The Food and Drug Administration (the “FDA”) is a federal agency tasked with closely monitoring retailer, manufacturer, importer, and distributor compliance with Federal tobacco laws and regulations. The FDA regulates the industry's compliance through surveillance, inspections, and investigations of retailers. When the FDA finds an alleged violation, they have several actions which they may pursue against a retailer, such as:
- Issuing Warning Letters;
- Serving the Establishment with a Civil Money Penalty Complaint (a “CMP”);
- Imposing a No-Tobacco-Sale Order Complaint (a “NTSO”); or
- Effectuating Seizures, Injunctions, and Criminal Prosecutions
If and when a tobacco retailer is faced with one of the above penalties, it is important for the retailer to know that they have the right to fight these citations and seek legal representation.
Simply paying the fine may not be in the best interest of the retailer as multiple CMP's may likely result in the retailer being issued a NTSO, which would prohibit them from selling any kind of tobacco product for a prescribed period of time. Multiple citations are likely to occur because the FDA is committed to conduct follow-up inspections on every establishment in which they observe an alleged violation. If a retailer receives multiple citations and primarily depends on tobacco sales to survive, an NTSO could result in substantial financial losses.
In the event that the tobacco retailer is also a franchisee, a citation could present an even more serious problem. Many franchise agreements contain a clause which requires the franchisee to comply with all applicable laws and regulations. Should the franchisee admit to the alleged FDA violation, the franchisor could find the franchisee in default of the franchise agreement and have the power to take back the franchise.
If you are a retailer and have been issued a warning letter, CMP, NTSO, or any other FDA tobacco penalty, it is of the utmost importance to find an attorney to represent your interests. You should hire an attorney that can help navigate your issues with both the FDA and, potentially, your franchisor.
Not only is Hutchison Law here to help you face the FDA and/or your franchisor when cited with these alleged violations, but we are here to help you prevent these violations from occurring in the first place. We have developed procedures and best practices which can be implemented in your business model to help you and your employees potentially reduce exposure to these violations in the future. These practices are important because the FDA takes such efforts into consideration when pursuing penalties against retailers.
At Hutchison Law, we know what to do. No matter if you are a franchisee or a non-franchised tobacco retailer, we have the tools and resources to help you navigate these very serious matters. We will be with you every step of the way. Please contact us for a free consultation to discuss your next steps.