Madison-Food-Mart-Inc. d/b/a Madison Food Mart, DAB TB5267 (2020)

INITIAL DECISION

Found:

1) Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(b)(1) and 1140.14(b)(2)(i) as charged in the complaint; and
2) Respondent committed at least three (3) violations in a 24-month period as set forth hereinabove.
3) Respondent is hereby assessed a civil penalty in the amount of $570.

Glossary:

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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 17.2

II.  PROCEDURAL BACKGROUND

The Center for Tobacco Products (CTP/Complainant) filed a complaint on February 11, 2020, against Madison-Food-Mart-Inc. d/b/a Madison Food Mart (Respondent or Madison Food Mart), at 902 East Johnson Street, Madison, Wisconsin 53703, alleging that FDA documented three (3) violations within a 24-month period.  On February 19, 2020, Respondent's timely filed answer was received in the Civil Remedies Division.

On February 25, 2020, I issued a Pre-Hearing Order (PHO) setting a schedule for filings and procedures including a May 26, 2020 deadline for the parties to file their pre-hearing exchange.  CTP timely filed its pre-hearing exchange, containing a brief (CTP

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Pre-Hearing Br.), a list of proposed witnesses and exhibits, and 20 proposed exhibits (CTP Exhibits (Exs.) 1-20), which included the written direct testimony of two proposed witnesses, CTP's Senior Regulatory Counsel Laurie Sternberg (CTP Ex. 3) and Inspector Margaret McCullough (CTP Ex. 5).  Respondent did not submit a pre-hearing exchange which complied with the directives set forth in my February 25, 2020 PHO.  See PHO ¶¶ 4-7.  However, Respondent submitted a number of images and documents throughout the course of this proceeding, including several that were submitted after the pre-hearing exchange deadline.  See Docket Entry Nos. 28-28b, 32-51.  Respondent gave notice of its intention to present witnesses William Droser, Jaylin Marshall, and Thom Duncan but did not submit any written direct testimony.  Docket Entry Nos. 30 and 43.

On June 11, 2020, I issued an order that scheduled this matter for a hearing on August 25, 2020.  I also directed the parties to file any motions to exclude or objections to the other party's proposed exhibits at least 15 days before the hearing date.  Docket Entry No. 29 at 1.

On August 7, 2020, CTP filed a Motion to Exclude Evidence Not Exchanged in Accordance with 21 C.F.R. §§ 17.25 and 17.37(b) (Motion to Exclude Evidence).  Docket Entry No. 52.  The motion requested that I exclude evidence that was not exchanged in accordance with the PHO and 21 C.F.R. §§ 17.25(a) and 17.37(b).  CTP argues all of Respondent's submissions filed after the May 26, 2020 exchange deadline are untimely and must be excluded.  Id. at 1, 3.  Additionally, Respondent's notice to present witnesses does not comply with 21 C.F.R. § 17.37(b) because it does not provide a summary of the testimony, a written declaration, any prior witness statements, or the

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last known address of the witnesses.  Id. at 2.  Therefore, CTP argues that any direct testimony of any witnesses that Respondent may wish to provide at the hearing must also be excluded.  Id.  On August 11, 2020, I issued an order giving Respondent until August 20, 2020 to file a response to CTP's Motion to Exclude.  Docket Entry No. 54.  On August 11, 2020, Respondent filed a response.  Docket Entry No. 55.  Subsequently, on August 20, 2020, CTP submitted a reply to Respondent's response.  Docket Entry No. 56.

I conducted a hearing on August 25, 2020.  I admitted all exhibits submitted by both parties subject to CTP's pending Motion to Exclude Evidence.  Transcript (Tr.) at 5.  Respondent was given an opportunity to cross-examine both of CTP's witnesses but chose to only cross-examine Inspector McCullough.  Tr. at 3, 6-12.  Respondent presented one witness, Thomas Duncan, who offered direct testimony of Respondent's character.  Respondent did not submit written direct testimony from Mr. Duncan prior to hearing, however, I allowed Mr. Duncan to testify, and informed the parties I will rule on the admissibility of his testimony when I issue my initial decision of this case.  Tr. at 4-5, 17-19.  At the conclusion of the hearing, I informed the parties that I will allow them to file post-hearing briefs and make final arguments but I will not allow additional evidence.  Tr. at 22.

On September 1, 2020, Respondent submitted the written direct testimony of William Droser.  Docket Entry Nos. 60, 62.  I will not consider Mr. Droser's testimony as it is additional evidence submitted after the hearing.  On September 18, 2020, I issued an Order informing the parties that the Court received the transcript of the hearing, and set a

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deadline for the parties to submit post-hearing briefs.  Both parties timely submitted their post-hearing briefs.

III.  PENDING MOTION

Pursuant to 21 C.F.R. § 17.37(b), direct testimony must be submitted in the form of a written declaration submitted under penalty of perjury, and must be provided to all other parties along with the last known address of the witness.  Any prior written statements of witnesses proposed to testify at the hearing shall be exchanged at least 30 days before the hearing.  21 C.F.R. § 17.25(a)

I grant CTP's motion to exclude Mr. Duncan's testimony as it was not presented in accordance with the regulations.  Additionally, even if Respondent followed the regulations, Mr. Duncan's testimony is not relevant and must be excluded.  21 C.F.R. § 17.39(c).  Mr. Duncan testified that he was not present during the transactions at issue in this case.  Tr. at 17-18.  He did not provide any testimony that is of consequence in determining liability.  He only offered testimony about Respondent's character, which is not an issue in this case.

With regard to Respondent's submissions filed after the exchange deadline, I deny CTP's Motion to Exclude Evidence.  With its Answer, Respondent included a USB flash drive that it claims contains video files that will absolve it from liability.  However, USB flash drive submitted by Respondent arrived damaged to the Civil Remedies Division, and the files on the drive were inaccessible.  On March 4, 2020, a letter by my direction was issued, which returned the USB flash drive and instructed Respondent to re-file its

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submission electronically.  Docket Entry No. 8.  Respondent did not resubmit the video files as it claims the damaged USB flash drive was its only copy.  Docket Entry No. 12.

The Court acknowledges many of Respondent's submissions were untimely.  However, given that Respondent was unable to submit a functional USB drive, I will waive the exchange deadline and consider all of Respondent's submissions that were filed prior to the hearing as timely.  21 C.F.R. § 17.19(b)(17).  CTP will not be prejudiced by these submissions as it had ample time to review these submissions prior to the hearing and formulate an argument against them.  I find the ends of justice will be served if Respondent is given a fair opportunity to defend itself against CTP's allegations.

The matter is now ready for decision.  21 C.F.R. § 17.45(c).

IV.  BURDEN OF PROOF

CTP as the petitioning party has the burden of proof.  21 C.F.R. § 17.33(b).

V.  LAW

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

VI.  ISSUES

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

If so, is a civil money penalty in the amount of $570 appropriate?

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VII.  ALLEGATIONS

A. Complainant's recitation of facts

CTP alleges that Respondent owns an establishment, doing business under the name Madison Food Mart, located at 902 East Johnson Street, Madison, Wisconsin 53703.  CTP further alleges that Respondent's establishment receives tobacco products in interstate commerce and holds them for sale after shipment in interstate commerce.

On August 15, 2019, CTP issued a Warning Letter to Respondent, alleging that Respondent committed the following violations:

1. Selling tobacco products to a minor, in violation of 21 C.F.R. § 1140.14(b)(1).  Specifically, a person younger than 18 years of age was able to purchase a JUUL Mint e-liquid product on July 17, 2019, at approximately 12:52 PM; and
2. Failing to verify the age of a person purchasing tobacco products by means of photographic identification containing the bearer's date of birth, as required by 21 C.F.R. § 1140.14(b)(2)(i).  Specifically, the minor's identification was not verified before the sale, as detailed above, on July 17, 2019, at approximately 12:52 PM.

Further, during an inspection of Madison Food Mart conducted on December 4, 2019, an FDA-commissioned inspector documented the following violations:

1. Selling tobacco products to a minor, in violation of 21 C.F.R. § 1140.14(b)(1).  Specifically, a person younger than 18 years of age was able to purchase a JUUL Classic Tobacco e-liquid product on December 4, 2019, at approximately 6:28 PM; and

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2. Failing to verify the age of a person purchasing tobacco products by means of photographic identification containing the bearer's date of birth, as required by 21 C.F.R. § 1140.14(b)(2)(i).  Specifically, the minor's identification was not verified before the sale, as detailed above, on December 4, 2019, at approximately 6:28 PM.

B.  Respondent's recitation of facts

Respondent denies the allegations.  Specifically, Respondent disputes the accuracy of the clerk's appearance described in the inspector's report, the accuracy of the location inspected, and questions CTP's inspection procedure.  Answer at 1.

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 that Act 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.

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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 previously passed in 1996.  21 U.S.C. § 387 a-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 civil money penalty 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

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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 individually in computing any civil money penalty 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, 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 civil money penalty, 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.  HEARING

I conducted a hearing on August 25, 2020, by telephone.

Wendy Vicente, Esquire, appeared on behalf of Complainant.

Abdullah Akhun appeared pro se on behalf of Respondent.

Laurie Sternberg provided written direct testimony (CTP Ex. 3) on behalf of CTP.

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Respondent waived its right to cross-examine Ms. Sternberg.  Tr. at 3.  Inspector Margaret McCullough also provided written direct testimony (CTP Ex. 5) on behalf of CTP, and was cross-examined by Respondent at the hearing.  Tr. at 6-12.

X. SUMMARY OF TESTIMONY AND EVIDENCE

A. Complainant's case

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.  She testified that the JUUL ENDS/E-liquid products purchased during the July 17, 2019 and December 4, 2019 inspections at Madison Food Mart are manufactured by JUUL, Inc.  Id. at 2-3.  She further testified that the products are manufactured, prepared, compounded or processed for commercial distribution in JUUL Labs, Inc.'s facilities in California, and that JUUL Labs, Inc. does not have any registered tobacco production facilities in the state of Wisconsin.  Id. at 3; CTP Ex. 4.

i. July 17, 2019 Inspection

Inspector McCullough testified that she conducted an inspection of Respondent's establishment located at 902 East Johnson Street, Madison, Wisconsin 53703.  CTP Ex. 5 at 2.  The inspection involved a UB (undercover buy) compliance check inspection on July 17, 2019, at approximately 12:52 PM.  Id.  At the time of the inspection, Inspector McCullough was an FDA-commissioned officer in the state of Wisconsin where her duties included performing UB inspections.  Id. at 1-2.  UB inspections are primarily conducted to determine whether retailers are compliant with the age and photo identification requirements relating to the sale of tobacco products.  Id. at 2.  These

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inspections entail accompanying undercover minors who attempt to purchase tobacco products from retail establishments such as the one operated by Respondent.  Id.  Before the inspection, Inspector McCullough confirmed that Minor A possessed his or her photographic identification and was under the age of 18.  Id.  She also confirmed that Minor A did not have any tobacco products in his or her possession.  Id. at 2-3.

Inspector McCullough testified that she parked her car near Respondent's establishment where she had a clear, unobstructed view of the establishment front door.  Id. at 3.Inspector McCullough observed Minor A exit the vehicle and enter Respondent's establishment.  Id.  Inspector McCullough did not accompany Minor A into the establishment because she felt that her presence would compromise the undercover nature of the inspection.  Id.  Shortly thereafter, the inspector observed Minor A leave Respondent's establishment and return directly to her vehicle.  Id.  Upon entering the vehicle, Minor A immediately handed the inspector the e-liquid product.  Inspector McCullough observed "the package of e-liquid was JUUL ENDS/E-liquid."  Inspector McCullough further testified that Minor A reported to her that Minor A was able to purchase the ENDS/E-liquid product from an employee at the establishment and, prior to the purchase, Minor A did not present identification to the employee.  Inspector McCullough testified that Minor A also reported that the employee did not provide Minor A a receipt after the purchase, and that the employee who sold the e-liquid product to Minor A was an adult male "with black/dark brown hair, a mustache, and a beard."  Id.

Inspector McCullough then labeled the ENDS/E-liquid product as evidence and photographed all of the panels of the package, and processed the evidence according to

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procedure, and created a narrative report shortly thereafter.  Id. at 3. Beyond Inspector McCullough's declaration, CTP also provided evidence corroborating her testimony, including: photographs of the product Respondent unlawfully sold to Minor A (CTP Exs. 9-10); a copy of the Compliance Check Inspection Notice (CTP Ex. 11); Inspector McCullough's Narrative Report of the July 17, 2019 undercover inspection (CTP Ex. 7); the Tobacco Inspection Management System (TIMS) Form (CTP Ex. 8); and a redacted copy of the Minor A's identification establishing his/her age at the time of the sale (CTP Ex. 6).

ii. December 4, 2019 Inspection

Inspector McCullough testified that she conducted a follow-up UB inspection of Respondent's establishment on December 4, 2019, at approximately 6:28 PM.  CTP Ex. 5 at 4.

Before this inspection, Inspector McCullough again confirmed that Minor A possessed his or her photographic identification, was under the age of 18, and did not have any tobacco products in his or her possession.  Id.

Inspector McCullough testified that she parked her car near Respondent's establishment where she had a clear, unobstructed view of the establishment front door.  Id.  Inspector McCullough observed Minor A exit the vehicle and enter Respondent's establishment.  Id.  Inspector McCullough did not accompany Minor A into the establishment because her identity is known to the retailer/establishment.  Id.  The inspector testified that minutes later, she observed Minor A leave Respondent's establishment and return directly to her vehicle.  Id.  Upon entering the vehicle, Minor A

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immediately handed the inspector the e-liquid product.  Inspector McCullough observed "the package of e-liquid was JUUL ENDS/E-liquid."  Id. at 4-5.  Inspector McCullough further testified that Minor A reported to her that Minor A was able to purchase the ENDS/E-liquid product from an employee at the establishment, and prior to the purchase, Minor A did not present identification to the employee.  Id. at 5.  Minor A also reported to Inspector McCullough that the employee did not provide Minor A a receipt after the purchase, and that the employee who sold the e-liquid product to Minor A was an adult male with black/dark brown hair, a mustache, and a beard.  Id.

Inspector McCullough then labeled the ENDS/E-liquid product as evidence and photographed all of the panels of the package, and processed the evidence according to procedure, and created a narrative report shortly thereafter.  Id.  CTP again provided evidence corroborating her testimony, including: photographs of Respondent's establishment and the product Respondent unlawfully sold to Minor A (CTP Exs. 15-16, 20); Inspector McCullough's Narrative Report of the December 4, 2019 undercover inspection (CTP Ex. 13); and the TIMS Form (CTP Ex. 14).

B. Respondent's case

Abdullah Akhun appeared on behalf Respondent.  Mr. Akhun states that he owns the business and was working during both inspections.  Docket Entry No. 22.

On March 4, 2020, Respondent submitted several photographs of Mr. Akhun.  Docket Entry Nos. 6-6e.  The photographs do not indicate when they were taken but they show Mr. Akhun without a beard.  See Docket Entry Nos. 6a-6d.  Respondent also submitted a petition that was signed by individuals in April 2020 that purportedly

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affirmed that Mr. Akhun did not have a beard in 2019 or 2020.  Docket Entry Nos. 19-20.  Respondent submitted several other images, including a photograph of the establishment's front door which shows the business address posted on and above the front door.  Docket Entry No. 10.

XI. ANALYSIS OF EVIDENCE AND TESTIMONY

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.  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.  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, and whether any affirmative defenses are meritorious.  21 C.F.R. § 17.45(b).

A. I find and conclude that CTP has shown by a preponderance of the evidence that the tobacco products sold during the July 17, 2019 and December 4, 2019 inspections were offered for sale after shipment in interstate commerce.

I find Inspector Ms. Sternberg's testimony to be credible and unbiased.  Her testimony is supported by documentary evidence establishing that the JUUL ENDS/E-liquid products traveled in interstate commerce before Respondent sold them to Minor A.  CTP Exs. 3-4.  I find Ms. Sternberg's testimony sufficient to satisfy CTP's burden of proving that these tobacco products travelled in interstate commerce, and are subject to the requirements set forth in the Act.

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B. I find and conclude that CTP has shown by a preponderance of the evidence that Respondent violated 21 C.F.R. § 1140.14(b)(1) when it impermissibly sold covered tobacco products to a minor on July 17, 2019 and December 4, 2019.

Inspector McCullough's testimony establishes that on July 17, 2019 and December 4, 2019, Respondent sold tobacco products to a minor.  Prior to both inspections, Inspector McCullough confirmed that Minor A was under the age of 18.  CTP Ex. 5 at 2, 4.  Inspector McCullough observed Minor A turn out his/her pockets, and confirmed that he/she did not possess any tobacco products in his or her possession before entering Respondent's establishment.  Id.  During both inspections, Inspector McCullough observed Minor A enter Respondent's establishment and return with the JUUL ENDS/E-liquid products.  Id. at 3, 4-5.  Minor A reported to Inspector McCullough that he/she was able to purchase the JUUL ENDS/E-liquid products from an employee at Respondent's establishment.  Id.

I find Inspector McCullough's testimony to be credible, unbiased, and supported by physical evidence.  CTP submitted a redacted copy of Minor A's state photo identification, listing the date of birth as May 17, 2002, or 17 years old during the inspections.  CTP Ex. 6.  CTP also submitted copies of the photographs that Inspector McCullough took of the JUUL ENDS/E-liquid products.  CTP Exs. 9-10, 15-16.  I find Inspector McCullough's testimony, in conjunction with the corroborating documentary evidence (e.g., the contemporaneous reports) and physical evidence (e.g., photographs), is sufficient to satisfy CTP's burden of proving that Respondent violated 21 C.F.R.

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§ 1140.14(b)(1) on July 17, 2019 and December 4, 2019 by a preponderance of the evidence.

C. I find and conclude that CTP has shown by a preponderance of the evidence that Respondent violated 21 C.F.R. § 1140.14(b)(2)(i) when it failed to verify, by means of photographic identification containing the purchaser's date of birth, that no covered tobacco product purchaser is younger than 18 years of age, on July 17, 2019 and December 4, 2019.

Prior to the July 17, 2019 and December 4, 2019 inspections, Inspector McCullough confirmed that Minor A possessed his/her true and accurate photographic identification showing his/her actual date of birth.  CTP Ex. 5 at 2, 4.  During the inspections, Inspector McCullough did not directly observe whether Respondent's employee asked to see Minor A's identification.  However, Inspector McCullough testified:

. . . Minor A reported to me that during the inspection, Minor A was able to purchase a package of ENDS/E-liquid from an employee at the establishment.  Minor A also reported to me that prior to the purchase, Minor A did not present any identification to the employee, and the employee did not provide Minor A a receipt after the purchase . . . .

CTP Ex. 5 at 3, 5.

I find Inspector McCullough's testimony, in conjunction with the corroborating documentary evidence (e.g., the contemporaneous reports) and physical evidence (e.g., photographs), is sufficient to satisfy CTP's burden of proving that Respondent violated

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21 C.F.R. § 1140.14(b)(2)(i) on July 17, 2019 and December 4, 2019 by a preponderance of the evidence.

D. Respondent offered no affirmative proof to rebut the evidence of noncompliance presented by CTP.

Pursuant to 21 C.F.R. § 17.33(c), Respondent must prove any affirmative defenses by a preponderance of the evidence.  I find that Respondent has failed to rebut Inspector McCullough's testimony regarding the sale of the tobacco products at issue, or the failure to verify the purchaser's age.

Respondent asserts there are some inconsistencies with Inspector McCullough's testimony.  First, Respondent argues that the description of the clerk provided by Minor A is inaccurate.  Answer at 1.  Inspector McCullough testified that Minor A reported to her that the employee that sold him/her the tobacco products was an adult male with black/dark brown hair, a mustache, and a beard.  CTP Ex. 5 at 3, 5.  Respondent argues that this does not match his description as he does not have a beard or mustache.  Docket Entry Nos. 6-6e.

I am not persuaded by the photographs or petition Respondent submitted as they do not rebut Inspector McCullough's testimony.  Minor A's description of the sales clerk was based on the clerk's appearance on the date of both inspections, July 17, 2019 and December 4, 2019.  The photographs Respondent submitted are undated.  I presume they were taken on March 4, 2020, the day Respondent filed them.  These photographs do not establish what the clerk looked like during the dates of either inspections.  Nor does Respondent's signed "petition" present persuasive proof of Respondent's appearance in

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2019 and 2020.  If Respondent intended to rely on such documentation to support its position, at a minimum, Respondent could have submitted a signed affidavit from at least one of the petition signators for my review and consideration.

Second, Respondent attempts to argue that the inspector may have mistaken its establishment with a different retail establishment.  It bases this argument on the fact that Inspector McCullough's Narrative Report for the December 4, 2019 inspection indicates that the establishment had no posted address.  CTP Ex. 13 at 1.  Respondent presented a picture of its front door showing that its address is in fact posted.  Docket Entry No. 10.  However, Inspector McCullough later clarified she observed that the address was listed on the door, and took a picture of the front door.  CTP Ex. 5 at 4.  CTP submitted the picture as CTP Ex. 20.  After reviewing CTP Ex. 20 and the photograph Respondent submitted (Docket Entry No. 10), I find that both of these are photographs of Respondent's establishment, and that the July 17, 2019 and December 4, 2019 inspections were conducted at Respondent's establishment as stated by Inspector McCullough.

I do not find any of Respondent's arguments persuasive.  Respondent cannot get around the fact that a minor entered Respondent's establishment without tobacco products, and returned to the inspector in possession of an e-liquid product.  Based on the evidence, the most reasonable explanation for Minor A to emerge from Respondent's establishment with tobacco products is that he/she purchased them in the establishment.  Further, it is also reasonable to conclude that had Respondent's employee asked for Minor A's identification to verify his/her age, it would have been apparent that the minor

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was only 17 years old during the relevant period and, therefore not of sufficient age to purchase covered tobacco products.  Therefore, I conclude that Respondent has failed to rebut the evidence presented against it, and has not proved any affirmative defense by a preponderance of the evidence.

XII.  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 civil monetary penalty.  21 U.S.C. §§ 331, 333.

I find and conclude that the evidence presented supports a finding that on July 17, 2019, and December 4, 2019, Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(b)(1), in that persons younger than 18 years of age were able to purchase covered tobacco products.

I also find and conclude that the evidence presented supports a finding that on those same dates, Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(b)(2)(i), in that Respondent failed to verify, by means of photo identification containing a purchaser's date of birth, that no covered tobacco product purchasers are younger than 18 years of age.

The conduct set forth above on July 17, 2019, and December 4, 2019 counts as three (3) violations under FDA policy for purposes of computing the civil money penalty.  See Guidance for Industry at 13-14.  Accordingly, I find and conclude that Respondent is liable for three (3) violations of FDA policy within a 24-month period.

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XIII.  PENALTY

There being liability under the relevant statute, I must now determine the amount of penalty to impose.  Pursuant to 21 U.S.C. § 333(f)(9), Respondent is liable for a civil money penalty not to exceed the amounts listed in FDA's civil money penalty regulations at 21 C.F.R. § 17.2.  In its complaint, CTP seeks to impose the maximum penalty amount of $570 against Respondent for three (3) violations of the Act and its implementing regulations within a 24-month period.  Complaint ¶ 1.

When determining the amount of a civil money penalty, 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 Violations

I have found that Respondent specifically committed two (2) violations of selling tobacco products to minors and two (2) violations of failing to verify the photographic identification of a purchaser, totaling four (4) violations of the tobacco regulations.  However, Respondent is only being held liable for three (3) of those violations.  See Guidance for Industry at 13-14.  Respondent's repeated inability to comply with federal tobacco regulations is serious in nature and the civil money penalty amount should be set accordingly.

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B. Respondent's Ability to Pay and Effect on Ability to do Business

Respondent has not presented any evidence that it does not have the ability to pay the $570 civil money penalty sought by CTP.  Nor has Respondent presented any evidence that imposition of the penalty will effect its ability to conduct business.

C. History of Prior Violations

This is the first CMP action that CTP has brought against Respondent.

D. Degree of Culpability

Based on my finding that Respondent committed the three (3) violations in the complaint, I hold it fully culpable for three (3) violations of the Act and its implementing regulations.

E. Additional Mitigating Factors

Mitigation is an affirmative defense for which Respondent bears the burden of proof.  See 21 C.F.R. § 17.33(c).  I do not find any mitigating factors.

The purpose of the TCA to prevent unlawful sales of tobacco products to minors.  Tobacco is a highly addictive and dangerous product.  The reason that sales of tobacco products to minors is unlawful is that consumption of these products at an early age can lead to a lifetime of addiction, to illness, and ultimately to premature death.  Sales of tobacco products to minors are unlawful because younger individuals often lack the maturity and judgment to make informed decisions about whether to consume such inherently dangerous and addictive products.  Selling tobacco products to these individuals puts them at risk for all of the adverse consequences that addiction can cause.

I find and conclude there is no reason to consider mitigation of the penalty herein.

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F. Penalty

Based on the foregoing reasoning, I conclude a penalty amount of $570 is appropriate under 21 U.S.C. § 333(f)(5)(B) and 333(f)(9).

XIV.  CONCLUSION

Respondent committed three (3) violations in a 24‑month period as set forth in the complaint.  Respondent is liable for a civil money penalty of $570.  See 21 C.F.R. § 17.2.

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

1. I find Respondent has been served with process herein and is subject to this forum;
2. I find and conclude that the evidentiary facts, by a preponderance of the evidence standard, support a finding Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(b)(1) on July 17, 2019 and December 4, 2019, in that a person younger than 18 years of age was able to purchase covered tobacco products as set forth in the complaint;
3. I find and conclude that the evidentiary facts, by a preponderance of the evidence standard, support a finding Respondent violated 21 U.S.C. § 331, specifically 21 C.F.R. § 1140.14(b)(2)(i) on July 17, 2019 and December 4, 2019, in that Respondent failed to verify the age of a person purchasing covered tobacco products by means of photographic identification containing the bearer's date of birth as set forth in the complaint;
4. I find and conclude Respondent committed three (3) violations of the regulations within a 24-month period; and
5. I assess a monetary penalty in the amount of $570.

1. See 5 C.F.R. § 930.204.
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2. See also Butz v. Economou, 438 U.S. 478 at 513, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978); Marshall v. Jerrico, Inc., 446 U.S. 238 (1980); Federal Maritime Com'n v. South Carolina State Ports Authority, 535 U.S. 743, 744 (2002).
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