Rose W. Gunckel d/b/a Gunckels Service, DAB TB5190 (2020)

ORDER LIFTING STAY AND GRANTING CTP’S MOTION TO IMPOSE SANCTIONS AND INITIAL DECISION AND DEFAULT JUDGMENT

In response to the COVID-19 pandemic, the Departmental Appeals Board encouraged all employees to telework starting on March 16, 2020.  Certain tasks completed in the Civil Remedies Division offices, including mail processing, were temporarily interrupted.  On March 27, 2020, I stayed this case given circumstances associated with the pandemic until further notice.  Currently, the Civil Remedies Division has resumed limited operation, which includes mail processing.  Accordingly, I order that the stay entered on March 27, 2020 is LIFTED.    

The Center for Tobacco Products (CTP) filed an Administrative Complaint (Complaint) against Respondent, Rose W. Gunckel d/b/a Gunckels Service, that alleges that Respondent impermissibly sold regulated tobacco products to minors, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its

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implementing regulations, 21 C.F.R. pt. 1140.  CTP seeks to impose a $285 civil money penalty against Respondent Gunckels Service. 

Respondent filed an Answer to the Complaint, but has failed to comply with multiple judicial orders and directives during the hearing process.  I therefore strike Respondent’s Answer and issue this decision of default judgment.

I.      Procedural History

On July 23, 2019, CTP began this matter by serving a Complaint on Respondent, seeking a $285 civil money penalty.  On August 30, 2019, Respondent timely filed a request for an extension of time in which to file an Answer.  On September 3, 2019, I issued an Order giving Respondent until September 23, 2019 to file an Answer to CTP’s Complaint.  On September 19, 2019, Respondent timely filed its answer in the DAB E-File system. 

On September 26, 2019, I issued an Acknowledgment and Pre-Hearing Order (APHO).  The APHO generally explained to the parties what they must do to present evidence and arguments in this case.  Specifically, it explained that the parties may request copies of documents relevant to this case and that the requesting party must serve the request for documents no later than October 24, 2019.  As indicated in the APHO, a party who received such a request was required to provide the requested documents no later than 30 days after the request had been made.  The APHO also established a deadline of December 16, 2019 for all pre-hearing exchanges from CTP to Respondent, and a deadline of January 6, 2020 for all pre-hearing exchanges from Respondent to CTP. 

On October 3, 2019, by email transmission, Respondent’s through its representative submitted a one-page handwritten letter with attachments to the Civil Remedies Division.  I infer Respondent’s submission to be its pre-hearing exchange.

On December 6, 2019, pursuant to 21 C.F.R. § 17.23(a), CTP filed a Motion to Compel Discovery.  In that motion, CTP stated that it served a Request for Production of Documents (RFP) on Respondent on October 24, 2019, and indicated it had not received a response to its request.  On that same date, CTP also filed a Motion to Extend Deadlines.  On December 9, 2019, I issued an Order giving Respondent until December 23, 2019 to file a response to CTP’s motion to compel discovery.  I warned:  “. . . if it fails to respond, I may grant CTP’s motion in its entirety.”  My Order also extended the parties’ pre-hearing exchange deadlines.  Respondent did not file a response.

Accordingly, on January 9, 2020, I issued an Order Granting Motion to Compel and directed Respondent to comply with CTP’s request for production of documents by January 27, 2020.  I warned Respondent:

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

I also extended the pre-hearing deadlines in this matter.

On February 7, 2020, CTP filed a Status Report and Motion to Impose Sanctions.  CTP advised that Respondent had not complied with my Order Granting Motion to Compel.  CTP requested that I strike Respondent's answer and issue a default judgment in its favor.  On February 7, 2020, CTP also filed a Motion to Extend Deadlines.  On February 10, 2020, I issued an Order advising Respondent that it had until February 25, 2020, to file a response to CTP's Motion to Impose Sanctions.  Again, Respondent was warned that if it failed to file a timely response, I “may grant CTP’s motion [to impose sanctions] in its entirety.”  To date, Respondent has not filed a response.

II.      Striking Respondent’s Answer

Pursuant to 21 C.F.R. § 17.35, I am granting CTP’s Motion to Impose Sanctions and striking Respondent’s Answer for failing to comply with multiple judicial orders and directions.  Specifically, Respondent has not complied with:  1) the deadline set forth in the Acknowledgment and Pre-Hearing Order for responding to any discovery request;  2) the order granting CTP’s Motion to Compel issued on January 9, 2020; or 3) the order affording Respondent the opportunity to respond to CTP’s Motion to Impose Sanctions.  The regulations at 21 C.F.R. § 17.35(a)(2) provide that, in addition to a party’s failure to comply with an order, subpoena, rule, or procedure governing the proceedings, a presiding officer may impose sanctions for a party’s failure to prosecute or defend an action.  Respondent has not only failed to act in response to my orders of September 26, 2019, January 9, 2020, or February 10, 2020, Respondent has failed to take any action in response to CTP’s motions, or to otherwise defend its Answer dated August 5, 2019 or its October 3, 2019 email submission.  Therefore, sanctions are appropriate in accordance with 21 C.F.R. § 17.35(a). 

The issue is whether CTP’s proposed sanction – striking Respondent’s answer and issuing a default judgment – is the appropriate one.  The harshness of the sanctions I impose upon either party must relate to the nature and severity of the misconduct or failure to comply.  I find here that Respondent's repeated failure to comply is sufficiently egregious to warrant striking the answer and issuing a decision without further proceedings.  See 21 C.F.R. § 17.35(b).

III.      Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered.  Therefore, I am required to issue an initial decision by default if the Complaint is sufficient to justify a

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penalty.  21 C.F.R. § 17.11(a).  Accordingly, I must determine whether the allegations in the Complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true and conclude the default judgment is merited based on the allegations of the Complaint and the sanctions imposed on Respondent for failure to comply with the orders.  21 C.F.R.
§ 17.11.  Specifically:

• At approximately 5:58 PM on August 10, 2018, at Respondent’s business establishment, 105 West Main Street, Verona, Ohio 45378, an FDA‑commissioned inspector conducted an inspection.  During this inspection, a person younger than 18 years of age was able to purchase a package of Grizzly Long Cut Premium Wintergreen smokeless tobacco;
• In a warning letter dated October 4, 2018, CTP informed Respondent of the inspector’s August 10, 2018 documented violation, and that such action violates federal law.  The letter further warned that Respondent’s failure to correct its violation could result in a civil money penalty or other regulatory action;
• At approximately 3:20 PM on April 19, 2019, at Respondent’s business establishment, 105 West Main Street, Verona, Ohio 45378, an FDA‑commissioned inspector conducted an inspection.  During this inspection, a person younger than 18 years of age was able to purchase a package of Grizzly Long Cut Premium Wintergreen smokeless tobacco.

These facts establish Respondent Gunckels Service’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.   

A $285 civil money penalty is permissible under 21 C.F.R. § 17.2.

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Order

For these reasons, I enter default judgment in the amount of $285 against Respondent Rose W. Gunckel d/b/a Gunckels Service.  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.