ND1121111

Title: FDA Outlines Civil Money Penalty Process for Tobacco Retailers

Description: The agency is currently operating under the less onerous schedule until FDA regulations are developed for approved retailer training programs.

Page Content: WASHINGTON ? Last week FDA hosted a tobacco retailing compliance webinar on the process that will soon take place once the FDA has served a civil money penalty complaint against a tobacco retailer.

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The webinar touched on four topics important for retailers:

• FDA?s authority to issue civil money penalties
• When may FDA seek a civil money penalty
• What happens if you get a civil money penalty
• Civil money penalty procedures

FDA has begun pursuing civil money penalties (i.e., fines) against retailers who not complying with regulations of the Family Smoking Prevention and Tobacco Control Act.

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The two civil money penalty schedules are:

1. One for retailers without an ?approved retailer training program? (higher fines)
2. One for retailers with an ?approved retailer training program? (lower fines)

FDA is operating under the less onerous schedule (lower fines) until FDA regulations are developed for ?approved retailer training programs.? No timetable for those FDA regulations was provided. NACS is urging the FDA to approve the We Card program as an approved training program.

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The first time FDA identifies violation(s) at a retail establishment it will issue a warning letter (without a monetary penalty) describing the violation(s) observed. So far about 1,200 of warning letters have been issued. FDA will then conduct a second (follow-up) compliance check inspection. If it identifies violations during the follow-up check, FDA intends to seek civil money penalties from the retailer via the Civil Money Penalty Process.

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During this process, the FDA will open a ?federal administrative enforcement action? against the retailer and serve an ?Administrative Complaint? (and cover letter) citing the alleged violation(s), the law or regulatory basis for those violation(s) and the civil money penalty (fine) being sought. A copy is sent to the Administrative Law Judge in Washington, D.C. FDA will serve retailers with the complaint via UPS or personal delivery.

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Upon receipt, retailers have 30 days to either:

1. Pay the civil money penalty
2. ?Answer? the FDA complaint in one of three ways:
• Request an extension for responding (which is not automatically granted).
• File an Answer and request a hearing to contest some or all of the allegations
• File an Answer and ask to discuss settlement options before any hearing is held
3. Do nothing (by not filing an ?Answer? or paying the penalty) and a ?Court may issue an order requiring full payment of the penalties and respondent (retailer) waives right to a hearing.? (In other words, doing nothing is an admission of guilt and you?ll be required to pay the penalty.)

FDA strongly urges retailers to be vigilant and meet the 30-day deadline following receipt of a complaint. Requests for extensions are in the hands of an Administrative Law Judge and not the FDA.

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During the webinar, FDA noted that the Judge might, for ?good cause shown,? grant an extension up to 30 additional days to file an ?Answer,? but if the Judge denies the request, the original 30-day deadline remains in effect. Therefore, it is suggested that retailers make any request for an extension early, and unless and until the extension is granted, prepare the ?Answer? as if the extension will be denied while waiting for the Judge?s response. The retailer should never assume that an extension is granted unless the retailer receives written acknowledgment of the extension.

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By preparing now and well in advance of any compliance issues, retailers can protect themselves from undergoing the FDA?s civil money penalty process. While the information above is not legal advice, receiving an FDA Administrative Complaint (or even a Warning Letter) is the first step in a legal proceeding and should be treated as such.

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Retailer training programs such as We Card can help retailers assess whether they are in compliance with FDA tobacco retailing requirements.

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View the FDA?s entire presentation here.

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*Disclaimer: The above information should not be considered legal advice or a complete summary of all information presented during FDA?s November 15 webinar. If you have any questions about the material presented by FDA, or any facet of the FDA Civil Money Penalty Process, please seek the advice and counsel of an attorney.

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Content Subject: Government Relations

Formatted Article Date: November 21, 2011

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