U.S. v. 22 Rectangular or Cylindrical Devices
| Decision Date | 26 June 1996 |
| Docket Number | Civil No. 86-C-486G. |
| Citation | 941 F.Supp. 1086 |
| Court | U.S. District Court — District of Utah |
| Parties | UNITED STATES of America, Plaintiff, v. 22 RECTANGULAR OR CYLINDRICAL FINISHED DEVICES, MORE OR LESS, "THE STER-O-LIZER MD-200 * * *, ... HALOGENIC PRODUCTS COMPANY, a/k/a Ster-O-Lizer Manufacturing Company, a corporation, and Tim Themy-Kontronakis, an individual, Defendants. |
Jacqueline Eagle, Washington, DC, David J. Horowitz, Rockville, MD, for Plaintiff.
Robert L. Booker, Salt Lake City, for Defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
On January 29-30, 1996, a bench trial was held on the court's order to show cause why defendants should not be held in criminal contempt for violation of the court's permanent injunction issued in 1989 and its Injunction Order issued in 1994. The government was represented by Jacqueline H. Eagle and David J. Horowitz. Defendants were represented by Robert L. Booker. The parties submitted evidence and presented final arguments after which the parties were permitted to file post trial memorandums. The case was submitted for decision and taken under advisement upon submission of the post trial filings.
Now being fully advised, the court makes and enters its Findings of Fact and Conclusions of Law.
1. This case first came before the court on June 5, 1986, when the United States filed a civil seizure action under the Federal Food, Drug, and Cosmetic Act (the Act) against devices marketed for use in sterilizing surgical instruments (STER-O-LIZERs or sterilizers) sold by the Halogenic Products Company.
2. On July 27, 1987, the government amended the complaint to add as defendants Tim Themy-Kotronakis (Themy) and the Halogenic Products Company and to seek, in addition to the condemnation of the devices, injunctive relief against these defendants.
3. On January 12, 1989, the Court, concluding that the seized STER-O-LIZERs were devices within the meaning of the Act, 21 U.S.C. § 321(h), which were adulterated under 21 U.S.C. § 360j(f)(1)(A) and misbranded under 21 U.S.C. § 352(o), granted summary judgment to the government. U.S. v. 22 Rectangular or Cylindrical Devices, 714 F.Supp. 1159, 1167 (D.Utah 1989).
4. At the same time, the Court condemned the devices and ordered that an injunction issue.
5. On March 16, 1989, the Court entered its Judgment and Decree of Condemnation and Injunction (1989 Order).
6. Paragraph IX of the 1989 Order contains the following provisions relevant to this contempt action:
IX. ... the defendants, Themy and Halogenic, and each of the corporate defendant's officers, directors, employees, agents, successors and assigns, and any and all persons in active concert or participation with them, are hereby perpetually restrained and enjoined from directly or indirectly doing any of the following acts:
A. Introducing or causing the introduction into interstate commerce of any device, or holding for sale any device after shipment of one or more of its components in interstate commerce, unless and until:
1. The methods, facilities, and controls for manufacturing, processing, packing, storing and labeling devices are established operated, and administered in conformity with FDA's Good Manufacturing Practice Regulations, 21 CFR Part 820;
. . . . .
3. A DHHS representative inspects the defendants' facilities.... and
4. The FDA notifies the defendants in writing that the defendants appear to be incompliance with the Good Manufacturing Practice Regulations, 21 CFR Part 820.
7. In March 1994, the government moved this Court to reopen and modify the 1989 injunction on the grounds that Themy, now operating under the auspices of Brinecell, Inc. ("Brinecell"), was manufacturing, promoting, and actually using a new device, the AIDS Treating Machine, to treat patients.
8. In March 1994, the government gave notice and defendants consented and acquiesced therein that it intended to seek modification and to revise the 1989 injunction to make it absolutely clear that the injunction and order extends to all untested and unapproved devices produced by the defendants, including the AIDS Treating Machine. The government made it clear that it intended to seek to prohibit the defendants from distributing and holding devices for sale until they are in compliance with current good manufacturing practice [CGMP] regulations, 21 C.F.R. Part 820, and until the defendants have obtained the necessary approval from FDA.
9. On July 6, 1994, this Court signed an Injunction Order amending the 1989 injunction (1994 Order), which contains the following relevant provisions:
I. Except as explicitly stated in paragraph VI herein [providing for costs of inspections], this decree supplements but does not supersede the Order of Permanent Injunction entered in this case on March 16, 1989 ("the March 16, 1989 Order"), which Order is otherwise unaffected by this decree and remains in effect.
II. This decree applies only to articles that are intended for use, as defined in 21 C.F.R. §§ 201.128 [for drugs] and 801.4 [for devices], in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or function of the body of man, within the meaning of 21 U.S.C. §§ 321(g) [for drugs] and 321(h) [for devices]. Intended use under 21 U.S.C. is determined by the objective intent of the manufacturer or vendor as set forth in 21 C.F.R. §§ 201.128 and 801.4.
10. The 1994 Order enjoins the defendants from, among other things, directly or indirectly doing or causing to be done any of the following acts:
Manufacturing, processing, labeling, packing, promoting, distributing, or holding for sale the AIDS Treating Machine or any other article of device intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or function of the body of man, within the meanings of 21 U.S.C. § 321(h), unless and until defendants have obtained premarket approval from the FDA, as required by 21 U.S.C. § 360e, or an exemption pursuant to 21 U.S.C. § 360(g) and 21 C.F.R. Part 812. (¶ III.B)
11. On June 13, 1995, the government filed a petition for an order to show cause ("petition") in criminal contempt.
12. In August 1995, the government produced more than thirteen hundred pages of discovery documents to the defendants pursuant to Fed.R.Crim.P. 16(b), and on August 10, 1995, filed its notification of compliance with D.Ut.Rule 308(h).
13. On January 5, 1996, pursuant to Fed. R.Evid. 404(b), the government served the defendants with notice of intent to offer certain evidence that might be characterized as other crimes or wrongs, including "evidence that in or about July 1994, defendant Tim Themy-Kontronakis ... promoted the sale of and offered for sale to various medical offices in Salt Lake City ... both the MD-200 Ster-O-Lizer and the AIDS Treating Machine," and evidence that after the date of entry of the first injunction (March 16, 1989), Themy continued to hold the MD-200 for sale.
14. The court executed the Order to Show Cause and set the matter for bench trial on charges of criminal contempt.
15. After continuances, the case was finally set for trial to commence on January 29, 1996. Evidence was presented to the court on January 29-30, 1996. The following findings 16-47 are based upon the evidence presented at the said criminal contempt proceeding.
16. On May 17, 1995, Joseph Wolgramm, vice president of operations for Jets Air Freight, picked up a package from Brinecell for delivery to the Fritz Company, a freight forwarder. The package was invoiced for shipment to Barcelona, Spain, and Mr. Wolgramm delivered the package to the Fritz Company on May 17, 1995.
17. In May 1995, Dana Ferguson of the Fritz Company advised Mr. French, an FDA investigator, that Fritz had received the aforesaid package from Brinecell and that the Brinecell invoice identified the contents as a Surgical Instrument Sterilizer model MD-200 and the destination as Barcelona, Spain. As a result, Mr. French found that the package contained a sterilizer model MD-200, and that the Brinecell invoice dated "17 May 95," listed the price for the sterilizer at $7,000.00 and was signed by Themy.
18. Thereafter, the MD-200 was administratively detained by FDA and then seized by the U.S. Marshal. Mr. French personally served Themy with copies of the administrative detention papers.
19. Prior to the aforesaid May 1995 inspection, Mr. French had inspected the Brinecell facility on three separate occasions, once in 1993, once in 1994, and once in 1995. At each inspection, Mr. French found evidence that Themy was not complying with the terms of the court issued injunctions. Specifically, Mr. French found evidence indicating that Themy was manufacturing and holding for sale both the sterilizer models MD-200 and MD-201, and the AIDS Treating Machine, and that Themy was promoting the AIDS Treating Machine. Mr. French also found during each inspection that Themy had failed to comply with CGMP requirements.
20. In the 1993 inspection, Mr. French found, and photographed, assembled sterilizers and sterilizer components at Brinecell. Themy admitted that the gauges which were assembled for his medical sterilizers came from Ohio.
21. In the 1993 inspection, Mr. French also found documents showing that Brinecell had shipped a sterilizer (priced at $1000.00) to Greece in 1992. When Mr. French asked Themy if he had shipped the sterilizer to Greece, Themy admitted that he had.
22. At the close of the 1993 inspection, Mr. French gave Themy a copy of the 1989 Injunction Order and discussed it with him. Themy agreed that he understood the requirements of the 1989...
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U.S. v. Themy-Kotronakis
...by willfully disobeying the 1989 and 1994 Orders, in violation of 18 U.S.C. § 401(3). See United States v. 22 Rectangular or Cylindrical Finished Devices, 941 F.Supp. 1086, 1096 (D.Utah 1996). DISCUSSION Themy contends that the evidence presented by the government was insufficient to prove ......