B. Bliss, LLC d/b/a Citgo, DAB No. 3155 (2024)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

B. Bliss, LLC d/b/a Citgo (Respondent) appeals the July 9, 2024 Administrative Law Judge (ALJ) Initial Decision imposing a $638 civil money penalty against Respondent for three violations of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, over a period of twenty-four months.  B. Bliss, LLC d/b/a Citgo, DAB TB8274 (2024) (ALJ Decision).  The ALJ issued his decision following a hearing on an administrative complaint (Complaint) filed by the Food and Drug Administration’s Center for Tobacco Products (CTP).  The ALJ concluded that the evidence of record supported the allegations in the Complaint and provided a basis for assessing a $638 penalty.  For the reasons explained below, the Board affirms the ALJ Decision because it is supported by substantial evidence and free of legal error.

Legal Background

To protect public health, the Act imposes restrictions on the sale, distribution, and use of tobacco products.  See 21 U.S.C. §§ 301, 331(b), 331(k), 387a(a)-(b), 387c(a)(7)(B), 387f(d).  One such restriction is that “[i]t shall be unlawful for any retailer to sell a tobacco product to any person younger than 21 years of age.”  Id. § 387f(d)(5).  The Act also prohibits any action with respect to a tobacco product held for sale after shipment in interstate commerce that results in the product being “misbranded.”  Id. § 331(k).  A tobacco product is misbranded if, among other things, “it is sold or distributed in violation of section 387f(d)(5)” or “regulations prescribed under section 387f(d).”  Id. § 387c(a)(7)(B). 

The Act directed the Secretary of Health and Human Services (Secretary) to establish the CTP and authorized the Secretary to issue regulations restricting the sale and distribution of tobacco products.  21 U.S.C. §§ 387a(e), 387f(d).  In accordance with the Act, the Secretary issued regulations codified in 21 C.F.R. Part 1140.  Failure to comply with any of those regulations in the sale or distribution of “covered tobacco products” renders them “misbranded” under the Act.  21 C.F.R. § 1140.1(b); see id. § 1143.1 (defining “Covered tobacco product”).  Regulations prohibiting the sale of covered tobacco

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products to an underage person appear in subpart B of 21 C.F.R. Part 1140.  Those regulations, in relevant part, prohibit a retailer from “sell[ing] covered tobacco products to any person younger than 21 years of age.”  21 C.F.R. § 1140.14(b)(1).  A retailer also must “verify by means of photographic identification containing the bearer’s date of birth that no person purchasing the product is younger than 21 years of age,” except that “[n]o such verification is required for any person over the age of 29.”  Id. § 1140.14(b)(2)(i)-(ii).¹ 

“FDA conducts inspections of tobacco product retailers to determine a retailer’s compliance with federal laws and regulations,” including the Act and its implementing regulations.  FDA, Advisory and Enforcement Actions Against Industry for Selling Tobacco Products to Underage Purchasers (Nov. 14, 2023), (last visited Oct. 7, 2024), https://www.fda.gov/tobacco-products/compliance-enforcement-training/advisory-and-enforcement-actions-against-industry-selling-tobacco-products-underage-purchasers.  The violations in this case were discovered during undercover buy inspections.  “During Undercover Buy Inspections, the retailer is unaware an inspection is taking place.  The inspector and underage purchaser will not identify themselves.”  Id.  After the inspection, the results are sent to FDA for an initial review, and, if there is a potential violation, a Notice of Compliance Check inspection (NCCI) is sent to the retailer within one week of the inspection.  Id.  After FDA reviews the evidence and confirms there was a violation, a warning letter is sent to the retailer, who is subject to reinspection.  Id.

The Act provides for imposition of civil money penalties (CMPs) against “any person who violates a requirement of [the Act] which relates to tobacco products.”  21 U.S.C. § 333(f)(9)(A).  The implementing regulations concerning CMPs are found in 21 C.F.R. Part 17 and 45 C.F.R. § 102.3.  These regulations establish a schedule of maximum CMP amounts based on the number of violations committed and the time period over which they have occurred.  See 21 C.F.R. § 17.2 (citing 45 C.F.R. § 102.3 (table)). 

When CTP serves an administrative complaint on a retailer, the retailer may request a hearing, which proceeds before a “presiding officer” who is a qualified ALJ.  Id. §§ 17.3(c), 17.5, 17.7, 17.9, 17.19.  The ALJ must “conduct a hearing on the record to determine whether the respondent is liable for a [CMP] and, if so, the appropriate amount of any such [CMP] considering any aggravating or mitigating factors.”  Id. § 17.33(a).  CTP must prove the respondent’s liability and the appropriateness of the CMP, and the

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respondent also must prove any affirmative defenses and mitigating factors, by a preponderance of the evidence.  Id. § 17.33(b), (c).  The ALJ issues a decision (which the regulations refer to as the “initial decision”) based only on the administrative record.  Id. § 17.45(a). 

A respondent may appeal the ALJ’s initial decision to the Board.  21 C.F.R. §§ 17.45(d), 17.47.  The Board may decline to review, affirm, or reverse the initial decision, “or increase, reduce, reverse, or remand any [CMP] determined” by the ALJ.  Id. § 17.47(j).

Case Background ²

A. Complaint and ALJ Proceedings

Respondent was subject to an undercover inspection by CTP on February 9, 2022, and on March 17, 2022, CTP issued a warning letter informing Respondent of its violations for selling a tobacco product to a person under 21 years of age and failing to verify identification for the minor purchaser.  CTP Ex. 1, at 1-2.  On August 11, 2023, CTP filed a complaint against Respondent stating that on May 1, 2023, during a second undercover inspection by CTP, Respondent again committed violations of selling tobacco product to a person under 21 years of age and failing to verify identification for the minor purchaser, and that Respondent was notified of these violations on May 3, 2023.  Complaint (Compl.)  ¶¶ 13-14.  CTP alleged that on February 9, 2022 and May 1, 2023, Respondent sold covered tobacco products to individuals under the age of 21 in violation of 21 C.F.R. § 1140.14(b)(1) and failed to verify the age of persons purchasing covered tobacco products by means of a photographic identification containing the bearer’s date of birth in violation of 21 C.F.R. § 1140.14(b)(2)(i).  Id. ¶¶ 13, 15.  CTP argued that by failing to comply with “the tobacco regulations, Respondent caused its tobacco products to become misbranded” within the meaning of the Act.  Informal Br. of Complainant at 2 (citing 21 U.S.C. § 387c(a)(7)(B)).  CTP sought a penalty of $638 for the violations.  Compl. ¶ 1. ³

Respondent filed an Answer, denying the allegations in CTP’s Complaint and disputing that there were more than two violations because there were only two inspection dates.  Answer at 1.  Respondent stated it has “stringent” identification-checking policies and its

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“POS” system always asks for identification before a sale of tobacco product.  Id. at 2.  Respondent did not respond to or otherwise contest the appropriateness of the CMP.  Id.

The ALJ issued an Acknowledgment and Pre-Hearing Order that set procedures and a schedule for filings, that included a December 8, 2023 deadline for prehearing exchange (requests for discovery, evidence, and arguments) for CTP, and a December 29, 2023 deadline for pre-hearing exchange for Respondent.  After a pre-hearing exchange, Respondent filed a response to CTP’s motion to compel discovery, which included a series of attachments labeled as exhibits A and B.  Exhibits A and B consisted of tobacco retailer training materials, “We Scan IDs” signage at its establishment, and a photo of a register with ID check software.

Respondent filed an informal, pre-hearing brief, stating that it initially thought the warning letter was fraudulent, and by the time Respondent conducted additional research, it could not confirm the violations due to system and camera recording limitations as to backdated data and footage.  R. Informal Br. at 2.  Respondent denied that it sold a tobacco product to an underage purchaser (UP) on February 9, 2022 and May 1, 2023, and asserted, “Swisher Sweet Classic cigars are available at almost all convenience stores/gas stations” and “without a proof of purchase, such as a sales receipt, it cannot be claimed with full certainty that the tobacco product was indeed purchased” at Respondent’s establishment.  Id. at 4.  Respondent further denied that it failed to check the UPs identification on the alleged dates, stating that it uses “up-to-date training manuals,” an FDA-provided date check system, and a system-enabled identification check “for all tobacco product sales.”  Id.  Respondent stated it had “never had any violations with state/local/federal tobacco enforcement officers,” citing prior compliance.  Id. at 4-5.  Respondent did not agree to the $638 penalty amount because its establishment did not commit the violations.  Id. at 5.  Respondent attached 16 pages of documentation labeled as exhibits A-C, which included tobacco retailer training materials, “We Scan IDs” signage at its establishment, a photo of a register with ID check software, and post-inspection letters from 2018-19 showing successful compliance with local decoy operations involving underage purchasers.  Id. at 5, 8-23.

CTP filed its pre-hearing exchange, which consisted of an informal brief, proposed witness and exhibit list, and nineteen proposed exhibits, including written declarations of two witnesses and other evidence collected by FDA-commissioned state inspector Colleen Mencl (Inspector Mencl).  CTP Informal Br.; CTP List of Proposed Witnesses and Exs.; CTP Exs. 1-19; see also ALJ Decision at 1-2.  In its brief, CTP stated that evidence demonstrated that Respondent sold covered tobacco products to two customers under the age of 21 on February 9, 2022 and May 1, 2023, and failed to verify their age by means of photographic identification at the time of the sales, as substantiated by the inspector’s subsequent reports.  CTP Informal Br. at 5-13.  CTP further asserted that Respondent’s three violations warrant the maximum penalty of $638.  Id. at 13-17.  CTP’s exhibits included photographs of the tobacco products from the February 9, 2022

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and May 1, 2023 inspections.  CTP Exs. 10-11, 15.  CTP Ex. 10 is a photograph of Swisher Sweets Classic cigarillos with a yellow label dated “2/8/2022,” and CTP Ex. 11 is a photograph of a CTP bag dated “02/09/2022,” containing the tobacco product.  Photographs of the UP’s identification were included as evidence, CTP Exs. 9, 14, as well as Inspector Mencl’s TIMS/narrative reports.  CTP Exs. 6-8.  Also included were Compliance Check Inspection Notices with photographs of Respondent’s establishment and descriptions of the clerks who sold the tobacco product on the dates in question.  CTP Exs. 12, 17.

Inspector Mencl stated that on February 9, 2022, at approximately 11:01 a.m., she “conducted an UB [undercover buy] compliance inspection” of Respondent’s establishment, with a trained underage purchaser (UP A) who had accurate photo identification showing their date of birth, was under the age of 21, and “did not have any tobacco product in their possession.”  CTP Ex. 4, at ¶¶ 6-7; see also CTP Ex. 9 (UP A’s identification card).  Inspector Mencl further stated that she entered the establishment “moments” after UP A and “had a clear, unobstructed view” of UP A purchasing the tobacco product “from an employee at the establishment” without presenting “any identification” and without receiving a receipt from the employee.  Id. at ¶ 8.  Inspector Mencl stated that after exiting Respondent’s establishment, the UP “immediately placed the package of cigars in the center console of the vehicle,” and, at a secure location nearby, the Inspector, in accordance with standard procedures, “retrieved the package of cigars from the center console,” observed the package was “Swisher Sweets Classic cigars,” labeled the package as evidence, and “photographed the front and back” of the package; Inspector Mencl then created a narrative report in TIMS.  Id. at ¶¶ 9-11; see also CTP Exs. 5-6 (copies of the Feb. 9, 2022 narrative report and TIMS Form); 10, at 1 (photograph of tobacco product labeled Feb. 8, 2022); 11 (photograph of tobacco product in bag labeled Feb. 9, 2022).

Inspector Mencl stated that on May 1, 2023, at approximately 12:16 p.m., she “conducted a follow-up UB compliance” inspection, with another underage purchaser (UP B), and again entered the establishment “moments” after UP B and “had a clear, unobstructed view” of UP B purchasing a tobacco product (also a package of Swisher Sweets) from an employee at the establishment without presenting any identification or receiving a receipt.  Id. at ¶¶ 12-13; see also CTP Ex. 14 (UP B’s identification card).  Inspector Mencl further stated that after exiting the establishment and securing the tobacco product, she photographed the tobacco product and labeled it as evidence, and then created a narrative report in TIMS.  Id. at ¶¶ 14-16; see also CTP Exs. 7-8 (copies of the May 1, 2023 narrative report and TIMS Form); 15-16 (photographs of tobacco product).

A hearing was held on April 10, 2024.  See CTP v. Bliss T-23-3295 (Hearing Transcript (Tr.)).  At the April 10, 2024 hearing, Respondent objected to CTP Ex. 10 because the evidence (pictures of Swisher Sweets tobacco product) had a date of February 8, 2022, “one day before” the inspection, which occurred on February 9, 2022.  Tr. at 6.  The ALJ

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overruled the objection, noting it “goes to … the probative value of the exhibit,” which is “not a basis for [the ALJ] to exclude the exhibit.”  Id. at 7.  The ALJ then admitted CTP Exs. 1-19 and Respondent Exs. A-C.  Id.  The remainder of the hearing was for the purpose of allowing Respondent to cross-examine Inspector Mencl.  Id. at 7-8.  Respondent asked the Inspector why the evidence tag for the product purchased at the February 9, 2022 inspection had a date of February 8, 2022.  Id. at 8-9.  Inspector Mencl stated that the date of February 8, 2022 on the evidence was “an error on my end” and confirmed the “inspection took place on February 9th,” explaining that “the TIMS [Tobacco Inspection Management System] report” cannot be opened the day before the inspection, so the inspection “has to be on February 9th” and it “was just a human error that I wrote February 8th on the yellow piece of paper.”  Id. at 9-11. 

Further efforts by Respondent to challenge the evidence rather than cross-examine the witness regarding the description of the employee working on February 9, 2022, and the photograph of the outside of the store resulted in Respondent making a statement under oath.  See id. at 11-13.  Respondent then testified that “we did not sell the tobacco products underage” and they “always check the ID,” which can be scanned into their system.  Id. at 13.  On cross-examination, Respondent stated only herself and her husband were employed at the time of the February 9, 2022 and May 1, 2023 inspections; that she opened weekday mornings at 6:00 a.m., her husband took over around 2:00 p.m., and the store closed at 10:00 p.m; and she did not wear glasses.  Id. at 14-16.  The ALJ concluded the hearing, stating that the evidence taking portion of the hearing was complete and the parties could proceed to written closing arguments, after receipt of the transcript.  Id. at 16-18.

Respondent filed a post-hearing brief, asserting “discrepancies that contradict the alleged violations claimed by CTP” and requesting “this case to be dismissed” due to “no concrete evidence.”  R. Post-Hearing Br. at 1.  Respondent repeated its assertions from the hearing, including: the handwritten date discrepancy for the February 9, 2022 evidence created doubt as to date of the inspection; the descriptions of the clerks for both inspection dates were inaccurate; there was no proof of purchase nor in-person notification of the violations, such that the inspection was “conducted with multiple procedural failures;” and Respondent thought the warning letter was fraudulent and by the time it responded it “could not check [the] point-of-sale and camera surveillance systems due to back-up limitations for historical data.”  Id. at 2-4.

CTP filed a post-hearing brief, stating that Inspector Mencl provided “direct evidence that the violations occurred” because she was “physically present with the underage purchaser on both dates and personally observed” the sale of tobacco products to UP’s “without verifying their identification.”  CTP Post-Hearing Br. at 2.  CTP argued that “Respondent has not provided any additional evidence in support of its assertion” that the inspection took place on February 8, 2022, “other that the unsubstantiated contention that

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Inspector Mencl’s entire testimony should be discounted because of a typographical error.”  Id. at 3.

B. The ALJ Decision

The ALJ issued a decision on the merits on July 9, 2024.  ALJ Decision.  The ALJ determined that the “weight of the evidence” establishes Respondent committed three violations in a 24-month period by unlawfully selling tobacco products and failing to check the identification of underage individuals.  Id. at 1, 3.  The ALJ relied on Inspector Mencl’s testimony and contemporaneous narrative reports for each inspection, as well as corroborating evidence, including photographs of the underage purchasers’ identification and the purchased tobacco products.  Id. at 3 (citing CTP Exs. 4-5, 7, 9-11, 14-16).  The ALJ found that Respondent offered “no tangible evidence to rebut” the Inspector’s testimony and stated, regarding the date discrepancy on the tobacco products, that Inspector Mencl had explained that the TIMS report could only be created on the actual date the inspection took place, “which would mean the inspection of Respondent’s establishment occurred on February 9, 2022.”  Id. at 4.  The ALJ also found “no basis to conclude that any of Respondent’s allegations,” such as disputing the descriptions given by CTP of the employees that made the sale to the underage purchaser, or doubt as to whether the underage purchasers could have concealed tobacco products prior to entering the store, “are credible.”  Id. at 4-5.  The ALJ further found that Respondent’s evidence, which consisted of tobacco retailer training materials, “We Scan IDs” signage at its establishment, a photo of a register with ID check software, and post-inspection letters from 2018-19 showing successful compliance with local decoy operations involving underage purchasers, failed to “directly rebut[] Inspector Mencl’s testimony or undermine[] that testimony’s credibility.”  Id. at 5 (citing Respondent’s Exs. A-C).  The ALJ also stated, “Regardless of whether Respondent thought [CTP’s] warning letter had merit, the Respondent is still responsible for ensuring it complies with all tobacco regulations.”  Id. at 6.  Having found Respondent liable for “at least three” violations, the ALJ assessed a $638 penalty against Respondent, concluding that Respondent committed three violations of the FDA’s tobacco regulations within twenty-four months.  Id. at 6-7 (citing 42 C.F.R. § 102.3). ⁴  

C. Respondent’s appeal to the Board

Respondent timely appealed the ALJ Decision.  Respondent filed a notice of appeal and brief (R. Br.) on August 5, 2024, stating that CTP’s evidence is “insufficient to conclude

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wrongdoing.”  Id. at 1.  Respondent purports to “have never heard of FDA or an organization claiming to be part of FDA conducting any such inspections” and “any person in my situation would believe [CTP’s warning] letter is not legit,” as well as that a Michigan state tobacco representative “had not heard of any such inspections” and by August 2023, when the state representative investigated further and told her to respond, CTP had filed an official complaint.  Id. at 2.  Respondent states that it “run[s] a small business” and does not have the technology or resources to verify inspections.  Id.  Respondent asserts that the evidence shows “a generic pack of Cigarillos with no proof of purchase, with no on-spot notification, and wrong date on the evidence itself,” and questions whether proper procedure was followed or the UPs were “thoroughly searched for tobacco product before the inspections,” which “[a]t first look” creates “reasonable doubt about the inspection.”  R. Br. at 2-3. 

CTP’s response asserts that Respondent “cites no evidence that contradicts” the record that formed the basis of the ALJ Decision.  Response at 2.  CTP notes that “the standard for a [CMP] is a preponderance of the evidence and not beyond reasonable doubt, as [Respondent] states in its Brief.”  Id. at 8.  CTP further asserts that Inspector Mencl witnessed the sales “firsthand,” and the Inspector’s testimony was corroborated by evidence including the TIMS and narrative reports, as well as photographs of the UPs identification and the purchased tobacco products, and that the “ALJ properly found that [Respondent] did not offer any” rebuttal evidence.  Id. at 9.  CTP further noted, regarding the lack of receipts, that “there is nothing in the Act or regulations … requiring CTP to provide a receipt showing proof of purchase.”  Id. at 10-11 (citing Kuma H. Mamie, DAB No. 2877, at 7 (2018) and Madison-Food-Mart-Inc., DAB No. 3058, at 9 (2022) (“The lack of receipts for the transactions did not preclude the ALJ from relying on [an] Inspector[’s] testimony or concluding that Respondent sold tobacco products to minors at the time of the inspections.”)).

Respondent replies that it should have been “given active notification via credible source and not use mail[] for citation,” and states that “fraud is rampant via mail[]” and “an in-person notification/citation is absolute[ly] necessary.”  Reply at 1.  Respondent asserts that the “entire evidence in this case is a generic tobacco product” that “could have been bought from any store,” such that there “is no proof that the sale actually occurred” without “proof of purchase or on-spot citations.”  Id. at 2.  Respondent questions why an addendum was not done regarding the mistaken inspection date listed on evidence, which Respondent asserts “supports my suspicion of the inspection actually not happening.”  Id.  Respondent further questions if Inspector Mencl was physically present in the establishment, asserting that a “[c]lear view of the counter does not mean inside the building, and can very well mean sitting outside in the vehicle and viewing through the window.”  Id.  Respondent states it has “strict ID checking guidelines,” which, it asserts, “begs the question [of whether] the tobacco exchange [was] actually witnessed by the officer.”  Id.

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Standard of Review

The standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record.  21 C.F.R. § 17.47(k).  The standard of review on a disputed issue of law is whether the initial decision is erroneous.  Id.  The term “substantial evidence” means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).  

Under the substantial evidence standard, the Board does not re-weigh the evidence or overturn an ALJ’s choice between two fairly conflicting views of the evidence; instead, the Board determines whether the contested finding could have been made by a reasonable fact-finder tak[ing] into account whatever in the record fairly detracts from [the] weight of the evidence that the ALJ relied upon.

Douglas Bradley, M.D., DAB No. 2663, at 5 (2015) (internal quotation marks omitted). 

Analysis

A. Substantial evidence supports the ALJ’s conclusion that Respondent committed three violations of the FDA’s tobacco regulations within a 24-month period.

The ALJ relied on Inspector Mencl’s declaration and testimony and CTP’s evidence.  See ALJ Decision at 6.  Inspector Mencl declared that, during compliance inspections of Respondent’s establishment on February 9, 2022, at approximately 11:01 a.m., and on May 1, 2023, at approximately 12:16 p.m., she confirmed that each minor possessed their photo identification, was under the age of eighteen, and “did not have any tobacco product in their possession.”  CTP Ex. 4, ¶¶ 7, 12.  She further declared that she entered the establishment “moments” after both UP A and B and “had a clear, unobstructed view” of them purchasing the tobacco products “from an employee at the establishment” without presenting “any identification” and without receiving receipts from the employee.  Id. at ¶¶ 8, 13.  Inspector Mencl stated that they exited the premises and after driving to a nearby secure location, the Inspector photographed the tobacco product and labeled it as evidence, and then created a narrative report in TIMS.  Id. at ¶¶ 9-11, 14-16.  The ALJ found that “CTP corroborated Inspector Mencl’s testimony by offering as evidence photographs” of the UPs’ identification and the tobacco products, as well as contemporaneously created “narrative reports by Inspector Mencl.”  ALJ Decision at 3 (citing CTP Exs. 5, 7, 9-11, 14-16).  The ALJ determined “CTP’s allegations to be supported by the weight of the evidence,” including Inspector Mencl’s declaration and testimony and CTP’s evidence, which he found supported the credibility of CTP’s complaint.  ALJ Decision at 3, 6. 

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Inspector Mencl’s declaration and testimony – along with her narrative and TIMS reports written shortly after the inspection (CTP Exs. 5-8) and photographs she took of the tobacco products shortly after she left the establishment with the UPs (CTP Exs. 10-11, 15) – is substantial evidence that Respondent sold tobacco products to the UPs and failed to check their photo identification in violation of 21 C.F.R. §§ 1140.14(b)(1) and 1140.14(b)(2)(i).  See J. Peaceful, L.C., DAB No. 2742, at 9 (2016) (holding that evidence establishing “that the minor entered [the] establishment without cigarettes and exited shortly thereafter with cigarettes” was substantial evidence that the retailer unlawfully sold cigarettes to a minor). 

The Board defers to an ALJ’s findings regarding witness credibility and the weight assigned to a party’s evidence unless there is “compelling reason” to do otherwise.  Atty’s Parti Expo, Inc., DAB No. 2925, at 7 (2019).  Respondent has offered no compelling reason to not defer to the ALJ’s credibility determinations and weighing of the evidence.  Accordingly, we find that substantial evidence supports the ALJ’s conclusion that Respondent violated 21 C.F.R. §§ 1140.14(b)(1) and 1140.14(b)(2)(i).  Below we address Respondent’s specific arguments made to the Board challenging the ALJ decision. 

B. Respondent’s arguments lack merit.

Respondent makes multiple assertions; many of which are criticisms of the overall compliance inspection process.  Regarding the challenges to the evidence, Respondent fails to support these assertions with relevant evidentiary exhibits or witness statements or testimony.  Thus, Respondent has provided no basis to dispute CTP’s evidence or the ALJ’s conclusion.  Respondent asserts that the evidence shows “a generic pack of Cigarillos with no proof of purchase, with no on-spot notification, and wrong date on the evidence itself,” and questions whether proper procedure was followed or the UPs were “thoroughly searched for tobacco product before the inspections,” which “[a]t first look” creates “reasonable doubt about the inspection.” R. Br. at 2-3; see also Reply at 2 (asserting that the “entire evidence in this case is a generic tobacco product” that “could have been bought from any store,” such that there “is no proof that the sale actually occurred” without “proof of purchase or on-spot citations”). ⁵

Initially, Respondent fails to articulate the proper standard of review in this case.  As highlighted above, the standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record.  21 C.F.R. § 17.47(k). 

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Under the substantial evidence standard, the Board determines whether the contested finding could have been made by a reasonable fact-finder taking into account whatever in the record fairly detracts from the weight of the evidence that the ALJ relied upon.  Bradley at 5.  Here, as the ALJ found, Respondent fails to provide any evidence in support of its assertions, including evidence that “either directly rebuts Inspector Mencl’s testimony or undermines that testimony’s credibility.”  ALJ Decision at 5.

Respondent’s assertion that proof of purchase is required for the tobacco product is without merit.  “[T]here is nothing in the Act or regulations requiring CTP to provide a receipt showing proof of purchase.”  Madison at 9 (citing Mamie at 7).  Even without a receipt, an ALJ may reasonably credit an FDA-commissioned inspector’s testimony that a sale occurred unless there is evidence that the inspector testified falsely about whether a receipt was given to the UP.  Id. (citing J. Peaceful at 9).  Here, Inspector Mencl declared that she personally observed that Respondent’s employees failed to provide sales receipts for the UPs.  CTP Ex. 4, at ¶¶ 8, 13 (“From my location, I had a clear, unobstructed view of the sales counter” and the UPs, and the “employee did not provide a receipt” after the purchases).  The ALJ found Inspector Mencl’s declaration credible, and Respondent fails to put forth any evidence that Inspector Mencl testified falsely.

Respondent also seemingly questions the Inspector’s physical presence in the establishment, stating that a “[c]lear view of the counter does not mean inside the building.”  Reply at 2.  Respondent’s argument is refuted by Inspector Mencl’s declaration that she “entered” the establishment “moments” after the UPs, which Respondent neglects to address.  CTP Ex. 4, at ¶¶ 8, 13.  Moreover, Respondent provides no evidence to contradict the Inspector’s statement that she had a clear view of the transaction.  To the extent Respondent challenges the credibility of the Inspector’s declaration, Respondent had the opportunity to cross-examine the Inspector on this issue but did not do so.  No evidence in the record contradicts Inspector Mencl’s testimony that she was present in the establishment at the time of the sale and witnessed Respondent’s employee failing to provide receipts to the UPs.  As the ALJ noted, Respondent “failed to provide any video footage to show that the sale to the [UPs] did not occur at its establishment at the alleged time and date noted in the complaint.”  ALJ Decision at 4.  Respondent’s general assertion that it has “strict ID checking guidelines,” Reply at 2, does not serve as evidence to rebut Inspector Mencl’s declaration and accompanying evidence that Respondent’s employee failed to verify the UPs’ identification on February 9, 2022 and May 1, 2023. 

Moreover, while Respondent characterizes the tobacco product as “a generic pack of Cigarillos with no proof of purchase,” Respondent presents no argument or evidence to rebut Inspector Mencl’s declaration and testimony detailing the process of obtaining and marking the evidence.  Response at 2; Reply at 2. The Inspector declared that for both inspections, after exiting Respondent’s establishment, the UPs “immediately placed the package of cigars in the center console of the vehicle,” and, at a secure location nearby,

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the Inspector, in accordance with standard procedures, “retrieved the package of cigars from the center console,” observed the package was Swisher Sweets, labeled the package as evidence, and “photographed the front and back” of the package.  CTP Ex. 4, at ¶¶ 9, 14; see also CTP Exs. 10-11, 15 (photographs of “Swisher Sweets classic” tobacco product, marked as evidence).  As the ALJ noted, “Respondent offered no tangible evidence to rebut Inspector Mencl’s” declaration, ALJ Decision at 4, which established the process by which the evidence was obtained, secured, and labeled.

Respondent further questions whether the UPs were “thoroughly searched for tobacco product before the inspections,” but again fails to provide any argument or evidence to rebut Inspector Mencl’s declaration, which states that before the inspections, the Inspector “confirmed that [the UPs] did not have any tobacco products” in their possession.  CTP Ex. 4, at ¶¶ 7, 12; see also CTP Ex. 6, at 1; 7, at 1 (TIMS/narrative reports detailing that the UPs’ belongings were secured in the vehicle prior to the inspection, they were asked to turn out their pockets, and they were asked directly whether they had tobacco products).  As the ALJ found, in response to Respondent’s assertion that the UPs could have concealed tobacco products prior to entering the store, “Respondent offer no evidence to counter Inspector Mencl’s narrative report” that the UPs’ “pockets were checked prior to entering the establishment on February 9, 2022, and May 1, 2023.”  ALJ Decision at 4.  The ALJ determined Inspector Mencl’s “testimony, plus the corroborating evidence, leads to the inference that the [UPs] could only have obtained cigars by purchasing them at Respondent’s business establishment.”  Id.

The only evidence Respondent challenges is the incorrect date of February 8, 2022 on the evidence label for the tobacco product found in CTP Ex. 10, contrasted with the date of February 9, 2022, found on every other piece of evidence, including the label in CTP Ex. 11.  Respondent cross-examined Inspector Mencl about this date discrepancy before the ALJ.  The Inspector stated that this date was “an error on my end” and confirmed the “inspection took place on February 9th,” explaining that “the TIMS report” cannot be opened the day before the inspection, so the inspection “has to be on February 9th” and it “was just a human error that I wrote February 8th on the yellow piece of paper.”  Hearing at 9-11.  Respondent questions why there was no “addendum” report addressing the incorrect date on one piece of evidence, Reply at 2, but provides no evidence to rebut the Inspector’s testimony, which the ALJ found showed that the “TIMS report could only be created on the actual date the inspection took place, which would mean the inspection of Respondent’s established occurred on February 9, 2022.”  ALJ Decision at 4.  Respondent offers no compelling reason not to defer to the ALJ’s assessment of the evidence, including the credibility of Inspector Mencl’s testimony.  See 1701 Express, Inc., DAB No. 2979, at 9 (2019) (“It is well-settled that the Board defers to the ALJ’s assessment of the evidence, including credibility to be accorded to witness testimony, absent a compelling reason for not doing so.”) (citing Atty’s Parti Expo, Inc.at 7), aff’d, 1701 Express, Inc. v. Sec’y of Health & Human Servs., 836 F. App’x 366 (6th Cir. 2020).  “Absent any actual evidence that the inspector testified falsely . . . the ALJ could

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reasonably credit [this] testimony and the physical evidence as showing that Respondent sold cigarettes to the minor on both occasions.”  J. Peaceful at 9.

As the ALJ found, none of the exhibits that Respondent submitted before the ALJ rebut CTP’s evidence.  ALJ Decision at 5.  Respondent’s evidence consisted of general tobacco training materials, “We Scan IDs” signage at its establishment, a photo of a register with ID check software with a date of January 1, 2024, and post-inspection letters from 2018 and 2019 showing compliance with local decoy operations.  R. Exs. A-C.  Respondent fails to explain how general tobacco materials, signage, and photographs of Respondent’s ID check software dated from 2024 are relevant to the inspections that occurred on February 9, 2022 and May 1, 2023; these materials contain no specific information that speaks to the inspections that occurred on those dates.  Respondent’s general assertion that it has “strict ID checking guidelines,” Reply at 2, does not serve as evidence to rebut Inspector Mencl’s declaration and accompanying evidence that Respondent’s employee failed to verify the UP’s identification on February 9, 2022 and May 1, 2023. 

Moreover, prior letters showing compliance with local operations have no bearing on whether Respondent violated federal law prohibiting the sale of tobacco products to a minor and requiring verification of a purchaser’s age by means of photographic identification on the dates specified in the Complaint.  See Madison-Food-Mart at 11.  Overall, “none of the evidence submitted by Respondent corroborates” its assertions.  Atty’s Parti Expo, Inc. at 8.

Respondent argues that due to fraud concerns, only “on spot” notification should be acceptable, rather than notice by mail after the investigation.  R. Br. at 1-2; Reply at 1-2.  However, Respondent does not provide any support for its assertion that “fraud is rampant via mail[],” Reply at 1, and Respondent’s unsupported arguments are not evidence.  Atty’s Parti Expo, Inc. at 8 (finding that a letter and declaration from the respondent’s attorney was merely argument and not evidence).  Moreover, Respondent does not assert nor provide any evidence that CTP failed to follow the regulations codified in 21 C.F.R. Part 1140 or the procedures outlined in FDA’s Advisory and Enforcement Actions Against Industry for Selling Tobacco Products to Underage Purchasers, such that Respondent’s arguments have no basis in any statutory, regulatory, or legal precedent.  Respondent has provided no basis for the Board to conclude that CTP’s investigations were improper in any way.

Respondent’s arguments that neither Respondent nor a Michigan state tobacco representative had “heard of any [FDA] investigations” and that Respondent did not initially believe the warning letter was legitimate, as well as that it “run[s] a small business” that lacks resources to verify inspections, R. Br at 2, “are, in effect, a request for equitable relief, which neither the ALJ nor the Board can grant.”  Carolina Cigar of Delray, LLC, DAB No. 3134, at 10 (2024); see also Kwik Gas Inc., DAB No. 2852, at 7 (2018) (The Board, “like the ALJ, cannot ignore binding regulations on equitable

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grounds.”).  Moreover, even if the Board could consider Respondent’s arguments that it had not heard of these investigations and did not believe the warning letter was legitimate, Respondent’s assertion is undercut by its briefing and submissions before the ALJ.  Respondent submitted Exhibit A to the ALJ, which included tobacco retailer training materials such as the Undercover Buy Inspections flowchart detailing the process of CTP’s investigations, and stated in its informal brief before the ALJ, “I have also established that we use strict checks/verifications before making a tobacco product sale (Exhibit A and B),” and, “Please see Exhibit A, that shows a sample of training material we use to adhere to the State/Federal/local polies.”  R. Informal Br. at 5.  Respondent fails to explain how it could have been unaware of CTP investigations while at the same time purporting to adhere to CTP investigation materials, which it had in its possession and offered as exhibits. 

In sum, none of Respondent’s evidence or arguments provide a basis for the Board to disturb the ALJ’s findings and conclusions that Respondent violated 21 C.F.R. §§ 1140.14(b)(1) and 1140(b)(2)(i) on February 9, 2022 and May 1, 2023.  We conclude that substantial evidence supports the ALJ’s findings and that the ALJ’s conclusions are free of legal error.

C. Respondent violated the tobacco products regulations in 21 C.F.R. Part 1140 at least three times within a 24-month period.

Based on the conclusion that Respondent committed violations of both 21 C.F.R. §§ 1140.14(b)(1) and 1140(b)(2)(i) on February 9, 2022, and again on May 1, 2023, the ALJ found that Respondent had committed at least three violations of the FDA’s tobacco product regulations within a 24-month period and was therefore liable for a CMP not to exceed the maximum penalty of $638.  ALJ Decision at 6-7.  Respondent does not dispute this finding (apart from the contentions we have already addressed and rejected above).  Accordingly, we summarily affirm the ALJ’s finding that Respondent violated tobacco product regulations three times within a 24-month period.

D. No basis exists to disturb the ALJ’s finding that the CMP is appropriate.

The ALJ “considered the circumstances of Respondent’s noncompliance” and found they “amply justify the penalty [of $638],” which is the maximum penalty for committing three violations in a 24-month period.  ALJ Decision at 6-7.  Respondent did not object to the amount of the penalty or that conclusion before the ALJ or the Board.  See Answer at 2 (not responding to or otherwise contesting the CMP amount); R. Informal Br. at 5 (disputing the CMP penalty only in the context of Respondent’s assertion that no violations occurred).  We therefore summarily affirm the ALJ’s conclusion regarding the appropriate CMP amount.

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Conclusion

For the foregoing reasons, we affirm the ALJ Decision.

Endnotes

¹  The minimum age for sale of tobacco products, codified at 21 U.S.C. § 387f(d)(5), was changed from 18 to 21 as a result of 2019 amendments to the Act.  See Further Consolidated Appropriations Act, Pub. L. No. 116–94, § 603(a), (Dec. 20, 2019), http://uscode.house.gov/statviewer.htm?volume=133&page=3123 (last visited Oct. 7, 2024).  Those statutory amendments also directed the Secretary to “update all references to persons younger than 18 years of age” in 21 C.F.R. Part 1140, subpart B, and to “update the relevant age verification requirements” to “require age verification for individuals under the age of 30.”  Id. at § 603(b)(1).  Prohibition of Sale of Tobacco Products to Persons Younger Than 21 Years of Age, 89 Fed. Reg. 70,483, 70,486 (Aug. 30, 2024), amended 21 C.F.R. § 1140.14(b) to increase the minimum age for the sale of tobacco products from 18 to 21 and to reflect that no such verification is required for any person over the age of 29 (formerly 26).

²  The factual information presented in this section is taken from the ALJ Decision and the administrative record before the ALJ.  It is not intended to serve as new findings or substitute for any findings in the ALJ Decision.

³  The three violations were:  (1) selling a covered tobacco product to an individual younger than the minimum age for sales of tobacco products and failing to verify the age of a person purchasing covered tobacco products by means of a photographic identification containing the bearer’s date of birth on February 9, 2022;  (2) selling a covered tobacco product to an individual under the age of 18 on May 1, 2023;  and (3) failing to verify the age of a person purchasing covered tobacco products by means of a photographic identification containing the bearer’s date of birth on May 1, 2023.  Informal Br. of Complainant at 14.

⁴  The ALJ found the weight of the evidence supports the allegations of “two violations (unlawful sale of a tobacco product to an underage purchaser and failure to verify the purchaser’s age by photo identification prior to the sale) committed on” each date, February 9, 2022 and May 1, 2023, but noted that under “current FDA (and CTP) policy, the four alleged violations described count as three violations for purposes of computing” the CMP.  ALJ Decision at 6, 6 n.3; see also CTP Br. in Opposition (Response) at 2, n.1 (In accordance with customary practice, CTP counts violations cited in the Warning Letter as a single violation.).

⁵  Before the ALJ, Respondent challenged Inspector Mencl’s descriptions of Respondent’s clerks, and the ALJ found “no basis to conclude that any of Respondent’s allegations are credible” and Respondent’s “assertion that it does not employ a clerk that meets the description provided by the inspector is unsupported by any evidence of record.”  ALJ Decision at 4-5; see also Hearing Tr. at 10-12; R. Post-Hearing Br. at 2-3.  Respondent raises no specific exception before the Board as to the Inspector’s description of Respondent’s clerks; thus, we need not address it further.  See 21 C.F.R. § 17.47(c) (A notice of appeal “must identify specific exceptions to the initial decision, must support each exception with citations to the record, and must explain the basis for each exception.”).