Orton Motor, Inc. v. HHS

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 7, 2017 Decided March 20, 2018

No. 16-1299

ORTON MOTOR, INC., D/B/A ORTON’S BAGLEY,

PETITIONER

v.

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN

SERVICES,

RESPONDENT

On Petition for Review of an Order

of the Departmental Appeals Board of the

United States Department of Health and Human Services

Johanna Dennehy argued the cause for petitioner. With

her on the briefs were Michael J. Baratz and Molly Bruder Fox.

Megan Barbero, Attorney, U.S. Department of Justice,

argued the cause for respondent. With her on the brief were

Mark B. Stern and Alisa B. Klein, Attorneys, and AnnaMarie

Kempic, Deputy Chief Counsel for Litigation, United States

Food & Drug Administration.

Before: TATEL, GRIFFITH and WILKINS, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKINS.

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WILKINS, Circuit Judge: Orton Motor, Inc. d/b/a Orton’s

Bagley (“Orton”) is a gas station and convenience store in

Bagley, Minnesota, that sells cigarettes and tobacco products,

among other sundries. The Food and Drug Administration

(“FDA”) levied civil money penalties in the amount of $500

against Orton following two inspections in which Orton sold

cigarettes to a minor without first checking identification to

verify age. As a policy, if a retailer fails an inspection for the

first time, the FDA’s Center for Tobacco Products (the

“Center”) charges all violations observed during that

inspection as a single violation. However, the Center charges

each separate violation of a regulation as a discrete violation

during subsequent failed inspections. Accordingly, the FDA

counted both the sale to a minor and the failure to verify age as

two separate violations on Orton’s second failed inspection and

assessed the maximum penalty of $500 for three violations

within a 24-month period under the civil money penalty

schedule.

Orton challenges this determination on two principal

grounds: that the Tobacco Control Act precludes the FDA’s

methodology of charging multiple violations in a single

inspection, and that the FDA violates the law by failing to

provide a process for retailers to challenge first violations

before the issuance of a warning letter. We find no merit in

either contention, and accordingly, we deny Orton’s petition.

I.

In 2009, Congress passed the Family Smoking Prevention

and Tobacco Control Act (“TCA”), which “g[ave] the FDA

broad regulatory authority over tobacco products, including,

for instance, authority to impose restrictions on their sale, and

on the advertising and promotion of such products . . . .”

Sottera, Inc. v. Food & Drug Admin., 627 F.3d 891, 898 (D.C.

3

Cir. 2010) (citations omitted). The FDA previously attempted

to regulate tobacco products under the Food, Drug, and

Cosmetic Act (“FDCA”) in 1996, but the Supreme Court

concluded in Food & Drug Administration v. Brown &

Williamson Tobacco Corp. that it lacked the authority to do so

based on “the FDCA’s overall regulatory scheme and [] the

tobacco-specific legislation that [Congress] ha[d] enacted

subsequent to the FDCA.” 529 U.S. 120, 125-26 (2000).

Congress passed the TCA to fill this gap, finding that “Federal

and State governments have lacked the legal and regulatory

authority and resources they need to address comprehensively

the public health and societal problems caused by the use of

tobacco products” and determining that “[i]t is in the public

interest for Congress to enact legislation that provides the Food

and Drug Administration with the authority to regulate tobacco

products and the advertising and promotion of such products.”

21 U.S.C. § 387 Note, Findings (7) & (12); Pub. L. No. 111-

31, 123 Stat. 1776 (June 22, 2009). The TCA incorporated this

authority to regulate tobacco into the existing regulatory

structure of the FDCA. Sottera, 627 F.3d at 894-95.

Relevant to this case, the TCA prohibits the “misbranding

of any . . . tobacco product . . . in interstate commerce,” 21

U.S.C. § 331(b), as well as “the doing of any [] act . . . [that]

results in [a tobacco product] being . . . misbranded.” Id.

§ 331(k). A tobacco product is “deemed to be misbranded” if

“it is sold or distributed in violation of regulations prescribed

under section 387f(d),” id. § 387c(a)(7)(B), which in turn

authorizes the Secretary of Health and Human Services to

“require restrictions on the sale and distribution of a tobacco

product” by regulation, as “appropriate for the protection of the

public health.” Id. § 387f(d). The regulations promulgated

pursuant to this section provide that:

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(1) No retailer may sell cigarettes or smokeless

tobacco to any person younger than 18 years of

age;

(2) (i) Except [through mail-order and in locations

admitting only adults], each retailer must verify by

means of photographic identification containing

the bearer’s date of birth that no person purchasing

the product is younger than 18 years of age;

(ii) No such verification is required for any

person over the age of 26;

(3) Except as otherwise provided in [regulations

about self service], a retailer may sell cigarettes or

smokeless tobacco only in a direct, face-to-face

exchange without the assistance of any electronic

or mechanical device (such as a vending machine);

(4) No retailer may break or otherwise open any

cigarette or smokeless tobacco package to sell or

distribute individual cigarettes [or a quantity of

cigarettes or smokeless tobacco smaller than that

contained in a manufacturer-distributed package];

(5) Each retailer must [bring into compliance] all

self-service displays, advertising, labeling, and

other items, that are located in the retailer’s

establishment.

21 C.F.R. § 1140.14(a). Neither the statute nor the regulations

explicitly states how violations are to be counted.

The TCA created civil monetary penalties for violations

related to tobacco. Section 333 provides for civil money

penalties “in an amount not to exceed $15,000 for each such

violation, and not to exceed $1,000,000 for all such violations

adjudicated in a single proceeding,” with enhanced penalties

available for intentional violations. 21 U.S.C. § 333(f)(9).

Other provisions specify the penalty schedule applicable to

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violations of the retailer-specific regulations. For a retailer

with an approved training program, the maximum penalties

are:

(I) in the case of the first violation, $0.00

together with the issuance of a warning letter

to the retailer;

(II) in the case of a second violation within a 12-

month period, $250;

(III) in the case of a third violation within a 24-

month period, $500;

(IV) in the case of a fourth violation within a 24-

month period, $2,000;

(V) in the case of a fifth violation within a 36-

month period, $5,000; and

(VI) in the case of a sixth or subsequent violation

within a 48-month period, $10,000 as

determined by the Secretary on a case-by-

case basis.

21 U.S.C. § 333 Note; Pub. L. No. 111-31, 123 Stat. 1776,

1839 (June 22, 2009).

The TCA requires the Secretary of Health and Human

Services to issue guidance regarding a variety of topics and

procedures for the assessment of violations and civil money

penalties. Codified at 21 U.S.C. § 333, these provisions direct

that the Secretary issue guidance:

(B) providing for timely and effective notice . . . to

the retailer of each alleged violation at a particular

retail outlet prior to conducting a followup

compliance check . . . .;

(C) providing for a hearing pursuant to the

procedures established through regulations of the

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Food and Drug Administration for assessing civil

money penalties, including at a retailer’s request a

hearing by telephone or at the nearest regional or

field office of the Food and Drug Administration,

and providing for an expedited procedure for the

administrative appeal of an alleged violation;

(D) providing that a person may not be charged

with a violation at a particular retail outlet unless

the Secretary has provided notice to the retailer of

all previous violations at that outlet;

(E) establishing that civil money penalties for

multiple violations shall increase from one

violation to the next violation pursuant to [the

penalty schedule] within the time periods provided

for in such [schedule].

TCA § 103(q)(1); Pub. Law No. 111-31, 123 Stat. 1776, 1838-

39 (June 22, 2009).

The Center published two guidance documents explaining

its approach to enforcement of the tobacco retail regulations.

One was entitled “Civil Money Penalties and No-Tobacco-Sale

Orders for Tobacco Retailers” and the other offered

“Responses to FAQs” about the same. See Ctr. for Tobacco

Prods., Food & Drug Admin., U.S. Dep’t of Health & Human

Servs., Civil Money Penalties and No-Tobacco-Sale Orders for

Tobacco Retailers: Guidance for Industry (“CMP Guidance”)

(rev. Dec. 2016), available at www.fda.gov/Tobacco

Products/Labeling/RulesRegulationsGuidance/ucm447308.ht

m (last visited Mar. 19, 2018); Civil Money Penalties and No-

Tobacco-Sale Orders for Tobacco Retailers, Responses to

Frequently Asked Questions (“FAQs”) (rev. Dec. 2016),

available at www.fda.gov/TobaccoProducts/Labeling/

RulesRegulationsGuidance/ucm252810.htm (last visited Mar.

19, 2018). The guidance documents bear a banner announcing

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that they are “not binding on FDA or the public.” See CMP

Guidance at 1; FAQs at 1. Substantively, the guidance sets

forth the Center’s approach to actions for civil money penalties.

The CMP Guidance provides significant detail about the

Center’s enforcement approach, including follow-up visits to

inspect retailers after violations. The Center’s “FAQ”

document explains the Center’s enforcement position of

counting multiple regulation violations on subsequent visits,

while “count[ing] only one regulation violation from the first

inspection.” See FAQs, Question 43 at 13 (“[The Center]

counts only one regulation violation from the first inspection at

a retail outlet, regardless of the number of regulation violations

that were noted and included in a Warning Letter. For any

subsequent inspections, [the Center] may count any or all

violations and its general policy is to count all of them

individually.”).

II.

The parties do not disagree about the facts underlying this

dispute. On July 10, 2013, an FDA inspector visited Orton and

observed that a minor was permitted to purchase cigarettes, in

violation of then-current 21 C.F.R. § 1140.14(a) (2010), and

that no one checked the minor’s identification before the

tobacco sale, in violation of 21 C.F.R. § 1140.14(b)(1) (2010).

The FDA issued a “Warning Letter” on August 15, 2013,

documenting these violations and concluding that they “cause

[Orton’s] cigarettes to be ‘misbranded’” under 21 U.S.C.

§ 387(c). See Letter from Ann Simoneau, Office of

Compliance and Enforcement, Center for Tobacco Products

(Aug. 15, 2013); Joint Appendix (“J.A.”) 1-3. Orton did not

challenge the issuance of the Warning Letter at that time.

On May 16, 2015, the FDA again inspected Orton and

documented the same violations for a second time: the sale of

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tobacco products to a minor and that the minor’s purchase took

place without Orton checking the minor’s identification to

verify age. The Center brought an administrative complaint

against Orton on October 1, 2015, seeking civil money

penalties of $500. See Admin. Compl. For Civ. Money

Penalties, Ctr. for Tobacco Prods. v. Orton Motor, Inc. d/b/a

Orton’s Bagley, FDA Docket No. FDA-2015-H-3414 (Oct. 1,

2015); J.A. 4-8. This amount derives from the FDA’s

regulations at 21 C.F.R. § 17.2 (2014), which provided at the

time for a $500 maximum civil money penalty for “3

[Violations] within a 24 month period.” Id. at 2. Orton

answered the Complaint with a defense that the statute and

regulations “do not authorize [the agency] to impose multiple

violations as a result of one inspection” or “one transaction.”

See Answer to Admin. Compl., Ctr. for Tobacco Prods. v.

Orton Motor, Inc. d/b/a Orton’s Bagley, FDA Docket No.

FDA-2015-H-3414 at 3 (Oct. 30, 2015); J.A. 11-14. Orton

accordingly argued that the $500 penalty was impermissible

“because two violations were cited during one inspection” or

“one transaction.” Id. Orton sought a hearing before an

administrative law judge (“ALJ”). Id. at 1.

After a prehearing conference and cross-motions for

summary decision, ALJ Lewis Booker issued a Decision and

Order concluding that Orton “misbranded a tobacco product on

May 16, 2015, and will be sanctioned by a civil monetary

penalty of $0 and a judicial Warning Letter.” FDA Office of

Admin. Law Judges, Initial Decision and Order, Ctr. for

Tobacco Prods. v. Orton Motor, Inc. d/b/a Orton’s Bagley,

FDA Docket No. FDA-2015-H-3414 (Feb. 8, 2016); J.A. 26-

35. In short, ALJ Booker concluded that both the sale to a

minor and the failure to check identification resulted in

“misbranding” under a single statutory provision, and, as such,

constituted a single violation supporting civil money penalties.

ALJ Booker held that the July 10, 2013, and May 16, 2015,

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incidents each constituted misbranding but, because they were

22 months apart, they triggered a $0 penalty. Id. at 5-6. The

ALJ issued his own Warning Letter based on the later violation.

Id. at 7.

The Center appealed to the Departmental Appeals Board

(the “Board”). In a decision on June 30, 2016, the Board

reversed the ALJ’s decision and reinstated the $500 penalty.

See Final Decision on Review of Administrative Law Judge

Decision, Ctr. for Tobacco Prods. v. Orton Motor, Inc. d/b/a

Orton’s Bagley, Docket No. A-16-56 (June 30, 2016); J.A. 40-

65. The Board reasoned that the agency was interpreting its

own regulations, justifying deference unless the agency’s

interpretation was contrary to the regulations’ unambiguous

meaning. Other portions of the statute demonstrated that

Congress “knew how to limit the number of violations for

multiple acts in the course of one transaction” as well as to limit

“how penalties may be applied,” including by imposing caps

where multiple violations are “adjudicated in a single

proceeding.” Id. at 11-12. The FDA’s guidance demonstrated

its approach to “distinct” violations, including that the FDA

would not count multiple violations in the first inspection, but

would do so in subsequent visits. Id. at 13-15, 20. The Board

further reasoned that the Center’s enforcement policy gave

effect to the statute’s notice provisions, including through its

guidance and the availability of hearings when civil money

penalties are imposed on the basis of prior enforcement. Id. at

18-19. The Board re-imposed the $500 penalty as authorized

under the schedule. Id. at 26. Orton petitioned for review.

III.

Orton argues that the $500 penalty imposed by the Board

should be set aside under the Administrative Procedure Act as

“not in accordance with law.” 5 U.S.C. § 706(2)(A). In

10

particular, Orton contends that the TCA does not permit the

Center’s practice of charging multiple violations arising from

a single inspection or transaction or the issuance of a warning

letter for a first violation, without a hearing. Orton’s petition

thus implicates the consistency between the FDA’s practices

and the TCA.

The deference afforded to an agency interpretation of a

statute “var[ies] with circumstances.” See United States v.

Mead Corp., 533 U.S. 218, 228 (2001). An interpretation

reached through a formal process, including adjudication, will

ordinarily be reviewed under Chevron. See id. at 230-31. In

this case, however, the interpretation that we now review did

not originally arise through an FDA adjudication: instead, the

Center expressed its position in guidance documents, upon

which the Board in turn relied during the civil money penalty

proceedings. Such “interpretations contained in policy

statements, agency manuals, and enforcement guidelines, all of

which lack the force of law [] do not warrant Chevron-style

deference,” and instead “are ‘entitled to respect’ . . . but only

to the extent that those interpretations have the ‘power to

persuade.’” Christensen v. Harris Cty., 529 U.S. 576, 587

(2000) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140

(1944)). Orton purports to challenge both the Board decision

and the guidance documents themselves, but we need not

determine which form of the agency’s interpretation is Orton’s

primary target: it makes no difference in the result here, since

our conclusion does not require the valence of Chevron

deference.

Under Skidmore, the weight a court affords to an agency

interpretation “will depend upon the thoroughness evident in

its consideration, the validity of its reasoning, its consistency

with earlier and later pronouncements, and all those factors

which give it power to persuade, if lacking power to control.”

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Skidmore, 323 U.S. at 140. Ultimately, a court will uphold an

agency determination under Skidmore if it is persuasive.

Christensen, 529 U.S. at 587. Evaluating the statute “in this

old-fashioned way,” Fed. Election Comm’n v. Craig for U.S.

Senate, 816 F.3d 829, 839 (D.C. Cir. 2016) (quotation marks

omitted), assessing its text and structure, we conclude that the

FDA’s interpretation is persuasive. “[W]e need not reach the

question of Chevron deference if the [agency] interpretation

satisfies the requirements for Skidmore deference.” Union

Neighbors United, Inc. v. Jewell, 831 F.3d 564, 580 (D.C. Cir.

2016) (citing Brown v. United States, 327 F.3d 1198, 1205

(D.C. Cir. 2003) (quotation marks omitted).

A.

Orton posits that the TCA precludes the charging of

multiple violations at one time based on certain procedural

aspects of the statute as well as the broader legislative context.

But the statute and the regulatory scheme support the agency’s

contrary conclusion, which has consistently informed its

enforcement practices.

As an initial matter, the statute provides plainly for the

imposition of civil penalties for violations of the tobacco

requirements. See 21 U.S.C. § 333(f)(9). Although the statute

does not expressly permit the charging of multiple violations

from a single inspection or transaction, the law provides the

FDA with the authority to impose civil penalties for any

violations committed, absent such a restriction. The FDA’s

position that its enforcement authority permits it to impose

penalties for each violation of the tobacco sale restrictions

arising during a single inspection or transaction is a persuasive

interpretation of the plain terms of the statute.

12

Orton argues that three procedural provisions combine to

curtail the FDA’s enforcement authority: the requirement of

“timely and effective notice . . . to the retailer of each alleged

violation at a particular retail outlet prior to conducting a

followup compliance check,” that the FDA enact regulations

establishing a hearing process and an “expedited procedure for

the administrative appeal of an alleged violation,” and that “a

person may not be charged with a violation at a particular retail

outlet unless the Secretary has provided notice to the retailer of

all previous violations at that outlet.” See TCA § 103(q). But

these provisions hardly demand the interpretation that Orton

advocates. Notice before a “followup compliance check”

refers to subsequent inspections – by the plain meaning of the

words, “compliance check” is an event of inspection, not the

incident of a violation. And “notice . . . of all previous

violations” does not mean that the Center may not charge

multiple violations, where the regulations support overlapping

as well as discrete-but-concurrent violations and where the

statute expressly contemplates the adjudication of multiple

violations in a single proceeding, as discussed below. Instead,

“all previous violations” must mean all violations previous to

those charged. This conclusion preserves the integrity of the

statutory scheme and reconciles the provisions within it. See

James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1093 (D.C. Cir.

1996) (noting the Court’s “obligation to interpret the statute’s

provisions in harmony with each other”); Nat’l Corn Growers

Ass’n v. EPA, 613 F.3d 266, 272 (D.C. Cir. 2010) (citing Brown

& Williamson Tobacco Corp. for the proposition that a “statute

must be interpreted as a ‘coherent regulatory scheme’ with ‘all

parts fit into a harmonious whole’”).

The structure of the regulations promulgated under Section

387f(d), as directed by 21 U.S.C. § 387c(a)(7)(B), also cuts

against Orton’s proposed interpretation. First, Orton’s position

would render regulations superfluous with respect to retailer

13

conduct toward underage tobacco purchasers. Generally

speaking, a retailer who sells a tobacco product to a minor, in

violation of 21 C.F.R. § 1140.14(a)(1), likely only would do so

without checking identification first, in violation of 21 C.F.R.

§ 1140.14(a)(2). Understanding these regulations as restricting

separate conduct and supporting separate violations gives

meaning to both age-related regulations in such circumstances.

The distinction between the groups of tobacco purchasers to

which the regulations relate further suggests that each of these

regulations has independent significance: the requirement that

a retailer verify age applies with respect to prospective tobacco

purchasers up to 26 years old, while the sales restriction relates

only to would-be purchasers under the age of 18. Accordingly,

the regulations punish violations of the age-verification

requirements for any purchaser under age 26, but the

punishment becomes more severe when the violation also

results in a minor being permitted to purchase tobacco – the

concern at the core of the age-related regulations. Moreover,

setting aside the overlap at issue here, it requires little

imagination to envision an inspection revealing multiple

violations of other sale restrictions. Perhaps a retailer sells a

loose cigarette to a 25-year-old, without checking

identification, violating 21 C.F.R. § 1140.14(a)(4) and (2). Or

maybe a store offers loose cigarettes in a self-service vending

machine, despite having no age restrictions on entry to that

location, violating 21 C.F.R. § 1140.14(a)(4) and (3). If the

statute counted single and multiple violations identically for

purposes of the civil money penalties that may attach, the

incentive for retailers to comply with each of the regulations

would diminish.

When examining the varied, potentially overlapping

conduct covered by these regulations, it merits note that the

regulations themselves have a special history. Ordinarily,

reliance on regulations to interpret the authorizing statute

14

would be misplaced. See Decker v. Nw. Envtl. Def. Ctr., 568

U.S. 597, 609 (2013) (“[R]egulations, in order to be valid, must

be consistent with the statute under which they are

promulgated.” (quoting United States v. Larionoff, 431 U.S.

864, 873 (1977)). But the regulations at issue here are unique

because Congress in the TCA directed the agency to

promulgate “identical” regulations to those promulgated by the

Secretary of Health and Human Services in 1996, which were

part of the prior regulatory regime that the Supreme Court

struck down in Brown & Williamson. See 21 U.S.C.

§ 387a-1(a)(2). Cf. Regulations Restricting the Sale and

Distribution of Cigarettes and Smokeless Tobacco to Protect

Children and Adolescents, 61 Fed. Reg. 44,396-01, § 897.14

(Aug. 28, 1996). Evidently, Congress legislated with these

restrictions in mind. See Merrill Lynch, Pierce, Fenner &

Smith, Inc. v. Curran, 456 U.S. 353, 381-82 & n.66 (1982) (“re-

enact[ing] a statute without change” or “incorporating sections

of a prior law” demonstrate congressional intent to “le[ave]

intact” contemporary interpretations); cf. Pub. Citizen, Inc. v.

U.S. Dep’t of Health & Human Servs., 332 F.3d 654, 669 (D.C.

Cir. 2003) (declining to rely on congressional ratification

canon of interpretation where “no formal regulation addressed

the question”). With these regulations in place at the direction

of Congress, the statute is easily understood to permit multiple

violations where multiple regulations were breached.

Structural characteristics of the statute confirm the

strength of the FDA’s interpretation and provide further reason

to find it persuasive. The TCA recognizes the adjudication of

multiple violations within a single proceeding where it caps

civil money penalty liability for tobacco control “for all such

violations adjudicated in a single proceeding.” 21 U.S.C.

§ 333(f)(9). The reference to “violations” in the plural form

demonstrates that a single proceeding may involve the

simultaneous adjudication of more than one violation.

15

Orton asserts that the inclusion of this language in the

section governing tobacco civil money penalties generally, but

not within the provisions setting forth the specific procedures

for retailers, indicates Congress’s intention that multiple

violations be adjudicated in discrete proceedings in the latter.

Pet’r’s Br. 31-32. However, as Orton concedes in the Reply,

§ 333(f)(9) by its plain terms applies to retailers as well as to

any other entity doing business regulated by the TCA. Pet’r’s

Reply Br. 10. Moreover, there is no conflict between

§ 333(f)(9) and the specific procedures for civil money

penalties against retailers – as noted above, the statute is

otherwise silent as to whether multiple violations may be

charged at once. It makes little sense that Congress would

provide generally for the adjudication of multiple tobacco

control violations in a single proceeding, but carve out retailers

from that provision implicitly through a series of other

procedures – without ever stating such an intention expressly.

Nothing in the retailer provisions demands such a reading of

the statute taken as a whole.

In contrast to the contorted exception that Orton would

have us imply with respect to tobacco retailers, Congress

clearly precluded the agency from finding multiple violations

in a single transaction in other portions of the FDCA. In

particular, the FDCA provides that “multiple convictions of

one or more persons arising out of the same event or

transaction, or a related series of events or transactions, shall

be considered as one violation” for the purpose of calculating

civil money penalties with respect to violations of certain

prescription drug sampling restrictions. 21 U.S.C. § 333(b)(2).

The absence of such a limitation in the provisions governing

tobacco violations suggests that multiple violations can arise

from a single inspection or transaction, based on the

presumption that “[w]here Congress includes particular

16

language in one section of a statute but omits it in another

section of the same Act . . . Congress acts intentionally and

purposely in the disparate inclusion or exclusion.” Russello v.

United States, 464 U.S. 16, 23 (1983) (citation omitted).

This principle holds true despite the enactment of the

FDCA provisions at different times. Courts presume that

Congress legislates against the backdrop of existing statutes.

See, e.g., Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 185

(1988) (courts “presume that Congress is knowledgeable about

existing law pertinent to the legislation it enacts”); Jerman v.

Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573,

590 (2010). While that presumption “may be overcome by

specific language that is a reliable indicator of congressional

intent,” Arkansas Dairy Co-op Ass’n, Inc. v. U.S. Dep’t of Agr.,

573 F.3d 815, 829 (D.C. Cir. 2009) (citation omitted), the TCA

included no such clear language distinguishing the new tobacco

provisions from the rest of the FDCA into which they were

incorporated. Assuming, as we must, that Congress understood

the statutory framework into which it legislated the TCA, the

explicit preclusion of multiple violations based on a single

event of improper prescription drug sampling provides further

persuasive force in favor of the FDA’s position that the tobacco

restrictions contain no such charging limitation.

We finally note that the Skidmore inquiry “consider[s]

whether the agency has applied its position with consistency”

as a factor in persuasion. Fed. Express Corp. v. Holowecki,

552 U.S. 389, 399 (2008). While not dispositive, variation in

an agency’s interpretation will “count against” its

persuasiveness. See Landmark Legal Found. v. IRS, 267 F.3d

1132, 1137 (D.C. Cir. 2001). Here, the Center’s position shows

no irregularity. To the contrary, the FDA guidance documents

upon which the Board relied have been operative since 2013,

without change to the Center’s violation-counting

17

methodology. That the FDA has interpreted the statute

consistently buttresses our determination that its reading merits

our respect.

Accordingly, we deny Orton’s petition with respect to its

first argument that the FDA’s methodology of counting

violations is improper.

B.

We now turn to Orton’s argument that the FDA violated

the TCA by not providing a process to challenge an alleged first

violation prior to issuance of a warning letter. As described

above, the TCA directed the Secretary to issue guidance

“providing for a hearing pursuant to the procedures established

through regulations of the Food and Drug Administration for

assessing civil money penalties.” TCA § 103(q)(1)(C). The

FDA’s regulations detail extensive procedures governing such

hearings. However, the FDA treats first violations as falling

outside of these civil money penalty procedures, as the penalty

is $0.00 and a warning letter. Orton argues that this omission

violates the TCA and Orton’s procedural due process rights.

We disagree. The consequences from a first violation

alone do not trigger notice and hearing requirements, either

under the TCA or principles of procedural due process. The

TCA requires such procedures only for the assessment of civil

money penalties, and no such penalty attaches to a first

violation. TCA § 103(q)(1)(C). While the notice requirement

attaches to any alleged violation, see id. § 103(q)(1)(B), it is

undisputed that Orton received a warning letter providing

notice of the violations found during the first inspection. Orton

does not explain why the warning letter itself is not sufficient

notice.

18

Moreover, this Court has rejected the idea that an FDA

warning letter itself is a consequence subject to judicial review.

In Holistic Candlers & Consumers Association v. Food & Drug

Administration, we explained that FDA warning letters, while

potentially significant as bases for later enforcement, are not

subject to review where “no legal consequences flow from the

agency’s conduct to [that point].” 664 F.3d 940, 944-45 (D.C.

Cir. 2012) (citation omitted). The lack of legal consequences

distinguishes an FDA warning letter in this context from an

agency letter representing final agency action. Cf. Rhea Lana,

Inc. v. Dep’t of Labor, 824 F.3d 1023, 1030 (D.C. Cir. 2016)

(warning letter carries legal consequences where its issuance is

“dispositive” of notice and establishes “willfulness” in a later

proceeding); Ciba-Geigy Corp. v. EPA, 801 F.2d 430, 436-37

(D.C. Cir. 1986) (concluding that an EPA letter constituted

reviewable agency action where it stated agency policy that

certain products would be considered misbranded and the

company would face cancellation of its registration). Because

the warning letter issued to Orton does not determine Orton’s

rights or obligations or carry other legal consequences, the

FDA’s lack of a hearing procedure by which Orton could

challenge the first violation is not unlawful.

As for Orton’s constitutional claims, due process is

required only where government action threatens a deprivation

of life, liberty, or property. But Orton has failed to show that

the mere issuance of a warning letter, absent further

enforcement action, effects any such deprivation.

“[R]eputation alone, apart from some more tangible interests

such as employment, is [n]either ‘liberty’ [n]or ‘property’ by

itself sufficient to invoke the procedural protection of the Due

Process Clause.” Paul v. Davis, 424 U.S. 693, 701 (1976); see

Trifax Corp. v. Dist. of Columbia 314 F.3d 641, 643-44 (D.C.

Cir. 2003). Orton has not alleged any such tangible effect here.

See Trifax, 314 F.3d at 644.

19

Critically, a retailer has an opportunity to challenge the

issuance of a first violation upon the later assessment of civil

money penalties. During oral argument, counsel for the FDA

clarified that a retailer can challenge the facts underlying a first

violation during the adjudication of a subsequent violation: if

a first violation is disproved, it will not be counted against a

retailer. Oral Arg. at 24:17-28; 31:51-32:07. This is important

because a first violation becomes legally significant when civil

money penalties are assessed for violations identified during a

subsequent failed inspection. At that point, the amount of

penalty assessed moves up the civil money penalty schedule,

based on the foundation of the first violation. As the first

violation affects the amount of penalty assessed later, the

concrete consequence of the first violation arises at that point.

The FDA adjudication of the subsequent violation thus

provides a meaningful opportunity for a retailer to be heard

regarding the underlying first violation, at the time that the first

violation carries legally significant effects. Due process

requires nothing more, and for this reason, we reject Orton’s

second basis for its petition.

* * *

For the foregoing reasons, we deny Orton’s petition.