Lincoln Park Smokers LLC d/b/a Lincoln Park Smoker’s, DAB TB5732 (2023)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint on Respondent, Lincoln Park Smokers LLC d/b/a Lincoln Park Smoker’s, at 1121 Southfield Road, Lincoln Park, Michigan 48146, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that Lincoln Park Smoker’s impermissibly sold regulated tobacco products to underage purchasers, 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  CTP seeks a $320 civil money penalty against Respondent Lincoln

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Park Smoker’s for at least two² violations within a 12-month period.³

During the course of this administrative proceeding, Respondent failed to comply with orders and procedures governing this proceeding, and failed to defend its actions, which has 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 strike Respondent’s Answer as a sanction and issue this decision of default judgment.

I.    Procedural History

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on August 4, 2022, CTP served the complaint on Respondent Lincoln Park Smoker’s by United Parcel Service.  On September 6, 2022, Respondent, through counsel, filed a timely Answer to CTP’s complaint.  On September 8, 2022, I issued an Acknowledgment and Pre-Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery.  I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  APHO ¶ 4; see 21 C.F.R. § 17.23(a).  I warned that I may impose sanctions if a party failed to comply with any order, including the APHO.  APHO ¶ 21.

On November 10, 2022, CTP filed a Motion to Compel Discovery, asserting that Respondent did not respond to its discovery request as required by my APHO and regulations.  By Order of November 14, 2022, I informed Respondent of its deadline to file a response and warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  Order at 2, Nov. 14, 2022 (emphasis added); 21 C.F.R. § 17.32(c); APHO ¶ 20.  Respondent did not respond.

On December 6, 2022, I issued an Order Granting Motion to Compel (Order to Compel Discovery) in which I ordered Respondent to produce documents responsive to CTP’s discovery request by January 4, 2023.  I warned Respondent that:

[F]ailure to comply may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

Order to Compel Discovery at 1-2 (emphasis added).

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On January 5, 2023, CTP filed Complainant’s Status Report and Motion to Impose Sanctions (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 in compliance with my Order to Compel Discovery.  By Order of January 6, 2023, I informed Respondent that it had until January 22, 2023, to file a response to CTP’s Motion to Impose Sanctions.  I warned Respondent that if it failed to file a response, “I may grant CTP’s motion in its entirety.”  Order at 2, Jan. 6, 2023.  Respondent did not respond.

II.    Striking Respondent’s Answer

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).

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; and
• Respondent failed to comply with my Order to Compel Discovery when it failed to produce documents responsive to CTP’s Request for Production of Documents by January 4, 2023.

Respondent also failed to defend its actions, despite my November 14, 2022 Order and January 6, 2023 Order, informing Respondent that it may file a response 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 nature and severity of the misconduct or failure to comply.  21 C.F.R. §

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17.35(b).  When a party fails to comply with a discovery order, including the discovery provisions under the regulations, I may strike any pleadings or submissions of the party failing to comply.  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; Order to Compel Discovery) under 21 C.F.R. § 17.35(a)(1), despite my explicit warnings that its failure could result in sanctions (APHO ¶ 21; Order to Compel Discovery at 1-2; Order at 2, Jan. 6, 2023).  I specified that these failures to comply “may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.”  Order to Compel Discovery at 1-2.  Respondent also failed to defend its actions, under 21 C.F.R. § 17.35(a)(2), despite my orders expressly reminding Respondent that it may file a response.  Order at 2, Nov. 14, 2022; Order at 2, Jan. 6, 2023.  In fact, Respondent has not participated in this action in any meaningful fashion since filing its Answer.  Respondent’s repeated misconduct has 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 and issuing a decision by default, without further proceedings, reasonably relates to the severity and nature of Respondent’s misconduct.  21 C.F.R. § 17.35(b), (c)(3).  Accordingly, I strike Respondent’s Answer.  21 C.F.R. § 17.35(c)(3).

III.     Default Decision

Striking Respondent’s Answer leaves the complaint unanswered.  Therefore, pursuant to 21 C.F.R. § 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.

CTP alleges the following facts in its complaint:

• At approximately 1:41 PM on July 13, 2021, at Respondent’s business establishment, 1121 Southfield Road, Lincoln Park, Michigan 48146, an FDA‑commissioned inspector conducted an inspection.  During this inspection, a person younger than 21 years of age was able to purchase a Breeze Smoke Blueberry Mint Plus Edition electronic nicotine delivery system (ENDS) product;
• In a warning letter dated August 24, 2021, CTP informed Respondent of the inspector’s July 13, 2021 documented violation, and that such action violates federal law.  The letter further warned that Respondent’s failure to correct its violation could result in a civil money penalty or other regulatory action;

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• At approximately 6:17 PM on June 1, 2022, at Respondent’s business establishment, 1121 Southfield Road, Lincoln Park, Michigan 48146, an FDA‑commissioned inspector conducted an inspection.  During this inspection, a person younger than 21 years of age was able to purchase a Breeze Smoke Lush Ice Pro Edition electronic nicotine delivery system (ENDS) product.

These facts establish Respondent Lincoln Park Smoker’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 also 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.

A $320 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $320 against Respondent Lincoln Park Smokers LLC d/b/a Lincoln Park Smoker’s.  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 The complaint alleges one violation on July 13, 2021, and one on June 1, 2022.

³ CTP did not include violations that occurred outside the relevant timeframe for this complaint.  See Complaint ¶ 1 fn. 1.