John Ratliff d/b/a J.R.'s Drive-Thru, DAB TB4544 (2019)

INITIAL DECISION

The Center for Tobacco Products (CTP) of the United States Food and Drug Administration (FDA) seeks to impose a civil money penalty (CMP) of $279 against Respondent, John Ratliff d/b/a J.R.’s Drive-Thru, 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.  Specifically, CTP alleges that Respondent violated the Act when it sold regulated tobacco products to minors and failed to verify, by means of photo identification containing a date of birth, that one of the purchasers was 18 years of age or older.  

Respondent denies the violations and raises several defenses and mitigating circumstances:  Respondent was targeted by the FDA; the inspections constitute entrapment; the tobacco sales were authorized by the adult driver in the vehicle; the tobacco products were sold to the adult driver in the vehicle; and Respondent will no longer accept vertical identification cards for tobacco sales.  For the reasons discussed

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below, I find Respondent liable for the violations alleged in the Complaint and conclude that a civil money penalty of $279 is appropriate.

I. Background and Procedural History

As provided in 21 C.F.R. §§ 17.5 and 17.7, CTP served the Complaint on Respondent J.R.’s Drive-Thru, located at 1601 South State Street, Girard, Ohio 44420, by United Parcel Service, on November 6, 2018.  See DAB E-File Docket No. T-19-393, Docket (Dkt.) Entry Nos. 1-1b.  Respondent timely filed its Answer, which the Civil Remedies Division (CRD) received on December 6, 2018.  Dkt. Entry No. 3 (Respondent’s Answer (Answer)).  In its Answer, Respondent denied the allegations.  Answer at 2.  On December 17, 2018, I issued an Acknowledgment and Pre-Hearing Order (APHO) acknowledging receipt of Respondent’s Answer and establishing procedural deadlines for this case.  Dkt. Entry No. 4.

CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief, list of proposed witnesses and exhibits, and 21 exhibits (CTP Exs. 1-21), including the written direct testimony of two proposed witnesses, CTP’s Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 3) and Inspector Shaun Griffin (CTP Ex. 4).  Dkt. Entry Nos. 7-7v.  Respondent mailed an unsworn letter containing arguments to CTP on March 28, 2019, which I consider a pre-hearing brief.  Dkt. Entry No. 9 (R. Additional Response (Additional Response)).  However, Respondent’s letter did not comport fully with pre-hearing exchange requirements four through ten of the APHO.  Respondent did not propose any witnesses or submit evidence by the deadline for Respondent’s exchange. 

On May 9, 2019, I held a prehearing conference call in this case.  See Dkt. Entry No. 14.  During the prehearing conference call, we discussed CTP’s proposed witnesses and exhibits.  Respondent asserted that he was not aware that Ms. Sternberg was a proposed witness and had not reviewed her pre-filed testimony, but he raised no objection to her as a witness.  I directed Respondent to review Ms. Sternberg’s declaration and to notify me whether he intended to cross-examine her at the hearing.  Respondent objected to Inspector Griffin as a proposed witness.  I overruled Respondent’s objection because Inspector Griffin’s testimony is relevant to the facts of the case.  Id. at 1.  Respondent indicated that he wished to cross-examine Inspector Griffin at the hearing.  Therefore, I instructed CTP to make Inspector Griffin available at the hearing.  I also instructed CTP to make Ms. Sternberg available at the hearing in case Respondent wished to cross-examine her.  I admitted CTP Exhibits 1 through 21, absent any objection from Respondent.  Id. at 1-2.

Next, Respondent asserted that he intended to send a USB flash drive containing video footage to the Departmental Appeals Board (DAB).  See id. at 2.  I determined that Respondent instead sent it to CTP as part of discovery.  I instructed Respondent to submit the USB flash drive to the DAB as a proposed exhibit and I informed the parties that CTP

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would have an opportunity to object to Respondent’s proposed exhibit once it had been filed.  On June 10, 2019, the DAB received Respondent’s USB flash drive.  Dkt. Entry No. 16.  On June 11, 2019, a video that contained footage from security cameras at Respondent’s establishment was uploaded to DAB E-file.  See Dkt. Entry No. 16a.

On June 13, 2019, I held a telephone hearing in this case.  As a preliminary matter, since CTP had less than a week to review Respondent’s filing, I asked CTP whether it had any objection to the admission of Respondent’s video.  Tr. at 8.  CTP referred to its June 13, 2019 Motion to Seal Docket Entry 16A and stated that its only objection was to protect the identity of the minor as detailed in the motion.  Tr. at 8; Dkt. Entry No. 17.  CTP asserted in its motion that the video on the USB flash drive shows what appears to be CTP’s undercover minor and CTP requested that the video be placed “under seal” to withhold it from public disclosure.  CTP further asserted that the video contains sensitive information and that it should be sealed to protect the identity of the minor.  Docket Entry No. 17 at 1.  Respondent objected to CTP’s motion, arguing that Inspector Griffin put the minor “in harm’s way” and that the video appearing to show the identity of the undercover minor should not be sealed.  Tr. at 9-10.  I overruled Respondent’s objection stating that I would admit the video into evidence as Respondent’s Exhibit 1, but I would seal the video from public disclosure.  Tr. at 10.

During the hearing, Respondent cross-examined Ms. Sternberg.  See Tr. at 11-15.  Respondent also cross-examined Inspector Griffin.  See Tr. at 15-22.  CTP questioned Inspector Griffin on redirect examination (see Tr. at 22-24) and Respondent conducted a recross-examination of Inspector Griffin.  See Tr. at 24-25.

In addition to CTP’s Motion to Seal Exhibit 16A, Respondent’s objection to CTP’s motion and the related ruling, the parties made the following objections during the telephone hearing:

• CTP’s objection that Respondent’s questioning of Ms. Sternberg was outside the scope of her direct testimony.  Tr. at 11-12.  Respondent rephrased his question.
• CTP’s objection that Ms. Sternberg already answered Respondent’s question.  Tr. at 13.  I sustained this objection.
• CTP’s objection that Respondent’s question was outside the scope of Ms. Sternberg’s direct testimony.  Tr. at 14.  I sustained the objection because the question was argumentative.
• CTP’s objection that Respondent’s question to Inspector Griffin was argumentative.  Tr. at 16.  Respondent rephrased the question.

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• CTP’s objection that Respondent’s question was outside the scope of Inspector Griffin’s direct testimony.  Tr. at 17-18.  I overruled the objection.
• CTP’s objections that Respondent’s questions were outside the scope of Inspector Griffin’s direct testimony.  Tr. at 21-22.  I sustained the objections.
• Respondent’s objections that CTP’s questions to Inspector Griffin were argumentative.  Tr. at 23-24.  I overruled the objections.
• CTP’s objection that Respondent’s question to Inspector Griffin was outside the scope of Inspector Griffin’s direct testimony.  Tr. at 25.  Respondent withdrew the question.

I also warned Respondent generally that his line of questioning of Inspector Griffin was harassing and argumentative and that he needed to save his arguments for his post-hearing brief.  Tr. at 18-19.  In addition, I warned Respondent that he was going outside the scope of Inspector Griffin’s direct testimony and that the purpose of cross-examination is not to testify, but to focus on the substance of the declaration or to present impeachment evidence.  Tr. at 20-21.

Finally, near the conclusion of the hearing, Respondent objected to Minor B’s redacted identification, which I had previously admitted as CTP Exhibit 12 at the prehearing conference.  See Tr. at 25-26; see also Dkt. Entry No. 14.  I explained to Respondent that CTP Exhibit 12 was admitted at the time of the prehearing conference and that he had an opportunity to object at the prehearing conference.  Respondent continued to argue that it should not be admitted, but I informed Respondent that he could address this issue in his post-hearing brief.  Respondent indicated that he understood my statement about his opportunity to raise an objection to CTP Ex. 12.  Tr. at 26.  As indicated below, Respondent did not file a post-hearing brief.

On July 12, 2019, I informed the parties that the Court had received the transcript of the hearing, and set the deadline for the parties’ post-hearing brief submissions as August 12, 2019.  Dkt. Entry No. 19.  I also informed the parties that they could file any proposed corrections to the transcript on or before August 12, 2019.  Finally, I set the deadline for the parties post-hearing response briefs as August 27, 2019.  Id.  CTP filed a post-hearing brief on August 12, 2019.  Dkt. Entry No. 20.  Respondent did not file a post-hearing brief and neither party filed a post-hearing response brief.  Neither party filed proposed corrections to the transcript.  However, I issued a Notice of Transcript Corrections to ensure an accurate and complete administrative record.  Dkt. Entry No. 21.  This case is now ripe for a decision.

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II. Issues

The issues in this case are:

1. Whether Respondent, J.R.’s Drive-Thru, sold cigarettes and smokeless tobacco to minors and failed to verify that the smokeless tobacco purchaser was of sufficient age, in violation of 21 C.F.R. § 1140.14(a)(1) and 21 C.F.R. § 1140.14(a)(2)(i); and
2. If so, whether the civil money penalty of $279 that CTP seeks is an appropriate amount, pursuant to the provisions of 21 C.F.R. § 17.34(a)-(c).

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

A. Legal Standard

CTP has the burden to prove Respondent’s liability and the appropriateness of the penalty by a preponderance of the evidence.  21 C.F.R. § 17.33(b).  Respondent has the burden to prove any affirmative defenses and any mitigating factors, likewise by a preponderance of the evidence.  21 C.F.R. § 17.33(c).  The U.S. Supreme Court has described the preponderance of the evidence standard as requiring that the trier-of-fact believe that the existence of a fact is more probable than its nonexistence before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  In re Winship, 397 U.S. 358, 371-72 (1970); Concrete Pipe and Products of California, Inc. v. Construction Laborers, 508 U.S. 602, 622 (1993).

B. Violations

CTP seeks a civil money penalty against Respondent pursuant to the authority conferred by the Act and implementing regulations at Title 21, Part 1140 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).  FDA and its agency, 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); see also 21 U.S.C. § 333 note; 21 C.F.R. §§ 17.1(j), 17.2, 17.5. 

The sale of cigarettes and smokeless tobacco to an individual who is under the age of 18 is a violation of the implementing regulations.  21 C.F.R. § 1140.14(a)(1).  The failure to verify, by means of photo identification containing the bearer's date of birth, that no smokeless tobacco purchaser is younger than 18 years of age is also a violation of the implementing regulations.  21 C.F.R. § 1140.14(a)(2)(i).

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All violations observed during the initial failed inspection are counted as a single violation, and each separate violation observed during subsequent failed inspections count as a discrete violation.  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).   

CTP alleges that Respondent committed two violations of the Act and its implementing regulation over a 12-month period.  Dkt. Entry No. 1 (Complaint at ¶ 1).  Specifically, CTP asserts that Respondent sold smokeless tobacco to a minor and failed to verify the minor’s identification before the sale on May 8, 2018, at approximately 8:12 PM.  Complaint ¶ 9.  CTP also asserts that, during a subsequent inspection, Respondent sold cigarettes to a minor on August 16, 2018, at approximately 2:41 PM.  Complaint ¶ 7.  As detailed below, I find, based on the evidence of record, that it is more probable than not that Respondent sold the alleged tobacco products to minors and failed to verify one minor’s identification in violation of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i).

1. Evidence and Legal Arguments Regarding the Alleged Violations

Respondent’s establishment is located in Ohio.  Complaint ¶¶ 5-6.  Senior Regulatory Counsel Laurie Sternberg testified that the tobacco products at issue were manufactured, prepared, compounded or processed for commercial distribution outside of Ohio, which is corroborated by the FURLS reports in the record.  CTP Ex. 3, at 3; CTP Exs. 19-20.  Respondent did not present any evidence to contradict Ms. Sternberg’s testimony.  At the hearing, Respondent cross-examined Ms. Sternberg concerning her personal knowledge that the cigarettes at issue came from the Respondent’s establishment.  Tr. at 11-14.  Ms. Sternberg testified that she “reviewed the photographs [of the cigarettes] that were submitted as evidence in this case,” determined that they were made by R.J. Reynolds Tobacco Company, and used the database to determine that “R.J. Reynolds does not have any registered tobacco facilities in the state of Ohio.”  Tr. at 12-14. 

I find the testimony of Ms. Sternberg to be credible and persuasive that the alleged tobacco products were sold after shipment in interstate commerce.  Ms. Sternberg testified that she has personal knowledge of FDA’s process and records regarding tobacco establishment registration and product listing requirements.  CTP Ex. 3, at 1-2.  Respondent does not dispute that its establishment is located in Ohio and has not presented any evidence contradicting Ms. Sternberg’s testimony that the tobacco products at issue were manufactured, prepared, compounded or processed for commercial distribution outside of Ohio.  I also find that the testimony of FDA-commissioned Inspector Shaun Griffin and contemporaneous evidence in the record corroborate that the photographs reviewed by Ms. Sternberg depict cigarettes obtained from Respondent’s establishment.  Inspector Griffin testified that he photographed the tobacco products and processed the evidence in accordance with FDA standard procedures at the time of the inspections, which included completing Narrative Reports and TIMS Forms.  CTP Ex. 4,

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at 3-4; CTP Exs. 6-9, 13-16.  As indicated above, Ms. Sternberg testified that she reviewed the same photographs.  Tr. at 12-14.  

Likewise, I find the testimony of Inspector Griffin to be credible and persuasive that Respondent sold the alleged tobacco products to minors and failed to verify Minor A’s date of birth before the sale.  At the time of the respective inspections, Inspector Griffin was an FDA-commissioned officer with the state of Ohio.  Inspector Griffin’s duties included determining whether retailers were compliant with the age and photo identification requirements relating to the sale of tobacco products.  CTP Ex. 4 at 1-2.  The inspections entailed accompanying undercover minors who attempt to purchase tobacco products from retail establishments such as the one operated by Respondent.  Id. at 1.

Inspector Griffin testified that he conducted both inspections at Respondent’s location, 1601 South State Street, Girard, Ohio, 44420.  CTP Ex. 4 at 2, 3; CTP Ex. 6 at 1; CTP Ex. 7 at 1; CTP Ex. 13 at 1; CTP Ex. 14 at 1.  Specifically, he conducted a compliance check inspection with Minor A at approximately 8:12 PM on May 8, 2018, and a follow-up compliance check inspection with Minor B at approximately 2:41 PM on August 16, 2018.  Id.  Before each inspection, he confirmed that the minors did not have any tobacco products in his/her possession and that each minor possessed an accurate photographic identification of his/her date of birth.  CTP Ex. 4 at 2-3, 3-4; CTP Exs. 5, 12.

During each inspection, Inspector Griffin testified that he entered the establishment by driving his car into J.R.’s Drive-Thru and both he and the respective minor remained inside the vehicle.  CTP Ex. 4 at 3-4.  Inspector Griffin explained that he was in the driver’s seat, and Minor A or Minor B was seated directly behind him.  Id. at 3, 4.  He observed a clerk come out of the building within the establishment and observed Minor A purchase a smokeless tobacco product from the clerk on May 8, 2018.  Id. at 3.  Similarly, Inspector Griffin observed Minor B purchase cigarettes from the clerk on August 16, 2018.  Id. at 4.  Prior to the purchase on May 8, 2018, he also observed that Minor A did not present any identification to the employee.  Id. at 3.  The employee did not provide Minor A or Minor B a receipt after purchases.  Id. at 3, 4.  After the inspections, Inspector Griffin retrieved the smokeless tobacco and cigarette packages from Minor A and Minor B, respectively.  Id.  Inspector Griffin photographed the tobacco packages and processed the evidence in accordance with standard procedures at the time of each inspection, which entailed completing several contemporaneous reports.  CTP Ex. 4 at 3, 4; CTP Exs. 6-9, 13-16.

2. Evidence and Legal Arguments Regarding Respondent’s Defenses

In its Answer, Respondent denied the violations alleged in the Complaint.  Dkt. Entry No. 3 at 1.  As indicated above, Respondent did not present any witness testimony.  However, Respondent offered a video exhibit and various arguments to defend his actions.  See Dkt.

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Entry No. 16a (R. Ex. 1); Dkt. Entry No. 3 (Answer); Dkt. Entry No. 9 (Additional Response).  Respondent’s first contention is that, on the May 8, 2018 violation date, he thought that the regulated tobacco products were for the adult driver even though the sale was to Minor A in the back seat of the vehicle.  See Answer at 2.  According to Respondent, the person in the back seat stuck his/her hand out the window with money and asked the driver what he should buy.  Id.  The driver replied to the clerk Grizzly Long Cut Premium Wintergreen.  Id.  Additionally, Respondent asserts that the establishment’s security camera video shows the driver’s hand reaching back to get the tobacco product.  Id.  Therefore, Respondent contends that he thought the tobacco product was going to the driver.  Id.

For the August 16, 2018 violation, Respondent’s contention is that he thought the adult driver was giving implicit approval of the sale to Minor B, who was located in the back seat of the vehicle, even though Respondent was unsure of Minor B’s age and asked for identification.  See id.  According to Respondent, its security camera video shows the driver motioning to the back seat with his thumb.  Id.; see also R. Ex. 1.

In addition to Respondent’s Answer, Respondent filed an Additional Response dated March 28, 2019 (Dkt. Entry No. 9), that addresses the alleged violations.  Respondent also suggested that the size of the government-issued identification is too small and that it can be “misread” if quickly reviewed due to customers waiting in line.  See Additional Response at 1.  A related argument that Respondent advances is that adults or parents permit minors in their care to purchase tobacco products because “they would rather them smoke cigarettes then [sic] take drugs.”  Additional Response at 1.  Additionally, Respondent reiterated his previous arguments about the adult driver being in the car and motioning him to the minor in the back seat, that he sold the tobacco products to the adult in the car, and that adult drivers are responsible for all minors in a car.  See id.  Respondent’s final arguments were that the FDA targeted him and that he considers the inspections and resulting violations to be entrapment.  See id.

At the hearing, Respondent questioned Inspector Griffin concerning his training and procedures related to the supervision of minors who enter establishments that sell tobacco products.  Tr. at 15-19.  Inspector Griffin testified that he attended FDA-required online training and seminars and had over one year experience working for the FDA.  Tr. at 16.  Additionally, Respondent questioned Inspector Griffin regarding whether he gave the two minors funds to purchase the tobacco products and instructions on what to purchase.  Tr. at 19-22.  I sustained CTP’s objection that Respondent’s question about whether Inspector Griffin gave the minors funds to purchase the tobacco products was outside the scope of Inspector Griffin’s declaration.  Tr. at 21-22.  However, Inspector Griffin denied that he instructed the minor on what brand of smokeless tobacco to buy.  Tr. at 20.  On redirect examination, Inspector Griffin testified that the minor gave the money to the Respondent and received the tobacco products from the Respondent on both dates in question.  Tr. at 22-24.

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As discussed above, Respondent repeatedly asked argumentative questions to the two witnesses and occasionally attempted to testify as to his own recollection of what occurred on the dates at issue.  I informed Respondent that he could not ask argumentative questions and that he needed to save his arguments for his post-hearing brief.  Tr. at 19, 20, 21, 26.  As noted above, Respondent did not submit a post-hearing brief or post-hearing response brief.

I find Respondent’s arguments to be without merit.  Respondent offered no evidence that rebuts the testimony of Inspector Griffin regarding the sales at issue or the failure to verify the age of the purchaser.  Indeed, Respondent’s August 16, 2018, video evidence corroborates Inspector Griffin’s testimony that the minor gave the money to the Respondent and received the tobacco product from the Respondent.  CTP Ex. 4; Tr. at 22-24; R. Ex. 1.  In short, the video evidence establishes that Respondent sold the tobacco product to the minor – and not to the adult driver – on August 16, 2018, contrary to Respondent’s claims otherwise.  Id.  Specifically, it shows the clerk speaking directly to the minor in the back seat, taking the identification and payment from the minor, and handing the tobacco product to the minor.  R. Ex. 1.  Moreover, I note that the August 16, 2018, video recording does not include any audio recording.  Accordingly, Respondent has failed to substantiate its assertion that Inspector Griffin instructed the minors on what brand of tobacco products to buy, and Inspector Griffin denied such allegations at the hearing.  Tr. at 20.  Furthermore, Respondent admitted that, during the inspection on August 16, 2018, the driver directed him with his thumb to the back seat where the minor was sitting, Respondent asked the minor if he/she was old enough, and then asked for his/her identification when the minor did not respond.  Answer at 2.  Similarly, these factual admissions establish that the actual sale of regulated tobacco products was between Respondent and Minor B on August 16, 2018. 

Although Respondent referenced video evidence in its Answer to support his defenses concerning the May 8, 2018, alleged violation, Respondent did not submit a video recording of that tobacco sales transaction.  However, Respondent admitted that the adult driver’s window was up, whereas the minor’s window in the back seat was down, that the minor stuck his/her hand out the back window with money, and Respondent asked the minor what he/she wanted to purchase at the May 8, 2018 inspection.  Answer at 2.  These factual admissions establish that Respondent sold the smokeless tobacco to Minor A, and not to the adult driver in the vehicle, on May 8, 2018.  Further, Respondent does not deny that he did not verify Minor A’s identification prior to selling Minor A regulated tobacco products on May 8, 2018.

Accordingly, I find that the evidence of record establishes by a preponderance of evidence that Respondent sold tobacco products to minors and failed to verify one of the minor’s identification prior to the sale on the dates in question.  Respondent has failed to establish that the sales of regulated tobacco products were for the adult driver on May 8, 2018, or were authorized by the adult driver on August 16, 2018. To the contrary, the

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evidence in the record shows that Respondent sold regulated tobacco products to a minor on each date at issue and also failed to check the minor’s identification on May 8, 2018. 

Even if the Respondent had shown that the adult driver authorized the sales of tobacco products to the minors in the car, that is not a legal defense.  The Act and applicable regulations do not provide an exception for tobacco sales made to minors in the presence of or with the approval of adults.  Likewise, a mistake in reading a minor’s authentic identification or a subsequent change in the retailer’s policy to no longer accept vertical identification for tobacco sales is not a defense.  Additional Response at 1.  Respondent’s contentions in his Answer and in his Additional Response may provide an explanation for why he made the unlawful sales to the minors and failed to check Minor A’s identification, but his assertions do not refute the violations alleged in the Complaint.  Likewise, the video that was admitted as Respondent’s Exhibit 1 does nothing to counter the allegations in the Complaint.  Indeed, it supports them. 

Finally, Respondent’s claims of entrapment and being targeted by the FDA are without merit.  First, Respondent did not present any evidence to support these claims.  Second,  “[e]ntrapment is a defense to criminal prosecution intended to prevent the prosecution of an otherwise innocent individual who is caught up in a crime instigated by government officials.”  Sorrells v. United States, 287 U.S. 435, 450-51 (1932).  The allegations detailed in the Complaint are not criminal in nature, and, thus, the defense of entrapment is not applicable in this non-criminal, administrative proceeding.  Moreover, Respondent was not targeted or tricked into violating the law.  Respondent has provided no evidence to support his claims that the FDA targeted him or used trickery in its compliance methods or procedures.  To the contrary, Inspector Griffin testified that the identifications that the minors used were authentic and the alleged violations relating to regulated tobacco sales were made using face-to-face transactions.  See CTP Ex. 4 at 2-4; CTP Exs. 5 and 12.  Additionally, “minors are instructed to always dress in age-appropriate attire when working.”  CTP Ex. 4 at 2.  Minors must carry identification with them during inspections, and “they must tell the truth if they are asked about their age or whether they have identification.”  Id.  Respondent did not submit any evidence to rebut Inspector Griffin’s testimony.  

In summary, the evidence of record establishes to my satisfaction that the violations alleged in the Complaint in fact occurred on the dates in question.  The unrebutted testimony of Inspector Griffin, corroborating exhibits, and Respondent’s admissions are sufficient to establish that it is more probable than not that Respondent unlawfully sold cigarettes and smokeless tobacco to minors and failed to verify that a purchaser was of sufficient age, in violation of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i).  Therefore, I conclude that the facts as outlined above establish that Respondent J.R.’s Drive-Thru is liable under the Act for two violations within a 12-month period.  Specifically, the unlawful sale of smokeless tobacco to Minor A and Respondent’s failure to verify Minor A’s age before the sale on May 8, 2018, constitute one violation.  See Orton Motor, Inc.,

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d/b/a Orton’s Bagley v. U.S. Dep’t of Health & Human Serv., 884 F.3d 1205 (D.C. Cir. 2018).  Additionally, Respondent’s unlawful sale to Minor B on August 16, 2018, constitutes a second violation with in a 12-month period.  Id.

C. Civil Money Penalty

I have determined that Respondent committed two violations of the Act and its implementing regulations within a 12-month period.  Pursuant to 21 U.S.C. § 333(f)(9), Respondent J.R.’s Drive-Thru is liable for a CMP not to exceed the amounts listed in FDA’s civil money penalty regulations at 21 C.F.R. § 17.2; see also 45 C.F.R. § 102.3.  When determining the appropriate amount of a civil money penalty, I am required to consider any “circumstances that mitigate or aggravate the violation” and “the factors identified in the statute under which the penalty is assessed . . .”  21 C.F.R. §§ 17.34(a); 17.34(b).  Specifically, I must take into account “the nature, circumstances, extent and gravity of the 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).  Also, “for purposes of mitigating a civil penalty . . . [I] shall consider the amount of any penalties paid by the retailer to a State for the same violation” and whether the retailer has an “approved training program.”  21 U.S.C. § 333 note (Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act), Pub. L. 111–31, div. A, title I, § 103(q)(2)(C)).

In its Complaint, CTP seeks to impose the maximum penalty amount, $279, against Respondent.  Complaint at ¶ 1.  In its Answer, Respondent did not indicate whether it believed that the CMP that CTP requested was too high.  However, Respondent stated in its Answer that it was denying allegations made in the Complaint, and, thus, I can reasonably infer that Respondent is also challenging the amount of the CMP.  See generally, Answer.  For the reasons explained below, I find that a CMP of $279 is appropriate.

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

Respondent committed two violations of selling covered tobacco products to minors and failing to verify, by means of photo identification containing a date of birth, that one of the purchasers was 18 years of age or older.  The repeated inability of Respondent to comply with federal tobacco regulations is serious in nature and the civil money penalty amount should be set accordingly. 

Respondent argues in his Additional Response that he misread the minors’ identification cards, the inspections constitute unlawful entrapment, the tobacco sales were authorized by the adult driver in the vehicle, he believed the tobacco products were being sold to the adult driver in the vehicle, and he was targeted by the FDA because he owns a drive-thru.

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As discussed above, Respondent did not submit any evidence or legal support to substantiate these claims, and I find them unpersuasive for mitigation purposes.

2. Respondent’s Ability to Pay

Although Respondent suggested that his new policy of no longer accepting vertical identifications will compromise business sales, he has not presented any evidence supporting this claim or otherwise demonstrating that he does not have the ability to pay the $279 CMP sought by CTP.  See Additional Response at 1.

3. Effect on Respondent’s Ability to Continue to Do Business

Likewise, Respondent has not presented any evidence to support his claim that the new policy of no longer accepting vertical identifications will compromise business sales or that the $279 CMP sought by CTP would have a negative effect on his ability to continue to do business.  See Additional Response at 1.

4. History of Prior Violations

The current action is the first civil money penalty action brought against Respondent for violations of the Act and its implementing regulations.  As noted above, Respondent has violated the prohibition against selling covered tobacco products to persons younger than 18 years of age and has failed to verify, by means of photo identification containing a date of birth, that a purchaser was 18 years of age or older at least twice within a 12-month period.  21 C.F.R. § 1140.14(a)(1); 21 C.F.R. § 1140.14(a)(2)(i).

5. Degree of Culpability

Based on my finding that Respondent committed the violations as alleged in the Complaint, I hold him fully culpable for two violations of the Act and its implementing regulations.  I do not find Respondent’s arguments that he may have misread the minors’ identification cards, the inspections constitute unlawful entrapment, the tobacco sales were authorized by the adult driver in the vehicle, he believed the tobacco products were being sold to the adult driver in the vehicle, or he was targeted by the FDA because he owns a drive-thru to reduce Respondent’s culpability because they are not persuasive or supported by the evidence of record.

6. Employee Training Program

Respondent has not presented any evidence that he has an approved training program that complies with standards developed by the Food and Drug Administration.  21 U.S.C. § 333 note (quoting Tobacco Control Act § 103(q)(2)(A)-(B)); see also 45 C.F.R. § 102.3.  However, CTP has decided to seek CMPs using the lower schedule for all

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retailers until FDA promulgates regulations establishing standards for approved retailer training programs.  Guidance for Industry, Civil Money Penalties and No-Tobacco-Sale Orders for Tobacco Retailers, https://www.fda.gov/regulatory-information/search-fda-guidance-documents/civil-money-penalties-and-no-tobacco-sale-orders-tobacco-retailers-revised, at 9 (December 2016).

7. State Penalties

Respondent has not presented any evidence that he has paid any penalty to the state of Ohio for the same violations.  21 C.F.R. § 17.34(b).

8. Other Matters as Justice May Require

Mitigation is an affirmative defense for which Respondent bears the burden of proof.  Respondent must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.  21 C.F.R. § 17.33(c). 

Respondent has asserted “I will no longer accept vertical I.D.’s in my Drive-Thru . . .”  Additional Response at 1.1   However, this is not a mitigation factor in part because it is Respondent’s future intention and not a policy that was in effect at the time of the violations.  Moreover, Respondent did not present any corroborating evidence to support this assertion or any other evidence of corrective measures taken.

In summary, Respondent has violated the regulations on two separate occasions and has not presented any evidence or legal support of mitigating circumstances.  Thus, I find no basis for mitigation of the CMP sought by CTP, which I find proportional and appropriate in this case.  Based on the foregoing reasoning, I find the penalty amount of $279 to be appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $279 against Respondent, John Ratliff d/b/a J.R.’s Drive-Thru, for two violations of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., and its implementing regulations, 21

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C.F.R. pt. 1140, within a 12-month period.  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. Vertical driver’s licenses in the state of Ohio are designated for individuals under 21 years old.  See https://ohio.gov/wps/portal/gov/site/residents/resources/driver-licenses
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