A M Food Market Inc. d/b/a AM Food Market, DAB TB4851 (2020)

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, A M Food Market Inc. d/b/a AM Food Market, alleging facts and legal authority sufficient to justify imposing a civil money penalty of $11,410.  The Complaint alleges that Respondent’s staff impermissibly sold regulated tobacco products to minors and failed to verify that purchasers were 18 years of age or older, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless Tobacco, 21 C.F.R. pt. 1140.  CTP seeks a civil money penalty of $11,410 for at least six violations within a 48-month period.

During the course of these administrative proceedings, Respondent failed to comply with orders and procedures governing this proceeding and failed to defend this action, which interfered with the speedy, orderly, or fair conduct of this proceeding.  21 C.F.R.

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§ 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 June 17, 2019, CTP served the Complaint on Respondent by United Parcel Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7.  On July 2, 2019, Respondent timely answered CTP’s Complaint.  On July 3, 2019, I issued an Acknowledgement and Pre-Hearing Order (APHO) that set deadlines for the parties’ filings and exchanges, including a schedule for discovery.  I directed that a party receiving a discovery request must provide the requested documents within 30 days of the request.  APHO ¶ 12; see 21 C.F.R. § 17.23(a).  I warned: 

I may impose sanctions including, but not limited to, dismissal of the complaint or answer, if a party fails to comply with any order (including this order), fails to prosecute or defend its case, or engages in misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.  21 C.F.R. § 17.35.

APHO ¶ 16.

In accordance with the deadlines set forth in the APHO, CTP served Respondent with its Request for Production of Documents on July 17, 2019.  On August 21, 2019, CTP filed a Motion to Compel Discovery, asserting that Respondent had not responded to its discovery request.  On August 26, 2019, I issued an Order advising Respondent that it had until September 5, 2019, to file a response to CTP’s Motion to Compel Discovery.  See also 21 C.F.R. § 17.32(c); APHO ¶ 19.  In my Order, I also extended the pre-hearing exchange deadlines.  Respondent failed to submit a response to CTP’s Motion to Compel or my August 26, 2019 Order, or otherwise comply with CTP’s Request for Production of Documents.

On September 10, 2019, I issued an Order granting CTP’s Motion to Compel Discovery, and ordering Respondent to produce documents responsive to CTP’s Request for Production of Documents by September 25, 2019.  I warned:

Failure to [comply] may result in sanctions, including the issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

September 10, 2019, Order, at 1-2.  In the same Order, I also extended the parties’ pre‑hearing exchange deadlines.  Id. at 2.

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On October 8, 2019, CTP filed a Motion to Compel Further Responses (MTC Further Responses) asserting that, while Respondent submitted four email messages containing apparent links to four video files, CTP was unable to download or otherwise access the files.  CTP stated that on September 24, 2019, CTP “requested by e-mail correspondence that Respondent mail CTP a thumb drive or CD containing the video or videos because they were inaccessible to CTP in their current form.”  MTC Further Responses at 2.  CTP asserted that Respondent did not respond or otherwise communicate with CTP regarding its September 24, 2019 request.  On October 24, 2019, I issued an Order giving Respondent until November 4, 2019, to file a response to CTP’s MTC Further Responses.  In my Order, I also extended the pre-hearing exchange deadlines.

On November 8, 2019, CTP filed a Status Report noting Respondent’s failure to file a response to the MTC Further Responses, and requesting that I grant its MTC Further Responses in its entirety.  Also on November 8, 2019, subsequent to CTP’s November 8, 2019 filing, Respondent uploaded a 12‑minute, 37-second video recording date-stamped “03-04-2019 Mon” to the DAB E-File System.  The video was submitted without any correspondence or documentation indicating whether the submission was representative of the video recordings requested by CTP’s Request for Production.  On November 13, 2019, I issued an Order giving Respondent until November 27, 2019 to provide CTP, via U.S. Mail, with either:  1) a thumb drive or CD copy of the four videos previously forwarded to CTP; or 2) advise CTP and this office in writing whether the video recording uploaded to the DAB E-File System is representative of the video recording requested by CTP.  In my Order, I also extended the pre-hearing exchange deadlines.  To date, Respondent has not responded to the November 13, 2019 Order.

On December 16, 2019, CTP filed a Status Report and Motion to Impose Sanctions.  CTP advised that Respondent had not complied with my November 13, 2019 Order.  CTP argued that sanctions against Respondent for its repeated non-compliance are an appropriate remedy.  Specifically, CTP asked that I strike Respondent’s Answer as a sanction and issue an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.

On December 19, 2019, I issued an Order informing Respondent that it had until January 3, 2020, to file a response to CTP’s Motion to Impose Sanctions.  In the same Order, I also extended the parties’ pre‑hearing exchange deadlines.  To date, Respondent has not filed a response to CTP’s Motion to Impose Sanctions or my December 19, 2019 Order.

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;

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(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:

• Respondent failed to comply with 21 C.F.R. § 17.23(a) and paragraph 12 of my APHO, when Respondent failed to respond to CTP’s Request for Production of Documents within 30 days;
• Respondent failed to comply with my August 26, 2019 Order, when it failed to respond to CTP’s Motion to Compel Discovery by September 5, 2019;
• Respondent failed to comply with my September 10, 2019 Order, when it failed to produce documents responsive to CTP’s Request for Production of Documents by September 25, 2019;
• Respondent failed to comply with my October 24, 2019 Order, when it failed to respond to CTP’s MTC Further Responses by November 4, 2019;
• Respondent failed to comply with my November 13, 2019 Order, when, by November 27, 2019, it failed to provide CTP with the previously disclosed videos in the requested format, and failed to indicate whether its November 8, 2019 submission was representative of the videos requested by CTP; and
• Respondent failed to comply with my December 19, 2019 Order, when it failed to respond to CTP’s Motion to Impose Sanctions by January 3, 2020.

I find that Respondent failed to comply with orders and procedures governing 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 severity and nature of the misconduct or failure to comply.  21 C.F.R. § 17.35(b).  Here, Respondent failed to comply with six of my orders, despite my explicit warnings that its failure could result in sanctions.  I specified that those sanctions may include striking its Answer and “issuance of an Initial Decision and Default Judgment finding Respondent liable for the violations listed in the Complaint and imposing a civil money penalty.”  APHO ¶ 16; September 10, 2019 Order, at 1-2; November 13, 2019 Order, at 1-2.  I find that Respondent’s actions

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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, and issue this Initial Decision and Default Judgment, assuming the facts alleged in CTP’s Complaint to be true.  21 C.F.R. §§ 17.35(c)(3), 17.11(a). 

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 [C]omplaint 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:

• Respondent owns AM Food Market, an establishment that sells tobacco products and is located at 1201 North 52nd Street, Philadelphia, Pennsylvania 19131.  Complaint ¶¶ 7-8.
• On March 6, 2018, CTP initiated a prior civil money penalty action, CRD Docket Number T-18-1513, FDA Docket Number FDA-2018-H-0950 (see also CRD Docket Number T-17-5950, FDA Docket Number FDA-2017-H-5002), against Respondent for violations of 21 C.F.R. pt. 1140, four1 of which occurred during the 48-month period relevant in the current Complaint.  Complaint ¶ 11.
• 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.”  Complaint ¶ 12.
• An FDA-commissioned inspector conducted a subsequent inspection of Respondent’s establishment on March 4, 2019, at approximately 7:11 PM, during which “a person younger than 18 years of age was able to purchase a package of five Hi-Fi Watermelon cigars . . . .”  Additionally, “the minor’s identification was not verified before the sale . . . .”  Complaint ¶ 9.

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These facts establish that Respondent is liable under the Act.  The Act prohibits misbranding of a tobacco product.  21 U.S.C. § 331(k).  A tobacco product is misbranded if sold or distributed in violation of regulations issued under section 906(d) of the Act.  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 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).  The regulations prohibit the sale of regulated tobacco products to any person younger than 18 years of age.  21 C.F.R. § 1140.14(b)(1).  The regulations also require retailers to verify, by means of photographic identification containing the purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 18 years of age.  21 C.F.R. § 1140.14(b)(2)(i). 

Taking the above alleged facts as true, Respondent committed six violations of regulations found at 21 C.F.R. pt. 1140 within a 48-month period.  Respondent violated the prohibition against selling regulated tobacco products to persons younger than 18 years of age on October 24, 2016, June 21, 2017, February 10, 2018, and March 4, 2019.  21 C.F.R. § 1140.14(b)(1).  On October 24, 2016, June 21, 2017, and March 4, 2019, Respondent also violated the requirement that retailers verify, by means of photo identification containing a purchaser’s date of birth, that no regulated tobacco product purchasers are younger than 18 years of age.  21 C.F.R. § 1140.14(b)(2)(i).  Therefore, Respondent’s actions constitute violations of law that merit a civil money penalty.

CTP has requested a civil money penalty of $11,410, which is a permissible penalty for six violations of the regulations found at 21 C.F.R. pt. 1140 within a 48-month period.  21 C.F.R. § 17.2.  Therefore, I find that a civil money penalty of $11,410 is warranted and so order one imposed.

• 1. Two violations were committed on October 24, 2016, two on June 21, 2017, and one on February 10, 2018. In accordance with customary practice, CTP counted the violations identified during the initial inspection as a single violation, and violations identified during subsequent inspections individually.