U.S. v. Syntrax Innovations, Inc.

• Decision Date: 14 February 2001
• Docket Number: No. 1:99CV140RWS.,1:99CV140RWS.
• Citation: 149 F.Supp.2d 880
• Parties: UNITED STATES of America, Plaintiff, v. SYNTRAX INNOVATIONS, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

149 F.Supp.2d 880

UNITED STATES of America, Plaintiff, v. SYNTRAX INNOVATIONS, INC., et al., Defendants.

No. 1:99CV140RWS.

United States District Court, E.D. Missouri, Southeastern Division.

February 14, 2001.

Michael A. Price, Asst. U.S. Attorney, Office of U.S. Attorney, Cape Girardeau, MO, for plaintiff.

Richard E. Greenberg, Greensfelder and Hemker, Sanford J. Boxerman, Capes and Sokol, St. Louis, MO, John L. Oliver, Jr., President, James F. Waltz, Vice-President, Oliver and Oliver, Cape Girardeau, MO, for defendants.

MEMORANDUM AND ORDER

SIPPEL, District Judge.

On December 10, 1999, the government filed this civil forfeiture action under the Federal Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., seeking the condemnation and destruction of "Triax."¹ Triax, which was being marketed and sold by defendants as a dietary supplement to assist in weight reduction, contains a thyroid hormone called tiratricol. The government's original and amended complaints allege that tiratricol is a misbranded and unapproved drug. Defendants initially contested these allegations and asserted that tiratricol was a dietary supplement, not a drug.

On March 3, 2000, I entered an order granting preliminary injunctive relief with the consent of defendants. That order enjoined defendants from "directly or indirectly manufacturing or distributing any product containing tiratricol, purporting to contain tiratricol, which is labeled as `Triax,' or any other product containing any T-3 or T-4 thyroid hormone or T-3 or T-4 thyroid hormone analogue" during the pendency of this action.

After summary judgment motions were filed, the government discovered that an investigational new drug application (IND) has been in effect for tiratricol since 1990. This IND precludes tiratricol from being a dietary supplement as a matter of law. 21 U.S.C. § 321(ff)(3)(B)(ii) provides that the term "dietary supplement" does not include "an article authorized for investigation as a new drug ... for which substantial clinical investigations have been instituted and for which the existence of such investigations have been made public, which was not before such ... authorization marketed as a dietary supplement or as a food." The undisputed facts demonstrate that: substantial clinical investigations have been instituted for tiratricol; the existence of such investigations have been made public; and, tiratricol was not marketed as a dietary supplement or as a food prior to the authorization of the IND. For this reason, defendants now concede that Triax and any product containing tiratricol cannot be considered dietary supplements and do not contest entry of summary judgment against them.

However, defendants do object to several of the provisions contained in the government's proposed order of condemnation, forfeiture and permanent injunction. In particular, defendants object to the following proposed provisions: 1) the proposed injunction is overbroad because it is not limited to the marketing and sale of tiratricol; 2) the proposed order is vague because it allegedly enjoins them from "violating the law;" 3) the proposed order grants the FDA the right to conduct inspections of defendants' facilities to ensure compliance with the terms of the permanent injunction without notice; 4) the proposed order requires defendants to pay for the government's investigation and prosecution costs incurred to ensure compliance with the permanent injunction; 5) the proposed order enjoins others "in active concert or participation" with them and is not limited to those involved in the distribution of tiratricol; 6) the proposed order imposes deposition costs and travel expenses upon defendants as a sanction even though the government did not first file a discovery motion on this issue; 7) the proposed order requires that the defendants notify any purchasers of tiratricol that distribution is prohibited; 8) the proposed order allows the FDA to shut down defendants' operations without further order from the Court if it determines that defendants are violating the terms of the injunction; and 9) the proposed order provides that the FDA's determinations are final and not subject to judicial review.

The government responds that these provisions are necessary to protect the health and are routinely ordered in these kinds of forfeiture cases. I have reviewed all the cases cited by both parties and find that, for the most part, the requested injunctive relief is necessary and has been authorized by many other courts considering these issues. My analysis of the appropriate scope of injunctive relief follows.

Scope of Permanent Injunctive Relief

Defendants do not object to the propriety of a permanent injunction prohibiting the sale and distribution of tiratricol, but contend that the injunctive relief sought by the government is overly broad because it is not limited to the sale and distribution of tiratricol.² Instead, the government also seeks to enjoin the sale of products bearing the word Triax on its label or promotional material and "any product labeled as being similar in composition or effect to tiratricol or Triax." After this case was filed, defendants began marketing and selling a product labeled as "Triax II." Because Triax II does not contain tiratricol, defendants argue that they should be allowed to continue marketing and selling it. This argument fails.

As the government correctly notes, defendants are marketing Triax II by explicit association with Triax, a misbranded and unapproved new drug. Defendants' marketing materials suggest that this product is an improved version of Triax. In fact, the use of the word Triax implies that there is also tiratricol (an illegal drug) in the product. Defendants have indicated that they intend to continue marketing and selling Triax II unless prohibited from doing so by the terms of this Order.. Because I do not believe the defendants should be permitted to continue profiting, either directly or indirectly, from the sale of an illegal drug, I will enjoin the sale of any products bearing the word "Triax."

Defendants' concern that they will be precluded from selling any products that assist in weight reduction is misplaced. The proposed order does not prohibit defendants from selling products that assist in weight loss; it prohibits the defendants from selling products that reference or draw comparisons between the effects and composition of that product and tiratricol or Triax. I find this provision reasonable and necessary for the same reasons discussed above. This argument would not prevent me from enjoining these activities in any event, because defendants may not "successfully defend against the issuance of an injunction by asserting that the injunction would drive it out of business." U.S. v. Articles of Drug, 825 F.2d 1238, 1247 (8th Cir.1987).

Defendants also contend that the proposed injunctive relief is overbroad and vague because it enjoins them from the sale or distribution of: 1) "any product that is a new drug within the meaning of 21 U.S.C. § 321(p), unless and until (1) an approval of an application filed pursuant to 21 U.S.C. § 355(b) is in effect for such product, or (2) an acceptable notice of claimed investigational exemption filed pursuant to 21 U.S.C. § 355(i) and 21 C.F.R. Part 312 is on file for each such product"; and 2) any misbranded drug. Defendants argue that these proscriptions amount to an injunction to simply "follow the law."

While it is true that the terms of an injunction must be specific in terms and reasonably describe the restrained acts, see Fed.R.Civ.P. 65(d), the injunctive relief sought by the government passes this test. It describes with particularity the type of conduct sought to be restrained and does not simply require defendants to "follow the law." This requested relief has been routinely awarded by other courts. See, Articles of Drug, 825 F.2d at 1248 (holding that "the district court did not abuse its discretion in issuing an injunction barring [defendant] from marketing and selling drugs in violation of 21 U.S.C. §§ 331, 352(i)(2)."); U.S. v. Universal Management Services, Inc., 999 F.Supp. 974, 983-84 (N.D.Ohio 1997) (enjoining defendants from "violating 21 U.S.C. § 331(a) by introducing or delivering for introduction into interstate commerce any article of device that is adulterated or misbranded; (2) violating 21 U.S.C. § 331(k) by causing the adulteration or misbranding of any article of device ... and (3) violating 21 U.S.C. § 331(p) by failing to register in accordance with 21 U.S.C. § 360."), aff'd, 191 F.3d 750 (6th Cir.1999), cert. denied, 530 U.S. 1274, 120 S.Ct. 2740, 147 L.Ed.2d 1005 (2000); U.S. v. Union Cheese Co., 902 F.Supp. 778, 788-89 (N.D.Ohio 1995) (enjoining defendants from "(a) introducing or delivering for introduction into interstate commerce any article of food that is adulterated within the meaning of 21 U.S.C. § 342(a)(1) or § 342(a)(4) while such food or one or more of its components is held for sale after shipment in interstate commerce.").

As for their third objection, defendants correctly note that the inspection authority proposed by the government exceeds the inspection authority granted the FDA under 21 U.S.C. § 374. This fact, however, does not compel the conclusion that the inspection authority proposed by the government is unreasonable or unnecessary. The inspection authority needed by the FDA to ensure that defendants are complying with the terms of my order should be more extensive than the statutory authority granted the FDA to determine whether the FDCA is, in fact, being violated. Here, there is no question that defendants violated the FDCA. Moreover, this Order provides the requisite notice to defendants. This type of relief is routinely ordered by other courts, see, U.S. v. Vital Health Prods., Ltd., 786 F.Supp. 761, 779 (E.D.Wis.1992), aff'd, 985 F.2d 563 (7th Cir.1993); Union Cheese Co., 902 F.Supp. at 789 (...