USA v. Univ. Mgmt. Serv

• Decision Date: 10 August 1999
• Docket Number: No. 98-3310,98-3310
• Citation: 191 F.3d 750
• Parties: (6th Cir. 1999) United States of America, Plaintiff-Appellee, v. Universal Management Services, Inc., Corporation; Natural Choice, Inc. Corporation, doing business as Natural Choice Products, Inc.; Paul M. Monea, individual; Paul A. Monea, Defendants-Appellants. Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 750

191 F.3d 750 (6th Cir. 1999)

United States of America, Plaintiff-Appellee, v. Universal Management Services, Inc., Corporation; Natural Choice, Inc. Corporation, doing business as Natural Choice Products, Inc.; Paul M. Monea, individual; Paul A. Monea, Defendants-Appellants.

No. 98-3310

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: August 10, 1999

Decided and Filed: September 13, 1999

Appeal from the United States District Court for the Northern District of Ohio at Cleveland; No. 95-02768--Solomon Oliver, Jr., District Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Cassandra P. McGurk, OFFICE OF GENERAL COUNSEL, FOOD & DRUG ADMINISTRATION, Rockville, Maryland, Alexander A. Rokakis, OFFICE OF THE U.S. ATTORNEY, Cleveland, Ohio, Deborah M. Autor, U.S. DEPARTMENT OF JUSTICE, CIVIL DIVISION, OFFICE OF CONSUMER LITIGATION, Washington, D.C., Appellee.

Michael S. Pasano, Christopher S. Carver, ZUCKERMAN, SPAEDER, TAYLOR & EVANS, Miami, Florida, for Appellants.

Before: NORRIS and SUHRHEINRICH, Circuit Judges; RICE, District Judge^*.

OPINION

SUHRHEINRICH, Circuit Judge.

Defendants appeal summary judgment for plaintiff and a permanent injunction from the manufacture and sale of a device intended to relieve certain types of physical pain when applied to accupressure points. We AFFIRM.

The court of appeals reviews an order granting summary judgment de novo, and hence uses the same test as used in the district court. See Terry Barr Sales Agency, Inc. v. All-Lock Co., 96 F.3d 174, 178 (6th Cir. 1996). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c).

I.

Appellants Universal Management Services, Inc., and Natural Choice, Inc. are Ohio corporations which are managed by Appellants Paul M. Monea and his son, Paul A. Monea. As part of their business, Appellants sell and distribute a product known as the Stimulator, and also a product that connects to the Stimulator known as the Xtender. The Stimulator is essentially an electric gas grill igniter, marketed as a pain relieving device. To produce the Stimulator, Appellants purchase gas grill igniters and outfit them with finger grips. A user then places the tip of the Stimulator on his body, presses with his thumb on a plunger, and an electric current passes into that part of the body. Appellants' advertising literature states that, when applied to certain acupressure points, the Stimulator can relieve numerous kinds of pain (e.g., migraine headaches, swollen joints, allergies). J.A. at 76-77, 505, 808, 810, 814. The Xtender is an accessory that allows an individual to use the Stimulator to reach areas of the body otherwise difficult to reach, such as the spine. In total, Appellants sold a total of 800,000 gas grill ignitors, at a cost to the company of one dollar each, for $88.30 each. J.A. at 505, 793, 839.

In May 1995, U.S. Marshals seized over $1.2 million worth of Appellants' devices pursuant to seizure authority under the Federal Food, Drug & Cosmetic Act, 21 U.S.C. § 301 et seq. (FDCA). J.A. at 782-84. Later that month, the Food and Drug Administration (FDA) informed Appellants that they considered the devices adulterated and subject to regulation, threatening further legal action if approval was not sought and distribution did not cease. J.A. at 78. Distribution did not cease and the Government sought the injunction that is the subject of this appeal. The district court granted summary judgment for the Government on December 30, 1997, and, in February 1998, rejected Appellants' Motion for Reconsideration. J.A. at 774-75. The resulting judgment placed a permanent injunction against the distribution of Appellants' products and ordered Appellants to offer full refunds to all customers who had purchased their devices after the May 1995 seizure. J.A. at 39, 50.

II.

The district court concluded that the Stimulator and Xtender are "adulterated" devices under the FDCA. Specifically, the Government claims that Appellants violated 21 U.S.C. § 331(a) and § 331(k), which prohibit misbranding or adulterating medical devices and introducing such devices into interstate commerce.

To show a violation of §§ 331(a) and (k), the Government must prove: (1) Appellants' products are "devices" within the meaning of the FDCA; (2) the devices are adulterated or misbranded; and (3) the devices move in interstate commerce. The third element is undisputed.

A device is "adulterated" under the FDCA if it is required to receive premarket approval ("PMA") from the FDA but moves in commerce even though it did not receive this PMA. See 21 U.S.C. § 351(f)(1)(B); United States v. An Article of Device Consisting of 1,217 Cardboard Boxes, 607 F.Supp. 990, 998 (W.D. Mich. 1985). Whether a device is required to receive a PMA from the FDA depends on a scheme set out in 21 U.S.C. § 360c. Under this scheme, all medical devices are categorized as Class I (minimal regulation), Class II (intermediate regulation), or Class III (stringent regulation) devices. All "new devices," those not on the market before 1976, are, as a default, automatically Class III devices.

Class III devices cannot be marketed unless either: (1) the manufacturer has submitted to the FDA an application for a PMA and receives approval; or (2) the manufacturer submits a "premarket notification" arguing that its device should be reclassified as Class I or II because it is substantially equivalent to an existing device so categorized and the FDA finds the devices are in fact so equivalent.

Appellants contend that their products¹ are not violative of §§ 331(a) & (k) for three reasons. First, they argue their products are not devices within the meaning of the FDCA. The FDCA's definition of "device" is as follows:

The term "device" . . . means an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part or accessory, which is . . .

(2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or

(3) intending to affect the structure or any function of the body of man or other animals, and

which does not achieve its primary intended purpose through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

21 U.S.C. § 321(h).

Appellants claim that their products are not devices because they (1) achieve their primary intended purpose through chemical action and (2) do not have any effect on the structure or function of the body. As the district court found, however, Appellants presented no genuine issue of material fact that their products operate through chemical action, and two of their own witnesses, Dr. Roy Bugay and Dr. Robert Charm, both indicated that their products do not operate through chemical action. J.A. at 34. The district court also noted that Appellants pointed to nowhere in the record to establish that their products have no effect on the structure or function of the body.²

We agree with the district court. Appellants' own description of the products supports the Government's position. Appellants describe the Stimulator, for example, as working as follows: "the [] electrical stimuli [from the device] . . . stimulate excitatory cells which release electrical potentials which set off a chain of . . . reactions that send messages to the brain creating a responsive reaction that organizes peptides to return the body to homeostasis." J.A. at 34. Appellants also assert their product relieves pain. As such, the products are intended to affect the function of the body and are, therefore, devices under 21 U.S.C. § 321(h)(3)³.

III.

In their Motion for Reconsideration, Appellants raised two issues not originally presented to the district court. First, Appellants claim that it was entitled to a new trial given the malfeasance of Appellants' original trial counsel. Second, Appellants claim that Paul A. Monea may not be personally subject to an injunction.

A.

The Notice of Appeal in this case, however, indicates that Appellants are appealing only from the district court's order granting summary judgment to the Government and the denial of their motion for summary judgment. Appellants fail to appeal from the district court's denial of their Motion for Reconsideration. J.A. at 55. Therefore, Appellants are foreclosed from asking this court to review the issues rejected in the district court's denial of their Motion for Reconsideration because the general rule is that "[i]f an appellant . . . chooses to designate specific determinations in his notice of appeal -- rather than simply appealing from the entire judgment -- only the specified issues may be raised on appeal." McLaurin v. Fischer, 768 F.2d 98, 102 (6th Cir. 1985). However, the Government addresses the merits of the Motion for Reconsideration issues raised on appeal because, it argues, absent a showing of prejudice, this court has usually considered such an error in what is appealed to be harmless. See id. This is inaccurate.

The court must always consider its jurisdiction first and may not hear a cause over which it has no jurisdiction. See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 118 S. Ct. 1003, 1012-13 (1998). Federal Rule of Appellate Procedure 3(c)(1)(B) requires the designation of the judgment or order from which an appeal is taken. Moreover, this rule is jurisdictional and may not be "waived" by this court. See Torres v. Oakland Scavenger Co., 487 U.S. 312, 317 (1988); Smith v. Barry, 502 U.S. 244, 248 (1992)("Rule 3's dictates are jurisdictional in...