordance with standard procedures at the time of each inspection, which entailed completing several contemporaneous reports.  Id.  These contemporaneous photographs and reports were admitted into evidence and corroborate Inspector Ceballos’s testimony.  CTP Exs. 6-9. 

At the hearing, Respondent’s counsel cross-examined Inspector Ceballos.  Tr. at 4-7.  Specifically, Respondent’s counsel asked Inspector Ceballos where he was physically located during the UB inspection.  Id. at 4.  Inspector Ceballos testified that he was 10 to 15 feet away from the minor.  Id. at 4-5.  Respondent’s counsel asserted that the small area for customers to purchase tobacco products at Respondent’s retail store is smaller than 10 to 15 feet and asked Inspector Ceballos to describe the store.  Id. 5-6.  Inspector Ceballos testified, “[t]hat’s more or less what I always do when I go inside with minors . . .”  Id.  However, Inspector Ceballos could not remember or describe Respondent’s specific store because he had conducted inspections at approximately 7,000 stores during his four years of employment with the FDA.  Id. at 6.  Respondent’s counsel asked Inspector Ceballos whether he remembered seeing Minor A at Respondent’s location on the day in question.  Id. at 6-7.  Inspector Ceballos testified that he did not recall and his answers to all cross-examination questions would be based on his records written at the time of the UB inspection.  Id. at 7.  Respondent’s counsel concluded the cross-examination by asking Inspector Ceballos to confirm that he could not say where specifically he was located when the alleged violation occurred, to which Inspector Ceballos, responded, “Correct.”  Id.  CTP’s counsel declined redirect examination.  Id.

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Senior Regulatory Counsel Laurie Sternberg testified that she has personal knowledge of FDA’s processes and records regarding tobacco establishment registration and product listing requirements.  CTP Ex. 3, at 1-2.  Specifically, the Act requires persons who own or operate establishments in any state that manufacture, prepare, compound, or process tobacco products to register their business and to file and update biannually a list of all tobacco products manufactured, prepared, compounded, or processed for commercial distribution.  Id. at 2.  This information is stored in the Tobacco Registration and Product Listing Module (TRLM) of the FDA Unified Registration and Listing Systems (FURLS).  Id.  Ms. Sternberg also testified that Swisher Sweets Classic cigars are manufactured by Swisher International, Inc., and its corporate headquarters is located in Florida.  Id. at 2-3.  According to the label, Swisher Sweets Classic cigars are manufactured in the Dominican Republic.  Id. at 3; CTP Ex. 7, at 2.  She further testified that the Swisher Sweets Classic cigars purchased during the June 26, 2019, UB inspection at Respondent’s establishment also may be manufactured, prepared, compounded and/or processed for commercial distribution in Florida and/or West Virginia, which is corroborated by the FURLS reports in the record.  CTP Ex. 3, at 2-3; CTP Exs. 13, 15.  Respondent declined to cross-examine Ms. Sternberg.

In its defense, Respondent submitted the testimony of Golam Amelep.  R. Ex. 1; see also R. Brief.  Mr. Amelep testified that he and his wife own the establishment located at 1301 South Missouri Avenue, Clearwater, Florida, 33756, he acts as the manager, and he has worked at the establishment for approximately 20 years.  R. Ex. 1, at 1.  He described the store as a “very small . . . local store with gas (Citgo) . . .”  Id.  He also testified that he was working during the June 26, 2019, UB inspection and did not sell any cigarettes or tobacco products to anyone except those who possessed a license or valid ID that showed they were 18 years or older.  Id.  Mr. Amelep stated that he and his wife always check IDs and follow the law, and the allegations are “completely baseless and untrue.”  Id.  He questioned the authenticity of the redacted copy of Minor A’s identification in the record and whether a correct and true identification was presented at the time of the UB inspection at issue.  Id. at 2; see also CTP Ex. 8.  Mr. Amelep also accused Minor A of lying about his/her age and committing a crime because he checked the identification of everyone whom he sold tobacco products to on the day at issue to make sure they were over 18 years old, and Minor A’s identification did not show that he/she was under 18 years old.  Id. at 2.  He also questioned why Minor A’s identity was not disclosed and why he/she was not available for a deposition or examination.  Id.  CTP declined to cross-examine Mr. Amelep.

I find the testimonies of Inspector Ceballos and Ms. Sternberg credible because they have personal knowledge and professional experience concerning the June 26, 2019, UB inspection and the FDA’s processes and systems for regulating tobacco products.  I also find their testimonies to be persuasive because they are supported by corroborating evidence documenting that the June 26, 2019, sale to Minor A occurred.  Specifically, Inspector Ceballos’s testimony is supported by contemporaneous photographs, reports,

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and Minor A’s redacted identification.  CTP Exs. 5-15.  Likewise, Ms. Sternberg’s testimony is supported by documentary evidence establishing that the Swisher Sweets Classic cigars traveled in interstate commerce before Respondent sold it to Minor A.  CTP Exs. 9-10, 19.  I also find that Respondent has failed to rebut CTP’s evidence regarding the June 26, 2019, violation for selling a tobacco product to a minor.  See generally Answer, R. Ex. 1.  Respondent did not impeach the testimony of Inspector Ceballos or Ms. Sternberg concerning the UB inspection on June 26, 2019. 

In contrast, I do not find the testimony of Mr. Amelep to be fully credible or persuasive.  Unlike the testimony of Inspector Ceballos, the administrative record does not include any contemporaneous evidence to corroborate Mr. Amelep’s testimony.  While I believe that Mr. Amelep and his wife take their responsibility to comply with tobacco laws seriously, I find that the weight of the evidence in the record indicates that it is more likely than not that Respondent sold covered tobacco products to a minor on June 26, 2019.  I also find that Respondent has failed to prove any affirmative defenses concerning the June 26, 2019 violation.  21 C.F.R. § 17.33(c).  Although “good faith reliance on the presentation of a false government-issued photographic identification” is a defense to liability if the retailer has taken effective steps to prevent such violations, Respondent has failed to establish that Minor A provided a false identification during the UB inspection.  21 U.S.C. § 333 note, Guidance § (1)(F).  Indeed, Respondent has not established that Minor A was dishonest in any way during the UB inspection.  Inspector Ceballos testified that minors are instructed to dress in age-appropriate attire when working, to carry photographic identification during the UB inspection, and to tell the truth if asked about their age or whether they have identification.  CTP Ex. 4 at 2.  Inspector Ceballos also testified that He observed Minor A present his/her identification to Respondent’s employee during the inspection.  Id. at 3.  Other than uncorroborated testimony, Respondent has not produced any documents or other evidence to support its assertions.  However, CTP presented a redacted photograph of Minor A’s identification and contemporaneous reports corroborating Inspector Ceballos’ testimony that Minor A possessed a true and accurate photographic identification showing his/her actual date of birth, he observed Minor A present his/her identification to Respondent’s employee, and Minor A purchased a package of Swisher Sweets Classic Cigars from Respondent’s employee.  CTP Ex. 4, at 2-3; see also CTP Exs. 5-9. 

Respondent also contends that CTP failed to prove its case against Respondent because it did not present testimony from Minor A.2   R. Prehearing Brief at 2.  For the reasons explained in my June 30, 2020 Order, I overruled Respondent’s objection to the redaction of Minor A’s identification and granted CTP’s motion for a protective order concerning the disclosure of Minor A’s identity and Minor A’s availability as a witness.  See Dkt.

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Entry No. 29.  Thus, Respondent’s arguments concerning Minor A’s availability as a witness are meritless and unpersuasive.  Respondent also argues that CTP “has presented no evidence from any person with direct knowledge that tobacco products were sold to a person with identification that showed his or her age was under 18.”  Id.   Contrary to Respondent’s assertion, CTP has presented someone with direct knowledge that a violation occurred at Respondent’s establishment on June 26, 2019, Inspector Ceballos.  Inspector Ceballos testified under oath that he confirmed that Minor A was under the age of 18 when he/she participated in the June 26, 2019, inspection, and personally observed Minor A purchase a package of cigars from an employee at Respondent’s establishment.  CTP Ex. 4, at 2-3.  To the extent Respondent argues that the lack of Minor A’s testimony absolves it of liability, I find it unpersuasive.  Although Minor A’s testimony may have bolstered FDA’s case, I find that the unimpeached testimonies of Inspector Ceballos and Ms. Sternberg and other exhibits in the record are sufficient to establish that Respondent sold a package of cigars to Minor A on June 26, 2019.

Additionally, I find that the tobacco product sold to Minor A on June 26, 2019, was offered for sale after shipment in interstate commerce.  FDA has authority to regulate tobacco products that are “held for sale (whether or not the first sale) after shipment in interstate commerce . . .”  21 U.S.C. § 331(k).  Under the Act, “interstate commerce” includes “commerce between any State . . . and any place outside thereof . . .”  21 U.S.C. § 321(b).  Thus, the Act authorizes FDA to regulate tobacco products that are imported from foreign countries.  According to Inspector Ceballos, Minor A purchased Swisher Sweets Classic cigars from Respondent’s establishment located in Clearwater, Florida.  CTP Ex. 4 at 2- 3; see also CTP Exs. 7, 9.  The labeling on the cigars states that the cigars are “Made in Dominican Republic” and “Sale only allowed in the United States.”  CTP Ex. 7, at 2; CTP Ex. 9.  Thus, the cigars were offered for sale at Respondent’s establishment in Florida after shipment in interstate commerce from the Dominican Republic.  Although Ms. Sternberg testified that the Swisher Sweets Classic cigars purchased during the June 26, 2019, UB inspection also may be manufactured, prepared, compounded and/or processed for commercial distribution in Florida and/or West Virginia, I accord significant weight to the statements on the cigars’ labeling and conclude that it is more probable than not that at least some part of the manufacture, preparation, compounding, or processing of the cigars purchased on June 26, 2019, occurred in the Dominican Republic.  CTP Ex. 3, at 3; see also CTP Exs. 7, 9, 13, 15.  Accordingly, the cigars were offered for sale after shipment in interstate commerce.

In summary, the evidence of record establishes to my satisfaction that the violations alleged in the Complaint in fact occurred on the date in question.  The unrebutted testimonies of Ms. Sternberg and Inspector Ceballos and corroborating exhibits are sufficient to establish by a preponderance of evidence that it is more probable than not that Respondent unlawfully sold a tobacco product to a minor on June 26, 2019, in violation of 21 C.F.R. § 1140.14(b)(1).  The record also establishes that Respondent previously committed one violation of the Act on December 17, 2017, and one violation

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of the Act on October 12, 2018.  Therefore, I conclude that the facts outlined above establish that Respondent Citgo is liable under the Act for three violations within a 24-month period. 

B.  Civil Money Penalty

I have determined that Respondent committed three violations of the Act and its implementing regulations within a 24-month period.  Pursuant to 21 U.S.C. § 333(f)(9), Respondent Citgo is liable for a CMP not to exceed the amounts listed in FDA’s CMP regulations at 21 C.F.R. § 17.2; see also 45 C.F.R. § 102.3.  When determining the appropriate amount of a CMP, I am required to consider any “circumstances that mitigate or aggravate the violation” and “the factors identified in the statute under which the penalty is assessed . . . .” 21 C.F.R. §§ 17.34(a); 17.34(b).  Specifically, I must take into account “the nature, circumstances, extent and gravity of the violations and, with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require.”  21 U.S.C. § 333(f)(5)(B).  Also, “for purposes of mitigating a civil penalty . . . [I] shall consider the amount of any penalties paid by the retailer to a State for the same violation” and whether the retailer has an “approved training program.”  21 U.S.C. § 333 note.  Respondent must prove any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  In its Amended Complaint, CTP seeks to impose the maximum penalty amount, $570, against Respondent.  Amended Complaint ¶ 1.  For the reasons explained below, I find that a CMP of $570 is appropriate.

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

Respondent committed three violations of the Act.  It sold covered tobacco products to minors on three separate occasions:  December 17, 2017, October 12, 2018, and June 26, 2019.  Respondent also failed to verify, by means of photo identification containing a date of birth, that the December 17, 2017, purchaser was 18 years of age or older.  After the first violation on December 17, 2017, CTP warned Respondent that failure to correct the violation could result in enforcement action, such as a CMP, informed Respondent that periodic inspections would continue, and directed Respondent to retailer education materials and other resources to ensure compliance.  CTP Ex. 12, at 1-2.  Despite these warnings from CTP and a subsequent CMP action, Respondent committed an additional violation on June 26, 2019.  The repeated inability of Respondent to comply with federal tobacco regulations is serious in nature and the CMP amount should be set accordingly.

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2. Respondent’s Ability to Pay

Respondent states that its business is extremely small and produces very little income.  R. Brief, at 2; see also R. Ex. 1, at 1.  To support its position, Respondent provided CTP with part of its 2018 tax return, which was admitted under seal as CTP Ex. 14.  Respondent has not presented any other evidence concerning its financial situation for me to consider.  Based on Respondent’s total assets and ordinary business income reflected on CTP Ex. 14, I find that Respondent has failed to show that it cannot afford to pay the $570 CMP sought by CTP. 

3. Effect on Respondent’s Ability to Continue to Do Business

Likewise, I find that a $570 CMP will not affect Respondent’s ability to continue to do business, considering Respondent’s total assets and ordinary business income reflected on CTP Ex. 14. 

4. History of Prior Violations

The current action is the second CMP action brought against Respondent for violations of the Act and its implementing regulations.  CTP previously initiated CMP action, CRD Docket Number T-19-1129, FDA Docket Number FDA-2019-H-0162, against Respondent for two violations of 21 C.F.R. pt. 1140 within a 12-month period.  CTP Ex. 1, at 1.  As noted above, Respondent admitted that it violated the prohibition against selling covered tobacco products to persons younger than 18 years of age on December 17, 2017, and October 12, 2018, and failed to verify, by means of photo identification containing a date of birth, that a purchaser was 18 years of age or older on December 17, 2017.  21 C.F.R. § 1140.14(b)(1); 21 C.F.R. § 1140.14(b)(2)(i).

5. Degree of Culpability

Based on my finding that Respondent committed the violations as alleged in the Complaint, I hold it fully culpable for three violations of the Act and its implementing regulations.

6. Employee Training Program

Respondent has not presented any evidence that it has an approved training program that complies with standards developed by the Food and Drug Administration.  21 U.S.C. § 333 note (quoting Tobacco Control Act § 103(q)(2)(A)-(B)); see also 45 C.F.R. § 102.3.  However, CTP has decided to seek CMPs using the lower schedule for all retailers until FDA promulgates regulations establishing standards for approved retailer training programs.  Guidance for Industry, Civil Money Penalties and No-Tobacco-Sale

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Orders for Tobacco Retailers, https://www.fda.gov/regulatory-information/search-fda-guidance-documents/civil-money-penalties-and-no-tobacco-sale-orders-tobacco-retailers-revised, at 9 (December 2016).

7. State Penalties

Respondent has not alleged or presented any evidence that it has paid any penalty to the state of Florida for the same violations.  21 C.F.R. § 17.34(b).

8. Other Matters as Justice May Require

Respondent must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  As discussed above, Respondent failed to prove any affirmative defenses and failed to establish any statutory factors to mitigate the CMP.  After reviewing the exhibits and briefs admitted in the administrative record, I do not find any evidence or legal support to support any other mitigating circumstances. 

Respondent failed to prove that the requested CMP is too high and should be reduced or not assessed.  Respondent did not present any persuasive evidence to support its claims that it is not fully culpable, cannot afford the proposed CMP, or would be forced out of business.  Respondent also did not submit any corroborating or persuasive evidence of corrective measures taken.  Thus, I find no basis for mitigating the CMP sought by CTP, which I find proportional and appropriate.  Based on the foregoing reasoning, I find the penalty amount of $570 to be appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $570 against Respondent, Wafeeq and Saladdin Brothers, LLC d/b/a Citgo, for three violations of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140, within a 24-month period.  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.

1. On December 20, 2019, the legal age to purchase tobacco products changed to 21.  Further Consolidated Appropriations Act, 2020, Pub. L. 116–94, div. N, title I, subtitle F, § 603(a)(1) (substituting "21 years" for "18 years") and § 603(a)(2) (adding subsection 387f(d)(5), which states “[i]t shall be unlawful for any retailer to sell a tobacco product to any person younger than 21 years of age”).  The corresponding regulations have not been updated yet.  See Id. § 603(b) (authorizing the Secretary to “to update all references to persons younger than 18 years of age in subpart B of part 1140 of title 21, Code of Federal Regulations, and to update the relevant age verification requirements under such part 1140 to require age verification for individuals under the age of 30”).  However, each of the violations at issue in this case occurred before these statutory changes.
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2. Respondent suggests that CTP must prove its case by “clear and convincing evidence.”  R. Prehearing Brief at 2.  However, the correct legal standard in this case is by “a preponderance of the evidence.”  21 C.F.R. § 17.33(b).
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