United States v. Kaadt

• Citation: 171 F.2d 600
• Decision Date: 03 January 1949
• Docket Number: No. 9617,9618.,9617
• Parties: UNITED STATES v. KAADT et al.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

171 F.2d 600 (1948)

UNITED STATES v. KAADT et al.

Nos. 9617, 9618.

United States Court of Appeals Seventh Circuit.

December 7, 1948.

Rehearing Denied January 3, 1949.

Maurice J. Walsh, of Chicago, Ill., and Frank E. Corbett and James P. Murphy, both of Fort Wayne, Ind., for defendants-appellants.

Gilmore S. Haynie, U.S. Atty., of Ft. Wayne, Ind., James E. Keating, Asst. U. S. Atty., of South Bend, Ind., Alexander M. Campbell, Asst. Atty. Gen., and Bernard D. Levinson, of Washington, D. C., Attorney, Federal Security Agency, for plaintiff-appellee.

Before KERNER and SPARKS, Circuit Judges, and LINDLEY, District Judge.

KERNER, Circuit Judge.

These are appeals from a judgment sentencing each appellant to a term of imprisonment after a jury had found them guilty as charged in an indictment containing seven counts and alleging violation of the Federal Food, Drug, and Cosmetic Act of June 25, 1938, 52 Stat. 1040, 21 U.S. C.A. § 301 et seq., in that they introduced or delivered for introduction into interstate commerce misbranded drugs.

Each of the seven counts charged that appellants did, on a date stated, cause to be introduced and delivered for introduction into interstate commerce, consigned to a named individual, an article of drug; that accompanying the drug was certain printed matter; that the statements in the accompanying printed matter were false and misleading because they represented and suggested and created in the mind of the reader the impression that the drug would be efficacious in the cure, mitigation, and treatment of diabetes, whereas in fact and in truth the drug would not be so efficacious.

The printed matter consisted of (1) a letter signed by C. F. Kaadt, referring to a booklet dealing with his theory of the cause, symptoms, and effect of diabetes and the treatment of same in which he states: "I have treated many cases that have been in a very advanced stage * *. * * * I will be pleased to see you"; (2) a leaflet beginning with the words "We do Not prescribe any Set diet"; and (3) a circular entitled "Of Great Interest to Diabetics."

Section 331(a) of the Act prohibits the introduction into interstate commerce of any drug that is adulterated or misbranded. It is misbranded according to § 352(a) if its "labeling is false or misleading in any particular." The term labeling is defined in § 321(m) to mean "all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article." Section 333(a) makes the violation of any of the provisions of § 331 a misdemeanor.

Four questions are argued for reversal of the judgment. In substance appellants' contentions are (1) the misbranding, if any, must occur in the labels used, and the labels must accompany the drug into interstate commerce; (2) the representations made in the labeling were honest expressions of their opinion; (3) the court erred in instructing the jury; and (4) the doctrine of res judicata was applicable.

First: Appellants argue that the misbranding must occur in the labels used and the labels must accompany the drug into interstate commerce; that there is nothing in any of the three items of printed matter that informs the patient as to how the medicine is to be used; that the ingredients of the medicine are not given in the literature and no therapeutic claim is made for it, nor does any statement appear that it is efficacious in the treatment of diabetes except as to results had in prior cases.

The record discloses that all three items of printed matter or literature are not involved in every count. The circular is involved in each count and is the only printed matter in counts 2, 5 and 7. In addition to the circular, counts 1, 3 and 4 involve the leaflet, and counts 4 and 6 involve the letter. The circumstances under which the drug and the literature were introduced or delivered for introduction into interstate commerce varied, but the general pattern was the same. A prospective patient, living outside of Indiana, addressed a letter of inquiry to appellants' clinic and in response received the printed circular and sometimes the form letter. The circular contained the following statements and representations.¹ The patient thereafter attended appellants' clinic, and while there received the leaflet containing diet recommendations which stated in part,² and in some instances also received a copy of the circular. Before leaving, the patient had delivered to him, or appellants later shipped to him, a supply of the drug constituting a three-months' treatment. In five of the seven counts (counts 1, 4, 5, 6 and 7) it was alleged that a supply of the drug, other than that received by the patient at the clinic, was shipped from the clinic to the patient. In those counts the shipment of the additional supply of the drug and the accompanying labeling is charged as the violative shipment.

We have already been told that the phrase "accompanying such article" is not restricted to labels that are on or in the article or package that is transported, and that the first clause of § 321(m) clearly embraces advertising or descriptive matter that goes with the package in which the article is transported. The second clause — "accompanying such article" — has no specific reference to packages, containers or their contents, and it plainly includes what is contained within the package whether or not it is "upon" the article or its wrapper or container, Kordel v. United States, 69 S.Ct. 106, and the advertising matter need not travel with the drug, United States v. Urbuteit, 69 S.Ct. 112. And since in our case it appears that the printed matter was used in the sale of the drug, that it advertised and explained the use of the drug, and that the drug and the printed matter moved from Indiana to a point outside of the State of Indiana, we are impelled to hold that the printed matter was "labeling" within the meaning of the Act.

Second: Appellants insist that the representations made in the labeling were expressions of opinion that they honestly believed. They assert that "this is a repeat of the constant quarrel existing in the medical profession as to what is proper and what is improper treatment of disease"; that a difference of judgment among medical men as to the best course or method of treatment does not tend to prove that either party is wholly wrong or wholly right, and that all this case reflects is that certain physicians believe in one course of treatment and other physicians believe in another course of treatment. They make the point that before a court is warranted in submitting the false or misleading qualities of an assertion of effectiveness to a jury to decide, it must be satisfied that something more is involved than mere differences of opinion between schools or practitioners.

In this case, the issue left to the jury was whether the labeling was false and misleading in that the statements in the printed matter represented and suggested and created in the mind of the reader and led him to believe that the drug was efficacious in the cure, mitigation, or treatment of diabetes. The labeling, as we have already observed, represented that "there is real hope for the diabetic, and the possibility of recovery; * * * this hope is presented in the form of a method and a treatment, which is free from prolonged or continuous dieting * * *. This consideration is invited in terms of what actually has been accomplished in a large number of cases of relief and recovery. * * In the majority of cases the patient resumes a normal diet within two or three weeks after beginning the treatment."

The drug or treatment consisted principally of a mixture of vinegar and potassium nitrate (saltpeter); Taka-diastase, a proprietary digestive preparation, was sometimes added, but analysis revealed no Taka-diastase because it is inactivated and destroyed in a solution as strongly acid as the vinegar medicine. To show the ineffectiveness of the treatment, there was the testimony of patients who had been treated at the clinic and who had subjected themselves to the recommended home treatment with the vinegar medicine, and the testimony of relatives of former patients who had undergone the treatment and subsequently died. Each of these histories was supported by competent medical testimony. A diabetic under competent medical care, taking insulin and on a regulated diet, with his disease under control, was induced to enter the clinic for the prescribed period. In accordance with appellants' recommendations, he decreased his dosage of insulin or discontinued it and substituted appellants' treatment. After subjecting himself to appellants' treatment, he experienced results that commonly follow uncontrolled or improperly treated diabetes. The serious and irreparable injuries that followed included diabetic coma, permanent eye injuries, and gangrene resulting in amputation.

Outstanding medical authorities who were specialists in the treatment of diabetes, testified...