Sidelines of Bennett, Inc. d/b/a Sidelines Bar Bait and Resort, DAB TB5225 (2020)

INITIAL DECISION

The Food and Drug Administration's Center for Tobacco Products (CTP) seeks a $285 civil money penalty against Respondent, Sidelines of Bennett, Inc. d/b/a Sidelines Bar Bait and Resort, 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.  Specifically, CTP alleges that Respondent violated the Act when it sold regulated tobacco products to minors.  For the reasons discussed below, I find Respondent liable for the violations alleged, and conclude that a CMP of $250 is appropriate.

I.  Background

CTP began this case by serving an administrative complaint on Respondent at its establishment located at 7860 South County Road P, Lake Nebagamon, Wisconsin 54849, and by filing a copy of the complaint with the Food and Drug Administration's (FDA) Division of Dockets Management.  Respondent timely requested a hearing by

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filing an Answer.  On February 6, 2020, I issued an Acknowledgement and Prehearing Order in which I set a schedule of prehearing exchanges and deadlines for submissions.

CTP timely filed its prehearing exchange, consisting of a prehearing brief, a list of proposed witnesses and exhibits, and 19 proposed exhibits (CTP Exs. 1-19), including the written direct testimony of two proposed witnesses, CTP's Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 3) and Inspector Brandon Omernik (CTP Ex. 4).1  Respondent timely filed its prehearing exchange, consisting of a prehearing brief.  Respondent did not submit any exhibits or written direct testimony.

On June 11, 2020, I held a prehearing conference call in this case.  During the prehearing conference call, I explained that the purpose of a hearing was to allow for the cross-examination of any witnesses who have provided sworn testimony.  Respondent declined to cross-examine either of CTP's proposed witnesses.  The parties agreed to waive a formal hearing and agreed to proceed to a decision based on the written record.

The parties were given the opportunity to submit final briefs.  Respondent was additionally given the opportunity to include any objections to CTP's proposed exhibits.  Respondent timely filed its final brief but did not object to any of CTP's exhibits.  Accordingly, CTP's exhibits 1-19 are admitted into evidence.  CTP did not file a final brief.  The administrative record is now complete and this matter is ready for a decision.

II.  Issues

(1)  Whether Respondent sold regulated tobacco products to a minor on June 20, 2019 and November 4, 2019, in violation of 21 C.F.R. § 1140.14(a)(1); and if so,
(2)  Whether the civil money penalty amount of $285 is appropriate.

III.  Analysis, Findings of Fact, and Conclusions of Law

CTP seeks a civil money penalty against Respondent pursuant to the authority conferred by the Act and implementing regulations at Part 21 of the Code of Federal Regulations.  The Act prohibits the misbranding of tobacco products while they are held for sale after shipment in interstate commerce.  21 U.S.C. § 331(k).  The FDA, through CTP, may seek civil money penalties from any person who violates the Act's requirements as they relate to the sale of tobacco products.  21 U.S.C. § 333(f)(9).  The sale of a regulated tobacco product to an individual who is under the age of 18 is a violation of the Act and implementing regulations. 21 C.F.R. § 1140.14(a)(1).

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CTP has the burden of proving Respondent's liability by a preponderance of the evidence.  21 C.F.R. § 17.33(b).  It is Respondent's burden to prove any affirmative defenses also by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  As detailed below, I find that based on the evidence of record, on June 20, 2019 and November 4, 2019, Respondent sold regulated tobacco products to a minor in violation of 21 C.F.R. § 1140.14(a)(1).

A. Violations

CTP's case against Respondent rests on the testimony of CTP's Senior Regulatory Counsel Laurie Sternberg and Inspector Brandon Omernik.  Inspector Omernik is an FDA-commissioned officer with the state of Wisconsin, whose duties include determining whether retail outlets unlawfully sell regulated tobacco products to minors through undercover buy (UB) inspections.  CTP Ex. 4 (Corrected) at 1-2.  Inspector Omernik testified that he conducted a UB compliance check inspection of Respondent's establishment, located at 7860 South County Road P, Lake Nebagamon, Wisconsin 58449, on June 20, 2019, at approximately 1:07 PM, during which he observed Minor A purchase a package of cigarettes from an employee at Respondent's establishment.  Id. at 2-3.

Inspector Omernik testified that, prior to the inspection, he confirmed that Minor A possessed a true and accurate photographic identification showing the minor's actual date of birth.  Id. at 2.  Inspector Omernik also confirmed that Minor A was under the age of 18, and that the minor did not have any tobacco products in the minor's possession prior to entering Respondent's establishment.  Id.  Inspector Omernik parked his car near Respondent's establishment, where Minor A exited the vehicle and entered Respondent's establishment.  Id. at 3.  Inspector Omernik testified he had a clear, unobstructed view of the sales counter and Minor A.  Id.  From this location, Inspector Omernik observed Minor A purchase a tobacco product from an employee at the establishment.  Id.

Inspector Omernik testified that after the purchase, Minor A returned to the vehicle and immediately handed him a package of cigarettes.  Id.  Inspector Omernik identified that package as Marlboro cigarettes.  After moving to a nearby safe location, Inspector Omernik testified that he labeled the cigarettes as evidence, photographed all the panels of the package, and processed the evidence in accordance with standard procedures.  Id.  Inspector Omernik also contemporaneously recorded the inspection in the FDA's Tobacco Inspection Management System (TIMS) and created a Narrative Report.  Id.  CTP corroborated Inspector Omernik's testimony by offering as evidence photographs that the inspector took of the cigarettes on June 20, 2019.  CTP Exs. 9, 12.  CTP further corroborated Inspector Omernik's account by submitting a copy of his contemporaneously recorded TIMS report and Narrative Report.  CTP Exs. 5-6.

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On November 4, 2019, at approximately 7:00 PM, Inspector Omernik conducted a follow-up UB compliance check inspection of Respondent's establishment, during which he observed Minor B purchase a package of cigarettes from an employee at Respondent's establishment.  Id. at 4-5.

Inspector Omernik testified that, prior to the inspection, he confirmed that Minor B possessed a true and accurate photographic identification showing the minor's actual date of birth.  Id. at 4.  Inspector Omernik also confirmed that Minor B was under the age of 18, and that the minor did not have any tobacco products in the minor's possession prior to entering Respondent's establishment.  Id.  Inspector Omernik parked his car near Respondent's establishment, where Minor B exited the vehicle and entered Respondent's establishment.  Id.  Inspector Omernik testified he had a clear, unobstructed view of the sales counter and Minor B.  Id.  From this location, Inspector Omernik observed Minor B purchase a tobacco product from an employee at the establishment.  Id.

Inspector Omernik testified that after the purchase, Minor B returned to the vehicle and immediately handed him a package of cigarettes.  Id.  Inspector Omernik identified that package as Marlboro cigarettes.  Id. at 4-5.  After moving to a nearby safe location, Inspector Omernik testified that he labeled the cigarettes as evidence, photographed all the panels of the package, and processed the evidence in accordance with standard procedures.  Id. at 5.  Inspector Omernik also contemporaneously recorded the inspection in TIMS and created a Narrative Report.  Id.  CTP corroborated Inspector Omernik's testimony by offering as evidence photographs that the inspector took of the cigarettes on November 4, 2019.  CTP Exs. 10, 16.  CTP further corroborated Inspector Omernik's account by submitting a copy of his contemporaneously recorded TIMS report and Narrative Report.  CTP Exs. 7-8.

Ms. Sternberg is a Senior Regulatory Counsel in the Office of Compliance and Enforcement for the CTP.  CTP Ex. 3 at 1.  In her declaration, Ms. Sternberg testified that she has personal knowledge of FDA's process and records regarding tobacco establishment registration and product listing requirements.  Id. at 1-2.  Ms. Sternberg further testified that the Marlboro cigarettes purchased at Respondent's establishment during the June 20, 2019 and November 4, 2019 inspections were "manufactured, prepared, compounded, or processed for commercial distribution at Philip Morris USA's and/or Park 500's facilities in Virginia."  Id. at 3.  Ms. Sternberg further noted that the manufacturer of Marlboro cigarettes does not have any registered tobacco production facilities in the state of Wisconsin.  Id.

Respondent does not challenge Ms. Sternberg's testimony and does not dispute that it held Marlboro cigarettes for sale at its business establishment on June 20, 2019 and November 4, 2019.  Accordingly, I find that Respondent's establishment received Marlboro cigarettes in interstate commerce and held them for sale on June 20, 2019 and November 4, 2019, after shipment in interstate commerce.

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Respondent also does not deny that its employee made the alleged sales on June 20, 2019 and November 4, 2019.  Respondent's Final Brief at 1.  Respondent argues that its employee did not knowingly sell a regulated tobacco product to a minor, therefore, it should not be liable for a violation.  Id.  A violation of 21 C.F.R. § 1140.14(a)(1) only requires that a sale to a minor occurred, and does not take into account a retailer's intent to determine liability.  Respondent further contends that "the ID furnished at the time of the sale indicated [Minor A and Minor B] were of age and therefore our transaction should not have been considered a violation."  Answer at 2.  Respondent acknowledges that the minors' driver's licenses submitted by CTP clearly show them to be probationary licenses.  Respondent's Final Brief at 1; See CTP Ex. 11 and 15.  However, Respondent claims CTP Ex. 11 and 15 were not the driver's licenses that were given to its employee.  Respondent argues "[t]here is absolutely no way Sandy would have missed that and therefore it is my contention that those were not the ID's provided during the sale of cigarettes."  Id.

Respondent has not come forward with any evidence or witness testimony to support this claim.  Respondent's bare assertion does not rebut Inspector Omernik's sworn testimony.  Inspector Omernik testified under oath that prior to both inspections he confirmed that Minor A and Minor B both possessed his/her photographic identification showing his/her date of birth.  CTP Ex. 4 at 2, 4.  Inspector Omernik also confirmed that both of the minors were under the age of 18.  Id.  Inspector Omernik testified credibly and comprehensively about his observations during the June 20, 2019 and November 4, 2019 inspections.

Based on the testimony of both Ms. Sternberg and Inspector Omernik, I find that CTP has provided sufficient evidence to support its allegation that Respondent sold regulated tobacco products to minors on June 20, 2019 and November 4, 2019, in violation of 21 C.F.R. § 1140.14(a)(1).  The facts, as outlined above, establish that Respondent's actions constitute violations of law, and I conclude that Respondent is liable under the Act.  Accordingly, CTP is entitled to a civil money penalty from Respondent.  21 U.S.C. § 333(f)(9).

B. Civil Money Penalty

I have found that Respondent committed at least two violations of the Act and its implementing regulations within a 12-month period.  In its complaint, CTP sought the maximum penalty amount, $285, against Respondent.  Complaint ¶ 1.  Accordingly, I now turn to whether a $285 civil money penalty is appropriate.

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1. Determining Amount of Civil Money Penalty

When determining the amount of a civil money penalty, I am required to take into account "the nature, circumstances, extent, and gravity of the violation or violations and, with respect to the violator, ability to pay, effect on ability to continue to do business, any history of prior such violations, the degree of culpability, and such other matters as justice may require."  21 U.S.C. § 333(f)(5)(B); see also 21 C.F.R. § 17.34.

a. Nature, Circumstances, Extent, and Gravity of the Violations

Respondent sold regulated tobacco products to minors on two separate occasions:  June 20, 2019 and November 4, 2019.  In a warning letter dated August 8, 2019, CTP informed Respondent of the June 20, 2019 violation, and warned Respondent that failure to correct its violation may lead to federal enforcement actions, including monetary penalties.  CTP Ex. 1 at 1.  Less than three months later, Respondent committed a second violation on November 4, 2019.  The inability of Respondent to comply with federal tobacco regulations is serious in nature and the civil money penalty amount should be set accordingly.

b. Respondent's Ability to Pay and Effect on Respondent's Ability to Continue to Do Business

Respondent does not contend that the requested $285 CMP will affect its ability to continue to do business.

c. History of Prior Violations

The current action is the first CMP action brought against Respondent for violations of the Act and its implementing regulations.

d. Degree of Culpability

It is Respondent's responsibility to ensure its staff complies with the regulations.  Therefore, I find Respondent fully culpable for all violations of the Act and its implementing regulations.

e. Additional Mitigating Factors and Other Matters as Justice May Require

Respondent must prove any mitigating factors by a preponderance of the evidence. 21 C.F.R. § 17.33(c).  Respondent has not submitted any exhibits or witness testimony for me to consider.

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In its prehearing brief, Respondent stated that its employees require photo identifications for anyone who appears to be less than 30 years old, and that its employees know that selling to underage individuals are grounds for immediate termination.  Respondent's Prehearing Brief at 4-5.  Additionally, in its response to CTP's request for production of documents, Respondent submitted photographs of signage in its establishment showing that tobacco customers must now be 21 years of age and must show identification.

In light of Respondent's actions to prevent future violations, I find evidence to reduce the $285 penalty.  I find that a CMP of $250 is appropriate.

2. Penalty

Based on the foregoing reasoning, I find a penalty amount of $250 appropriate under 21 U.S.C. § 333(f)(5)(B) and (f)(9).

IV.  Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $250 against Respondent, Sidelines of Bennett, Inc. d/b/a Sidelines Bar Bait and Resort, for at least two violations of 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, within a 12-month period.  Pursuant to 21 C.F.R. § 17.45(d), this order becomes final and binding upon both parties after 30 days of the date of its issuance.

• 1. On April 28, 2020, CTP filed a corrected declaration of Inspector Brandon Omernik.  See CTP Ex. 4 (Corrected).