United States v. 3 CARTONS, ETC., 12820.
| Decision Date | 20 November 1952 |
| Docket Number | No. 12820.,12820. |
| Citation | 132 F.Supp. 569 |
| Court | U.S. District Court — Southern District of California |
| Parties | UNITED STATES of America, Libelant, v. 3 CARTONS, MORE OR LESS, "NO. 26 FORMULA GM etc.," Respondents, and Basic Endocrines Sales Company, Inc., Claimant. |
COPYRIGHT MATERIAL OMITTED
Walter S. Binns, U. S. Atty., Clyde C. Downing, Asst. U. S. Atty., Chief, Civil Division, Robert Komins, Asst. U. S. Atty., Los Angeles, Cal., for the United States.
Lee J. Myers, Long Beach, Cal., for claimant.
(1) During 1949, the W. H. Grew Manufacturing Company shipped various quantities of the following articles from Salt Lake City, Utah, to Seattle, Washington, consigned to the Basic Endocrines Sales Company, Inc., 1219 Northern Life Tower:
No. 26 Formula GM No. 6 Formula GE - 5 No. 29 Formula GM - 3 No. 38 Formula GM - 12 No. 33 Formula GM - 7 No. 105 Androgenic Hormone
(2) On December 20, 1949, the United States filed a Libel of Information in the U. S. District Court for the Western District of Washington, No. 15418, alleging that said articles were drugs and were misbranded within the meaning of 21 U.S.C.A. § 352(f) (1) in that their labeling failed to bear adequate directions for use.
(3) Pursuant to said Libel and process issued thereunder, the United States Marshal for the Western District of Washington seized said articles in the possession of said Basic Endocrines Sales Company, Inc., at Seattle, Washington, which was then holding them to fill orders from customers.
(4) The Basic Endocrines Sales Co., intervened as claimant and filed an Answer, and later an Amended Answer, denying that the articles were either drugs or misbranded. Subsequently, by Order of Removal dated January 22, 1951, the cause was transferred by the District Court for the Western District of Washington to this District for trial.
(5) Extensive pre-trial proceedings were had in this District and the case was submitted upon a stipulated record.
(6) On January 30, 1952, by Stipulation and Order as to Partial Withdrawal of Claim and Amended Answer, the claimant withdrew its Claim and Amended Answer with respect to the article designated as "No. 105 Androgenic Hormone". Claimant asserted it was no longer distributing this article and therefore had no reason to contest the allegations in the Libel regarding this article.
(7) The labeling of the articles under seizure consists solely of the labels affixed to the individual cartons. One of these labels, typical of all, reads in its entirety as follows:
(8) Claimant concedes that none of these articles has any therapeutic value.
(9) Claimant has been doing an interstate business in the distribution of these products for the past 25 years. Claimant's main office is in Seattle, Washington, and it has branch offices in Los Angeles, San Francisco, Chicago, Detroit, and Cleveland. All literature used by the various branch offices emanates from the Seattle office. Sales promotion practices of the firm are the same throughout the country; the same literature is used and the same representations are made for its products in all the branch offices.
(10) Each product has a rather long identifying name — e. g., "No. 6 Formula GE - 5." Claimant has from time to time used different identifying symbols for its products but the letters and number following the word "Formula" have remained constant. Thus Formula GE - 5" has been unchanged and has referred to the same product though sometimes preceded by a number other than "No. 6".
(11) During the past 17 years, claimant's representatives have distributed many items of literature to customers and prospective customers to induce orders for claimant's products. Exhibits before the Court include 18 specimens of such literature, ranging in size from a 1-page chart to a 126-page booklet. These Exhibits are identified as follows:
Exhibit 1 — Booklet entitled "Basic Endocrines" (5th Edition) — published about 1937. Exhibit 2 — Indications Chart — 1935. Exhibit 3 — Booklet entitled "Basic Foods and Endocrines" subtitle "Formulae and Reference Guide" — 1935. Exhibit 5 — Booklet entitled "Basic Endocrines from Embryo Throughout Life" (6th Edition, 1939). Exhibit 6 — Leaflet entitled "Basic Endocrines" — about 1940. Exhibit 8 — Booklet entitled "Basic Endocrines from Embryo Throughout Life" — 1945. Exhibit 9 — Leaflet entitled "Androgenic Substance in Corn Oil" — 1945. Exhibit 11 — Booklet entitled "Index of Basic Endocrines". Exhibit 12 — Leaflet entitled "Dysmenorrhea" and "Nephritis etc." Exhibit 13 — Booklet entitled "Basic Endocrines from Embryo Throughout Life" and "Theory and Use of Basic Endocrines," 1941. Exhibit 14 — Magazines entitled "Endogram" July 1947, August 1949, April 1949 January 1949. Exhibit 15 — Booklet entitled "Basic Endocrines from Embryo Throughout Life" (Price List, 1947). Exhibit 19 — Three miniature leaflets entitled "Basic Endocrines from Embryo Throughout Life" — Volume 1, No. 1, No. 3, and No. 4. Exhibit 20 — Two miniature leaflets entitled "Basic Endocrines from Embryo Throughout Life" — Volume 1, No. 5 and No. 6. Exhibit 22 — Indications or Symptom Chart. Exhibit 23 — Chart entitled "Foundation of Basic Endocrines". Exhibit 24 — Specimens of current labels of articles under seizure. Exhibit 25 — Booklet entitled "Basic Endocrines from Embryo Throughout Life" — 1938 Edition.
(12) Despite claimant's concession that the products under seizure have no therapeutic value, claimant's literature has consistently represented these products as efficacious in the treatment, mitigation, and prevention of many ailments including some of the most serious that afflict mankind.
(13) Claimant's Secretary represents that in recent years the claimant has ordered its representatives to cease distributing said literature, but actual distribution of such literature has nevertheless been continued by its representatives. Claimant's representatives or detail men have given or "loaned" to prospective customers so-called "personal copies" of some items of this literature containing the most comprehensive therapeutic claims for the products under seizure.
(14) Claimant's representatives or detail men have also freely given their customers oral advice regarding the disease conditions for which they claimed these products were indicated as well as the dosages in which they should be prescribed in treating those conditions.
(15) Many of claimant's customers who had apparently not received its literature (making therapeutic claims) in recent years, had in their possession identical or similar literature which claimant had distributed 7-14 years ago, and these customers relied upon such literature and the aforesaid oral advice in ordering and prescribing the products in question.
(16) The products under seizure are labeled to declare the presence of minute quantities of animal glands in a vegetable base. For example, "No. 6 Formula GE-5" is represented to contain 5 grains of cardiac or animal heart in each capsule. It would require 1400 capsules, each containing five grains of cardiac, to comprise one pound of cardiac substance.
(17) The articles under seizure are all drugs within the meaning of 21 U.S.C.A. § 321(g) (2) since they were intended for use in the treatment, mitigation, and prevention of many disease conditions. Such intended...
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