On Tuesday, the FDA held a webinar, "Compliance Training for Tobacco Retailers: Warning Letter and Civil Money Penalty Update," that was moderated by Tara Goldman, an official within FDA€™s Center for Tobacco Products Office of Compliance and Enforcement.
Goldman noted that FDA will be changing the format of its warning letters to remove some of the burdensome legal language and include a time estimate for a violation so that retailers can better assess what may have happened when the alleged violation occurred €" a change that NACS has urged FDA to make.
As previously stated by FDA, the warning letter will list all instances of noncompliance discovered during the inspection and each violation will be numbered. Retailers should note that FDA expects all retailers who receive a warning letter to provide a written response, as stipulated in the letter. That response should include a plan to correct the cause of the violation and the steps the retailer intends to take to prevent future violations. FDA noted that it may take into consideration a retailer€™s response to a warning letter should there be future settlement discussions.
FDA also noted that there are two appropriate responses to retailers receiving a Civil Money Penalty complaint:
- The first option is to immediately pay the fine as directed within 30 days.
- The second option is to request more time from FDA to provide an "answer" or response to the alleged violations.
Retailers who pay the fine should then contact FDA€™s Center for Tobacco Products (CTP) to ensure that the case is closed. If a retailer requests an extension, the retailer should proceed with preparing an "answer" immediately because the extension may not be granted. In a retailer€™s response, the retailer should outline his desire for a settlement conference, during which FDA will consider mitigating factors that might warrant lessening or revoking the proposed civil money penalty, such as whether the retailer has already paid a state fine for the same violation, whether the fine will jeopardize the retailer€™s ability to remain in business and other factors.
If CTP grants the settlement conference, the retailer will be contacted with a date and time for the conference (usually on Tuesdays or Thursdays at 2:15 pm EST). If the retailer wants a hearing instead of a settlement conference, and the retailer€™s "answer" to the allegations is accepted, the retailer will then have the case heard by an administrative law judge, who will review the evidence put forward by both the retailer and the FDA. Once the "answer" has been accepted, the judge will issue a pre-hearing order, which will give the deadlines and the time and date when the hearing will take place.
During the webinar Q&A, FDA did note that warning letters are sent primarily to the establishment where the violation occurred with a copy sent to a company€™s headquarters; whereas a civil money penalty will be sent to the legally responsible entity and a copy sent to the location allegedly in violation.
A February 7 FDA webinar confirmed two of our primary concerns regarding tobacco regulation: First, that warning letters do not amount to "final agency action" and retailers cannot appeal allegations in a warning letter. Second, FDA is interpreting the law as permitting a single retail inspection to result in multiple violations (and therefore higher monetary penalties).
Both of these flawed interpretations squarely contrast with the law they are charged with implementing. NACS urges all tobacco retailers to be aware of FDA€™s flawed interpretations and immediately contact NACS (and consider hiring counsel) if they wish to appeal the allegations contained in a warning letter, civil money penalty complaint, or if they are fined for multiple violations discovered during a single inspection.
On March 14 at 3:00 pm EST, NACS and We Card will host a webinar to help retailers navigate the FDA€™s Civil Monetary Penalty Process and understand their responsibilities and compliance requirements when responding to tobacco violations. An email requesting registration will go out next week with additional webinar information.