Campustown Stores, Inc. d/b/a Campustown Supply, DAB TB5236 (2020)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint (Complaint) on Respondent, Campustown Stores, Inc. d/b/a Campustown Supply, at 121 West North Street, Normal, Illinois 61761, and by filing a copy of the Complaint with the Civil Remedies Division (CRD) of the Departmental Appeals Board (DAB).  The Complaint seeks a $285 civil money penalty from Respondent for 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, at least two times within a 12-month period.1  Respondent timely requested a hearing by filing an Answer.  For the reasons stated below, I strike Respondent’s Answer, and issue an initial decision and default judgment imposing a civil money penalty in the amount of $285 against Respondent. 21 C.F.R. § 17.35(c)(3).

I.     Background and Procedural History

On December 20, 2019, CTP served the Complaint on Respondent, located at 121 West North Street, Normal, Illinois 61761, by United Parcel Service, as required by 21 C.F.R.

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§§ 17.5 and 17.7.  Respondent registered for the DAB E-File system, and filed a timely Answer.  In its Answer, Respondent denied the allegations in the Complaint.

On January 21, 2020, I issued an Acknowledgment and Prehearing Order (APHO), acknowledging receipt of Respondent’s Answer and establishing procedural deadlines for this case.  The APHO ordered CTP to file its prehearing exchange by April 13, 2020 and Respondent to file its prehearing exchange by May 4, 2020.  APHO ¶ 4.  Further, the APHO warned the parties that “I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.”  APHO ¶ 16; see also 21 C.F.R. § 17.35.

On July 13, 2020, CTP timely filed its prehearing exchange, consisting of a pre-hearing brief, a list of proposed witnesses and exhibits, and 20 exhibits (CTP Exs. 1-20), including the written direct testimony of two proposed witnesses, CTP’s Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 4) and Inspector Tayisha Nelson (CTP Ex. 5).  Respondent did not file a prehearing exchange as directed by the APHO.

On August 5, 2020, I issued an order scheduling a prehearing conference.  I informed the parties of the date and time of the prehearing conference as well as the procedure to attend.  On August 18, 2020, I held the prehearing conference call.  Representatives for CTP appeared at the prehearing conference.  Respondent failed to appear as ordered.

On August 18, 2020, I issued an Order to Show Cause (OSC) giving Respondent until August 28, 2020 to show cause for its failure to appear at the prehearing conference.   Respondent was warned that failure to respond to the OSC 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.  To date, Respondent failed to respond to the OSC. 

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).  During the course of this administrative proceeding, Respondent failed to comply with two of my orders.  Specifically, Respondent failed to comply with

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my August 5, 2020 Order requiring it to appear at the prehearing conference, and Respondent failed to comply with my August 18, 2020 OSC requiring it to show cause for its failure to appear at the prehearing conference.  Additionally, Respondent has also failed to defend this action.  Respondent failed to file a prehearing exchange as directed by my APHO, failed to appear at the prehearing conference, and failed to respond to my OSC.  This leads me to conclude that Respondent does not intend to defend this action.

Accordingly, I conclude that sanctions against Respondent are warranted.  Any sanction “shall reasonably relate to the severity and nature of the failure or misconduct.”  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.  21 C.F.R. § 17.35. 

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:

• At approximately 4:12 PM on April 27, 2019, at Respondent’s business establishment, 121 West North Street, Normal, Illinois 61761, an FDA‑commissioned inspector conducted an inspection.  During this inspection, a person younger than 18 years of age was able to purchase a package of Newport Box 100s cigarettes.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was 18 years of age or older;
• In a warning letter dated June 6, 2019, CTP informed Respondent of the inspector’s April 27, 2019 documented violations, and that such actions violate federal law.  The letter further warned that Respondent’s failure to correct its violations could result in a civil money penalty or other regulatory action;
• At approximately 6:01 PM on October 7, 2019, at Respondent’s business establishment, 121 West North Street, Normal, Illinois 61761, an FDA‑commissioned inspector conducted an inspection.  During this inspection, a person younger than 18 years of age was able to purchase a package of Non-Menthol Newport Box cigarettes.

These facts establish Respondent’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

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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(a)(1), no retailer may sell regulated tobacco products to any person younger than 18 years of age.  Under 21 C.F.R. § 1140.14(a)(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. § 17.2, a $285 civil money penalty is permissible for two violations of the regulations found at 21 C.F.R. pt. 1140 within a 12-month period.

Order

For these reasons, I strike Respondent’s Answer and enter default judgment in the amount of $285 against Respondent.  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. CTP did not include violations that occurred outside the relevant timeframe for this Complaint.