FDA Details Civil Money Penalty Process

Webinar explains procedure, and tobacco retailer options

Published in Tobacco E-News

By  Linda Abu-Shalback Zid, Senior Editor

ROCKVILLE, Md. -- The FDA Center for Tobacco Products has begun issuing civil money penalties, and explained the process during a webinar last week.

Jessica Zeller, deputy director of the office of compliance and enforcement, explained that there are two schedules for the penalties: one for retailers with an approved training program and one for retailers without such a program. Because the FDA doesn't have regulations describing an approved retailer training program currently, the FDA is using the lower schedule of penalties for all retailers.

"Under these less onerous schedules, the first time FDA observes a violation at a tobacco retail establishment, FDA plans to issue a warning letter without any monetary penalty at all," she said. "In that warning letter, FDA will remind the retailer that failure to comply with the law means additional enforcement actions could come, including civil money penalties."

The center has begun conducting follow-up inspections on retailers who have been issued warning letters, according to Zeller, and filing the civil money penalties for violations found on the subsequent inspections -- which can range from up to $250 initially to up to $10,000 for numerous subsequent offenses.

Civil money penalty documents consist of a cover letter and the actual complaint.

The cover letter informs the respondent that FDA is seeking civil money penalties against them, the date of which the respondent previously received a warning letter and that a follow-up inspection was completed, which also identified violations. It also outlines the response options.

The complaint itself includes the illegal conduct alleged and the laws alleged to be broken, a statement that the respondent owns the retailer establishment and the amount of penalties that the FDA is seeking.

It also contains instructions for filing an answer to request a hearing or discuss settlement, a statement of the respondent's right to request a hearing by filing an answer, a statement of the respondent's right to retain counsel and a statement that failure to file an answer within 30 days of service of the complaint will result in the imposition of the amount of the proposed penalty. It also includes a history of previously cited violations.

Once a respondent receives a civil money penalty complaint, five actions can be taken within 30 days of the date of service of the complaint (the date the retailer receives the letter via UPS or in-person delivery).

  1. The respondent can pay the penalty. To submit the payment, the respondent must call the FDA to discuss specific payment options. The FDA subsequently will send the respondent notice of the case being closed.
  2. The respondent can file an answer requesting a formal hearing. Filing an answer includes admitting or denying each of the alleged violations; stating all defenses; stating all reasons why the respondent contends any penalties should be less than the requested amount; and stating the name, address and phone number of the respondent’s counsel if applicable. The respondent can choose to attend the hearing in person or via teleconference or videoconference.
  3. The respondent can file an answer, and request a settlement conference. He or she will be provided instructions on selecting a settlement conference date and any documents they will need for the settlement conference. If a settlement is reached, and the respondent pays the agreed-upon amount, the case will be closed. If a settlement is not reached or the respondent does not pay the agreed-upon amount, the case will proceed to a hearing.
  4. The respondent can request an extension, with a possibility of an additional 30 days to answer. Granting of an extension is not guaranteed, so respondents should file requests early. If the administrative law judge denies the request, the original due date for filing an answer stands.
  5. If the respondent does not answer or pay the fine, they may be issued an order requiring full payment of the penalties and the respondent waives the right to a hearing. "People may think that’s the easiest option," Zeller said, "but it takes away a lot of their ability to contest anything."

Zeller said that follow-up inspections will continue to happen after retailers are issued a civil money penalty. "It could be that on that next follow-up inspection the retailer will have corrected any violations and will be alright. And we appreciate that, and think that’s the best way to go," she said. "However, if violations continue or new violations are observed, FDA would intend to issue civil money penalty actions again."

To access an archive of this or other FDA Center for Tobacco Products webinars, please click here.