U.S. v. Articles of Drug for Veterinary Use

• Decision Date: 19 May 1995
• Docket Number: Nos. 94-1270,94-1314,s. 94-1270
• Citation: 50 F.3d 497
• Parties: UNITED STATES of America, Plaintiff-Appellant/Cross-Appellee, v. ARTICLES OF DRUG FOR VETERINARY USE, Identified in Attachment A which are in the Possession of Immuno-Dynamics, Inc., Highway 141/169, Perry, Iowa, Defendants- Appellees/Cross- Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 497

50 F.3d 497

UNITED STATES of America, Plaintiff-Appellant/Cross-Appellee, v. ARTICLES OF DRUG FOR VETERINARY USE, Identified in Attachment A which are in the Possession of Immuno-Dynamics, Inc., Highway 141/169 Perry, Iowa Defendants- Appellees/Cross- Appellants.

Nos. 94-1270, 94-1314.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 13, 1994.

Decided March 13, 1995.

Rehearing Denied May 19, 1995,

Deborah Kent, Washington, DC, argued (Frank W. Hunger, Don Carlos Nickerson, Douglas N. Letter, Margaret Jane Porter, Steven A. Johnson and Deborah Ruth Kent, on the brief), for appellant/cross-appellee.

David L. Charles, Des Moines, IA, argued (David L. Charles and S.P. DeVolder, Des Moines, IA, and Ralph R. Brown, Dallas Center, IA, on the brief), for appellee/cross-appellant.

Before WOLLMAN, Circuit Judge, JOHN R. GIBSON, Senior Circuit Judge, and HANSEN, Circuit Judge.

HANSEN, Circuit Judge.

The United States appeals the judgment entered on a jury verdict rendered in favor of the defendant, Immuno-Dynamics, Inc. (Immuno-Dynamics), in the United States' attempt to condemn six products manufactured by Immuno-Dynamics as unsafe and adulterated new animal drugs under the Federal Food, Drug, and Cosmetic Act (FDCA). See 21 U.S.C.A. Secs. 301-395 (1972 & West Supp.1994). The United States contends that the district court ¹ erred by not granting its motion for judgment as a matter of law or alternatively, that the jury verdict is not supported by the evidence. We affirm.

I.

This action began when the United States filed a complaint for forfeiture of six products manufactured by Immuno-Dynamics at its Perry, Iowa, plant, contending that the products were "adulterated" "new animal drugs." ² The United States seized the six products, as well as some written literature found at the plant. The seized products had not been approved by the United States Food and Drug Administration (FDA). Immuno-Dynamics protested the need for such approval, contending that these products are mere nutritional supplements or food and not drugs subject to FDCA regulation.

The six products seized (Bio-Stim Calf Boluses, Bio-Stim Cattle Boluses, Feed Supplement, ID-Vita Pak, VP-127, and VeGa-1) are made from dried colostrum with an added preservative. Colostrum, the first milk produced by a mammal after giving birth, is generally recognized for its high content of protein and antibodies that supply essential immunities to the newborn. ³ To manufacture the seized products, Immuno-Dynamics collects colostrum from dairy cows, sanitizes it, adds a preservative to prevent spoilage, formulates the colostrum into a cheese, extracts the whey (the watery part of milk that is separated from the curd in making cheese), and defats it through a drying process. Immuno-Dynamics then markets the colostral whey in both a powdered and a liquid form. Of the six products seized, some are powder and some are liquid; all must be mixed with either feed or water and orally ingested by young calves or cattle.

At trial, the United States contended that the products were adulterated new animal drugs in violation of the FDCA. Immuno-Dynamics argued that the seized products were not intended for drug uses and therefore were not adulterated new animal drugs under the FDCA. Rather, Immuno-Dynamics argued that the seized products were merely food or at most "animal biologics," which it contended are solely within the regulatory jurisdiction of the United States Department of Agriculture under the Virus, Serum, and Toxin Act of 1913 (VSTA), 21 U.S.C.A. Secs. 151-58; and are not subject to seizure under the FDCA. Both parties sought judgment as a matter of law, but the district court submitted the case to the jury.

The district court instructed the jury solely on the United States' FDCA claim and did not instruct on Immuno-Dynamics' VSTA jurisdictional issue. By special verdict form, the jury found that none of the six products was an "adulterated new animal drug," and accordingly, the district court entered judgment in favor of Immuno-Dynamics.

The United States appeals, contending that the six products at issue are adulterated new animal drugs within the meaning of the FDCA as a matter of law and that the case should not have been submitted to the jury or, alternatively, that no reasonable juror could have found that the six products were not new animal drugs in light of the uncontroverted evidence. The United States also contends that the six products are not generally recognized as safe and effective by qualified scientific experts. Immuno-Dynamics cross-appeals on the district court's failure to instruct on the VSTA animal biologics issue.

II.

The dispositive issue in our view is whether or not the district court properly submitted this case to the jury. In a new drug condemnation proceeding, either party may demand a jury trial on an issue of fact. 21 U.S.C.A. Sec. 334(b). Immuno-Dynamics presented evidence at trial indicating that the products seized were not intended to be used as drugs within the meaning of the FDCA, that the written literature seized at the plant was not actually distributed in the country to promote the six products seized, that colostrum is generally recognized as safe, and that controlled field testing performed on these products indicated the same. We must determine whether this evidence raised an issue of fact for a jury or a question of law for the court.

The FDCA broadly defines "drug" as any product "intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease" and any product "(other than food) intended to affect the structure or any function of the body of man or other animals." 21 U.S.C.A. Sec. 321(g)(1)(B) and (C). This statutory definition indicates that "whether a product is a drug depends on its intended application." United States v. Pro-Ag, Inc., 796 F.Supp. 1219, 1224 (D.Minn.1991), aff'd, 968 F.2d 681 (8th Cir.1992). "The vendor's intent is the key element in this statutory definition." United States v. Storage Spaces Designated Nos. 8 & 49, 777 F.2d 1363, 1366 (9th Cir.1985), cert. denied sub nom., Nescco, Inc. v. United States, 479 U.S. 1086, 107 S.Ct. 1291, 94 L.Ed.2d 148 (1987).

The vendor's intended application for a product may be derived from any relevant source, including product labels and any promotional materials accompanying the product. Id. at 1366; Pro-Ag, 796 F.Supp. at 1224. The FDCA defines "labeling" as "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." 21 U.S.C.A. Sec. 321(m). Physical attachment of promotional literature to the product is unnecessary. Kordel v. United States, 335 U.S. 345, 357, 69 S.Ct. 106, 113, 93 L.Ed. 52 (1948). Promotional materials are relevant to intent so long as they are currently being distributed with the product, and if not, there must be evidence that customers are still relying on the representations made in promotional materials distributed in the past. Pro-Ag, 796 F.Supp. at 1225.

The dispute in this case centers around claims made in written literature seized at the plant but not affixed to the products seized. The United States seized written literature consisting of a brochure, two University and Field Trial Results booklets, a pamphlet, and an advertisement. This literature described colostrum-based products in general and made various claims about the seized products, including that they increase the chance of survival in young animals, improve circulatory flow, increase circulatory cell volume, regulate the body defense system, improve the quality of blood flow, lessen the severity of scours and pneumonia, and act as a digestive stimulant to improve appetite after stress. There is little doubt that these claims, if used in promotional material, can be said to indicate an intent to "affect the structure or any function of the body of" animals within the FDCA's broad definition of "drug." 21 U.S.C.A. Sec. 321(g)(1)(C). The United States argues that drawing a conclusion about the vendor's intent based upon the uncontroverted statements in the written materials was purely a question of law that should not have been submitted to the jury. In this case, however, Immuno-Dynamics raised genuine factual disputes about whether these written materials were "promotional" and whether they were "accompanying" the products seized within the meaning of the Act. 21 U.S.C.A. Sec. 321(m)(2).

Immuno-Dynamics offered evidence to the effect that the written materials were not used to promote the products seized but were printed for other purposes. Immuno-Dynamics claimed that one pamphlet had been distributed only to overseas customers; that the university studies merely summarized the results of field trial studies and were not used for promotional purposes; and that it ceased distributing another pamphlet after the FDA voiced some concerns about its content. No customers testified that they purchased the seized products on the basis of a promoted drug purpose, and no product users testified that they relied on any present or prior representations when purchasing the products seized. Thus, the record demonstrates that factual disputes existed that were properly submitted to a jury.

The United States argues that in United States v. Pro-Ag, Inc., 968 F.2d 681, 683 (8th Cir.1992), and in United States v. 353 Cases * * * Mountain Valley Mineral Water, 247 F.2d 473, 480 (8th Cir.1957), we considered the labeling issue to be a question of law. Those decisions are readily distinguishable from the case at hand. In both of those cases, the fact that the written materials in issue were distributed as promotional materials was undisputed. In Pro-Ag, the district court considered only the promotional literature that was...