Tobacco N Vapes Inc. d/b/a Cigar N Vape, DAB TB7284 (2023)

ORDER GRANTING CTP’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, Tobacco N Vapes Inc. d/b/a Cigar N Vape, at 11106 Lee Highway, Fairfax, Virginia 22030, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that Cigar N Vape impermissibly sold regulated tobacco products to underage purchasers and failed to verify, by means of photo identification containing a date of birth, that the 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. Part 1140.¹  CTP seeks a $638 civil money penalty against Respondent Cigar N Vape, for three violations within a 24-month period.

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During the course of this administrative proceeding, Respondent failed to comply with orders and procedures governing this proceeding, 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 May 26, 2023, CTP served the complaint on Respondent Cigar N Vape by United Parcel Service Next Day Air.  On May 28, 2023, Respondent filed a timely Answer to CTP’s complaint.  Civil Remedies Division (CRD) Docket (Dkt.) Entry No. 2a (Answer).  On June 1, 2023, 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. 

In accordance with the deadlines set forth in the APHO, CTP served Respondent with its Request for Production of Documents (RFP) on June 30, 2023.  CTP Exhibits A and B (Supporting Documents/Exhibits). On August 7, 2023, CTP filed a Motion to Compel Discovery, asserting that Respondent did not respond to its discovery request, as required by the APHO and regulations. CTP’s Motion to Compel Discovery at 1-2.  Respondent filed a document on August 7, 2023 that appeared to be a response to CTP’s Motion to Compel Discovery, in which it asserted that “[w]e are not obligated to give you any information whatsoever.”  CRD Dkt. Entry No. 13 (Respondent’s August 7, 2023 Response).

Notwithstanding Respondent’s initial response, to ensure that it understood its regulatory obligation under 21 C.F.R. § 17.23(a), by Order of August 9, 2023, I notified Respondent that it had until August 23, 2023 to submit any additional responses to CTP’s Motion to Compel Discovery.  See Order at 1-2, August 9, 2023.  CRD Dkt. Entry No. 14.  See also 21 C.F.R. § 17.32(c); APHO ¶ 20.

On September 8, 2023, I issued an Order Granting Complainant’s Motion to Compel Discovery (Order to Compel Discovery), in which I ordered Respondent to produce documents responsive to CTP’s discovery request by September 15, 2023.  Respondent

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was also ordered to notify CTP in writing if it did not have documents responsive to CTP’s request. In this Order, Respondent was also warned that:

[F]ailure 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.  CRD Dkt. Entry No. 19.

On September 9, 2023, Respondent filed a response, in which it asserted, in part, that it would not be providing any requested documents, stating:

This is the third time I am writing this. You asked for document from this business. I see there is no requirement of any document, because my business has nothing to do With any of these allegations.

Respondent’s September 9, 2023 Response at 1.  CRD Dkt. Entry No. 16.

Respondent also asserted in this response that no sale was made to a minor by its employee, as alleged by CTP, that it is an honest business, that “there was no law broken here,” and that the onus is on CTP to provide “concrete evidence” that this occurred.  Id.

On September 18, 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.  CRD Dkt. Entry No. 17.  CTP argued that sanctions against Respondent for its repeated non-compliance were an appropriate remedy.  Id. 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.

By Order of September 20, 2023, I informed Respondent that it had until October 5, 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,” pursuant to 21 C.F.R. § 17.35.  Order at 2, September 20, 2023. CRD Dkt. Entry No. 19.   To date, Respondent has not responded.

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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 September 15, 2023.

I find that Respondent failed to comply with orders and procedures governing this proceeding and engaged in misconduct that 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). 21 C.F.R. § 17.35(c)(3) specifically provides that 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.   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), despite numerous explicit warnings that its failure could result in sanctions.  APHO ¶ 21; Order to Compel Discovery at 2.  CRD Dkt. Entry No. 5.  CRD Dkt. Entry No. 15.  Respondent was 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.”  Id.

Respondent has not participated in this action in any meaningful fashion since filing its Answer.  Rather, Respondent has defiantly refused to comply with the regulatory

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requirement and two judicial orders, insisting he does not have to comply.  CRD Dkt. Entry Nos. 13. and 16.  Despite numerous notices of the obligation to comply with discovery orders, as discussed above, Respondent continues to refuse to comply.  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 2:29 PM on July 10, 2021, at Respondent’s business establishment, 11106 Lee Highway, Fairfax, Virgina 22030, an FDA‑commissioned inspector conducted an inspection.  During this inspection, a person younger than 21 years of age was able to purchase a Joll Joll Menthol e-liquid product.
• In a warning letter dated August 10, 2021, CTP informed Respondent of the inspector’s July 10, 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.
• At approximately 1:23 PM on February 19, 2023, at Respondent’s business establishment, 11106 Lee Highway, Fairfax, Virgina 22030, an FDA‑commissioned inspector conducted a subsequent inspection.  During this inspection, a person younger than 21 years of age was able to purchase an Elfbar Cranberry Punch electronic nicotine delivery system (ENDS) product.  Additionally, Respondent’s staff failed to verify, by means of photographic

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identification containing a date of birth, that the purchaser was 21 years of age or older.²

These facts establish Respondent Cigar N Vape’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. Part 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, Tobacco N Vapes Inc. d/b/a Cigar N Vape.  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 identification violation alleged by CTP on February 19, 2023, is 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; see also supra fn.1.