United States v. Hakim

• Decision Date: 26 May 2020
• Docket Number: 18 Civ. 5726 (ER)
• Citation: 462 F.Supp.3d 418
• Parties: UNITED STATES of America, Plaintiff, v. Rahsan A. HAKIM and Adoniiah A. Rahsan, d/b/a Sundial Herbal Products, Defendants.
• Court: U.S. District Court — Southern District of New York

462 F.Supp.3d 418

UNITED STATES of America, Plaintiff,

v.Rahsan A. HAKIM and Adoniiah A. Rahsan, d/b/a Sundial Herbal Products, Defendants.

18 Civ. 5726 (ER)

United States District Court, S.D. New York.

Signed May 26, 2020

Emily Elizabeth Bretz, United States Attorney's Office, New York, NY, for Plaintiff.

Christine Humphrey, C. Humphrey & Associates PA, Miami, FL, for Defendants.

OPINION AND ORDER

Ramos, D.J.:

The United States (the "Government") brings this action to enjoin defendants Rahsan A. Hakim ("Hakim") and Adoniiah A. Rahsan ("Rahsan," and with Hakim "Defendants"), from violations of the Federal Food, Drug and Cosmetic Act (the "FDCA"), 21 U.S.C. § 301 et seq. Specifically, the Government seeks to enjoin Defendants from distributing unapproved new and misbranded drugs in violation of 21 U.S.C. § 331(a) and (d), and from misbranding drugs held for sale in violation of 21 U.S.C. § 331(k). Before the Court are cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, the Government's motion for summary judgment is GRANTED and Defendants’ motion for summary judgment is DENIED.

I. BACKGROUND

A. Factual Background¹

Hakim and Rahsan are a father and son who do business as Sundial Herbal Products ("Sundial"), an unincorporated entity that Defendants have identified as a partnership, located at 3609 Boston Road, Bronx, New York. Gov't Stmt., ¶ 1. Defendants prepare, pack, and hold numerous products they describe as tonics, "herbs and roots," and herbal tea. Id. ¶ 4. Hakim has formulated proprietary blends for the tonics manufactured by Sundial, and is responsible for manufacturing operations and major financial decisions. Id. Rahsan oversees Sundial with his father, and is responsible for quality control and sales. Id. Defendants also own a physical retail store that shares a building with Sundial, called the Koromantee Health Food Store. Id. ¶ 10. Koromantee sells Defendants’ products to other retail stores and to online buyers. Id. ¶ 11. Approximately thirty percent of Koromantee's sales are to out-of-state customers. Id. Defendants promote their products on their Facebook page, the radio, and their website, www.sundialherbs.com, where customers can also purchase their products. Id. ¶¶ 12, 13.

Between October 4 and November 15, 2012, the Food and Drug Administration (the "FDA") conducted an inspection of Sundial's facility (the "2012 Inspection"). Id. ¶ 14. During the 2012 Inspection, an FDA investigator documented that Defendants were making claims that their products are intended for use in diagnosing, curing, mitigating, treating, and/or preventing a wide variety of diseases such as syphilis

, asthma, diabetes, cancer, HIV/AIDS, and high blood pressure. Id. ¶ 15. The FDA investigator also collected Defendants’ product labels that made those claims. Id. ¶ 16. At the conclusion of that inspection, the investigator issued an FDA Form 483, a report of objectionable conditions that the investigator observed, to Defendants. See Decl. of Ronald M. Pace ("Pace Decl."), Doc. 30, Ex. 3 at 7–20. Subsequently, the FDA issued a warning letter² on March 24, 2013 (the "Warning Letter"), notifying Defendants that they were marketing unapproved new and misbranded drugs.³ Gov't Stmt., ¶¶ 17, 18. The 2013 Warning Letter provided, among other things, an extensive list of Defendants’ labels making disease claims.⁴

See Pace Decl., Ex. 2 at 1–2. They include, for instance, claims that a product named Woman Back Tonic "helps to break up abnormal growths, cysts & fibroids," and that another product named Wood and Root Tonic helps with asthma and flu. Id. Additionally, the Warning Letter identified six of Defendants’ products whose very names make disease claims, including "Arthritis," "Asthma," "Diabetics," "Flu-Allergy Hayfever," "Hepatitis /Liver," and "Worm & Parasites." Id. On June 28, 2013, Sundial sent the FDA a letter in response to the 2013 Warning Letter.⁵

See Decl. of Rahsan

A. Hakim ("Hakim Decl."), Doc. 48, Ex. 1 at 2.

Between January 7 and February 12, 2014, the FDA conducted a second inspection of Defendants’ facility (the "2014 Inspection"). Gov't Stmt., ¶ 19. During that inspection, an FDA investigator observed that Defendants were continuing to make similar claims on their products’ labels. Id. ¶ 20. At the end of the 2014 Inspection, the investigator issued another FDA Form 483 to Defendants, noting that Defendants had not corrected the deficiencies previously identified. Pace Decl., Ex. 1 at 9. In response, Sundial sent a letter to the FDA on April 1, 2014, explaining its procedure for handling product complaints and detailing the ingredients of some of its products. See Hakim Decl., ¶¶ 7, 8. According to Defendants, on April 17, 2014, the FDA responded and confirmed receipt of Sundial's April 1 letter.⁶ Id. ¶ 8. One year later, on May 13, 2015, Sundial sent another letter to the FDA stating that it has incorporated some of the FDA's prior recommendations regarding "detailed batch record, product complaints log, disclaimer on the herbal combinations, [equipment] maintenance log." Id. ¶ 10.

Between February 7 and 17, 2017, the FDA conducted a third inspection of Defendants’ facility (the "2017 Inspection"), during which an FDA investigator interviewed Rahsan and Hakim regarding their operations.⁷ Gov't Stmt., ¶ 21. Rahsan accompanied the FDA investigator during the inspection, answered questions about the company's operations, and identified and provided copies of requested records. Id. ¶ 23. Meanwhile, Hakim answered questions relating to Sundial's manufacturing operations. Id. ¶ 22. The FDA investigator collected records including, but not limited to, product labels and documentation of components and finished products traveling in interstate commerce.⁸ Id. ¶¶ 25–28. At the close of the inspection, the FDA investigator informed Rahsan that certain of Defendants’ product labels contained disease claims.⁹ Id. ¶ 29. Furthermore, the investigator reminded Rahsan that the FDA brought this issue to Defendants’ attention during both the 2012 and 2014 inspections, as well as in the 2013 Warning Letter.¹⁰ Id. Rahsan acknowledged that he understood the problem of having disease claims on product labels and on Defendants’ website, but he did not commit to correcting either the labels or website. Id. ¶ 31.

On March 10, 2017, FDA personnel reviewed Defendants’ website, and determined that it still continued to make disease claims about their products. Gov't Stmt., ¶ 32. On November 15, 2017, Defendants received a letter from Joon H. Kim, the Acting United States Attorney for the Southern District of New York, advising that the Government was prepared to file a civil action and seek a permanent injunction against them, unless Defendants agreed to the entry of a consent decree¹¹ on the proposed terms.¹² Hakim Decl., Ex. 1 at 28–29. On January 18, 2018, Defendants responded and rejected the proposed consent decree. Id. Ex. 1 at 30–36. Further review of Defendants’ website, one year later, on March 9 and June 25, 2018 revealed that Defendants’ website continued to contain similar disease claims. Gov't Stmt., ¶¶ 33, 34. On June 25, 2018, the Government commenced the instant action.

On June 27, 2018, two days after commencement of the instant action, Defendants, after consulting with "competent FDA counsel," requested that Sundial's webmaster¹³ remove all active links to Sundial's website." Defs’ Stmt. ¶ 7. As of June 28, 2018, customers have been unable to purchase Sundial's products online.¹⁴ Id. ¶ 8. Instead, customers would be redirected to a page that reads "We'll be back SOON." Id. ¶ 11. Furthermore, Rahsan testified that as of June 2018, all physical product labels have been removed. See Decl. of Rahsan ("Rahsan Decl."), Doc. 39, ¶ 2.

The Government filed the instant motion on January 9, 2020. Doc. 24. On February 27 and 28, 2020, almost eight years after the 2012 Inspection and more than 32 months after this action was filed, an FDA investigator purchased and photographed, at Defendants’ retail store, four of the seventy-four products that the FDA had previously identified as containing disease claims.¹⁵ See Decl. of Devon O. Seymour ("Seymour Decl."), ¶ 4, Ex. 1. Three of the four products had physical product labels making disease claims, contrary to what Rahsan had previously represented. Id. A review of Defendants’ website on February 28 and March 2, 2020 showed that the website continued to contain the same violative claims previously found. See Supp. Decl. of Lillian C. Aveta ("Aveta Decl."), ¶ 3, Ex. 2. The Government detailed these findings in its reply memorandum of law filed on March 20, 2020 in further support of its motion for summary judgment and in opposition to Defendants’ cross-motion. See Doc. 41. On that day, the Government also produced photographs of the four products purchased and screenshots of Defendants’ website containing disease claims as attachment to two declarations from the FDA investigators that made those findings. See Docs. 40, 41, 42.

Upon receipt of the Government's filings on March 20, 2020, Defendants purportedly conducted an investigation into their retail store. See Hakim Decl., ¶ 19. Defendants assert that those three products were "inadvertently overlooked" and contained old product labels, all of which have been removed as of March 20, 2020. Id. ¶¶ 19, 21. Defendants also instructed that Sundial's webmaster remove the pages with disease claims from their website. Id. ¶ 22.

Lastly, it is undisputed that the FDA's records contain no approvals for, or even submissions by Defendants for any new drug application ("NDA"), abbreviated new drug applications ("ANDA"), or investigational new drug ("IND") exemption applications, for any of Defendants’ products. Gov't Stmt. ¶ 39. The FDA has also conducted comprehensive searches of publicly available medical and scientific literature for Defendants’ products and was unable to identify any...