Inspections, Compliance, Enforcement, and Criminal Investigations

King Mountain Tobacco Company, Inc. 10/30/14

  

Department of Health and Human Services logoDepartment of Health and Human Services

Food and Drug Administration
 
Center for Tobacco Products
10903 New Hampshire Avenue
Silver Spring, MD 20993 

 

OCT 30, 2014

VIA Certified Mail and Facsimile
 
Delbert Wheeler
President
King Mountain Tobacco Company, Inc.
P.O. Box 422
White Swan, WA 98952-0422
 
 
WARNING LETTER
 
Dear Mr. Wheeler:
 
The Center for Tobacco Products (CTP) of the U.S. Food and Drug Administration (FDA) has reviewed our records and determined that King Mountain Tobacco Company, Inc. (King Mountain) is a domestic manufacturer of cigarettes and roll-your-own tobacco products for the purposes of section 919 of the Federal Food Drug and Cosmetic Act (the FD&C Act) (21 U.S.C. § 387s) and subject to user fees in accordance with that provision. Section 919(b)(6) of the FD&C Act  (21 U.S.C. § 387s(b)(6)) requires that each domestic manufacturer and importer of certain tobacco products, including cigarettes and roll-your-own tobacco remit payment of its user fee assessment by the last day of the applicable quarter.
 
Failure to Pay Assessed User Fees
 
FDA has determined that all regulated tobacco products manufactured byKing Mountain are adulterated under section 902(4) of the FD&C Act (21 U.S.C. § 387b(4)) because you have failed to pay user fees assessed to you as required by section 919 of theFD&C Act (21 U.S.C. § 387s).[1] Specifically, based on information you provided to the United States Department of Agriculture regarding tobacco products that you removed into domestic commerce, you were assessed user fees by FDA’s Office of Financial Management (OFM) on the dates indicated below. To date, FDA has not received payment from you for the assessment invoices enumerated in the table below.
 
 
 

Fiscal Quarter/Year of Assessment
Assessment Invoice Date
Assessment Due Date
(b)(7)(e)
(b)(7)(e)
(b)(7)(e)

 
Section 919(b)(6) of the FD&C Act (21 U.S.C. § 387s(b)(6)) requires that payments of all assessments must be made by the last day of the applicable quarter. Because you have failed to pay a user fee assessed pursuant to section 919 of the FD&C Act by the last day of the applicable quarter, or by the 30th day after final agency action on a resolution of any dispute as to the amount of fees assessed, regulated tobacco products manufactured by King Mountain are adulterated under section 902(4) of the FD&C Act (21 U.S.C. § 387b(4)). 
 
Conclusion and Requested Actions
 
Under section 301(a) of theFD&C Act (21 U.S.C. § 331(a)), the introduction or delivery for introduction into interstate commerce of any tobacco product that is adulterated is a prohibited act.
 
The violations discussed in this letter do not necessarily constitute an exhaustive list. It is your responsibility to ensure that all of your tobacco products comply with the applicable provisions of the FD&C Act and implementing regulations. Failure to ensure full compliance with the FD&C Act and regulations may result in FDA initiating further action without notice, including, but not limited to, civil money penalties, criminal prosecution, seizure, and/or injunction.
 
You should immediately correct the violations stated above and take all necessary actions to bring your tobacco products into compliance with the FD&C Act. Please submit a written response within 15 working days from the date of receipt of this letter describing your corrective actions and your plan for maintaining compliance with the FD&C Act. Your response should include:
 
1.    Documentation showing that you have paid or have contacted OFM at userfees@fda.gov for information on how to pay your assessed user fees and set up a plan to pay those fees.
 
2.    Documentation to show the steps you have taken to prevent similar violations from occurring again in the future.
 
3.    If your firm’s planned corrections will occur over time, please include a timetable for implementation of those activities.
 
 
Please direct your response to the following address:
 
DEM-WL Response, Office of Compliance and Enforcement
Food and Drug Administration
Center for Tobacco Products
Document Control Center
Building 71, Room G335
10903 New Hampshire Avenue
Silver Spring, MD 20993-0002
 
If you have any questions about the content of this letter, please contact Joanna Weitershausen at (301) 796-5533 or CTPCompliance@fda.hhs.gov.
 
 
Sincerely,
/S/
Ann Simoneau, J.D.
Director
Office of Compliance and Enforcement
Center for Tobacco Products
 
 
 
cc:       
Jay Thompson
Chief Executive Officer
King Mountain Tobacco Company, Inc.
Jay@kingmountaintobacco.com
 
Randolph Barnhouse
Johnson, Barnhouse & Keegan LLP
7424 4th Street NW
Los Ranchos de Albuquerque, NM 87107
 
_____________________________________________________

[1]On May 3, 2013, FDA received a letter from your counsel arguing that King Mountain is not subject to user fees. On February 24, 2014, FDA delivered a response letter responding to your arguments and reaffirming that, as a manufacturer of tobacco products, you are required to pay user fees. Subsequently, on March 10, 2014, you received a letter from FDA stating that you have failed to pay assessed user fees. This letter instructed you to either (1) refer to your most recent OFM delinquency letter for the various options to remit payment, or (2) request a review of FDA’s determination that you are required to pay user fees and how the amount was determined. To date, you have not responded to this letter and you have not paid your assessed user fees.
 
 

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