US v. Kasz Enterprises, Inc., Civ. A. No. 93-0455 P.

• Decision Date: 26 September 1994
• Docket Number: Civ. A. No. 93-0455 P.
• Citation: 862 F. Supp. 717
• Parties: UNITED STATES of America v. KASZ ENTERPRISES, INC., a corporation and James Kaszyk, an individual.
• Court: U.S. District Court — District of Rhode Island

862 F. Supp. 717

UNITED STATES of America v. KASZ ENTERPRISES, INC., a corporation and James Kaszyk, an individual.

Civ. A. No. 93-0455 P.

United States District Court, D. Rhode Island.

September 26, 1994.

Everett C. Sammartino, Asst. U.S. Atty., Providence, RI, Steven A. Keller, U.S. Dept. of Justice, Washington, DC, Cynthia Stofberg, U.S. Food & Drug Admin., Rockville, MD, for plaintiff.

MEMORANDUM AND ORDER

PETTINE, Senior District Judge.

Pursuant to Fed.R.Civ.P. 59(e), the plaintiff moves to amend a judgment entered by this Court against the defendants, Kasz Enterprises, Inc. and James Kaszyk (collectively "Kasz") on June 24, 1994 wherein a permanent injunction was entered in favor of the plaintiff, enjoining the defendants from distributing their products in violation of the Federal Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq. 855 F.Supp. 534. The issue here centers on the Court's authority to amend the judgment pursuant to Fed.R.Civ.P. 59(e) or 60(b) and the rule of specificity embodied in Rule 65(d). For reasons which follow, the Court amends the judgment and enters the detailed order hereinafter set forth.

I.

This case was initiated by a motion for summary judgment pursuant to Fed.R.Civ.P. 56, filed by the plaintiff, seeking to enjoin the defendants from distributing their product. The motion was referred to Magistrate Judge Robert W. Lovegreen. Since 28 U.S.C. § 636(b)(1) clearly does not authorize a Magistrate Judge to enter injunctive orders, he rightfully treated the referral as one for a Report and Recommendation. He found that the defendants' product, a hair solution to be applied to the scalp as a hair restorer, was a "new drug" under the FDCA and that the defendants were distributing it in interstate commerce without having first obtained the required approval from the U.S. Food and Drug Administration ("FDA"); he further concluded that the defendants were likely to continue to do so unless enjoined by the Court. On May 6, 1994, he recommended that the Court grant the plaintiff injunctive relief. On June 15, 1994, I approved his report by merely stating:

The Report and Recommendation of United States Magistrate Judge Robert W. Lovegreen filed on May 6, 1994 in the above-captioned case is hereby accepted pursuant to 28 U.S.C. § 636(b)(1).

As is obvious, I failed to comply with Fed. R.Civ.P. 65(d); it provides:

every order granting an injunction ... shall set forth the reasons for its issuance; shall be specific in terms; and shall describe in reasonable detail ... the act or acts sought to be restrained....

II.

The need for specificity in injunctive orders is well settled:

... the specificity provisions of Rule 65(d) are no mere technical requirements. The Rule was designed to prevent uncertainty and confusion on the part of those faced with injunctive orders, and to avoid the possible founding of a contempt citation on a decree too vague to be understood.

Schmidt v. Lessard, 414 U.S. 473, 476, 94 S.Ct. 713, 715, 38 L.Ed.2d 661 (1974).

The Eighth Circuit defined the Schmidt language as follows:

In Schmidt, supra, the Supreme Court identified two interests which the rule of specificity serves to advance. It prevents uncertainty on the part of those faced with injunctive orders and gives them explicit notice of what conduct is unlawful. Second, it allows a reviewing court "to know precisely what it is reviewing." Id. at 476-77, 94 S.Ct. at 715-716. To these two functions we would also add that a specific injunction allows those who are protected by its terms to know when the order is being violated so that they may then effectively police the order and enforce its mandate.

Daniels v. Woodbury County, Iowa, 742 F.2d 1128, 1134 (8th Cir.1984).

No further elaboration is necessary to conclude that the judgment, as it now stands, is entirely inadequate. It does not comport with Fed.R.Civ.P. 65(d).

Having thus concluded, the Court's authority to amend an entered judgment must be resolved.

Once a judgment has been entered, it can only be modified or vacated as specified in the Federal Rules of Civil Procedure. The pertinent Rule here is either 59(e) or 60(b).

Rule 59(e) provides that "a motion to alter or amend the judgment shall be served not later than 10 days after entry of the judgment." The time for appeal is tolled by the filing of the motion within the requisite time period and courts do not have the power to extend the deadline except to the extent and under the conditions stated in the rule. Fed.R.Civ.P. 6(b).

The judgment was entered on June 24, 1994 and the motion to amend was filed on July 5, 1994. "When the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation." Fed.R.Civ.P. 6(a). A simple reference to the calendar shows the motion to amend was filed within the prescribed time period.

Even if the movant had exceeded the 10 day deadline, resort could still be had to Rule 60(b). It provides:

On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence ...; (3) fraud ...; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken. A motion under this subdivision (b) does not affect the finality of a judgment or suspend its operation....

See Pfizer Inc. v. Aceto Corp., No. 93 Civ. 7160, 1994 WL 97224 (S.D.N.Y. Mar. 18, 1994) (using broad language of Rule 60(b)(6) to "clarify" a default judgment); Padco, Inc. v. Newell Companies, No. 85-C-1325, 1988 WL 187504 (E.D.Wis. Jul. 17, 1988), aff'd 878 F.2d 1445 (Fed.Cir.Wis.1989) (granting a motion to alter or amend some language of a judgment which movants contended was too general and not in conformance with Rule 65(d)); Kansas Health Care Ass'n v. Kansas Dep't of Social and Rehabilitative Services, 754 F.Supp. 1502, 1516 (D.Kan.1990), rev'd on other grounds, 958 F.2d 1018 (10th Cir. 1992) (though the court declined to amend in accordance with Rules 59(e) and 65(d), it stated "whether to open and amend a judgment is a decision committed to the sound discretion of this court."); U.S. v. Berenguer, 821 F.2d 19, 21 (1st Cir.1987) (relief under Rule 60(b)(6) is "reserved for extraordinary cases in which the unusual circumstances justify a party's delay"); Mitchell v. Hobbs, 951 F.2d 417, 420 (1st Cir.1991) (these motions are "addressed to the sound discretion of the district court").

From the foregoing, I conclude that an amendment of the judgment in this case is authorized and entirely appropriate in order to "prevent uncertainty and confusion" on the part of the defendants and to allow this Court "to know precisely what it is reviewing." Daniels, supra, at 1134.

III.

To comply with the rule of specificity, the plaintiff has proposed an order as set forth in the margin hereof.¹ The defendants object.

The defendants resist the outright prohibition from continued manufacturing and marketing of Solutions 109 that the proposed order imposes. Further, they strenuously object to notifying their customers that Solutions 109 have been adjudged to be unapproved new drugs. See Defendants' Memorandum in Support of Their Objection to Amend Judgment at 6. They claim that if entered, the order should be modified to enjoin them only from continuing to label or promote Solutions 109 as hair growth drugs. The government argues, and I agree, that the only cure for the violations is to enjoin the manufacturing, selling and distribution of Solutions 109 that are labeled or promoted as effective for hair growth or hair loss prevention, since defendants have created a market associating their products with hair growth.

There is no doubt that a substantial market has been created. The defendants have, by their own admission, "thousands of customers". Plaintiff's Reply to Defendants' Objection to Plaintiff's Motion to Amend Judgment at 5. They have created this market by their extensive promotional activity accentuating, in every way, their sine qua non for buyer demand — the magic ability of Solutions 109 to grow hair. The literature disseminated incorporated opinions and testimonials supposedly obtained from third party users.

"These so-called `testimonials' from Kasz customers, claiming that Solutions 109 grow hair and prevent hair loss, were incorporated into a package of promotional materials that was supplied to persons inquiring about the products, to hair salons that sold the products, and to purchasers of the products. The package included a booklet entitled KASZ Enterprises, Inc.: solution 109; a newspaper article reprinted from the Middlesex News entitled Is this the Solution to hair loss problem?; and a memorandum entitled From the Office of the President." Magistrate's Report and Recommendation at 3.

There is no doubt the public has been educated to associate Kasz Enterprises, Inc. and Solutions 109 with prevention of hair loss and the restoration of lost hair. The simple incorporation of a disclaimer would not negate the sensory impact of the defendants' marketing, selling and packaging practices. The ordinary buyer, unless he or she sets out to detect the disclaimer, would regard the product as hair restorers. Any modification, as defendants suggest, would not obviate the likelihood of continued purchases under the mistaken belief that Solutions 109 would fulfill their advertised...