[Federal Register Volume 79, Number 22 (Monday, February 3, 2014)]
[Rules and Regulations]
[Pages 6088-6092]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-02150]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 17

[Docket No. FDA-2014-N-0113]


Maximum Civil Money Penalty Amounts; Civil Money Penalty 
Complaints

AGENCY: Food and Drug Administration, HHS.

ACTION: Direct final rule.

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SUMMARY: The Food and Drug Administration (FDA) is issuing a new 
regulation to adjust for inflation the maximum civil money penalty 
(CMP) amounts for the various CMP authorities within our jurisdiction 
and to amend the process for initiating certain CMP

[[Page 6089]]

administrative actions. We are taking these actions to comply with the 
Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), as 
amended, and to streamline our internal processes. The last CMP 
adjustment was published in the Federal Register of November 12, 2008, 
and the FCPIAA requires Federal Agencies to adjust their CMPs at least 
once every 4 years. We are using direct final rulemaking for these 
actions because the Agency expects that there will be no significant 
adverse comment on the rule. We are concurrently proposing and 
soliciting comments on this rule. If significant adverse comments are 
received, we will withdraw this final rule and address the comments in 
a subsequent final rule. FDA will not provide additional opportunity 
for comment.

DATES: This rule is effective June 18, 2014, without further notice, 
unless FDA receives significant adverse comment by April 21, 2014. If 
we receive no timely significant adverse comments, we will publish a 
document in the Federal Register before May 19, 2014, confirming the 
effective date of the direct final rule. If we receive any timely 
significant adverse comments, we will publish a document in the Federal 
Register withdrawing this direct final rule before June 18, 2014.

ADDRESSES: You may submit comments, identified by Docket No. FDA-2014-
N-0113, by any of the following methods.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.

Written Submissions

    Submit written submissions in the following ways:
     Mail/Hand delivery/Courier (for paper submissions): 
Division of Dockets Management (HFA-305), Food and Drug Administration, 
5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
    Instructions: All submissions received must include the Agency name 
and Docket No. FDA-2014-N-0113 for this rulemaking. All comments 
received may be posted without change to http://www.regulations.gov, 
including any personal information provided. For additional information 
on submitting comments, see the ``Comments'' heading of the 
SUPPLEMENTARY INFORMATION section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov and insert the 
docket number, found in brackets in the heading of this document, into 
the ``Search'' box and follow the prompts and/or go to the Division of 
Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Jarilyn Dupont, Office of Policy, Food 
and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 
20903, 301-796-4830.

SUPPLEMENTARY INFORMATION: The last CMP adjustment was published in the 
Federal Register of November 12, 2008 (73 FR 66750).

I. Background

A. CMP Amounts

    FDA is amending Sec.  17.2 (21 CFR 17.2) to update the maximum CMP 
amounts. In general, FCPIAA requires Federal Agencies to issue 
regulations to adjust for inflation each CMP penalty provided by law 
within their jurisdiction. (28 U.S.C. 2461 note, as amended by the Debt 
Collection Improvement Act of 1996 (31 U.S.C. 3701)). FCPIAA directs 
Agencies to adjust the CMP provided by law by October 23, 1996, and to 
make additional adjustments at least once every 4 years thereafter. The 
adjustments are based on changes in the cost of living, and the FCPIAA 
defines the cost of living adjustment as the percentage (if any) for 
each civil monetary penalty by which the Consumer Price Index for the 
month of June of the calendar year preceding the adjustment, exceeds 
the Consumer Price Index for the month of June of the calendar year in 
which the amount of such civil monetary penalty was last set or 
adjusted pursuant to law (28 U.S.C. 2461 note, section 5(b)).
    FCPIAA also prescribes a rounding method based on the size of the 
penalty after the calculated increase, but states that the adjustment 
of a CMP may not exceed 10 percent of the penalty. FCPIAA defines a CMP 
as any penalty, fine, or other sanction that is for a specific monetary 
amount as provided by Federal law; or has a maximum amount provided for 
by Federal law; and is assessed or enforced by an agency pursuant to 
Federal law; and is assessed or enforced pursuant to an administrative 
proceeding or a civil action in the Federal Courts (28 U.S.C. 2461 
note, section 3(2)).

B. CMP Complaints

    Currently, under Sec.  17.5(a) (21 CFR 17.5(a)), CMP complaints 
against retailers of tobacco products may only be signed by attorneys 
in FDA's Office of the Chief Counsel (OCC). Given the routine nature of 
many of these CMPs, FDA is amending this regulation to permit the Chief 
Counsel to designate other FDA staff, such as those in FDA's Center for 
Tobacco Products, to sign a tobacco retailer CMP complaint.
    Based on FDA's experience, the large majority of the tobacco 
retailer complaints to date have involved alleged violations of the 
requirement to not sell cigarettes and smokeless tobacco to any person 
younger than 18 years of age or to verify age in accordance with 21 CFR 
1140.14(b). These complaints have almost always been straightforward, 
they involve simple fact patterns, and they do not require a complex 
legal analysis. Over time, such CMP complaints have increased in 
volume, and we anticipate that the volume will continue to be 
relatively high.
    We have determined that, with certain limitations and controls, 
non-attorney staff outside OCC can carry out the function of reviewing 
the evidence and signing the tobacco retailer CMP complaints in 
appropriate circumstances. The proposed amendment to Sec.  17.5(a) 
would give this decisionmaking authority to the Chief Counsel, who 
could ensure the authority to sign complaints is only given to 
appropriate staff and under appropriate circumstances. Under the 
proposal, the Chief Counsel would have the authority to set and revise 
limitations and controls, and to broaden, limit, or rescind any 
authorizations to sign tobacco retailer CMP complaints.
    The limitations could include, for example, limiting the delegation 
to situations where the CMP amount is below a certain dollar value; the 
CMP involves specified tobacco retailer charges that OCC has determined 
are routine and predictable and do not require a complex legal 
analysis; and involve charges for which FDA has developed OCC-approved 
templates, parameters, and procedures. The controls could include, for 
example, an audit or other quality review.
    FDA is publishing this rule as a direct final rule without prior 
proposal and comment because we view these as noncontroversial 
amendments and anticipate no significant adverse comment. This rule 
incorporates requirements specifically set forth in the FCPIAA 
requiring FDA to issue a regulation implementing inflation adjustments 
for all its CMP provisions. These technical changes, required by law, 
do not substantively alter the existing regulatory framework, nor do 
they in any way affect the terms under which CMPs are assessed by FDA. 
The formula for the amount of the penalty

[[Page 6090]]

adjustment is prescribed by Congress in the FCPIAA, and these changes 
are not subject to the exercise of discretion by FDA. The amendment to 
Sec.  17.5(a) changes an internal process.
    This direct final rule:
     Revises the table in Sec.  17.2 to adjust the maximum CMP 
amounts for inflation as prescribed by FCPIAA.
     Revises Sec.  17.5(a) to provide authority for the Chief 
Counsel to delegate the responsibility for initiating a CMP 
administrative action against a tobacco retailer.

II. Environmental Impact

    The Agency has determined under 21 CFR 25.33 that this action is of 
a type that does not individually or cumulatively have a significant 
effect on the human environment. Therefore, neither an environmental 
assessment nor an environmental impact statement is required.

III. Paperwork Reduction Act

    This final rule contains no collection of information. Therefore, 
clearance by the Office of Management and Budget under the Paperwork 
Reduction Act of 1995 is not required.

IV. Federalism

    FDA has analyzed this final rule in accordance with the principles 
set forth in Executive Order 13132. FDA has determined that the rule 
does not contain policies that have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Accordingly, the Agency has concluded 
that the rule does not contain policies that have federalism 
implications as defined in the Executive order and, consequently, a 
federalism summary impact statement is not required.

V. Analysis of Impacts

    FDA has examined the impacts of the final rule under Executive 
Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 
U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4). Executive Orders 12866 and 13563 direct Agencies to assess all 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety, and other advantages; distributive impacts; and 
equity). The Agency believes that this final rule is not a significant 
regulatory action under Executive Order 12866.
    The Regulatory Flexibility Act requires Agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. Because the final rule simply adjusts the maximum 
amount of CMPs administered by FDA as required by the FCPIAA, and 
because the proposed rule makes a change to FDA's internal processes, 
the Agency certifies that the final rule will not have a significant 
economic impact on a substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that Agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $141 million, using the most current (2012) Implicit 
Price Deflator for the Gross Domestic Product. FDA does not expect this 
final rule to result in any 1-year expenditure that would meet or 
exceed this amount.

VI. Comments

    Interested persons may submit either electronic comments regarding 
this document to http://www.regulations.gov or written comments to the 
Division of Dockets Management (see ADDRESSES). It is only necessary to 
send one set of comments. Identify comments with the docket number 
found in brackets in the heading of this document. Received comments 
may be seen in the Division of Dockets Management between 9 a.m. and 4 
p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

List of Subjects in 21 CFR Part 17

    Administrative practice and procedure, Penalties.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and the 
Public Health Service Act, and under authority delegated to the 
Commissioner of Food and Drugs, 21 CFR part 17 is amended as follows:

PART 17--CIVIL MONEY PENALTIES HEARINGS

0
1. The authority citation for 21 CFR part 17 continues to read as 
follows:

    Authority:  21 U.S.C. 331, 333, 337, 351, 352, 355, 360, 360c, 
360f, 360i, 360j, 371; 42 U.S.C. 262, 263b, 300aa-28; 5 U.S.C. 554, 
555, 556, 557.


0
2. Section 17.2 is revised to read as follows:


Sec.  17.2  Maximum penalty amounts.

    The following table shows maximum civil monetary penalties 
associated with the statutory provisions authorizing civil monetary 
penalties under the Federal Food, Drug, and Cosmetic Act or the Public 
Health Service Act.

          Civil Monetary Penalties Authorities Administered by FDA and Adjusted Maximum Penalty Amounts
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                                       Former
                                       maximum                                Date of last     Adjusted maximum
          U.S.C. Section               penalty         Assessment method     penalty figure   penalty amount (in
                                     amount (in                               or adjustment        dollars)
                                      dollars)
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                                                    21 U.S.C.
----------------------------------------------------------------------------------------------------------------
333(b)(2)(A).....................          60,000  For each of the first               2013  65,000.
                                                    two violations in any
                                                    10-year period.
333(b)(2)(B).....................       1,200,000  For each violation after            2013  1,275,000.
                                                    the second conviction
                                                    in any 10-year period.
333(b)(3)........................         120,000  Per violation...........            2013  130,000.
333(f)(1)(A).....................          16,500  Per violation...........            2008  16,500 (not
                                                                                              adjusted).
333(f)(1)(A).....................       1,200,000  For the aggregate of                2013  1,275,000.
                                                    violations.
333(f)(2)(A).....................          55,000  Per individual..........            2013  60,000.
333(f)(2)(A).....................         300,000  Per ``any other person''            2013  325,000.
333(f)(2)(A).....................         600,000  For all violations                  2013  650,000.
                                                    adjudicated in a single
                                                    proceeding.

[[Page 6091]]

 
333(f)(3)(A).....................          10,000  For all violations                  2013  11,000.
                                                    adjudicated in a single
                                                    proceeding.
333(f)(3)(B).....................          10,000  For each day the                    2013  11,000.
                                                    violation is not
                                                    corrected after a 30-
                                                    day period following
                                                    notification until the
                                                    violation is corrected.
333(f)(4)(A)(i)..................         250,000  Per violation...........            2013  275,000.
333(f)(4)(A)(i)..................       1,000,000  For all violations                  2013  1,075,000.
                                                    adjudicated in a single
                                                    proceeding.
333(f)(4)(A)(ii).................         250,000  For the first 30-day                2013  275,000.
                                                    period (or any portion
                                                    thereof) of continued
                                                    violation following
                                                    notification.
333(f)(4)(A)(ii).................       1,000,000  For any 30-day period,              2013  1,075,000.
                                                    where the amount
                                                    doubles for every 30-
                                                    day period of continued
                                                    violation after the
                                                    first 30-day violation.
333(f)(4)(A)(ii).................      10,000,000  For all violations                  2013  10,850,000.
                                                    adjudicated in a single
                                                    proceeding.
333(f)(9)(A).....................          15,000  Per violation...........            2009  15,000 (not
                                                                                              adjusted).
333(f)(9)(A).....................       1,000,000  For all violations                  2013  1,050,000.
                                                    adjudicated in a single
                                                    proceeding.
333(f)(9)(B)(i)(I)...............         250,000  Per violation...........            2013  275,000.
333(f)(9)(B)(i)(I)...............       1,000,000  For all violations                  2013  1,050,000.
                                                    adjudicated in a single
                                                    proceeding.
333(f)(9)(B)(i)(II)..............         250,000  For the first 30-day                2013  275,000.
                                                    period (or any portion
                                                    thereof) of continued
                                                    violation following
                                                    notification.
333(f)(9)(B)(i)(II)..............       1,000,000  For any 30-day period,              2013  1,050,000.
                                                    where the amount
                                                    doubles for every 30-
                                                    day period of continued
                                                    violation after the
                                                    first 30-day violation.
333(f)(9)(B)(i)(II)..............      10,000,000  For all violations                  2013  10,525,000.
                                                    adjudicated in a single
                                                    proceeding.
333(f)(9)(B)(ii)(I)..............         250,000  Per violation...........            2013  275,000.
333(f)(9)(B)(ii)(I)..............       1,000,000  For all violations                  2013  1,050,000.
                                                    adjudicated in a single
                                                    proceeding.
333(f)(9)(B)(ii)(II).............         250,000  For the first 30-day                2013  275,000.
                                                    period (or any portion
                                                    thereof) of continued
                                                    violation following
                                                    notification.
333(f)(9)(B)(ii)(II).............       1,000,000  For any 30-day period,              2013  1,050,000.
                                                    where the amount
                                                    doubles for every 30-
                                                    day period of continued
                                                    violation after the
                                                    first 30-day violation.
333(f)(9)(B)(ii)(II).............      10,000,000  For all violations                  2013  10,525,000.
                                                    adjudicated in a single
                                                    proceeding.
333(g)(1)........................         250,000  For the first violation             2013  275,000.
                                                    in any 3-year period.
333(g)(1)........................         500,000  For each subsequent                 2013  550,000.
                                                    violation in any 3-year
                                                    period.
333 note.........................             250  For the second violation            2009  250 (not adjusted).
                                                    (following a first
                                                    violation with a
                                                    warning) within a 12-
                                                    month period by a
                                                    retailer with an
                                                    approved training
                                                    program.
333 note.........................             500  For the third violation             2009  500 (not adjusted).
                                                    within a 24-month
                                                    period by a retailer
                                                    with an approved
                                                    training program.
333 note.........................           2,000  For the fourth violation            2009  2,000 (not
                                                    within a 24-month                         adjusted).
                                                    period by a retailer
                                                    with an approved
                                                    training program.
333 note.........................           5,000  For the fifth violation             2009  5,000 (not
                                                    within a 36-month                         adjusted).
                                                    period by a retailer
                                                    with an approved
                                                    training program.
333 note.........................          10,000  For the sixth or                    2013  11,000.
                                                    subsequent violation
                                                    within a 48-month
                                                    period by a retailer
                                                    with an approved
                                                    training program.
333 note.........................             250  For the first violation             2009  250 (not adjusted).
                                                    by a retailer without
                                                    an approved training
                                                    program.
333 note.........................             500  For the second violation            2009  500 (not adjusted).
                                                    within a 12-month
                                                    period by a retailer
                                                    without an approved
                                                    training program.
333 note.........................           1,000  For the third violation             2013  1,100.
                                                    within a 24-month
                                                    period by a retailer
                                                    without an approved
                                                    training program.
333 note.........................           2,000  For the fourth violation            2009  2,000 (not
                                                    within a 24-month                         adjusted).
                                                    period by a retailer
                                                    without an approved
                                                    training program.
333 note.........................           5,000  For the fifth violation             2009  5,000 (not
                                                    within a 36-month                         adjusted).
                                                    period by a retailer
                                                    without an approved
                                                    training program.
333 note.........................          10,000  For the sixth or                    2013  11,000.
                                                    subsequent violation
                                                    within a 48-month
                                                    period by a retailer
                                                    without an approved
                                                    training program.
335b(a)..........................         300,000  Per violation for an                2013  325,000.
                                                    individual.
335b(a)..........................       1,200,000  Per violation for ``any             2013  1,275,000.
                                                    other person''.
360pp(b)(1)......................           1,100  Per violation per person            2008  1,100 (not
                                                                                              adjusted).
360pp(b)(1)......................         355,000  For any related series              2013  375,000.
                                                    of violations.
----------------------------------------------------------------------------------------------------------------
                                                    42 U.S.C.
----------------------------------------------------------------------------------------------------------------
263b(h)(3).......................          11,000  Per violation...........            2008  11,000 (not
                                                                                              adjusted).
300aa-28(b)(1)...................         120,000  Per occurrence..........            2013  130,000.
----------------------------------------------------------------------------------------------------------------


[[Page 6092]]


0
3. In Sec.  17.5, revise paragraph (a) to read as follows:


Sec.  17.5  Complaint.

    (a) The Center with principal jurisdiction over the matter involved 
shall begin all administrative civil money penalty actions by serving 
on the respondent(s) a complaint signed by the Office of the Chief 
Counsel attorney for the Center and by filing a copy of the complaint 
with the Division of Dockets Management (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852. For a 
civil money penalty action against retailers of tobacco products, the 
complaint may be signed by any Agency employee designated by the Chief 
Counsel.
* * * * *

    Dated: January 28, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-02150 Filed 1-31-14; 8:45 am]
BILLING CODE 4160-01-P