Dave R. Pinakin d/b/a A-One Grocery / Corner Cupboard, DAB TB5204 (2020)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint on Respondent, Dave R. Pinakin d/b/a A-One Grocery / Corner Cupboard, at 162 Willow Street, Waterbury, Connecticut 06710, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  The complaint alleges that Respondent opened packages of cigarettes intended for the sale of individual cigarettes, thereby violating the Act and its implementing regulations at 21 C.F.R. pt. 1140.  The complaint also alleges that CTP previously initiated a civil penalty action against Respondent.  The prior action concluded after an Initial Decision and Default Judgment was entered against Respondent A-One Grocery / Corner Cupboard for at least three violations of the Act.  Therefore, CTP seeks a $2,282 civil money penalty against Respondent A-One Grocery / Corner Cupboard for a total of four violations within a 24-month period.

Respondent timely answered CTP’s complaint; however during the course of these administrative proceedings, Respondent failed to comply with judicial orders and

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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.  Background and Procedural History

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on December 9, 2019, CTP served the complaint on Respondent A-One Grocery / Corner Cupboard by United Parcel Service.  On January 7, 2020, Respondent timely filed an answer.  On January 16, 2020, I issued an Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of Respondent’s answer and establishing procedural deadlines for this case.  On February 18, 2020, CTP filed its Notice of Appearance and a Status Report.  In the Status Report, CTP stated that “[t]he parties have been unable to reach a settlement in this case.”

On March 18, 2020, CTP filed an Unopposed Motion to Extend Deadlines and Notice of Pending Settlement.  On March 20, 2020, I issued an Order Granting Motion to Extend Deadlines, which extended the deadline for CTP’s pre-hearing exchange to May 6, 2020, and Respondent’s pre-hearing exchange to May 27, 2020.  On April 20, 2020, CTP filed its second Motion to Extend Deadlines.  CTP asserted that it had received payment from Respondent, but had experienced delays in finalizing the settlement agreement with Respondent.  On April 21, 2020, I granted CTP’s motion and issued an order which extended the deadline for CTP’s pre-hearing exchange to May 21, 2020.  I noted that the deadline for Respondent’s pre-hearing exchange would remain as May 27, 2020. 

On May 21, 2020, CTP filed its Informal Brief, Complainant’s List of Proposed Witnesses and Exhibits, and twelve exhibits (CTP Exs. 1-12).  To date, Respondent has not filed a pre-hearing exchange. 

On June 1, 2020, I issued an Order Scheduling Pre-Hearing Conference setting a telephone pre-hearing conference for June 10, 2020, at 11:00 AM Eastern Time.  See 21 C.F.R. § 17.21(a), (c).  The parties were directed to call in to the conference using the telephone number and passcode provided in the June 1, 2020 Order.  The June 1, 2020 Order was served on Respondent via DAB E-File.  See June 1, 2020 Order, at 3.

On June 10, 2020, I held a pre-hearing conference.  Representatives for CTP appeared on the call, but Respondent neither appeared at the pre-hearing conference call nor provided any response to the June 1, 2020 Order.

On June 11, 2020, I issued an Order to Show Cause directing Respondent by June 18, 2020, to show cause for its failure to comply with my June 1, 2020, Order.  I warned Respondent that failure to show cause may result in sanctions including the issuance of a default judgment finding Respondent liable for the violations listed in the Complaint and

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imposing a civil money penalty.  The June 11, 2020, Order was served on Respondent via DAB E-File.  See June 11, 2020, Order, at 3.  Respondent did not respond to the June 11, 2020, Order to Show Cause for its failure to comply with the June 1, 2020, Order.

II.  Sanctions

The regulations authorize me to impose sanctions on any 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).  Any sanction “shall reasonably relate to the severity and nature of the failure or misconduct.”  21 C.F.R. § 17.35(b).

I conclude that sanctions against Respondent are warranted.  During the course of this administrative proceeding, Respondent repeatedly failed to comply with orders and procedures governing this proceeding and failed to defend its action.  21 C.F.R. § 17.35(a)(1), (2).  Specifically, Respondent failed to appear at the pre-hearing conference call as scheduled by the June 1, 2020, Order.  See 21 C.F.R. § 17.21(a), (c).  Respondent had notice of the pre-hearing conference scheduled for June 10, 2020, yet failed to call in.  Respondent’s failure to appear for the pre-hearing conference call is compounded by its failure to comply with my June 11, 2020, Order, which afforded Respondent until June 18, 2020, to show cause for its failure to comply with my June 1, 2020, Order to appear at the pre-hearing conference.  The June 11, 2020, Order also cautioned that Respondent’s failure to do so may result in sanctions including the issuance of a default judgment against Respondent and imposing a civil money penalty.  Despite this clear warning, Respondent still failed to respond to the June 11, 2020, Order to Show Cause.   

In the absence of any explanation from Respondent, I find no basis to excuse Respondent’s repeated failure to comply with the judicial orders in this proceeding.  Respondent did not comply with two orders and procedures governing this proceeding.  See June 1, 2020 Order; June 11, 2020 Order; see also 21 C.F.R. § 17.35(a)(1).  Respondent’s failure to appear at the pre-hearing conference call and failure to show cause suggest that it has abandoned its defense of this case.  21 C.F.R. § 17.35(a)(2).  Accordingly, I find that Respondent failed to comply with orders and procedures governing this proceeding and failed to defend its action, thereby authorizing the imposition of sanctions under the provisions of 21 C.F.R. § 17.35(a). 

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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).  I find that Respondent’s actions are sufficient to warrant striking its answer and issuing a decision by default, without further proceedings.  Id.  As the Departmental Appeals Board has recognized in a similar case involving a party’s failure to comply with judicial orders, this conduct is sufficiently egregious to warrant striking Respondent’s answer and issuing an initial decision by default.  Joshua Ranjit Inc. d/b/a 7-Eleven 10326, DAB No. 2758 (2017)(concluding that “the ALJ acted within his authority under the regulations and did not abuse his discretion in striking Respondent’s Answer as a sanction for Respondent’s failure to respond to the ALJ’s orders.”); see KKNJ, Inc. d/b/a Tobacco Hut 12, DAB No. 2678, at 10 (2016)(concluding that “the ALJ did not abuse her discretion in sanctioning Respondent’s ongoing failure to comply with the ALJ’s directions by striking Respondent’s answer to the Complaint”); see also Action Convenience Service Inc. d/b/a Marathon 113, CRD No. TB2472 (2018) (striking Respondent’s filings and issuing a default judgment as a sanction for Respondent’s failure to appear at the pre-hearing conference call, failure to show cause, and failure to participate in the hearing process); Whistlin’ Jack Lodge, Inc. d/b/a Whistlin’ Jack Lodge, CRD No. TB1715 (2017) (striking Respondent’s answer and issuing a default judgment as a sanction for Respondent’s failure to appear at two scheduled pre-hearing conferences).  Therefore, pursuant to 21 C.F.R. § 17.35(a) and (b), I strike Respondent’s answer for failing to comply with judicial orders and procedures governing this proceeding and for failing to defend its action, which interfered with the speedy, orderly, or fair conduct of this proceeding.

III.  Default Decision

Striking Respondent’s answer leaves the complaint unanswered.  Pursuant to 21 C.F.R. § 17.11, I assume that the facts alleged in the complaint (but not its conclusory statements) are true.  Specifically:

• On May 6, 2019, CTP initiated a previous civil money penalty action, CRD Docket Number T-19-2754, FDA Docket Number FDA-2019-H-2135, against Respondent for at least three1 violations of the Act.  CTP alleged those violations to have occurred at Respondent’s business establishment, 162 Willow Street, Waterbury, Connecticut 06710, on March 12, 2018, and February 9, 2019;  

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• The previous action concluded when an Initial Decision and Default Judgment was entered by an Administrative Law Judge, “finding that all of the violations alleged in the Complaint occurred”;
• An FDA-commissioned inspector conducted a subsequent inspection on September 11, 2019, at Respondent’s business establishment located at 162 Willow Street, Waterbury, Connecticut 06710.  During this inspection, the inspector observed a box of individual Newport cigarettes behind the sales counter in the establishment.  Additionally, Respondent’s employee stated to the inspector that the establishment sells individual cigarettes. 

These facts establish Respondent A-One Grocery / Corner Cupboard’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 of the U.S. Department of Health and Human Services 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).  Under 21 C.F.R. § 1140.14(b)(1), no retailer may sell regulated tobacco products to any person younger than 18 years of age.  Under 21 C.F.R. § 1140.14(b)(2)(i), 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.  Under 21 C.F.R. § 1140.14(a)(4), no retailer may break or otherwise open any cigarette package to sell individual cigarettes.

Under 21 C.F.R. § 17.2, a $2,282 civil money penalty is permissible for four violations of the regulations found at 21 C.F.R. pt. 1140 within a 24-month period.

Order

For these reasons, I enter default judgment in the amount of $2,282 against Respondent Dave R. Pinakin d/b/a A-One Grocery / Corner Cupboard.  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.

• 1. The complaint alleges two violations were committed on March 12, 2018, and two on February 9, 2019.  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).