Moon C. Baek d/b/a Moon's Market / Food Market, DAB TB4443 (2019)

DECISION

Found:

1. Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), on November 28, 2018, as charged in the Complaint; and
2. Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i),1 on April 17, 2016 and May 25, 2018, as charged in prior complaints; and
3. Respondent committed six2 violations in a 48-month period as set forth hereinabove; and
4. Respondent is hereby assessed a civil money penalty in the amount of $6,823.

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Glossary:

I. JURISDICTION

I have jurisdiction to hear this case pursuant to my appointment by the Secretary of Health and Human Services and my authority under the Administrative Procedure Act (5 U.S.C. §§ 554-556), 5 U.S.C.A. § 3106, 21 U.S.C. § 333(f)(5), 5 C.F.R. §§ 930.201 et seq. and 21 C.F.R. Part 17.4

II. PROCEDURAL BACKGROUND

The Center for Tobacco Products (CTP or Complainant) filed a Complaint dated February 25, 2019, against Moon C. Baek d/b/a Moon’s Market / Food Market (Moon’s Market / Food Market or Respondent), alleging that FDA documented six violations within a 48-month period.  CTP seeks a civil money penalty (CMP) in the amount of $11,410.

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Respondent was served with process on March 1, 2019.  On March 29, 2019, Respondent filed a timely Answer.  On April 2, 2019, I issued a Pre-Hearing Order (PHO) setting a schedule for filings and procedures, including a May 2, 2019 deadline to request documents from the opposing party.  The PHO further set forth that, pursuant to 21 C.F.R. § 17.23(a), any documents requested must be provided to the opposing party within 30 days of the request.  The PHO also instructed that a party may move to compel or for sanctions if requested documents are not received within 30 days.  The PHO also established a July 1, 2019 pre-hearing exchange filing deadline.

On May 15, 2019, CTP filed a Motion to Compel Discovery indicating Respondent failed to respond to CTP’s Request for Production of Documents, sent to Respondent on April 9, 2019, and delivered to Respondent’s retail location on April 10, 2019.  On May 16, 2019, I issued an Order to Compel Discovery and Order to Show Cause to Respondent, instructing Respondent to show cause why default judgment should not be entered against it, directing Respondent to respond to CTP’s Request for Production of Documents by May 24, 2019, and reiterating the July 1, 2019 pre-hearing exchange filing deadline in case Respondent was able to show cause.

On May 30, 2019, CTP filed a Status Report and Motion to Impose Sanctions asserting Respondent failed to produce documents in response to CTP’s Request for Production of Documents and failed to comply with my May 16, 2019 Order.  On that same date, Respondent filed a personal statement apologizing for the delay and stating Respondent was unaware of the deadline.  Respondent further indicated that although he received CTP’s Motion to Compel Discovery, it did not specify a deadline to respond.

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Allegedly, Respondent “was waiting for further instructions considering that all parties would exchange information by July 1, 2019 . . . .”  See Dkt. No. 10 (Respondent’s May 30, 2019 Statement).

On May 31, 2019, I issued an Order to Show Cause to Respondent instructing Respondent to show cause why default judgment should not be entered against it, directing Respondent to respond to CTP’s Request for Production of documents by June 10, 2019, and again reiterating the July 1, 2019 pre-hearing exchange filing deadline in case Respondent was able to show cause.

On June 10, 2019, Respondent filed a statement reinstating his arguments submitted on May 30, 2019 and attached eight supporting documents:  (1) Respondent’s pre- and post-surgery vision test results; (2) a copy of the answer previously submitted in the prior case (T-17-2481); and (3) copies of certificates from Delaware County Office of Behavioral Health and Health Promotion Council of Southeastern Pennsylvania showing that Respondent did not sell tobacco to underage buyers in the past.  See Dkt. Nos. 12 (Respondent’s June 10, 2019 Statement), 12a-12h (Respondent’s June 10, 2019 Documents).

On June 27, 2019, CTP filed its pre-hearing exchange, containing an Informal Brief of Complainant (CTP Br.), a List of Proposed Witnesses and Exhibits, and 15 exhibits (CTP Exs. 1-15).  The exhibits included the written direct testimony of two proposed witnesses, Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 5) and FDA-commissioned Inspector Theresa McClain (CTP Ex. 6).  As of the deadline set in my

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PHO and reiterated in my May 16, 2019 and May 31, 2019 Show Cause Orders, Respondent failed to file its pre-hearing exchange or propose any witnesses.

On July 16, 2019, I issued an Order Scheduling Telephone Hearing setting the hearing date for July 29, 2019.  On July 19, 2019, upon CTP’s request, I issued an Order Rescheduling Telephone Hearing resetting the hearing date for August 27, 2019, and instructing that at least 15 days before the hearing date the parties must indicate which witnesses, if any, they wish to cross-examine at the hearing.  I warned that I will cancel the hearing and proceed to a written decision on the record if neither party seeks to cross-examine the opposing party’s witness.

Respondent failed to indicate which CTP’s witness Respondent wished to cross-examine at the hearing by the August 12, 2019 deadline.  Accordingly, on August 21, 2019, I issued an Order canceling the hearing and indicating that I would decide this case based on the written record.  The August 21, 2019 Order directed both parties to move by written motion to admit their proposed exhibits into evidence for my consideration within 10 days of the Order.

On August 23, 2019, CTP moved to admit into evidence its Informal Brief of Complainant and List of Proposed Witnesses and Exhibits filed on June 27, 2019.  On August 26, 2019, Respondent filed a Motion to Admit Evidence raising no objection to the admission of CTP’s exhibits and moving to admit into evidence Respondent’s May 30, 2019 Statement, Respondent’s June 10, 2019 Statement, and Respondent’s June 10, 2019 Documents.  Respondent apologized for lack of knowledge in this process and asked to consider his exhibits in deciding this case based on the written record.  CTP

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neither objected to the admission of Respondent’s documents into evidence nor filed a rebuttal in reply to Respondent’s statement.

This matter is now ready for decision.  21 C.F.R. § 17.45(c).  I admit into evidence CTP’s proposed exhibits 1 through 15 and Respondent’s June 10, 2019 Documents and decide this case based on the written record.  21 C.F.R. § 17.19(b)(11), (17).

III. BURDEN OF PROOF

As the petitioning party, CTP has the burden to prove, by a preponderance of the evidence, that Respondent is liable and that the proffered CMP is appropriate.  21 C.F.R. § 17.33.

IV. LAW

21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i).

V. ISSUES

a. Did Respondent violate 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), as alleged in the Complaint?

b. If so, is a CMP in the amount of $11,410 appropriate?

VI. ALLEGATIONS

A. Complainant's recitation of facts

In its Complaint, CTP alleged that Respondent owns an establishment doing business under the name of Moon’s Market / Food Market, located at 215 Wanamaker Avenue, Essington, Pennsylvania 19029.  CTP also alleged that Respondent’s

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establishment received tobacco products in interstate commerce and held them for sale after shipment in interstate commerce.

CTP’s Complaint further alleged that on November 28, 2018, an FDA-commissioned inspector conducted an inspection of Moon’s Market / Food Market, and documented Respondent committing the following violations:

a. Selling cigarettes to a minor, in violation of 21 C.F.R. § 1140.14(a)(1). Specifically, a person younger than 18 years of age was able to purchase a package of Newport Box 100s cigarettes on November 28, 2018, at approximately 11:26 AM; and

b. Failing to verify the age of a person purchasing cigarettes by means of photographic identification containing the bearer’s date of birth, as required by 21 C.F.R. § 1140.14(a)(2)(i). Specifically, the minor’s identification was not verified before the sale, as detailed above, November 28, 2018, at approximately 11:26 AM.

B.  Respondent’s Recitation of Facts

In its Answer, Respondent checked the box indicating “I deny the following allegations in the Complaint” stating:

Your honor, [i]n the last two incidents, I was persuaded by several factors to choose the settlement option for convenience although I strongly denied allegations. I assure you that I do not sell tobacco to minors. I would like to request a hearing to go over the evidences [sic] and to provide supporting documents to prove my innocence.

Dkt. No. 4 (Answer).  In its Answer, Respondent provided no defenses nor indicated whether the proffered CMP is appropriate.

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VII. PRIOR VIOLATIONS

On March 7, 2017, CTP initiated its first CMP action, CRD Docket Number T-17-2481, FDA Docket Number FDA-2017-H-1136, against Respondent for three violations of 21 C.F.R. pt. 1140 within a 24-month period.  See CTP Ex. 1.  CTP asserted those violations to have occurred at Respondent’s business establishment, 215 Wanamaker Avenue, Essington, Pennsylvania 19029.  Id.  CTP alleged Respondent sold cigarettes to minors and failed to verify the age of the persons purchasing cigarettes by means of photographic identification containing the bearer’s date of birth on September 25, 2014 and August 17, 2016.  Id.

The first CMP action concluded when Respondent admitted the allegations contained in the complaint and paid the agreed upon monetary penalty in settlement of that claim.  See CTP Ex. 2.  Further, Respondent expressly waived its right to contest such violations in subsequent actions.  Id.

On June 14, 2018, CTP initiated a second CMP action, CRD Docket Number T-18-2557, FDA Docket Number FDA-2018-H-2280, against Respondent for at least four5 violations of 21 C.F.R. pt. 1140 within a 24-month period.  See CTP Ex. 3.  CTP stated those violations to have occurred at Respondent’s business establishment, 215 Wanamaker Avenue, Essington, Pennsylvania 19029.  Id.  CTP alleged Respondent sold cigarettes to minors and failed to verify the age of the persons purchasing cigarettes by

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means of photographic identification containing the bearer’s date of birth on August 17, 2016 and May 25, 2018.  Id.

The second CMP action concluded when Respondent admitted the allegations contained in the complaint and paid the agreed upon monetary penalty in settlement of that claim.  See CTP Ex. 4. Further, Respondent expressly waived its right to contest such violations in subsequent actions.  Id.

VIII. FAMILY SMOKING PREVENTION AND TOBACCO CONTROL ACT

The “relevant statute” in this case is actually a combination of statutes and regulations:  The Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111‑31, 123 Stat. 1776 (2009) (TCA), amended the Food, Drug, and Cosmetic Act (21 U.S.C.A. Chap. 9) (FDCA) and created a new subchapter of the FDCA that dealt exclusively with tobacco products, (21 U.S.C. §§ 387-387u), and it also modified other parts of the FDCA explicitly to include tobacco products among the regulated products whose misbranding can give rise to civil, and in some cases criminal, liability.  The 2009 amendments to the FDCA contained within the TCA also charged the Secretary of Health and Human Services with, among other things, creating regulations to govern tobacco sales.  The Secretary’s regulations on tobacco products appear in Part 1140 of Title 21, Code of Federal Regulations.

Under the FDCA, “[a] tobacco product shall be deemed to be misbranded if, in the case of any tobacco product sold or offered for sale in any State, it is sold or distributed in violation of regulations prescribed under section 387f(d).”  21 U.S.C. § 387c(a)(7)(B) (2012).  Section 387a‑1 directed FDA to re-issue, with some modifications, regulations

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previously passed in 1996.  21 U.S.C. § 387a-1(a) (2012).  These regulations were passed pursuant to section 387f(d), which authorizes FDA to promulgate regulations on the sale and distribution of tobacco products; 75 Fed. Reg. 13,225 (Mar. 19, 2010), codified at 21 C.F.R. Part 1140 (2015); 21 U.S.C. § 387f(d)(1) (2012).  Accordingly, 21 C.F.R.             § 1140.1(b) provides that “failure to comply with any applicable provision in this part in the sale, distribution, and use of cigarettes and smokeless tobacco renders the product misbranded under the act.”

Under 21 U.S.C. § 331(k), “[t]he alteration, mutilation, destruction, obliteration, or removal of the whole or any part of the labeling of, or the doing of any other act with respect to, a food, drug, device, tobacco product, or cosmetic, if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded” is a prohibited act under 21 U.S.C. § 331.  Thus, when a retailer such as Respondent misbrands a tobacco product by violating a requirement of 21 C.F.R. Part 1140, that misbranding in turn violates the FDCA, specifically 21 U.S.C. § 331(k).  FDA may seek a CMP from “any person who violates a requirement of this chapter which relates to tobacco products.”  21 U.S.C. § 333(f)(9)(A) (2012).  Penalties are set by 21 U.S.C. § 333 note and 21 C.F.R. § 17.2.

Under current FDA policy, the first time FDA finds violations of 21 C.F.R. Part 1140 at an establishment, FDA only counts one violation regardless of the number of specific regulatory requirements that were actually violated, but if FDA finds violations on subsequent occasions, it will count violations of specific regulatory requirements

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individually in computing any CMP sought.  This policy is set forth in detail, with examples to illustrate, at U.S. Food & Drug Admin., Guidance for Industry and FDA Staff, Civil Money Penalties and No-Tobacco-Sale Orders for Tobacco Retailers, Responses to Frequently Asked Questions (Revised) (2016), available at http://www.fda.gov/downloads/TobaccoProducts/Labeling/RulesRegulationsGuidance/UCM447310.pdf  [hereinafter Guidance for Industry], at 13-14.  So, for instance, if a retailer sells a tobacco product on a particular occasion to a minor without checking for photographic identification, in violation of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i), this will count as two separate violations for purposes of computing the CMP, unless it is the first time violations were observed at that particular establishment.  This policy of counting violations has been determined by the HHS Departmental Appeals Board to be consistent with the language of the FDCA and its implementing regulations.  See Orton Motor Co. d/b/a Orton’s Bagley v. HHS,884 F.3d 1205 (D.C. Cir. 2018).

IX. SUMMARY OF TESTIMONY AND EVIDENCE

A. Complainant's case

Complainant submitted CTP’s Exhibits 1-15, which included photos and written direct testimony from CTP’s witnesses, Inspector McClain and Ms. Sternberg.  Respondent did not object to the admission of Complainant’s exhibits, and, as indicated above, I admitted CTP’s Exhibits 1-15 into evidence.

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i. Senior Regulatory Counsel Laurie Sternberg

Witness Laurie Sternberg, Senior Regulatory Counsel in the Office of Compliance and Enforcement, CTP, FDA, provided written direct testimony on behalf of Complainant.  CTP Ex. 5.  In her declaration, Ms. Sternberg testified that the Newport Box 100s cigarettes purchased during the November 28, 2018 inspection “are manufactured, prepared, compounded, or processed for commercial distribution . . . in North Carolina.”  CTP Ex. 5 ¶¶ 7-8; see also CTP Ex. 15.  Ms. Sternberg further noted that the manufacturer of Newport Box 100s cigarettes does not have any registered tobacco production facilities in the state of Pennsylvania.  CTP Ex. 5 ¶ 9.

ii. Inspector Theresa McClain

Inspector McClain, the FDA-commissioned inspector who conducted the November 28, 2018 inspection at issue, provided written direct testimony on behalf of Complainant.  CTP Ex. 6.

In her declaration, Inspector McClain testified that on November 28, 2018, at approximately 11:26 AM, she and a confidential minor (Minor A) performed an undercover buy (UB) inspection at Respondent’s establishment, Moon’s Market / Food Market, located at 215 Wanamaker Avenue, Essington, Pennsylvania 19029.  CTP Ex. 6 ¶ 7.

Prior to the inspection, Inspector McClain confirmed that Minor A did not possess “his/her true and accurate state-issued birth certificate showing his/her actual date of birth[]” and that “Minor A was under the age of 18 when he/she participated in the inspection . . . .”  CTP Ex. 6 ¶ 7; see also CTP Ex. 11 (showing Minor A’s date of birth

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as October 12, 2001).  According to the Inspector McClain’s declaration, “[m]inors are trained not to carry photographic identification with them during an inspection and that they must tell the truth if they are asked about their age or whether they have identification.”  CTP Ex. 6 ¶ 6.  Additionally, before the inspection, Inspector McClain “confirmed that Minor A did not have any tobacco products in his/her possession.”  CTP Ex. 6 ¶ 7.

Inspector McClain then parked her car near Moon’s Market / Food Market, and she and Minor A exited the vehicle.  CTP Ex. 6 ¶ 8.  Minor A was the first to enter Moon’s Market / Food Market, and the inspector followed thereafter.  Id.  Inspector McClain noted:  “[f]rom my location inside the establishment, I had a clear, unobstructed view of the sales counter and Minor A.  During the inspection, I observed Minor A purchase a package of cigarettes from an employee at the establishment.”  Id.  Inspector McClain observed that Minor A neither presented identification prior to the purchase, nor received a receipt after the purchase.  Id.

After exiting Respondent’s establishment, Inspector McClain and Minor A returned to the vehicle.  CTP Ex. 6 ¶ 9.  Immediately upon entering the vehicle, Minor A handed the inspector the package of Newport Box 100s cigarettes.  Id.  Inspector McClain labeled the cigarettes as evidence, photographed the packaging (CTP Exs. 9 and 10), and “processed the evidence in accordance with standard procedures at the time of the inspection.”  Id.

Shortly thereafter, Inspector McClain recorded the inspection in the FDA’s Tobacco Inspection Management System (TIMS) (CTP Ex. 8), and created a Narrative

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Report (CTP Ex. 7). CTP Ex. 6 ¶ 10. Both TIMS and Narrative Report describe the employee who sold cigarettes to Minor A on November 28, 2018 as a senior male with gray/white hair and glasses. See CTP Ex. 7 ¶ 17; CTP Ex. 8 ¶ 18. In her written direct testimony, Inspector McClain testified that “Exhibits 7 and 8 are true and accurate redacted copies of the Narrative Report and the TIMS Assignment Form” and “Exhibits 9 and 10 are true and accurate copies of photographs [she] took during the inspection.” CTP Ex. 6 ¶¶ 10-11.

B. Respondent's case

Respondent failed to submit written direct testimony or other documentary evidence in accordance with my PHO dated April 2, 2019.  Respondent, however, moved to admit documents filed on June 10, 2019 in response to CTP’s document request.  CTP did not object to the admission of Respondent’s June 10, 2019 Documents into evidence, and, as indicated above, I admitted them into evidence.

It is Respondent’s position that:  (1) Respondent never agreed to committing the past violations and only agreed to settlements for convenience purposes since he required assistance with language and transportation from his children; (2) along with his wife (73), Respondent (75) had been managing a small convenience store since December 2002, located in a small township called Tinicum, which did not attract too many non-residents, meaning that (a) 99% of their customers were their neighbors, (b) they had special relationships with most of their customers, (c) they had seen many birth certificates of their neighbors, (d) they knew who was of legal age, (e) anyone new in town was very recognizable to them, and (f) any minor especially accompanied by an

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adult would have stood out to Respondent; (3) Respondent complied with the law, completed all required training in addition to reading tobacco merchant education training materials, had signs6 visible to all customers exhibiting no selling of tobacco products to minors, and always asked for identifications to ensure tobacco products were not sold to minors; (4) “[i]t would be senseless for [Respondent] to risk of owning a business when [his] marginal profits for grocery products are 30% vs. about 12% for the tobacco products;” (5) evidence submitted by CTP (such as narrative reports, store-front photos, and photos of cigarettes in zip-loc bags) is insufficient and unfair; and (6) the narrative report describing Respondent as a senior-male with gray hair wearing glasses is inaccurate because Respondent had cataract surgeries to both eyes in 2017 and no longer wears glasses.  See Respondent’s May 30, 2019 Statement, Respondent’s June 10, 2019 Statement, and Respondent’s Motion to Admit Evidence.  CTP failed to address or refute any of Respondent’s statements.

In support of his arguments, Respondent filed his pre- and post-surgery vision test results.  See Dkt. Nos. 12a-12b.  Respondent’s pre-surgery report indicated that his visual acuity as of January 11, 2017 was 20/400 in his right eye (OD) and 20/100 in his left eye (OS).  See Dkt. No. 12a.  Respondent’s post-surgery report showed improved visual acuity as of February 18, 2019: 20/40 in his right eye (OD) and 20/25-1 in his left eye

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(OS).  See Dkt. No. 12b.  Respondent’s post-surgery report also stated that he “uses glasses for NVO [near-vision-only] but did not bring with him today.”  Id.

Respondent also filed certificates from Delaware County Office of Behavioral Health (dated January 16, 2006) and Health Promotion Council of Southeastern Pennsylvania (dated May 31, 2008, September 6, 2008, April 9th, July 28th, and December 31st), showing that Respondent did not sell tobacco to underage buyers in the past.  See Dkt. Nos. 12c-12h.  Respondent offered no other evidence in support of its statements.

X. ANALYSIS OF EVIDENCE AND TESTIMONY

A. Complainant's case

Complainant offered and I have admitted into evidence CTP Exhibits 1-15.  Pursuant to 21 C.F.R. § 17.33(b), in order to prevail, CTP must prove Respondent’s liability and the appropriateness of the penalty under the applicable statute by a preponderance of the evidence.

I must determine whether the allegations in the Complaint are true, and if so, whether Respondent’s actions identified in the Complaint violated the law.  21 C.F.R. § 17.45(b)(1).

B. Respondent's case

Pursuant to 21 C.F.R. § 17.33(c), Respondent must prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.  As indicated above, Respondent offered no affirmative defenses in its Answer to rebut the allegations in the Complaint, but challenged Respondent’s description of the sales clerk in Inspector

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McClain’s Narrative Report, offered Respondent’s May 30, 2019 Statement, Respondent’s June 10, 2019 Statement, and Respondent’s Motion to Admit Evidence, and provided Respondent’s June 10, 2019 Documents in support of its position, which I admitted into evidence.

C. Analysis

1. I find and conclude that CTP has shown by a preponderance of the evidence that Respondent violated 21 C.F.R. § 1140.14(a)(1) when it impermissibly sold cigarettes to Minor A on November 28, 2018, at approximately 11:26 AM.

Respondent’s establishment received tobacco products in interstate commerce, including Newport Box 100s cigarettes, and held them for sale after shipment in interstate commerce.  CTP Ex. 5 ¶¶ 8-9; see also CTP Ex. 15.

On November 28, 2018, Inspector McClain conducted an UB compliance check inspection at Respondent’s establishment, Moon’s Market / Food Market, with Minor A. CTP Ex. 6 ¶ 7.  Prior to the inspection, Inspector McClain confirmed that Minor A was under the age of 18, did not have his/her birth certificate in his/her possession, and did not have any tobacco products in his/her possession.  Id.

Minor A entered Respondent’s establishment, and the inspector followed behind.  Inspector McClain positioned herself so she “had a clear, unobstructed view of the sales counter and Minor A.”  CTP Ex. 6 ¶ 8.  During the inspection, Inspector McClain “observed Minor A purchase a package of cigarettes from an employee at the establishment.”  Id.  Inspector McClain observed that Minor A did not receive a receipt after the purchase.  Id.

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After Inspector McClain and Minor A exited Respondent’s establishment, they returned to the vehicle.  CTP Ex. 6 ¶ 9.  Immediately upon entering the vehicle, Minor A tendered the package of Newport Box 100s cigarettes to the inspector.  Id.  Inspector McClain labeled the cigarettes as evidence, photographed the packaging, and “processed the evidence in accordance with standard procedures at the time of the inspection.”  Id.

Inspector McClain’s testimony was further supported by physical evidence.  CTP submitted a redacted copy of Minor A’s Commonwealth of Pennsylvania birth certificate, listing the date of birth as October 12, 2001, showing that Minor A was 17 years old at the time of the November 28, 2018 inspection.  CTP Ex. 11.  CTP also submitted copies of the photographs that Inspector McClain took of the Newport Box 100s cigarette package.  CTP Exs. 9, 10.  CTP submitted a contemporaneously-created Narrative Report (CTP Ex. 7) and TIMS form (CTP Ex. 8).  Inspector McClain’s observations and the physical evidence that was obtained on November 28, 2018, were, in and of themselves, adequate to prove CTP’s case.  I, therefore, find that in conjunction with the corroborating physical evidence (e.g., photographs) and Ms. Sternberg’s declaration, Inspector McClain’s testimony is sufficient to satisfy CTP’s burden of proving that Respondent violated 21 C.F.R. § 1140.14(a)(1) on November 28, 2018, at approximately 11:26 AM, by a preponderance of the evidence.

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2. I find and conclude that CTP has shown by a preponderance of the evidence that Respondent violated 21 C.F.R. § 1140.14(a)(2)(i) when it failed to verify the age of Minor A by means of photographic identification containing his/her date of birth, on November 28, 2018, at approximately 11:26 AM.

On November 28, 2018, Inspector McClain conducted an UB compliance check inspection at Respondent’s establishment, Moon’s Market / Food Market, with Minor A.  Prior to the inspection, Inspector McClain confirmed that Minor A was under the age of 18 and did not have in his/her possession “true and true and accurate birth certificate showing his/her actual date of birth.”  CTP Ex. 6 ¶ 7.  Prior to the sale of cigarettes, Inspector McClain observed that Minor A did not present his/her identification to Respondent’s employee.CTP Ex. 6 ¶ 8.

I find Inspector McClain’s testimony to be credible and unbiased.  Indeed, it is reasonable to infer that a store employee failed to check the minor’s identification on November 28, 2018.  It is undisputed that Minor A was 17 years old at the time of the inspection on November 28, 2018.  Consistent with the training procedures, Inspector McClain confirmed that Minor A did not possess his/her birth certificate when he/she entered the establishment on November 28, 2018.  Nonetheless, according to Inspector McClain’s declaration, Minor A was able to purchase a package of cigarettes.  It is also unrefuted that Inspector McClain observed that Minor A did not present his/her identification to Respondent’s employee when purchasing cigarettes on November 28, 2018.  I, therefore, find that in conjunction with the corroborating documentary evidence (e.g., Minor A’s birth certificate showing Minor A was 17 years old at the time of the inspection), Inspector McClain’s testimony is sufficient to satisfy CTP’s burden of

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proving that Respondent violated 21 C.F.R. § 1140.14(a)(2)(i) on November 28, 2018, at approximately 11:26 AM, by a preponderance of the evidence.

3. Respondent’s offered proof is insufficient to rebut the evidence of noncompliance on November 28, 2018, presented by CTP.

Respondent provided its pre- and post-surgery notes in an attempt to rebut the evidence submitted by CTP.  Specifically, Respondent argues that Inspector McClain’s Narrative Report is inaccurate because Respondent had cataract surgeries to both eyes in 2017 and no longer wears glasses.  Both TIMS and Narrative Report describe the employee who sold cigarettes to Minor A on November 28, 2018 as a senior male with gray/white hair and glasses.  See CTP Ex. 7 ¶ 17; CTP Ex. 8 ¶ 18.

While challenging Inspector McClain’s Narrative Report, Respondent did not contest that the sale of the cigarettes to Minor A occurred on November 28, 2018 at Respondent’s establishment and that Minor A’s age was not verified before the sale.  Even without relying on the TIMS and Narrative Report, CTP sufficiently proved its case based entirely on Inspector McClain’s declaration submitted under penalty of perjury, which I find to be credible and unbiased.  Inspector McClain’s testimony established that Minor A had no cigarettes in his/her possession before entering the store and had cigarettes upon leaving the establishment.  Consequently, the only reasonable inference that I can draw from the evidence is that Minor A purchased cigarettes in the store.  In addition, Inspector McClain’s testimony established that Minor A’s identification was not verified before the sale on November 28, 2018.

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While Respondent’s medical records revealed that his distance vision improved as of February 18, 2019, it is unclear when Respondent’s surgery occurred and whether or not Respondent required glasses on November 28, 2018.  Moreover, while Respondent’s distance vision may have improved, the post-surgery note indicated that Respondent used reading glasses.  Respondent’s statements proffering that Respondent had cataract surgeries to both eyes in 2017 and no longer wears glasses are not declarations signed under oath, and I, therefore, cannot accord them such weight.  Even if I could treat Respondent’s statements as sworn declaration, they fail to address Respondent’s need for reading glasses on November 28, 2018.  Respondent’s evidence, therefore, failed to rebut CTP’s proof that the sale of cigarettes to Minor A occurred at Respondent’s establishment on November 28, 2018, and that the age of Minor A was not verified before the sale.

Respondent also provided certificates from Delaware County Office of Behavioral Health and Health Promotion Council of Southeastern Pennsylvania in an attempt to prove that Respondent complied with the laws.  Respondent, however, was charged with violations of federal tobacco law, not Delaware or Pennsylvania state law.  Indeed, Respondent’s compliance with state law does not obviate its responsibility to adhere to applicable federal law and regulations.  See, e.g., W. Spirits, Inc. d/b/a T-Joe's Steakhouse & Saloon, DAB No. 2844 (H.H.S. Jan. 16, 2018) (stating that Respondent’s reliance on state law was misplaced since the case was governed by The Family Smoking Prevention and Tobacco Control Act and its implementing regulations).  I, therefore, find that

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Respondent’s medical notes and compliance certificates are insufficient to rebut CTP’s allegations.

XI. LIABILITY

When a retailer such as Respondent is found to have “misbranded” a tobacco product in interstate commerce, it can be liable to pay a CMP.  21 U.S.C. §§ 331, 333.

Based on the executed settlement agreements (CTP Exs. 2 and 4), Respondent previously admitted to four violations of 21 U.S.C. § 331, specifically two violations of 21 C.F.R. § 1140.14(a)(1) on August 17, 2016 and May 25, 2018, and two violations of 21 C.F.R. § 1140.14(a)(2)(i) on those same dates, as set forth in prior complaints.  Thus, the prior four violations are administratively final.

Based on the evidence presented, I find and conclude that Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1), in that a person younger than 18 years of age was able to purchase a package of Newport Box 100s cigarettes on November 28, 2018, at approximately 11:26 AM.

I further find and conclude that, based on the evidence presented, Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(2)(i), on that same date, in that Respondent failed to verify, by means of photo identification containing a purchaser’s date of birth, that no cigarette purchaser is younger than 18 years of age.

The conduct on November 28, 2018 set forth above counts as two violations under the FDA policy for purposes of computing the CMP in the instant case.  See Guidance for Industry, at 13-14.  Accordingly, I find and conclude that Respondent is liable for six violations of the FDCA and its implementing regulations within a 48-month period.

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XII. PENALTY

As Respondent is liable under the relevant statute, I must now determine the amount of penalty to impose.  In its Complaint, CTP sought to impose the maximum penalty amount, $11,410, against Respondent for six violations of the FDCA and its implementing regulations within a 48-month period.  In its Informal Brief, CTP asserts that an $11,410 CMP is appropriate for six violations within a 48-month period.  CTP Br.  Specifically, CTP argues that “[u]nder 45 C.F.R. § 102.3, the maximum penalty for six violations in a forty-eight [month] period is $11,410.  CTP believes that, for Respondent’s six violations in a forty-eight month period an assessment of an $11,410 penalty is appropriate.”  Id. at 11.

Respondent failed to file a pre-hearing brief.  However, in its Answer and subsequent statements, Respondent denied responsibility for the violations, contending that he did not sell tobacco to minors, and instead he complied with the law, completed all required training in addition to reading tobacco merchant education training materials, displayed signs visible to all customers exhibiting no sale of tobacco products to minors, and always requested identification to ensure tobacco products were not sold to minors.  See Answer, Respondent’s May 30, 2019 Statement, Respondent’s June 10, 2019 Statement, and Respondent’s Motion to Admit Evidence.  Respondent also argued that Moon’s Market / Food Market is a small convenience store located in a small township.  Respondent’s June 10, 2019 Statement, at 1.  Respondent asserted that he was persuaded to settle the prior actions “for the outcome of credit card payments until present.”  Id. at 1; Respondent’s Motion to Admit Evidence, at 1.  Respondent stated, “[i]t would be

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senseless for me to risk of owning a business when my marginal profits for grocery products are 30% vs. about 12% for the tobacco products.”  Respondent’s Motion to Admit Evidence, at 2.  Respondent also alleged that “[a]s an only and possibly one of the last remaining mom and pop store, . . . I feel targeted and intimated [sic] by bigger corporations surrounding my place of business.  Not sure how much longer I can survive having to deal with one Wawa in close proximity or possibly two in the near future.”  Id. at 4.  Respondent finally stated, “I would not want to admit to something I did not do or be against my work ethics when I am nearing end of my business.”  Id.  CTP failed to rebut any of Respondent’s statements.

Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a CMP not to exceed the amounts listed in FDA’s CMP regulations at 21 C.F.R. § 17.2.  I, however, “may compromise, modify, or remit, with or without conditions, any civil penalty assessed under [21 U.S.C. § 333(f)(1), (2), (3), (4), or (9)].”  21 U.S.C. § 333(f)(5)(C).  When determining the amount of a CMP, I am required to 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).

a. The nature, circumstances, extent, and gravity of the violation

I have found that Respondent committed three violations of selling tobacco products to minors, and three violations for failure to verify, by means of photo identification containing a purchaser’s date of birth, that no tobacco product purchasers

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are younger than 18 years of age, totaling six violations of the tobacco regulations.  The regulations governing the sale of tobacco products are set forth to protect public health, in particular the health of minors.  The repeated inability of Respondent to comply with federal tobacco regulations is serious in nature and demand a proportional CMP amount.

b. Respondent’s ability to pay and effect of the CMP on ability to do business

CTP is seeking an $11,410 CMP against Respondent asserting that an $11,410 CMP will not affect Respondent’s ability to do business, because “Respondent may continue to sell tobacco products and other products at the establishment.”  CTP Br., at 12.  Respondent’s owner, Mr. Moon Baek, argued that Moon’s Market / Food Market is a small convenience store “nearing end of [its] business,” and that Respondent’s marginal profits for tobacco products is about 12%.  Respondent’s Motion to Admit Evidence, at 2, 4.  While the record does not include specific evidence to show the effects of an $11,410 CMP on Respondent’s small convenience store, I find Mr. Baek to be sincere and credible, and a CMP of this amount will unavoidably have a significant effect on Respondent’s ability to do business.  The purpose of the penalty, however, is to promote compliance and penalize for non-compliance, but not to put a small convenience store out of business.

c. History of Prior Violations

The current action is the third CMP action brought against Respondent for violations of the FDCA and its implementing regulations.  The first $550 CMP action, CRD Docket Number T-17-2481, FDA Docket Number FDA-2017-H-1136, was brought against Respondent for violations of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i).  See CTP

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Ex. 1.  Respondent settled the first complaint with CTP for an undisclosed penalty amount.  See CTP Ex. 2.

The second $2,236 CMP action, CRD Docket Number T-18-2557, FDA Docket Number FDA-2018-H-2280, was brought against Respondent for two additional violations on May 25, 2018—one violation of 21 C.F.R. § 1140.14(a)(1) and one violation of 21 C.F.R. § 1140.14(a)(2)(i).  See CTP Ex. 3.  Respondent settled the second complaint with CTP for an undisclosed penalty amount.  See CTP Ex. 4.  The current $11,410 CMP action was brought against Respondent for violations of 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i) on November 28, 2018, when Respondent sold cigarettes to a minor and failed to verify the identification of the purchaser.

I agree with CTP that “[t]hese repeat violations show an unwillingness or inability to sell tobacco products in accordance with federal tobacco regulations.”  CTP Br., at 12.  While Respondent has already paid for its previous violations, its continued inability to comply with the federal tobacco regulations calls for a more severe penalty.

d. Degree of Culpability

Respondent admitted to four violations of the FDCA and its implementing regulations in the settlement agreements of the prior actions.  In addition, based on the evidence presented, I found Respondent committed the two most recent violations in the current Complaint.  Therefore, I hold Respondent fully culpable for six violations of the FDCA and its implementing regulations.

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e. Matters as justice may require / Additional mitigating factors

In its statements, Respondent asserted that he complied with the law, completed all required training in addition to reading tobacco merchant education training materials, had signs visible to all customers exhibiting no selling of tobacco products to minors, and always asked for identifications to ensure tobacco products were not sold to minors.  See Answer, Respondent’s May 30, 2019 Statement, Respondent’s June 10, 2019 Statement, and Respondent’s Motion to Admit Evidence.  In addition, Respondent stated that Moon’s Market / Food Market is a small convenience store “nearing end of [its] business,” and that Respondent’s marginal profits for tobacco products is about 12%.  Respondent’s May 30, 2019 Statement, at 1; Respondent’s Motion to Admit Evidence, at 2, 4.  Although Respondent provided no evidence in support of these statements, CTP failed to refute Respondent’s assertions.  To ensure that justice is served, I find Respondent’s assertions persuasive.

f. Penalty

I find that a large penalty amount will have a financial strain on Respondent’s small business.  I have considered statutory factors, most of which support imposition of a penalty.  In particular, Respondent has a history of repeated violations of tobacco regulations.  Warnings from CTP, previous CMP actions, and even progressively larger penalties did not affect Respondent’s behavior.  However, at least two statutory factors as discussed above suggest a somewhat lower penalty amount would be sufficient.  For these reasons, after considering all statutory factors, I find a reduced penalty amount of $6,823 to be appropriate under 21 U.S.C. § 333(f)(5)(B), (f)(5)(C), and (f)(9).

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XIII. CONCLUSION

Respondent committed six violations of the FDCA and its implementing regulations within a 48-month period.  Respondent is liable for a CMP of $6,823.  See 21 C.F.R. § 17.2.

WHEREFORE, evidence having been read and considered it be and is hereby ORDERED as follows:

a. I find Respondent was served with process herein and is subject to this forum;

b. I find and conclude that the evidentiary facts support a finding Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(a)(1) and (a)(2)(i) on November 28, 2018, in that Respondent sold a package of Newport Box 100s cigarettes to a person younger than 18 years of age and failed to verify the age of the person purchasing cigarettes by means of photographic identification containing the bearer’s date of birth, as set forth in the Complaint;

c. I find and conclude that the evidentiary facts support a finding Respondent:        (1) violated 21 C.F.R. § 1140.14(a)(1) on August 17, 2016 and May 25, 2018, in that Respondent sold cigarettes to persons younger than 18 years of age; and (2) violated 21 C.F.R. § 1140.14(a)(2)(i) on August 17, 2016 and May 25, 2018, in that Respondent failed to verify the age of the persons purchasing cigarettes by means of photographic identification containing the bearer’s date of birth, as stipulated in the settlement agreements of the prior actions;

d. I find and conclude Respondent committed six violations of the FDCA and its implementing regulations within a 48-month period; and

e. I assess a monetary penalty in the amount of $6,823.

1. On August 8, 2016, the citations to certain tobacco violations changed. For more information see: https://federalregister.gov/a/2016-10685.
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2. CTP did not include violations that occurred outside of the relevant timeframe in this Complaint.
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3. See 5 C.F.R. § 930.204.
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4. See also Butz v. Economou, 438 U.S. 478, 513 (1978); Marshall v. Jerrico, Inc., 446 U.S. 238 (1980); Fed. Maritime Com’n v. S.C. State Ports Auth., 535 U.S. 743, 744 (2002).
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5. CTP did not include violations that occurred outside of the relevant timeframe in the second complaint.
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6. Although Respondent attached photographs of the signs to his August 26, 2019 statement, he never moved to admit them into evidence as his exhibits. The photographs, therefore, are excluded as evidence, but will remain a part of the administrative record.
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