Randleman Trading, Inc. d/b/a Carolina Super Mart, DAB TB5281 (2021)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative complaint on Respondent, Randleman Trading, Inc. d/b/a Carolina Super Mart, at 2004 Randleman Road, C,1 Greensboro, North Carolina 27406, and by filing a copy of the complaint with the Food and Drug Administration’s (FDA) Division of Dockets Management.  CTP seeks to impose an $11,410, civil money penalty against Respondent for 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. part 1140, within a 48-month period. 

The complaint alleges that a previous civil money penalty action concluded after an Initial Decision and Default Judgment was entered against Respondent for at least four violations of the Act and its implementing regulations.  The complaint also alleges that

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Respondent subsequently sold a regulated tobacco product 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, thereby further violating the Act and its implementing regulations.

During the course of these administrative proceedings, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend its actions, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R. § 17.35(a).  Accordingly, pursuant to 21 C.F.R. § 17.35(c)(3), I strike Respondent’s Answer and issue this decision of default judgment.

I.   Procedural History

On January 27, 2020, CTP served the complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  On February 25, 2020, Respondent timely answered CTP’s complaint.  On March 4, 2020, I issued an Acknowledgment and Pre-Hearing Order (APHO) that set deadlines for filings and exchanges, including a schedule for discovery.  I directed that a party receiving a Request for Production of Documents must provide the requested documents within 30 days of the request.  APHO ¶ 12; see 21 C.F.R. § 17.23(a). 

On March 31, 2020, I stayed all deadlines in this matter due to circumstances associated with the COVID-19 pandemic.  On June 22, 2020, I lifted the stay and ordered that the parties file a Joint Status Report regarding the status of settlement negotiations.  CTP timely filed a Status Report indicating that it had been unable to make contact with Respondent, and intended to proceed to a hearing.  Respondent did not file a Status Report or otherwise respond to my June 22, 2020 Order. 

On July 28, 2020, I issued an Order modifying the deadlines initially established in the APHO, including the deadline for the parties to request documents from the opposing party.  On September 3, 2020, CTP filed a Motion to Compel Discovery.  In its motion, CTP asserted that it sent its Request for Production of Documents to Respondent, but that CTP had not received the requested documents from Respondent.  By Order of September 10, 2020, I directed Respondent to submit the documents, which CTP requested within 30 days and provided that, if Respondent failed to comply, CTP may renew its Motion to Compel.

On October 23, 2020, CTP filed a Renewed Motion to Compel Discovery, asserting that Respondent had not responded to CTP’s Request for Production of Documents.  By Order of October 30, 2020, I informed Respondent of its deadline to file a response to CTP’s Motion to Compel Discovery, and warned that if Respondent failed to respond, “I may grant CTP’s motion in its entirety.”  (Emphasis omitted).  See also 21 C.F.R. § 17.32(c); APHO ¶ 19.  Respondent did not respond.

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On December 3, 2020, I issued an Order to Compel Discovery in which I granted CTP’s motion and ordered Respondent to produce documents responsive to CTP’s Request for Production of Documents by December 31, 2020.  I warned Respondent that:

[F]ailure to comply may result in sanctions, which may include striking its filings and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.  21 C.F.R. § 17.35.

December 3, 2020 Order to Compel Discovery (emphasis in original).

On December 31, 2020, CTP filed a Motion to Impose Sanctions.  CTP advised that Respondent did not produce responsive documents in compliance with my Order to Compel Discovery.  Given that I provided Respondent until December 31, 2020, to produce responsive documents, by Order of January 5, 2021, I denied CTP’s motion as premature and provided that CTP could renew its motion if Respondent did not comply by the deadline. 

On January 12, 2021, CTP filed a Renewed Motion to Impose Sanctions.  By Order of January 14, 2021, I informed Respondent that it had until February 12, 2021, to file a response to CTP’s Renewed Motion to Impose Sanctions.  I warned Respondent that if it failed to file a response, “I may grant CTP’s Renewed Motion to Impose Sanctions in its entirety.”  January 14, 2021, Order (emphasis in original).  Respondent did not respond.

II.   Striking Respondent’s Answer

I may sanction a party for:

(1)      Failing to comply with an order, subpoena, rule, or procedure governing the proceeding;
(2)      Failing to prosecute or defend an action; or
(3)      Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.

21 C.F.R. § 17.35(a).

Respondent failed to comply with the following orders and procedures governing this proceeding:

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• Respondent failed to comply with my June 22, 2020 Order when it failed to file a Status Report;
• Respondent failed to comply with 21 C.F.R. § 17.23(a), paragraph 12 of my APHO, and my September 10, 2020 Order, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days; and
• Respondent failed to comply with my December 3, 2020 Order to Compel Discovery, when it failed to produce documents responsive to CTP’s Request for Production of Documents by December 31, 2020.

Respondent also failed to defend its action despite my October 30, 2020, and January 14, 2021, orders informing Respondent of such opportunities and warning of consequences.

I find that Respondent failed to comply with orders and procedures governing this proceeding, failed to defend its case, and, as a result, interfered with the speedy, orderly, or fair conduct of this proceeding.  I conclude that Respondent’s conduct establishes a basis for sanctions pursuant to 21 C.F.R. § 17.35, and that sanctions are warranted.

The harshness of the sanctions I impose must relate to the nature and severity of the misconduct or failure to comply.  21 C.F.R. §17.35(b).  Here, Respondent failed to comply with four of my orders, despite explicit warnings that its failure could result in sanctions.  I specified that those sanctions “may include striking its filings and issuing an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.”  December 3, 2020 Order to Compel Discovery.  Respondent also failed to defend its actions, despite my orders expressly reminding Respondent of the opportunity.  Respondent’s repeated misconduct interfered with the speedy, orderly, or fair conduct of this proceeding. 

I find that Respondent’s actions are sufficient to warrant striking its Answer and issuing a decision by default, without further proceedings.  21 C.F.R. § 17.35(b), (c)(3).  Accordingly, I strike Respondent’s Answer.  21 C.F.R. § 17.35(c)(3). 

III.   Default Decision

Striking Respondent’s Answer leaves the complaint unanswered.  Therefore, I am required to issue an initial decision by default, provided that the complaint is sufficient to justify a penalty.  21 C.F.R. § 17.11(a).  Pursuant to 21 C.F.R. § 17.11(a), I am required to “assume the facts alleged in the complaint to be true” and, if those facts establish liability under the Act, issue a default judgment and impose a civil money penalty.  Accordingly, I must determine whether the allegations in the complaint establish violations of the Act. 

Specifically, CTP alleges the following facts in its complaint:

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• On May 28, 2019, CTP initiated a previous civil money penalty action, CRD Docket Number T-19-3083, FDA Docket Number FDA-2019-H-2512, (see also CRD Docket Number T-18-2942, FDA Docket Number FDA-2018-H-2747), against Respondent for at least four violations2 of the Act.  CTP alleged those violations to have occurred at Respondent’s business establishment, 2004 Randleman Road, Suite C, Greensboro, North Carolina 27406, on October 21, 2017, May 19, 2018, and March 6, 2019;
• The previous action concluded when an Initial Decision and Default Judgment was entered by an Administrative Law Judge, “finding that all of the violations alleged in the Complaint occurred”;
• An FDA-commissioned inspector conducted a subsequent inspection on November 9, 2019, at approximately 5:01 PM at Respondent’s business establishment located at 2004 Randleman Road, Suite C, Greensboro, North Carolina 27406.  During this inspection, a person younger than 18 years of age was able to purchase a package of Newport Box cigarettes.  Additionally, Respondent’s staff failed to verify, by means of photographic identification containing a date of birth, that the purchaser was 18 years of age or older.

These facts establish Respondent Carolina Super Mart’s liability under the Act.  The Act prohibits misbranding of a regulated tobacco product.  21 U.S.C. § 331(k).  A regulated tobacco product is misbranded if sold or distributed in violation of regulations issued under section 906(d) of the Act.  21 U.S.C. § 387f(d); see also 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).  The Secretary of the U.S. Department of Health and Human Services issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.  21 U.S.C. § 387a-1; see also 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010); 81 Fed. Reg. 28,974, 28,975-76 (May 10, 2016).  Under 21 C.F.R. § 1140.14(a)(1), no retailer may sell regulated tobacco products to any person younger than 18 years of age.  Under 21 C.F.R. § 1140.14(a)(2)(i), retailers must verify, by means of photographic identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 18 years of age.

Under 21 C.F.R. § 17.2, an $11,410 civil money penalty is permissible for six violations of the regulations found at 21 C.F.R. pt. 1140 within a 48-month period.

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Order

For these reasons, I enter default judgment in the amount of $11,410 against Respondent Randleman Trading, Inc. d/b/a Carolina Super Mart.  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. While the proof of service did not specify “Suite,” it is apparent that CTP properly served the complaint on Respondent as evidenced by Respondent’s timely Answer.
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2. The complaint alleges two violations were committed on October 21, 2017, two on May 19, 2018, and one on March 6, 2019.  In accordance with customary practice, CTP counted the violations at the initial inspection as a single violation, and all subsequent violations as separate individual violations.  See Orton Motor, Inc. d/b/a Orton’s Bagley v. U.S. Dep’t of Health & Human Servs., 884 F.3d 1205 (D.C. Cir. 2018).
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