JJ Mini Market LLC d/b/a Smoker’s Stop Convenience, DAB TB5534 (2022)

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

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint on Respondent, JJ Mini Market LLC d/b/a Smoker’s Stop Convenience, at 874 Broad Street, Hartford, Connecticut 06106, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that Smoker’s Stop Convenience impermissibly sold regulated tobacco products to underage purchasers and failed to verify, by means of photo identification containing a date of birth, that purchasers were of age, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140.¹

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CTP seeks a civil money penalty of $11,904, for at least six violations within a 48-month period.²

During the course of this administrative proceeding, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend this action, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).  Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I grant CTP’s Motion to Impose Sanctions, strike Respondent’s Answer and issue this decision of default judgment.

I. Background

As provided for in 21 C.F.R. §§ 17.5 and 17.7, CTP served the complaint on Respondent Smoker’s Stop Convenience by United Parcel Service on April 6, 2022.  On May 5, 2022, Respondent registered for the Departmental Appeals Board Electronic Filing System (DAB E-File), and timely submitted its Answer to the Civil Remedies Division (CRD).  Dkt. Entry No. 3a.  Respondent stated that he no longer owned the store, that he closed it down due to having had a kidney transplant and that he could “not afford penalties” because of his medical issues.  Respondent mentioned he hired a lawyer who “is too busy right now” and that he would need an extension of “2 weeks.”  Id.  Respondent’s submission of May 5, 2022 was deemed to be a timely filed Answer so there was no apparent reason for the requested extension.  No attorney has filed a Notice of Entry of Appearance in this matter.

On May 12, 2022, I issued an Acknowledgment and Pre-Hearing Order (APHO), acknowledging receipt of Respondent’s Answer and establishing deadlines for the parties’ filings and exchanges, including a schedule for discovery.  The APHO set a deadline of June 20, 2022, for the parties to request documents from the opposing party and explained that a party must provide the requested documents no later than 30 days after the request has been made.  APHO ¶ 4; see 21 C.F.R. § 17.23(a).  The APHO also contained a provision that required each party to file its pre-hearing exchange, specifically ordering CTP to file its pre-hearing exchange by August 2, 2022, and Respondent to file its pre-hearing exchange by August 23, 2022.  APHO ¶ 6.  Further, the APHO warned the parties that “I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes

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with the speedy, orderly, or fair conduct of the hearing.”  APHO ¶ 21 (citing 21 C.F.R § 17.35).

On July 11, 2022, CTP filed a Motion to Extend Deadlines and a Motion to Compel Discovery with two exhibits, asserting that Respondent did not respond to its discovery request as required by my APHO and regulations.  See Dkt. Entry Nos. 7-8b.   

On July 12, 2022, I issued an Order granting CTP’s motion to extend pre-hearing exchange deadlines, and informed Respondent of its opportunity to file a response to CTP’s Motion to Compel Discovery by July 27, 2022.  See Order at 1; see also APHO ¶ 20.  I also warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  Order at 1 (emphasis in original); see 21 C.F.R. § 17.32(c).  Respondent did not submit a response.

On August 3, 2022, I issued an Order granting CTP’s Motion to Compel Discovery and ordered Respondent to produce documents responsive to CTP’s discovery request by August 23, 2022.  Order Granting Motion to Compel at 1.  Respondent was also ordered to notify CTP in writing if it did not have documents responsive to CTP’s request.  Id. at 1-2.   I warned Respondent that:

[F]ailure to comply may result in sanctions, which may include striking its filings, issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty. 

Order Granting Motion to Compel at 2 (emphasis in original).  Respondent did not submit a response.

On August 25, 2022, CTP filed a Status Report and a Motion to Impose Sanctions stating that, as of its filing, Respondent had not produced documents in response to CTP’s request for production of documents and was not in compliance with the August 3, 2022 Order.  Dkt. Entry No. 11 at 1-2.  On that same date, CTP also filed a Motion to Extend Deadlines.  Dkt. Entry No. 12. 

On August 26, 2022, I issued an Order informing Respondent that it had until September 9, 2022 to file a response to CTP’s Motion to Impose Sanctions and extended pre-hearing exchange deadlines again.  I warned Respondent that if it failed to file a response, “I may grant CTP’s Motion to Impose Sanctions in its entirety.”  Order at 1 (emphasis in original).  To date, Respondent has not submitted a response to CTP’s Motion to Impose Sanctions.

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II. Sanctions

I may sanction a party for:

(1)      Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;

(2)      Failing to prosecute or defend an action; or

(3)      Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.

21 C.F.R. § 17.35(a).  

I conclude that sanctions against Respondent are warranted.  Respondent failed to comply with the following orders and procedures governing this proceeding:

• Respondent failed to comply with 21 C.F.R. § 17 .23(a) and paragraph 4 of my APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days;
• Respondent failed to comply with my Order Granting Motion to Compel discovery when it failed to produce documents responsive to CTP’s Request for Production of Documents by August 23, 2022; and
• Respondent also failed to defend this action despite my July 12, 2022 and August 26, 2022 Orders, informing Respondent of due dates to file its responses to CTP’s motions and warning Respondent of the consequences if it failed to do so.

I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly, or fair conduct of this proceeding.  I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the severity and nature of the failure to comply or misconduct.  21 C.F.R. § 17.35(b). When a party fails to comply with a discovery order, including the discovery provisions under the regulations, I may strike any part of the pleadings or other submissions of the party failing to comply with such request.  21 C.F.R. § 17.35(c)(3).  Here, Respondent failed to comply with a procedural rule, 21 C.F.R. § 17.23(a), and two of my orders (APHO ¶ 4 and Order Granting Motion to Compel), despite my explicit warnings that its failure could result in sanctions (APHO ¶ 21; Order Granting Motion to Compel at 2; Order at 1). I specified that those sanctions “may include striking its filings and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.”  Order Granting Motion to Compel at 1. Respondent also failed to defend its actions, under 21 C.F.R. § 17.35(a)(2), despite my orders expressly reminding Respondent of due dates by which a response, if any, must be filed. 

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July 12, 2022 Order at 1; August 26, 2022 Order at 1. In fact, Respondent has not participated in this action in any meaningful fashion since filing its Answer.  Respondent’s misconduct interfered with the speedy, orderly, or fair conduct of this proceeding, under 21 C.F.R. § 17.35(a)(3). 

I find that imposing the sanction of striking Respondent’s Answer reasonably relates to the severity and nature of Respondent’s misconduct.  21 C.F.R. § 17.35(b), (c)(3).  Accordingly, I grant CTP’s Motion to Impose Sanctions and strike Respondent’s Answer.  21 C.F.R. § 17.35(c)(3). 

III. Default Decision

Striking Respondent’s Answer leaves the complaint unanswered.  Therefore, I am required to issue an initial decision by default, provided that the complaint is sufficient to justify a penalty.  21 C.F.R. § 17.11(a).  Pursuant to section 17.11(a), I am required to “assume the facts alleged in the complaint to be true” and, if those facts establish liability under the Act, issue a default judgment and impose a civil money penalty.  Accordingly, I must determine whether the allegations in the complaint establish violations of the Act. 

Specifically, CTP alleges the following facts in its complaint:

• On October 23, 2019, CTP initiated a previous civil money penalty action, CRD Docket Number T-20-294, FDA Docket Number FDA-2019-H-4897, against Respondent for at least four violations of the Act.³ CTP alleged those violations to have occurred at Respondent’s business establishment, 874 Broad Street, Hartford, Connecticut 06106, on January 22, 2019, and July 30, 2019;

• The previous action concluded when Respondent admitted the allegations contained in the complaint issued by CTP and paid the agreed upon monetary penalty in settlement of that claim.  Further, “Respondent expressly waived its right to contest such violations in subsequent actions”;

• An FDA-commissioned inspector conducted a subsequent inspection on December 20, 2021, at approximately 10:05 AM, at Respondent’s business establishment located at 874 Broad Street, Hartford, Connecticut 06106.  During this inspection, a person younger than 21 years of age was able to purchase a package of two Garcia y Vega Game Pineapple cigars.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was 21 years of age or older.

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These facts establish Respondent Smoker’s Stop Convenience’s liability under the Act.  The Act prohibits misbranding of a regulated tobacco product.  21 U.S.C. § 331(k).  A regulated tobacco product is misbranded if sold or distributed in violation of regulations issued under section 906(d) of the Act.  21 U.S.C. § 387f(d); see also 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  The Secretary issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016); see also 21 U.S.C. § 387f (note) (directing the Secretary to change references to persons younger than 18 to younger than 21, and to change the age verification requirements from individuals under the age of 26 to under the age of 30, in 21 C.F.R. subpart B of part 1140).  Under section 906(d)(5) of the Act, no retailer may sell regulated tobacco products to any person younger than 21 years of age and retailers must verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 21 years of age. For violations prior to December 20, 2019, regulated tobacco products may not be sold to any person younger than 18 years of age, 21 C.F.R. § 1140.14(b)(1), and retailers must verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 18 years of age, 21 C.F.R. § 1140.14(b)(2)(i).

Under 21 C.F.R. § 17.2, a $11,904 civil money penalty is permissible for six violations of the regulations found at 21 C.F.R. pt. 1140 within a 48-month period.

ORDER

For these reasons, I enter default judgment in the amount of $11,904 against Respondent JJ Mini Market LLC d/b/a Smoker’s Stop Convenience.  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.

Endnotes

¹  On December 20, 2019, the Act was amended by the Further Consolidated Appropriations Act, 2020, Pub. L. No. 116–94, § 603(a)-(b), to raise the federal minimum age for sale of tobacco products to 21, and directed the Secretary of the U.S. Department of Health and Human Services (Secretary) 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.”  21 U.S.C. § 387f (note).

²  CTP did not include violations that occurred outside the relevant timeframe for this complaint.  See Complaint ¶ 1 n.1.

³  The complaint alleges two violations were committed on January 22, 2019, and two violations on July 30, 2019.