Madison Food Mart, DAB No. 3058 (2022)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Madison-Food-Mart-Inc. d/b/a Madison Food Mart (Respondent) appeals the December 8, 2020 Administrative Law Judge (ALJ) Initial Decision imposing a $570 civil money penalty against Respondent for three violations of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., and its implementing regulations, over a period of twenty-four months.  Madison-Food-Mart-Inc. d/b/a Madison Food Mart, DAB TB5267 (2020) (ALJ Decision).  The ALJ issued his decision following a hearing on an administrative complaint (Complaint) filed by the Center for Tobacco Products (CTP) of the Food and Drug Administration (FDA).  The ALJ concluded that the evidence of record supported the allegations in the Complaint and provided a basis for assessing a $570 penalty.  For the reasons explained below, the Board affirms the ALJ Decision because it is supported by substantial evidence and free of legal error.

Legal Background

To protect public health, the Federal Food, Drug, and Cosmetic Act (Act) imposes restrictions on the sale, distribution, and use of tobacco products.  See 21 U.S.C. §§ 301, 331(b), 331(k), 387a(a)-(b), 387c(a)(7)(b), 387f(d).  The Act directed the Secretary to establish the CTP within the FDA and authorized the Secretary to issue regulations restricting the sale and distribution of tobacco products.  21 U.S.C. §§ 387a(e), 387f(d). In accordance with the Act, the Secretary has issued regulations codified in 21 C.F.R. Part 1140.  Those regulations, in relevant part (which are enforced by CTP), prohibit a retailer from “sell[ing] cigarettes or smokeless tobacco to any person younger than 18 years of age[,]” (i.e., a minor).  21 C.F.R. § 1140.14(a)(1).  The regulations also require a retailer to “verify by means of photographic identification containing the bearer’s date of birth that no person purchasing the product is younger than 18 years of age” (except that “[n]o such verification is required for any person over the age of 26”).  Id. § 1140.14(a)(2)(i)-(ii), (b)(1), (2).  Failure to comply with the applicable provisions of Part 1140 in the sale, distribution, and use of cigarettes and smokeless tobacco “renders the product misbranded” under the Act.  Id. § 1140.1(b).

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Regulations governing FDA CMP hearings, at 21 C.F.R. Part 17, during the time relevant to this appeal, specified the CMPs that FDA imposes for violations based on the number of violations and the time period in which they are committed.  For the time period relevant here, $584 was the maximum CMP allowed for three violations within a 24-month period.  45 C.F.R. § 102.3 (table) (Dec. 1, 2019). 

CTP initiated this case by serving its Complaint on Respondent and filing it with the Civil Remedies Division of the Departmental Appeals Board (DAB).  The CMP hearing regulations permit a retailer to appeal a CMP by filing a request for hearing (in the form of an answer to the complaint) before a “presiding officer” who is “an administrative law judge qualified under 5 U.S.C. 3105.”  21 C.F.R. §§ 17.3(c), 17.9(a).  Under the regulations, the ALJ is required to conduct a hearing to determine whether the respondent is liable for a CMP and, if so, the appropriate amount of any such CMP considering any aggravating or mitigating factors.  Id. § 17.33(a).  The ALJ issues a decision based only on the administrative record.  Id. § 17.45(a). 

A respondent may appeal the ALJ’s decision (which the regulations refer to as the “initial decision”) to the Board.  21 C.F.R. §§ 17.45, 17.47.  The Board “may decline to review the case, affirm the initial decision or decision granting summary decision (with or without an opinion),” or “reverse the initial decision or decision granting summary decision, or increase, reduce, reverse, or remand any civil money penalty determined” by the ALJ.  Id. § 17.47(j).

Case Background1

On February 11, 2020, CTP filed a complaint against Respondent alleging three violations of the FDA’s tobacco regulations within a 24-month period.  Complaint (Compl.) ¶¶ 1, 9, 11.2   CTP alleged that on July 17, 2019, and December 4, 2019, Respondent sold covered tobacco products to individuals under the age of eighteen in violation of 21 C.F.R. § 1140.14(b)(1) and failed to verify the age of persons purchasing covered tobacco products by means of a photographic identification containing the bearer’s date of birth in violation of 21 C.F.R. § 1140.14(b)(2)(i).  Id. ¶¶ 9, 11.  CTP

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argued that “[b]y failing to comply with the tobacco regulations, Respondent caused its tobacco products to become misbranded” within the meaning of the Act.  Informal Br. of Complainant at 2 (citing 21 U.S.C. § 387c(a)(7)(B)).  CTP sought a penalty of $570 for the violations.  Compl. ¶ 15.3

Respondent filed an Answer and the ALJ issued a Pre-Hearing Order that set a schedule for filings and procedures that included a May 26, 2020 deadline for the parties to file their pre-hearing exchange.  CTP filed its pre-hearing exchange, which consisted of an informal brief, proposed witness list, and twenty proposed exhibits, including written direct testimony of two witnesses and other evidence collected by FDA-commissioned state inspector Margaret McCullough (Inspector McCullough).  ALJ Decision at 2-3.  Respondent did not submit a timely pre-hearing exchange.  Id. at 3.  After the pre-hearing-exchange deadline, Respondent “submitted a number of images and documents” and names of potential witnesses, but not their written direct testimony.  Id.  CTP filed a motion to exclude Respondent’s witnesses and late-filed submissions under 21 C.F.R. §§ 17.25 and 17.37(b).  Id. at 3-4.4   Respondent timely responded to CTP’s motion, which remained pending at the time of the hearing.  Id. at 4.

During the August 25, 2020 hearing, the ALJ “admitted all exhibits submitted by both parties subject to CTP’s pending Motion to Exclude Evidence.”  Id. at 4 (citing Hearing Transcript (Tr.) at 5).  At the end of the hearing, the ALJ “informed the parties that [he] will allow them to file post-hearing briefs and make final arguments,” but “will not allow any additional evidence.”  Id. (citing Tr. at 22).  On September 1, 2020, in violation of the ALJ’s instructions, the Pre-Hearing Order, and applicable regulations, Respondent submitted an unsworn written statement signed by William Droser, who Respondent had previously identified as a potential witness, but who failed to appear at the hearing.5  The ALJ excluded the written statement of Mr. Droser because it was submitted after the hearing.  ALJ Decisionat 4. 

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The ALJ, however, denied CTP’s motion to exclude Respondent’s other submissions, which were filed after the pre-hearing exchange deadline but before the hearing, reasoning that “CTP will not be prejudiced by these submissions as it had ample time to review [them] prior to the hearing and formulate an argument against them.”  Id. at 5-6.  The ALJ also noted that with its Answer, Respondent had submitted a damaged USB flash drive that Respondent “claim[ed] contains video files that will absolve it from liability,” but “did not resubmit the video files as it claim[ed] the damaged USB flash drive was its only copy.”  Id.6  The ALJ acknowledged that many of Respondent’s submissions were untimely; but, the ALJ waived the pre-hearing exchange deadline, “given that Respondent was unable to submit a functional USB drive,” and considered all of Respondent’s documents that were filed before the hearing in order to give Respondent “a fair opportunity to defend itself.”  Id. at 6 (citing 21 C.F.R. § 17.19(b)(17)). 

On the merits, the ALJ first determined that CTP showed “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.”  Id. at 15.  Next, relying primarily on Inspector McCullough’s testimony, the ALJ found that CTP showed by a preponderance of the evidence that Respondent violated 21 C.F.R. § 1140.14(b)(1) when it sold covered tobacco products to a minor on July 17, 2019 and December 4, 2019.  Id. at 16-17.  The ALJ relied on Inspector McCullough’s testimony and corroborating evidence to further find 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.”  Id. at 17-18.  The ALJ also found that “Respondent offered no affirmative proof to rebut the evidence of noncompliance presented by CTP.”  Id. at 18.  Having found Respondent liable for the violations, the ALJ assessed a $570 penalty against Respondent, concluding that Respondent committed three violations of the FDA’s tobacco regulations within twenty-four months.  Id. at 23 (citing 21 U.S.C. §§ 303(f)(5)(B) and 333(f)(9)).7  

Respondent timely appealed the ALJ Decision.  Respondent filed a notice of appeal on December 14, 2020, stating that the appeal “is [b]ased on [d]ocuments which were deemed late submitted so they were not regarded.”  On December 15, 2020, Respondent

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submitted the second page of Inspector McCullough’s narrative report from the December 4, 2019 inspection with a handwritten note that appears to dispute evidence about the number of minors at the inspections.  On December 22, 2020, Respondent submitted an additional document that denies the violations and asserts that CTP was inconsistent on a number of issues, including but not limited to, Respondent’s address and the price of the e-liquid tobacco products. 

CTP submitted a memorandum in opposition arguing, among other things, that the Board should decline review because Respondent’s notice of appeal did not comply with 21 C.F.R. § 17.47(c).  CTP’s Mem. in Opp’n to Resp’t’s Notice of Appeal at 1, 4-7.8   More specifically, CTP argues that Respondent’s December 14, 2020 submission was “not accompanied by a written brief” and failed to identify specific exceptions to the ALJ Decision.  Id. at 5.  We note that all of Respondent’s written submissions to the Board were filed within the time for filing a notice of appeal (within 30 days of the ALJ Decision), and we find Respondent has sufficiently identified specific exceptions to the ALJ Decision.  Accordingly, we review Respondent’s appeal on the merits and considered all of Respondent’s submissions to the Board.  

Standard of Review

The Board reviews an ALJ’s decision according to the standard of review set forth in the regulations:  “The standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record.  The standard of review on a disputed issue of law is whether the initial decision is erroneous.”  21 C.F.R. § 17.47(k).  The term “substantial evidence” means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).  

Under the substantial evidence standard, the Board does not re-weigh the evidence or overturn an ALJ’s choice between two fairly conflicting views of the evidence; instead, the Board determines whether the contested finding could have been made by a reasonable fact-finder tak[ing] into account whatever in the record fairly detracts from [the] weight of the evidence that the ALJ relied upon.

Douglas Bradley, M.D., DAB No. 2663, at 5 (2015) (internal quotation marks omitted). 

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Analysis

I.    Substantial evidence supports the ALJ’s conclusion that Respondent committed three violations of the FDA’s tobacco regulations within a 24-month period.

The ALJ determined that Respondent violated section 1140.14(b)(1) by selling tobacco products to a minor and section 1140.14(b)(2)(i) by failing to verify that the purchaser was eighteen years of age or older by means of photo identification.  ALJ Decision at 16-18.  In his decision, the ALJ relied on Inspector McCullough’s testimony, which he found “to be credible, unbiased, and supported by physical evidence.”  Id. at 16.  Inspector McCullough testified that, during compliance inspections of Respondent’s store on July 17, 2019, at approximately 12:52 PM, and on December 4, 2019, at approximately 6:28 PM, she confirmed that each minor possessed his or her photo identification and was under the age of eighteen.  CTP Ex. 5, at 2 (¶ 8), 4 (¶ 13).  On each inspection date, she confirmed that before entering the store, the minor “did not have any tobacco products in his/her possession” by asking the minor to “turn out his/her pockets” and securing the minor’s belongings in the back of her vehicle.  Id. at 3 (¶ 8), 4 (¶ 13).  She further testified that on each occasion she parked her car near Respondent’s store where she “had a clear, unobstructed view” of the front door and watched the minor enter.  Id. at 3 (¶ 9), 4 (¶ 14).  On both occasions, “[m]inutes later, [she] observed [the minors] exit the establishment, and return directly to [her] vehicle.”  Id.at 3 (¶ 10), 4 (¶ 15).  Inspector McCullough further testified that “[u]pon entering the vehicle, [the minors] immediately handed [her] a package of e-liquid” that “was JUUL ENDS/E-liquid.”  Id.at 3 (¶ 10), 4-5 (¶ 15).  According to Inspector McCullough, the minors reported purchasing the package of e-liquid tobacco from a store employee who was “an adult male with black/dark brown hair, a mustache, and a beard,” and that prior to the purchase the minors did not present any identification to the employee and the employee did not provide a receipt after the purchase.  Id.at 3 (¶ 10); 5 (¶ 15).  Inspector McCullough then labeled the e-liquid tobacco product as evidence and photographed the panels of the package, processing the evidence according to procedure and creating a narrative report shortly thereafter.  Id.at 3 (¶ 11); 5 (¶ 16).  The ALJ found Inspector McCullough’s testimony, in conjunction with the corroborating documentary evidence, sufficient to satisfy CTP’s burden of proving that Respondent violated 21 C.F.R. §§ 1140.14(b)(1) and 1140.14(b)(2)(i) by a preponderance of the evidence on the dates of the inspections.  ALJ Decision at 16-17.  

This testimony – along with Inspector McCullough’s narrative reports written shortly after the inspection (CTP Exs. 7, 13) and photographs she took of the e-liquid tobacco packets minutes after the minors left the store (CTP Exs. 9, 10, 15, 16) – is substantial evidence that Respondent sold e-liquid tobacco products to the minors and failed to check their photo identification in violation of 21 C.F.R. §§ 1140.14(b)(1) and 1140.14(b)(2)(i).  See J. Peaceful, L.C. d/b/a Town Market, DAB No. 2742, at 9 (2016) (holding that evidence establishing “that the minor entered [the] establishment without cigarettes and

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exited shortly thereafter with cigarettes” was substantial evidence that the retailer unlawfully sold cigarettes to a minor). 

The Board defers to an ALJ’s findings regarding witness credibility and the weight assigned to a party’s evidence unless there is compelling reason to do otherwise.  See Atty’s Parti Expo, Inc., d/b/a Parti Expo, DAB No. 2925, at 7 (2019).  Respondent has offered no compelling reason to not defer to the ALJ’s credibility determinations and weighing of the evidence.  Accordingly, we find that substantial evidence supports the ALJ’s conclusion that Respondent violated 21 C.F.R. §§ 1140.14(b)(1) and (b)(2)(i).  Below we address Respondent’s specific arguments made to the Board challenging the ALJ decision. 

II.    Respondent’s arguments lack merit.

Respondent makes several requests and contentions, but none shows that the ALJ Decision is unsupported by substantial evidence or contains any legal error.  First, Respondent requests that the Board consider the witness statement from William Droser that Respondent submitted to the ALJ on September 1, 2020.  The ALJ excluded Mr. Droser’s statement because it was submitted after the August 25, 2020 hearing, and after the ALJ advised the parties that he “[would] not allow any additional evidence.”  ALJ Decision at 4; Tr. at 22.  Respondent has not identified any basis for overturning the ALJ’s exclusion of this evidence nor for admitting the statement now.  We find that the ALJ properly excluded Mr. Droser’s statement, which was not in the form of a sworn affidavit or declaration under penalty of perjury, and was submitted in violation of the ALJ’s instructions, the Pre-Hearing Order, and 21 C.F.R. §§ 17.25 and 17.37(b).9

Even if we were to consider Mr. Droser’s unsworn and untimely statement, it fails to rebut CTP’s evidence in any meaningful way.  Mr. Droser’s written statement asserts that “on December 4th, 2019, [he] was present in Madison Food Mart at the time of the alleged violation (6.28 pm)” and “[t]he owner of the business committed no violation to my knowledge.”  Id.  Mr. Droser’s conclusory assertion does not identify “the owner” of the business, fails to identify “the owner” as the clerk responsible for selling tobacco products at the time of the second inspection, fails to provide any factual or legal basis for his belief that “no violation” was committed by “the owner,” and fails to describe what, if anything, he witnessed on December 4, 2019, at 6:28 PM.  Thus, even presuming Mr. Droser was present at the time of the December 4, 2019 inspection, his conclusory and unfounded statement is entirely unpersuasive. 

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Respondent also asserts that the ALJ disregarded its submissions uploaded to DAB E-File on June 1, 2020, June 22, 2020, July 1, 2020, and August 11, 2020 because they were late.  Respondent, however, misunderstands the ALJ’s ruling regarding those submissions.  Although Respondent submitted those exhibits after the pre-hearing exchange deadline, the ALJ nevertheless admitted them into evidence over CTP’s objections.  ALJ Decision at 4, 5-6.  Before the Board, Respondent requests that we consider its August 11, 2020 submission to the ALJ—Respondent’s response to CTP’s motion to exclude its late-submitted documents and witnesses—that includes an explanation for why the ALJ should not exclude evidence because its “most damaging evidence” and “security footage of December 4th, 2019” was on the USB drive that arrived damaged to the Civil Remedies Division.  The ALJ, however, accepted Respondent’s argument to admit the late-filed exhibits because Respondent was unable to submit a functional USB drive.  ALJ Decision at 5-6.  Accordingly, contrary to Respondent’s assertion that its evidence was disregarded, these documents were admitted into evidence and considered by the ALJ. 

Respondent further addresses its damaged USB drive, stating that the “[p]rosecution claims that [the] security footage was [d]amage[d] in shipping[] [y]et can’t produce a letter from [the] United State[s] Post Office” supporting that claim and delayed notifying Respondent of that damage.  Id.It appears that Respondent misunderstands who received the USB drive and who notified Respondent that the USB drive was damaged.  The Civil Remedies Division, which is independent of the CTP, received the USB drive with Respondent’s Answer on February 19, 2020.  Thus, it was the ALJ, not CTP, who received the damaged USB drive, and it was the ALJ’s office that was unable to access its files and that ultimately returned the device to Respondent.  In the February 25, 2020 Pre-Hearing Order, the ALJ acknowledged receipt of Respondent’s Answer but noted that the USB drive had been “damaged in the mail and thus, the files cannot be accessed, reviewed, or docketed.”  Pre-Hearing Order at 1.  One week later, on March 4, 2020, the ALJ issued a letter, returned the USB flash drive to Respondent, and instructed Respondent to re-file its submission electronically because the USB drive “appear[ed] to be damaged.”  Thus, the ALJ did not delay notifying Respondent of the damage to the USB drive or delay returning the USB drive to Respondent.  Moreover, Respondent’s implication that someone must have intentionally damaged the USB drive is baseless.  The ALJ’s statement in the Pre-Hearing Order that the USB drive was damaged in the mail appears to be a reasonable inference where the ALJ’s office was unable to access its contents based on an assumption that a party would not send evidence that was already damaged to support its own case.  Additionally, the ALJ offered Respondent the opportunity to resubmit the evidence, but Respondent failed to do so.  ALJ Decision at 6.  To account for this, the ALJ admitted Respondent’s late-filed evidentiary submissions (made prior to the hearing date).  Id.  Finally, Respondent’s submissions, which the ALJ admitted into evidence, included an email from Respondent that generally described what Respondent asserted the damaged security footage would have shown.

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In any event, none of the exhibits that Respondent references in its submissions to the Board adequately rebuts CTP’s evidence.  The two photographs Respondent submitted to the ALJ on June 1, 2020 included an image of crumpled receipts in a trash bin and an image of multiple receipts still attached to the cash register.  In an accompanying statement, Respondent attempted to rebut CTP’s evidence that the minors did not receive receipts by arguing that the cash register at Madison Food Mart “alway[s] print[s] [r]eceipts” whether “someone wants it or not[].”  However, these photographs do not show that the receipts were offered to the minors on July 17 and December 4, 2019.  Instead, the photograph of the receipts in the trash bin shows that many receipts are discarded.  Similarly, the photograph of the cash register with receipts still attached demonstrates only that the cash register prints receipts, not that receipts are regularly offered or provided to customers.  If anything, the photograph bolsters Inspector McCullough’s testimony that the minors did not receive receipts for their transactions because the photograph shows that receipts for several transactions were printed, but not received by customers.  Thus, the photographs that Respondent submitted do not impeach Inspector McCullough’s testimony or detract from the ALJ’s findings or conclusions.

Moreover, “there is nothing in the Act or regulations . . . requiring CTP to provide a receipt showing proof of purchase.”  Kuma H. Mamie d/b/a 7-Eleven Store 22921A, DAB No. 2877, at 7 (2018).  Even without a receipt, an ALJ may reasonably credit an FDA-commissioned inspector’s testimony that a sale occurred unless there is evidence that the inspector testified falsely about whether a receipt was given to the undercover purchaser.  J. Peaceful at 9.  Here, Inspector McCullough testified that the minors told her that sales receipts for the undercover purchases were not provided.  CTP Ex. 5, at 3 (¶ 10), 5 (¶ 15); see also CTP Ex. 7 (¶ 13); CTP Ex. 13 (¶ 13) (“Upon exiting the establishment, the minor did not provide me a receipt.  He/She reported to me that the employee did not provide a purchase receipt and the minor did not request one.  It is not standard practice to request a receipt in a tobacco undercover buy inspection.”).  No evidence in the record contradicts that testimony.  The lack of receipts for the transactions did not preclude the ALJ from relying on Inspector McCullough’s testimony or concluding that Respondent sold tobacco products to minors at the time of the inspections.

Next, Respondent’s submissions on June 22, 2020 and July 1, 2020 appear to be photographs of spreadsheets of debit and credit card purchases from July 17, 2019, and December 4, 2019.  But, Inspector McCullough testified that the minors used cash to purchase the e-liquid tobacco products.  Tr. at 12:15-17 (“I give the minors, whenever we go out, a $20 bill, and then they bring back any change if there is a sale.  So this would’ve been a cash purchase.”).  Respondent has not explained how the spreadsheets of debit and credit card purchases are relevant for determining whether cash transactions occurred or how they would refute Inspector McCullough’s testimony.

In addition, Respondent asserts that CTP’s evidence was inconsistent concerning the price of e-liquids sold at the inspections.  At the hearing, Inspector McCullough testified

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that the price of the e-liquid was $18.68 on July 17 and $19.93 on December 4.  Tr. at 13:21-22.  Respondent replied:  “Your Honor, those are not the prices.  I have submitted Juul prices, a picture of our Juul prices, and what Ms. McCullough is saying, those are not our prices.”  Id. at 14:1-3.  Respondent also testified that “our Juul products cost more than $20, so they have not purchased those Juul products from here.”  Id. at 12:23-25.  The main problem with Respondent’s contention, though, is that it is contradicted by Respondent’s own submission—an undated photograph that lists the price of the 4-pack JUUL product as $18.99.  Thus, Respondent’s assertion that the price exceeded $20.00 on either July 17 or December 4, 2019, is not corroborated by other evidence in the record and is, in fact, contradicted by Respondent’s own exhibit. 

Respondent also appears to mistakenly believe that CTP alleged violations based on purchases made by six minors.  Respondent submitted to the Board the second page of Inspector McCullough’s narrative report from the December 4, 2019 inspection along with a handwritten note that states “[p]rosecution cla[ims] 2 minor[s] but this Inspection Narrative Report says six.”  Respondent’s argument misunderstands the report, which references the number of photographs relating to the December 4, 2019 inspection, not the number of minors involved in that inspection.  Paragraph 19 of the report refers to the number of photographs taken for different categories of evidence in parentheses after each category.  See also CTP Ex. 15 (showing six photographs of different angles of the e-liquid products sold on December 4, 2019).  Thus, the discrepancy that Respondent claims to have identified does not exist.

Before the Board, Respondent renews its argument that CTP was inconsistent about whether the clerk had a beard or mustache and the color of his hair.  But the ALJ adequately addressed this issue, determining that Respondent’s photographic evidence of the owner was unpersuasive because the photographs were presumably taken on the day Respondent uploaded them, not on the dates of the sales at issue.  ALJ Decision at 18-19.  The ALJ aptly noted that “[t]hese photographs do not establish what the clerk looked like during the dates of either inspections.”  Id. at 18.  The ALJ also did not find persuasive the “petition” Respondent submitted, noting that none of the signatories provided a signed affidavit.  Id. at 19. 

Respondent also renews its argument that Inspector McCullough was inconsistent by first stating in her narrative report that there was no address posted at the establishment and later clarifying in her written direct testimony that there was; however, the ALJ considered this argument and found that Inspector McCullough’s testimony on this point was credible, bolstered by the photographs of Respondent’s establishment.  Id. at 19 (citing CTP Ex. 5 at 4 (¶ 13); CTP Ex. 20).  Respondent offers no compelling reason not to defer to the ALJ’s assessment of this evidence.  See 1701 Express, Inc. d/b/a Citgo, DAB No. 2979, at 9 (2019) (“It is well-settled that the Board defers to the ALJ’s assessment of the evidence, including credibility to be accorded to witness testimony, absent a compelling reason for not doing so.”) (citing Atty’s Parti Expo, Inc., d/b/a Parti

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Expo, DAB No. 2925, at 7 (2019)), aff’d, 1701 Express, Inc. v. Sec’y of Health & Human Servs., 836 F. App’x 366 (6th Cir. 2020).  Based on all the evidence in the record (including photographic evidence submitted by both parties), there is no serious question that Respondent’s establishment located at 902 East Johnson Street was the location of the undercover buy inspections conducted on July 17, 2019, and December 4, 2019.

Respondent also asserts that it “has 19 years of good [r]ecords, when it comes to preventing [t]obacco sales to minors” from the Dean County Health Department or its subcontractors.  This statement, even if true, would have no bearing on whether Respondent violated federal law prohibiting the sale of e-liquid tobacco products to a minor and requiring verification of a purchaser’s age by means of photographic identification on the dates specified in the Complaint.10  

Respondent contends that “not a single question was answere[d]” at the hearing, but fails to identify what questions, in its view, were not answered.  Respondent’s assertion does not provide any specific evidence or argument in support of its appeal.  We find that the hearing and subsequent ALJ Decision left no relevant question unanswered.

In sum, none of Respondent’s evidence or arguments provides a basis for the Board to disturb the ALJ’s findings and conclusions that Respondent violated 21 C.F.R. §§ 1140.14(b)(1) and 1140(b)(2)(i) on July 17, 2019 and December 4, 2019.  We conclude that substantial evidence supports the ALJ’s findings and that the ALJ’s conclusions are free of legal error.

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Conclusion

For the foregoing reasons, we affirm the ALJ Decision and sustain the $570 penalty assessed by the ALJ.

1. The factual information presented in this section is taken from the ALJ Decision and the administrative record before the ALJ.  It is not intended to serve as new findings or substitute for any findings in the ALJ Decision.
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2. “FDA conducts inspections of tobacco product retailers to determine a retailer’s compliance with federal laws and regulations, including The Federal Food, Drug, and Cosmetic Act, as amended by the Tobacco Control  Act, and FDA rules and regulations.”  CTP Compliance & Enforcement – Compliance Check Inspections, at https://www.fda.gov/tobacco-products/compliance-enforcement-training/ctp-compliance-enforcement#a.  The violations in this case were discovered during undercover buy inspections.  “During Undercover Buy Inspections, the retailer is unaware an inspection is taking place. The minor and inspector will not identify themselves.”  Id.
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3. The three violations were:  (1) selling a covered tobacco product to an individual under the age of 18 and failing to verify the age of a person purchasing covered tobacco products by means of a photographic identification containing the bearer’s date of birth on July 17, 2019;  (2) selling a covered tobacco product to an individual under the age of 18 on December 4, 2019;  and (3) failing to verify the age of a person purchasing covered tobacco products by means of a photographic identification containing the bearer’s date of birth on December 4, 2019.  Informal Br. of Complainant at 15, n.5 (explaining how CTP counts multiple, separate violations for penalty calculation purposes).
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4. Under 21 C.F.R § 17.25(a), the parties must “exchange witness lists, copies of prior written statements of proposed witnesses, and copies of proposed hearing exhibits, including written testimony” “[a]t least 30 days before the hearing” or “by such other time as is specified by the presiding officer.”  And, 21 C.F.R. § 17.37(b) provides:  “Direct testimony shall be admitted in the form of a written declaration submitted under penalty of perjury. Any such written declaration must be provided to all other parties along with the last known address of the witness.”
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5. Mr. Droser’s statement (dated September 1, 2020) was not only untimely, but was not submitted in the form of a written declaration under penalty of perjury as required by 21 C.F.R. § 17.37(b).
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6. As the ALJ explained, the “USB flash drive submitted by Respondent arrived damaged to the Civil Remedies Division, and the files on the drive were inaccessible.”  ALJ Decision at 5.  On March 4, 2020, the ALJ issued a letter, along with the returned USB drive, that “instructed Respondent to re-file its submission electronically.”  Id. at 5-6.
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7. The ALJ found that four violations occurred but determined Respondent’s conduct counted as three violations for purposes of computing the civil money penalty under FDA policy.  ALJ Decision at 9-10, 20.
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8. 21 C.F.R. § 17.47(c) states in pertinent part:  “The notice [of appeal] must identify specific exceptions to the initial decision, must support each exception with citations to the record, and must explain the basis for each exception.”
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9. The rules applicable to the ALJ proceeding also require that “[a]ny written direct testimony must be in the form of a sworn affidavit or declaration under penalty of perjury.”  Civil Remedies Division Procedures at 18 (¶ 19.b).
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10. Respondent cannot complain that this evidence was ignored.  The ALJ properly considered Respondent’s history of no prior violations as one factor in analyzing the CMP amount.  ALJ Decision at 22.
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