West Side Food Inc. d/b/a Family Foods Basket, DAB TB5863 (2023)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint on Respondent, West Side Food Inc. d/b/a Family Foods Basket, at 403 Chicago Street, Michigan City, Indiana 46360, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that Family Foods Basket 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 21 years of age or older, 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 $638 civil money penalty

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against Respondent Family Foods Basket for three² violations within a 24-month period. 

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 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 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 16, 2022, CTP served the complaint on Respondent Family Foods Basket by United Parcel Service.  On September 19, 2022, Respondent filed a timely Answer to CTP’s complaint.  On September 21, 2022, an Acknowledgment and Pre-Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery, was issued.  The APHO directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  APHO ¶ 4; 21 C.F.R. § 17.23(a).  Respondent was warned that sanctions may be imposed if a party failed to comply with any order, including the APHO.  APHO ¶ 21.  

In accordance with the deadlines set forth in the APHO, CTP served Respondent with its Request for Production of Documents on October 4, 2022.  CTP Motion to Compel Discovery Responses (MTC) at 1, and MTC Exhibits A.  On October 17, 2022, CTP filed an Unopposed Motion to Extend Deadlines and Notice of Pending Settlement.  In response to the motion to extend deadlines, Administrative Law Judge Robinson issued an Order dated October 19, 2022, granting the extension request and requiring a joint status report regarding the status of the reported settlement negotiations.³  CTP filed a Joint Status Report on November 18, 2022, indicating that Respondent had not complied with the terms of the settlement agreement and, as a result, CTP intended to proceed to a hearing.

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On December 22, 2022, CTP filed a Motion to Compel Discovery, asserting that Respondent did not respond to its discovery request, as required by the APHO and regulations.  By Order of January 17, 2023, Respondent was notified of its deadline to file a response to the Motion to Compel Discovery and was warned that if it failed to respond, CTP’s motion would be granted in its entirety.  Order at 1-2, Jan. 17, 2023;  21 C.F.R. § 17.32(c); APHO ¶ 20.  Respondent did not respond.

On February 3, 2023, an Order Granting Complainant’s Motion to Compel Discovery (Order to Compel Discovery) was issued, in which Respondent was ordered to produce documents responsive to CTP’s discovery request by February 13, 2023.  Respondent was also ordered to notify CTP in writing if it did not have documents responsive to CTP’s request.  Respondent was warned that: 

Failure to comply with this Order 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 2.

On February 14, 2023, CTP filed a 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.  CTP argued that sanctions against Respondent for its repeated non-compliance were an appropriate remedy.  Motion to Impose Sanctions at 2.  Specifically, CTP asked that I strike the Respondent’s Answer as a sanction and issue an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing the requested civil money penalty of $638.  Id.  In my February 14, 2023 Order, I informed the Respondent that it had until February 28, 2023 to file a response to CTP’s Motion to Impose Sanctions.  I warned the Respondent that, “if it fails to respond, I may grant CTP’s Motion to Impose Sanctions and impose the requested civil money penalty of $638, pursuant to 21 C.F.R. § 17.35.”  Order at 2, Feb. 14, 2023 (emphasis in original).  Respondent did not respond. 

On April 26, 2023, CTP filed a pre-hearing exchange consisting of an Informal Brief of Complainant, Complainant’s List of Proposed Witnesses and Exhibits, and exhibits 1 through 19 (CTP Exs. 1-19, respectively).  Docket Entry Nos. 20, 20a-20t.  CTP’s exhibits included the declaration of two witnesses: (1) Loretta Chi, Senior Regulatory Counsel in the Office of Compliance and Enforcement, CTP, FDA (CTP Ex. 4), and (2) Derrick Cannon, FDA-Commissioned inspector for the state of Indiana (CTP Ex. 5).  Docket Entry Nos. 20e, 20f. 

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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). 

I find that 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 the APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with the Order to Compel Discovery when it failed to produce documents responsive to CTP’s Request for Production of Documents by February 13, 2023.

Respondent also failed to defend its action, despite the January 17, 2023 Order and the February 14, 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. § 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 orders (APHO ¶ 4; Order to Compel Discovery), under 21 C.F.R. § 17.35(a)(1), despite numerous explicit warnings that its failure could result in sanctions (APHO ¶ 21; Order to Compel Discovery at 2; Order at 2, Feb. 14, 2023).  Respondent was twice specifically warned that failure to comply with orders 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 2; Order at 2, Feb. 14, 2023.

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Respondent also failed to defend its actions, under 21 C.F.R. § 17.35(a)(2), despite the orders expressly reminding Respondent that it may file a response.  Order at 2, Jan. 17, 2023; Order at 2, Feb. 14, 2023.  In fact, Respondent has not participated in this action in any meaningful fashion since CTP filed an Unopposed Motion to Extend Deadlines and Notice of Pending Settlement on October 17, 2022, at which time Respondent concurred on the motion and notice and agreed to pay the agreed-upon civil money penalty within thirty days.  By Order of October 19, 2022, the motion to extend deadlines was granted and all the deadlines were extended by thirty days.  CTP, with Respondent’s approval, filed a Joint Status Report on November 18, 2022, stating Respondent did not comply with the terms of the settlement agreement and, although CTP remained open to settlement discussions, a hearing was eminent.  Respondent has not complied with any subsequent Orders, as detailed above, or defended its actions since the failed settlement negotiations.  Respondent’s repeated 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 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, 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 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. 

Specifically, CTP alleges the following facts in its complaint:

• At approximately 5:37 PM on December 28, 2021, at Respondent’s business establishment, 403 Chicago Street, Michigan City, Indiana 46360, an FDA-commissioned inspector conducted an inspection.  During this inspection, a person younger than 21 years of age was able to purchase a package of two Swisher Sweets Classic Grape 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;
• In a warning letter dated February 1, 2022, CTP informed Respondent of the inspector’s December 28, 2021 documented violations, and that such actions violate federal law.  The warning letter further warned that Respondent’s failure to

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correct its violations could result in a civil money penalty or other regulatory action;

• An FDA-commissioned inspector conducted a subsequent inspection on June 20, 2022, at approximately 6:04 PM, at Respondent’s business establishment located at 403 Chicago Street, Michigan City, Indiana 46360.  During this inspection, a person younger than 21 years of age was able to purchase a package of two Swisher Sweets Classic Grape 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.⁴

These facts establish Respondent Family Foods Basket’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 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. 

A $638 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $638 against Respondent West Side Food Inc. d/b/a Family Foods Basket.  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 two violations on December 28, 2021, and two on June 20, 2022.  In accordance with customary practice, CTP counted the violations at the initial inspection as a single violation, and all subsequent violations as separate individual violations.  See 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).

³  This case was transferred to me on February 8, 2023.

⁴  The identification violations alleged by CTP on December 28, 2021, and on June 20, 2022, are governed by section 906(d) of the Act, which went into effect as of December 20, 2019, although CTP cites 21 C.F.R. § 1140.14(b)(2)(i), which has not been updated to reflect the age change.  See Complaint ¶¶ 13.b, 15.b; see also supra fn.1.