Leung's, Inc. d/b/a El Faro Supermarket, DAB TB5162 (2020)

INITIAL DECISION

The Food and Drug Administration's (FDA) Center for Tobacco Products (CTP) seeks to impose a civil money penalty (CMP) of $11,182 against Respondent, Leung's, Inc. d/b/a El Faro Supermarket, for committing at least six 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 48-month period.  Specifically, CTP alleges that Respondent violated the Act when it sold cigarettes to a minor and failed to verify, by means of photo identification containing a date of birth, that the purchaser was 18 years of age or older.

Respondent denies the violations and raises several defenses:  there is no proof of purchase; there is no witness to the transaction; and there are no transactions during the time period alleged where only a package of Newport cigarettes was purchased.  For the reasons discussed below, I find Respondent liable for the violations alleged in the Complaint and conclude that a CMP of $11,182 is appropriate.

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I.  Background and Procedural History

As provided in 21 C.F.R. §§ 17.5 and 17.7, CTP served the Complaint on Respondent El Faro Supermarket, located at 4338 Northwest 7th Street, Miami, Florida 33126, by United Parcel Service, on November 9, 2018.  See DAB E-File Docket (Dkt.) No. T-19-456, Dkt. Entry Nos. 1 (Complaint), 1b (Proof of Service).  Respondent timely filed its Answer, which the Civil Remedies Division (CRD) received on December 10, 2018.  Dkt. Entry No. 3 (Respondent's Answer (Answer)).  In its Answer, Respondent denied the allegations.  Answer ¶ 1.  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.

On January 21, 2019, Respondent filed its pre-hearing exchange.  Dkt. Entry No. 7.  On January 25, 2019, in a letter issued by my direction, I informed Respondent that I would not accept its pre-hearing exchange because it was filed out of order and did not comply with the requirements set out in the December 17, 2018, APHO.  Dkt. Entry No. 8.  Respondent was instructed to refile an amended pre-hearing exchange that complied with the requirements of the APHO by April 1, 2019, after reviewing Complainant's pre-hearing exchange.  Dkt. Entry No. 8.  On February 19, 2019, CTP filed a Motion to Compel Discovery asserting that Respondent had not responded to its discovery request.  Dkt. Entry Nos. 9, 10, 10a.  On February 19, 2019, CTP also requested an extension of the pre-hearing deadlines.  Dkt. Entry No. 11.  On February 20, 2019, I issued an Order, which advised Respondent that it had until March 6, 2019, to file a response to CTP's Motion to Compel Discovery.  Dkt. Entry No. 12.  My Order also granted CTP's Motion to Extend Deadlines.  Id.

On March 6, 2019, CTP filed a Motion to Compel Further Response asserting that Respondent had not responded to its discovery request in its entirety.  Dkt. Entry No. 13.  In a March 11, 2019, Order, I interpreted CTP's March 6, 2019 filing as a revised Motion to Compel Discovery because it asserted new facts and arguments concerning the same Request for Production of Documents.  Dkt. Entry No. 14.  My Order advised Respondent that it had until March 21, 2019, to file a response to CTP's revised Motion to Compel Discovery and extended the pre-hearing exchange deadlines.  Id.  On April 3, 2019, I issued an Order Granting Complainant's Motion to Compel the Production of Documents, which required Respondent by April 17, 2019, to supplement its document production to comply with CTP's Request for Production of Documents in its entirety or file a written response stating that it did not have any additional documents to produce.  Dkt. Entry No. 17.  The April 3, 2019, Order further extended the pre-hearing exchange deadlines.  On April 3, 2019, Respondent filed a Fax Activity Log and stated that it faxed the requested documents on March 19, 2019, and April 3, 2019.  Dkt. Entry No. 18.  On April 22, 2019, Respondent filed a written response stating that it did not have additional documents to produce.  Dkt. Entry No. 20.

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On May 28, 2019, CTP timely filed its pre-hearing exchange, consisting of a pre-hearing brief, list of proposed witnesses and exhibits, and 16 exhibits (CTP Exs. 1-16), including the written direct testimony of two proposed witnesses, CTP's Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 5) and Inspector Jessie Carry (CTP Ex. 6).  Dkt. Entry Nos. 21-21q.  On June 21, 2019, I issued an Order to Show Cause to Respondent because Respondent failed to file its pre-hearing exchange by June 18, 2019.  Dkt. Entry No. 23.  My Order to Show Cause instructed Respondent to file a written response indicating whether it wished to continue defending its case and explaining why it did not file its pre-hearing exchange.  Id. at 1-2.  My Order also informed the parties that any statements from Respondent in response to the Order to Show Cause would constitute a motion to extend Respondent's pre-hearing exchange deadline, and CTP had until July 16, 2019, to file a response.  Id. at 2.

On June 30, 2019, Respondent filed a response to the Order to Show Cause stating that health and family issues had prevented it from filing its pre-hearing exchange.  Dkt. Entry No.24.  On July 16, 2019, CTP filed a response to Respondent's statement as required in the Order to Show Cause, indicating that it did not object to extending Respondent's deadline to file its pre-hearing exchange.  Dkt. Entry No. 25.  On July 17, 2019, I issued an Order Granting Motion to Extend Respondent's Pre-Hearing Exchange Deadline, finding that extraordinary circumstances had prevented Respondent from timely filing its amended pre-hearing exchange and ordered Respondent to file its pre-hearing exchange by July 31, 2019.  Dkt. Entry No. 26.  On July 31, 2019, Respondent filed its pre-hearing exchange, consisting of a pre-hearing brief (Informal Brief of Respondent), list of proposed witnesses and exhibits, and three exhibits (R. Exs. 1-3), including the written direct testimony of two proposed witnesses, Respondent's Manager, Brian Leung (R. Ex. 2) and Respondent's President, Chu Nam Leung (R. Ex. 3).  Dkt. Entry No. 28.

On September 26, 2019, I held a prehearing conference call in this case.  See Dkt. Entry No. 30.  During the prehearing conference call, we discussed both parties' proposed witnesses and exhibits.  Dkt. Entry No. 30.  Respondent indicated that it only wished to cross-examine Inspector Carry at the hearing.  Id. at 1-2.CTP indicated that it wanted to cross-examine both of Respondent's witnesses, Brian Leung and Chu Nam Leung.  Id. at 2.  I admitted CTP Exhibits 1 through 16, absent any objection from Respondent.  Id.  I also admitted Respondent Exhibits 1 through 3, absent any objection from CTP.  Id.

On December 11, 2019, I held a telephone hearing in this case.  During the hearing, Respondent cross-examined Inspector Carry.  See Tr. at 7-11.  CTP questioned Inspector Carry on redirect examination.  See Tr. at 11-13.  CTP cross-examined Mr. Brian Leung, and Respondent declined to question the witness on redirect examination.  See Tr. at 13-15.  During the hearing, CTP declined to cross-examine Mr. Chu Nam Leung as it previously requested in the prehearing conference call.  See Tr. at 16.

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The parties made the following objections during the telephone hearing:

• CTP's objection that Inspector Carry already answered Respondent's question.  Tr. at 8-9.  I overruled the objection.  However, I noted that Respondent asked a compound question, and directed Respondent to restate the questions individually.  Respondent rephrased his compound question into separate questions.
• CTP's objection that Respondent's question called for speculation.  Tr. at 10.  I sustained this objection.
• CTP's objection to Respondent's mention of a video that was not received as evidence.  Tr. at 10-11.  I sustained this objection.

On January 7, 2020, I informed the parties that the CRD had received the transcript of the hearing and informed them that they could file any proposed corrections to the transcript on or before January 31, 2020.  Dkt. Entry No. 32.  I also set the deadline for the parties' simultaneous post-hearing brief submissions as February 6, 2020.  Id. Finally, I set the deadline for the parties' simultaneous post-hearing responsive briefs as February 21, 2020.  Id.

Neither party filed proposed corrections to the transcript.  However, on February 12, 2020, I issued a Notice of Transcript Corrections to ensure an accurate and complete administrative record.  Dkt. Entry No. 33.  Neither party filed post-hearing briefs by the February 6, 2020, deadline.  On February 21, 2020, Respondent filed a letter, which I consider to be an untimely post-hearing brief.  Dkt. Entry No. 34 (Respondent's Post-Hearing Brief).  Neither party filed a post-hearing responsive brief.  This case is now ripe for a decision.

II.  Issues

The issues in this case are:

1. Whether Respondent, El Faro Supermarket, sold cigarettes to a minor and failed to verify that the cigarette purchaser was of sufficient age on October 3, 2018, in violation of 21 C.F.R. § 1140.14(a)(1) and 21 C.F.R. § 1140.14(a)(2)(i)1 ; and

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2. If so, whether the CMP of $11,182 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 Supreme Court of the United States 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.  Concrete Pipe and Prods. of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993) (citing In re Winship, 397 U.S. 358, 371-72 (1970) (Harlan, J., concurring)).

B. Violations

CTP seeks a CMP 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 CMPs 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 or 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 cigarette or 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).

All violations observed during an 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 six violations of the Act and its implementing regulation over a 48-month period.  Complaint ¶ 1.  Specifically, CTP asserts that it initiated two previous CMP actions against Respondent.  Complaint ¶ 9 (citing FDA Dkt. Nos. FDA-2015-H-4919 and FDA-2017-H-1698).  The most recent CMP action concerned four violations of 21 C.F.R. pt. 1140 within a 24-month period.  Id.

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Specifically, CTP alleged violations for selling tobacco products to minors on March 19, 2015, September 23, 2015, and October 15, 2016, and additional violations for failing to verify the age of purchasers with photographic identification on March 19, 2015, and October 15, 2016.  Complaint ¶ 9.  The prior CMP action concluded when Respondent admitted all of the allegations in the Complaint and was ordered to pay the penalty after a hearing.  Complaint ¶ 10 (citing CRD Dkt. No. T-17-2998, FDA Dkt. No. FDA-2017-H-1698, and CRD Decision No. TB2752).  CTP also asserts that, during a subsequent inspection, Respondent sold cigarettes to a minor and failed to verify the age of the purchaser with photographic identification on October 3, 2018, at approximately 7:29 PM.  Complaint ¶ 7.

In its Answer, Respondent denied the violations alleged in the Complaint and offered two defenses.  Answer ¶¶ 1-3.  Respondent's first contention is that there is no proof of purchase.  See Answer ¶ 2.  Respondent's second contention is that there was no witness to the transaction.  Id.  Additionally, Respondent argues that there were no single cigarette transaction during the time of the inspection.  See R. Ex. 2 ¶ 4; R. Ex. 3 ¶ 4; see also Informal Brief of Respondent ¶ 4; Respondent's Post-Hearing Brief at 1-2.  Specifically,Respondent argues that there were only two cigarette transactions during the time of the inspection and that both of those transactions contained more than one item, which contradicts Inspector Carry's narrative report.  Respondent's Post-Hearing Brief at 1-2; Tr. at 10.  Finally, Respondent contends that video surveillance footage shows the minor exiting the store without any other items in his/her hand.  Informal Brief of Respondent ¶ 4; Respondent's Post-Hearing Brief at 1-2.  Therefore, Respondent contends that it did not directly sell tobacco to a minor or fail to verify the purchaser's age.  Informal Brief of Respondent ¶¶ 5, 6; Respondent's Post-Hearing Brief at 2.

As detailed below, I find, based on the applicable law and evidence of record, that it is more probable than not that Respondent sold the alleged tobacco product to a minor and failed to verify the minor's identification on October 3, 2018, in violation of 21 C.F.R. § 1140.14(a)(1) and § 1140.14(a)(2)(i).  Consequently, Respondent is liable for committing six violations within a 48-month period.

1. Respondent's Previous Violations

CTP filed two previous CMP actions against Respondent in 2016 and 2017.  CTP Ex. 1 (January 2016 Complaint); CTP Ex. 3 (March 2017 Complaint).  The first CMP action sought a $250 CMP for two violations of the part 1140 regulations within a 12-month period and concluded when Respondent acknowledged that the two violations in the Complaint occurred, waived its right to contest the violations in future enforcement actions, and paid the agreed upon CMP.  CTP Ex. 1 ¶ 1; CTP Ex. 2 (Acknowledgment Form).  Specifically, Respondent admitted to selling cigarettes to a minor and failing to verify the age of the purchaser with photographic identification on March 19, 2015, and selling cigarettes to a minor on September 23, 2015.  CTP Ex. 1 ¶¶ 9-10.  The second

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CMP action sought a $2,200 CMP for four violations of the part 1140 regulations within a 24-month period.  CTP Ex. 3 ¶ 1.  After a hearing, the second CMP action concluded with an initial decision issued on May 24, 2018, finding Respondent liable for the four alleged violations and imposing the requested CMP of $2,200.  CTP Ex. 4, at 6.  In addition to the two prior violations on March 19, 2015, and September 23, 2015, Respondent was found liable for selling cigarettes to a minor and failing to verify the age of the purchaser on October 15, 2016.  CTP Ex. 3 ¶ 8; CTP Ex. 4, at 4.  After the initial decision became final, Respondent acknowledged that the violations in the Complaint occurred, waived its right to contest the violations in future enforcement actions, and paid the full CMP amount.  CTP Ex. 16; see also Informal Brief of Complainant at 3.  Respondent has not contested these prior violations, and they are administratively final.  See Answer ¶ 1; see also 21 C.F.R. § 17.15(b) (stating that a "settlement agreement shall be filed in the docket and shall constitute complete or partial resolution of the administrative case as so designated by the settlement agreement"); 21 C.F.R. § 17.45(d) (providing that "[u]nless the initial decision . . . is timely appealed, the initial decision . . . shall be final and binding on the parties 30 days after it is issued by the presiding officer").

2. Evidence and Legal Arguments Regarding the Alleged Current Violations

With respect to the alleged violation on October 3, 2018, I find the testimony of Inspector Carry to be credible and persuasive that Respondent sold the alleged tobacco product to a minor and failed to verify Minor A's date of birth before the sale.  At the time of the respective inspection, Inspector Carry was an FDA-commissioned officer with the state of Florida.  CTP Ex. 6 ¶ 3.  Inspector Carry's duties included determining whether retailers were compliant with the age and photo identification requirements relating to the sale of tobacco products.  Id. ¶ 4.  The inspections entailed accompanying undercover minors who attempt to purchase tobacco products from retail establishments such as the one operated by Respondent.  Id. ¶¶ 3-5.

Inspector Carry testified that she conducted the inspection at Respondent's location, 4338 Northwest 7th Street, Miami, Florida 33126.  CTP Ex. 6 ¶ 8; see also CTP Ex. 7 (Narrative Report at 1); CTP Ex. 8 (TIMS Inspection Details Report at 1); CTP Ex. 12 (Compliance Check Inspection Notice at 1).  Specifically, she conducted a compliance check inspection with Minor A at approximately 7:29 PM on October 3, 2018.  Id.  Before the inspection, she confirmed that the minor did not have any tobacco products in his/her possession and that the minor possessed an accurate photographic identification of his/her date of birth.  CTP Ex. 6 ¶ 8; see also CTP Exs. 7-9.

Inspector Carry testified that she parked her car near El Faro Supermarket and the minor entered the store while she remained inside the vehicle.  CTP Ex. 6 ¶ 9.  Inspector Carry explained that she watched the minor enter El Faro Supermarket and return to the vehicle

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a few minutes later with a package of Newport Box cigarettes.  Id. ¶¶ 9-10.  After the minor returned to the car, Inspector Carry retrieved the cigarettes from Minor A.  Id. ¶ 10. Minor A did not have a receipt because he/she did not request it and one was not provided.  Id. According to Inspector Carry, Minor A informed her that he/she was not asked for identification and he/she did not provide it.  Id. Inspector Carry photographed the cigarettes package and processed the evidence in accordance with standard procedures at the time of the inspection, which entailed taking photographs and completing several contemporaneous reports.  CTP Ex. 6 ¶¶ 10-12.  These contemporaneous photographs and reports were admitted into evidence and corroborate Inspector Carry's testimony.  CTP Exs. 7-11.

When cross-examined at the hearing, Inspector Carry's testimony was consistent with her declaration and the contemporaneous evidence of record.  At the hearing, Respondent questioned Inspector Carry concerning a proof of purchase for the cigarettes.  Tr. at 8.  Inspector Carry testified that the minor did not provide a proof of purchase to her.  Id.  Additionally, Respondent questioned Inspector Carry regarding whether the minor purchased cigarettes from an employee of El Faro Supermarket.  Tr. at 9.  Inspector Carry testified that the minor made the purchase from El Faro Supermarket.  Id.  Respondent asked Inspector Carry if the minor purchased more than the cigarettes.  Id.  Inspector Carry denied that the minor purchased more than the cigarettes.  See Tr. at 10.  Finally, Respondent questioned Inspector Carry on the appearance of the employee and if there was a witness to the transaction.  Id. at 11.  Inspector Carry testified that she did not enter the store, and there was no witness to the transaction.  Id.  On redirect examination, Inspector Carry testified that the minor entered the store and returned to the vehicle a few minutes later with a pack of cigarettes.  Tr. at 12.  Inspector Carry further testified that the minor did not purchase other items.  Id. at 12-13.

Respondent contends that it did not sell cigarettes to a minor or fail to verify the purchaser's age with photographic identification on October 3, 2018.  In support, Respondent submitted an excerpt of cash register tape from October 3, 2018, and the direct testimonies of Brian Leung, El Faro Supermarket's Store Manager, and Chu Leung, El Faro Supermarket's President.  R. Exs. 1-3.  Brian and Chu Leung both testified that they reviewed the transaction log from October 3, 2018, from 7:25 PM to 7:33 PM.  R. Ex. 2 ¶  3; R. Ex. 3 ¶ 3; see also R. Ex. 1.  According to their testimony, Newport cigarettes had been purchased during that time period, but not in a single item transaction.  Id.  The only transaction that had Newport cigarettes also included three other items.  Id. They also testified that they reviewed surveillance footage from the same time period and concluded that the individual who left the store did not carry any other items with him/her.  Id.  Respondent contends that this evidence establishes that the alleged undercover buy to Minor A did not occur at its establishment.  Informal Brief of Respondent ¶¶ 5, 6.  Respondent argues that the Narrative Report does not state that the minor bought any other items besides the cigarettes.  Id. ¶ 4.  Additionally, the Narrative Report does not provide proof of purchase or any witness to the alleged sale.  Id.

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At the hearing, CTP questioned Brian Leung if there was register tape available after 7:33 PM on October 3, 2018.  Tr. at 13.  Mr. Leung testified that register tape was available after 7:33 PM, but it was not provided as evidence because the minor had left the store by 7:31 PM or 7:32 PM.  Id. at 13-14.  Mr. Leung testified that he provided register tape for five minutes before the transaction and five minutes after.  Id. at 14.  CTP questioned Mr. Leung on why video evidence was not submitted.  Tr.  Mr. Leung testified that he has an older system and does not know how to download it.  Id.  Finally, CTP questioned Mr. Leung if it were possible that the transaction occurred after 7:33 PM.  Tr. at 15.  Mr. Leung testified that by 7:33 PM, the minor was back in the car and the car had left the parking lot.  Id.

Although I find the testimonies of Brian and Chu Leung to be credible, I do not find them persuasive.  Mr. Leung contradicted his direct testimony on cross-examination at the hearing.  He testified that he provided the tape register excerpt for five minutes before and five minutes after the alleged sale to Minor A at 7:29 PM.  Tr. at 14.  However, his direct testimony and the register tape only provide transactions four minutes before and four minutes after the alleged transaction.  R. Ex. 2 ¶ 3; R. Ex. 1.  Although this may appear to be a minor discrepancy, it suggests that Mr. Leung's testimony is not reliable.  I also note that the Complaint and Inspector Carry's testimony state that the transaction occurred "at approximately 7:29 PM."  Complaint ¶ 7; CTP Ex. 6 ¶ 8.  Consequently, I do not consider Respondent's evidence, which it arbitrarily limited to four minutes before and after the alleged transaction, to rebut the testimony of Inspector Carry.  Although he acknowledged that Respondent had receipts beyond 7:33 PM and he relied on surveillance video to determine the time range of receipts to submit as evidence, Mr. Leung did not state whether there were other transactions involving Newport cigarettes outside of the 7:25 PM to 7:33 PM time period on October 3, 2018.  See Tr. at 14; Respondent's Post-Hearing Brief at 1.  Based on the allegations in the Complaint and Inspector Carry's testimony, it may have occurred outside of the limited time period for which Respondent provided evidence.

Moreover, other than each other's verbatim testimony, Respondent has submitted little evidence to corroborate testimonies of Brian and Chu Leung or to rebut the testimony of Inspector Carry.  Although Respondent submitted an excerpt of the cash register receipts from 7:25 PM to 7:33 PM, I accord that evidence little weight, as discussed above.  Likewise, I accord little weight to the testimonies of Brian and Chu Leung concerning their review of the establishment's surveillance video because that video was not submitted into evidence to substantiate their statements.  Although Respondent suggested during Inspector Carry's cross-examination that it does not employ a person that fits the description of the alleged employee who sold the cigarettes to Minor A, Respondent has not provided any direct testimony or other evidence to support that claim.  Tr. at 9.  Moreover, Respondent did not submit any testimony or other evidence to rebut Inspector Carry's testimony regarding Respondent's failure to verify the age of the purchaser.

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While Inspector Carry acknowledged that she did not witness the sale and the minor did not provide a receipt, her testimony and other circumstantial evidence establish that Respondent sold cigarettes to a minor and failed to check the minor's identification.  Specifically, Inspector testified that before the inspection, she confirmed that the minor did not have any tobacco products in his/her possession and that the minor possessed an accurate photographic identification of his/her date of birth.  CTP Ex. 6 ¶ 8; see also CTP Exs. 7-9.  Inspector Carry watched the minor enter Respondent's establishment, exit Respondent's establishment, and return to the vehicle with cigarettes.  CTP Ex. 6 ¶¶ 9-10.  Additionally, Respondent verified that its name and address are the same as alleged in the Complaint, which are the same name and address identified in Inspector Carry's testimony, the Narrative Report, and the Inspection Details Report.  Informal Brief of Respondent ¶ 2; CTP Ex. 6 ¶ 8; CTP Ex. 7, at 1; CTP Ex. 8, at 1.  I also note that that the same Inspection Number (18FL142415B) is identified in the Narrative Report, Inspection Details Report, Compliance Check Inspection Notice, and photographs of the cigarettes sold to the minor.  CTP Ex. 7, at 1; CTP Ex. 8, at 1; CTP Ex. 12, at 1; CTP Exs. 10-11.  The Compliance Check Inspection Notice also includes a photograph of an establishment bearing Respondent's name (El Faro Supermarket).  CTP Ex. 12, at 1.

In short, Inspector Carry's testimony established that the minor did not have cigarettes in his/her possession before entering Respondent's store and had cigarettes when exiting the store and returning to the car.  Inspector Carry's testimony is corroborated by several, contemporaneous reports, the Compliance Check Inspection Notice, and photographic evidence.  Thus, it is reasonable to infer that the minor purchased the cigarettes at Respondent's store.  It is also reasonable to infer that the cashier failed to check the minor's identification before the sale because Inspector Carry testified that the minor had his/her photographic identification when entering the store, but was able to purchase cigarettes despite being underage.  Certainly, testimony that Inspector Carry directly witnessed the sale and a copy of the receipt showing the cigarettes purchased and the date, time, and location of the sale would provide further support of the violations at issue, but the applicable regulations neither require that an inspector directly witness the sale to an undercover minor nor require a proof of purchase in the form of a receipt.  Thus, I find Respondent's arguments to be without merit.

However, I find that the evidence of record establishes by a preponderance of evidence that Respondent sold tobacco products to a minor and failed to verify the minor's identification prior to the sale on October 3, 2018.  CTP Exs. 6-8, 11-12.  In the absence of video evidence and sales receipts for more than 8 minutes, Respondent has failed to present sufficient evidence to rebut Inspector Carry's testimony that the minor entered Respondent's store without tobacco products and returned minutes later with only a pack of cigarettes.  The record does not contain any corroborating evidence to suggest that the minor purchased multiple items as alleged by Respondent and disputed by Inspector Carry.  Indeed, Respondent asserts repeatedly that the minor left the store without any

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other items in hand, which also supports Inspector Carry's testimony that the minor only purchased cigarettes.  R. Ex. 2 ¶ 4; R. Ex. 3 ¶ 4; Informal Brief of Respondent ¶ 4; Respondent's Post-Hearing Brief at 2.  Finally, Respondent did not present any evidence challenging Inspector Carry's testimony that it failed to verify the age of the minor with photographic identification.

In summary, the evidence of record establishes to my satisfaction that the violations alleged in the Complaint in fact occurred on the date in question.  The unrebutted testimony of Inspector Carry and corroborating exhibits are sufficient to establish that it is more probable than not that Respondent unlawfully sold cigarettes to a minor and failed to verify that a 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).  Therefore, I conclude that the facts as outlined above establish that Respondent El Faro Supermarket is liable under the Act for six violations within a 48-month period.

C. Civil Money Penalty

I have determined that Respondent committed six violations of the Act and its implementing regulations within a 48-month period.  Pursuant to 21 U.S.C. § 333(f)(9), Respondent El Faro Supermarket is liable for a CMP not to exceed the amounts listed in FDA's CMP regulations at 21 C.F.R. § 17.2; see also 45 C.F.R. § 102.3.  When determining the appropriate amount of a CMP, 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, $11,182, against Respondent.  Complaint ¶ 1.  In its Answer, Respondent asserts that the CMP sought by CTP is too high because the "allegations in the Complaint are untrue."  However, Respondent did not submit any testimony or documentary evidence to mitigate the amount of the proposed CMP.  For the reasons explained below, I find that a CMP of $11,182 is appropriate.

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

Respondent committed six violations of selling regulated tobacco products to minors and failing to verify, by means of photo identification containing a date of birth, that the purchasers was 18 years of age or older.  As CTP noted, the most recent violations on October 3, 2018, occurred despite two prior CMP actions resulting in progressively higher CMPs, warnings from FDA that additional violations would result in more serious consequences, and after FDA identified resources designed to help retailers comply with the tobacco regulations.  Informal Brief of Complainant at 12; see also CTP Exs. 1-4, 14, 16.  Although Respondent presented several defenses to CTP's allegations, I do not find them persuasive or supported by the evidence of record, as explained above.  Respondent did not submit any other evidence for mitigation purposes.  The repeated inability of Respondent to comply with federal tobacco regulations is serious in nature and the CMP amount should be set accordingly.

2. Respondent's Ability to Pay

Although Respondent suggested that he is a small business owner, he has not presented any evidence demonstrating that he does not have the ability to pay the $11,182 CMP sought by CTP.  See Dkt. Entry No. 24, at 1-2.

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

Likewise, Respondent has not presented any evidence to show that an $11,182 CMP will compromise business sales or that the $11,182 CMP sought by CTP would have a negative effect on its ability to continue to do business.

4. History of Prior Violations

The current action is the third CMP action brought against Respondent for violations of the Act and its implementing regulations.  As noted above, Respondent has violated the prohibition against selling cigarettes or smokeless 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 purchasers were 18 years of age or older at least six times within a 48-month period.  21 C.F.R. § 1140.14(a)(1) and 21 C.F.R. § 1140.14(a)(2)(i).  Respondent's history of prior violations warrants a larger CMP.

5. Degree of Culpability

Based on my finding that Respondent committed the violations as alleged in the Complaint, I hold it fully culpable for six violations of the Act and its implementing regulations.  I do not find Respondent's arguments that there was no proof of purchase, there was no witness to the transaction, and that there were no single cigarette purchases

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during the time of the inspection legally sufficient 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 it 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 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, at 9 (Rev. Dec. 2016), https://www.fda.gov/media/80888/download.  In the interim, FDA has issued a non-binding guidance document containing various recommendations for retailer training programs.  Guidance for Industry, Tobacco Retailer Trainer Programs, at 1-2, 10-18 (Rev. Aug. 2018), https://www.fda.gov/media/79013/download.

7. State Penalties

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

8. Other Matters as Justice May Require

The Act gives me discretion to consider any other evidence or arguments to mitigate the amount of the CMP.  21 U.S.C. § 333(f)(5)(B).  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).  As explained above, Respondent presented several defenses to CTP's allegations, but I did not find them persuasive or supported by the evidence of record.  Further, Respondent did not present any evidence of corrective measures taken.

In summary, Respondent has violated the regulations on four separate occasions, constituting six violations within a 48-month period, 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 $11,182 to be appropriate under 21 U.S.C. §§ 333(f)(5)(B) and 333(f)(9).

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Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $11,182 against Respondent, Leung's, Inc. d/b/a El Faro Supermarket, for six violations of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140, within a 48-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. Effective August 8, 2016, the regulations were recodified without any substantive changes.  81 Fed. Reg. 28,973, 28,974, 29,103 (May 10, 2016), https://federalregister.gov/a/2016-10685.
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