US v. Undetermined Quantities of Cal-Ban 3000***, No. 90-126-CIV-7.

CourtUnited States District Courts. 4th Circuit. Eastern District of North Carolina
Writing for the CourtThomas P. McNamara, McNamara, Pipkin, Knott & Carruth, Raleigh, N.C., for claimants
Citation776 F. Supp. 249
PartiesUNITED STATES of America, Plaintiff, v. UNDETERMINED QUANTITIES OF "CAL-BAN 3000* * *", etc., Defendant.
Decision Date17 September 1991
Docket NumberNo. 90-126-CIV-7.

776 F. Supp. 249

UNITED STATES of America, Plaintiff,
v.
UNDETERMINED QUANTITIES OF "CAL-BAN 3000* * *", etc., Defendant.

No. 90-126-CIV-7.

United States District Court, E.D. North Carolina, Wilmington Division.

September 17, 1991.


776 F. Supp. 250

Stephen A. West, U.S. Atty., Raleigh, N.C., for U.S.

Thomas P. McNamara, McNamara, Pipkin, Knott & Carruth, Raleigh, N.C., for claimants.

ORDER

BRITT, District Judge.

The United States government brought this in rem seizure action pursuant to the Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. §§ 301, et seq., against a quantity of "Cal-Ban 3000" (Cal-Ban), a product marketed to the public for the purpose of weight reduction, appetite suppression, and prevention of colon cancer. The Cal-Ban was seized on September 25, 1990 in Wilmington, North Carolina and the government asks that the court order it condemned and destroyed. Daco Distributing, Inc., a Canadian company, has filed a claim alleging that it is entitled to the seized Cal-Ban. The action is now before the court upon the government's motion for summary judgment.

I. FACTS

The subject of this action is a shipment of packaged Cal-Ban capsules and tablets destined for Nova Scotia, Canada. Cal-Ban was marketed in the United States for several years by a company known as Health Care Products, Inc., doing business as Anderson Pharmacals, of Lutz, Florida.

776 F. Supp. 251
Cal-Ban is made from a substance known as "Galactomannan" or guar gum. Guar gum is obtained from the seed of the cluster bean plant, "Cyamopsis tetragonolobus," which has been commonly grown in the United States since the early 1900's. It is considered a dietary fiber and used in the manufacture of some food products

In its Cal-Ban form, guar gum has been marketed in the United States as a "major breakthrough and a powerful new weight loss formula that causes rapid weight loss without conventional dieting or exercise." Government Exhibit 4 to Tolen Declaration (emphasis in original). Advertisements stated that Cal-Ban "actually alters the way your body digests food. When taken before mealtime it bonds with the food you eat and `ties up' calories, especially those from fats, preventing their absorption. So a significant portion of the ingested calories pass through and out of the digestive system unabsorbed." Id. The advertisements promise that Cal-Ban has been "clinically tested" and "proven safe." Id.; see also Government Exhibits 5 and 8.

The Cal-Ban ads appeared in national magazines such as Playgirl, Muscle, Cosmopolitan, and the National Inquirer, as well as in local newspapers throughout the United States. Some pieces contained testimonials of individuals who claimed to have lost weight using Cal-Ban and photographs of how these individuals looked before and after following the Cal-Ban plan. Across the top of the ads in one-inch letters appeared slogans such as "I LOST 85 LBS. FAST" and "DESTROY FAT FAST." Id. at Exhibits 4 and 5. Cal-Ban was further marketed as doctor recommended and available without a prescription. The potential purchaser was told that rapid weight loss would occur without eating less, without exercise, and without harmful side effects. This is allegedly because Cal-Ban prevents "calorie absorption" thereby allowing the body to burn more fat.

Along with the Cal-Ban, purchasers received literature containing instructions on how to proceed under the "Cal-Ban 3000 Weight Loss Program." See, e.g., id. at Government Exhibits 9, 11, 12 and 13. For the first four days, the purchaser was instructed to take four tablets thirty minutes before each meal with a full glass of water, tea, or coffee. Id. at Exhibit 11. On the fifth day, this number was increased to six tablets before each meal, then to eight during the second week. Thereafter, the purchaser was instructed to take ten tablets thirty minutes before each meal every day. Id.

Some of the customers began to experience health problems after ingesting Cal-Ban and therefore filed complaints with Health Care Products, Inc., the Federal Food and Drug Administration (FDA), and the Hillsborough County Sheriff's Department in Lutz, Florida. Gregory Jones, Drug Supervisor for the State of Florida Health and Rehabilitative Services, was responsible for reviewing the 269 complaints obtained from the Hillsborough County Sheriff's Department and the headquarters of Health Care Products, Inc. These complaints were received from customers throughout the United States.

In his affidavit, Jones testified that there were numerous reports of esophageal obstruction, intestinal obstruction, and gastric obstruction, many of which required hospitalization and even surgery. There were also reports of diarrhea, cramps, nausea, vomiting, stomachache and bloating which customers alleged to have been caused by taking Cal-Ban tablets or capsules. Jones conferred with the Florida State epidemiologist and they determined that "Cal-Ban posed a danger to the public health and safety." Jones Declaration at 3. Therefore, the Florida Department of Health and Rehabilitative Services issued an Emergency Order on July 18, 1990, requiring that Cal-Ban be immediately removed from sale and distribution. Id.

The FDA also received at least twenty-one reports linking Cal-Ban to esophageal and intestinal obstructions, including reports of ten hospitalizations and one death. Consequently, the FDA began an investigation of the Health Care Products facility in Lutz, Florida in 1989. An FDA investigator collected samples of Cal-Ban tablets and of promotional literature. As a result

776 F. Supp. 252
of the investigation, the FDA concluded that Cal-Ban was a new drug without an approved new drug application and that it was misbranded. On July 25, 1990, the FDA sent a regulatory letter to the president of Health Care Products stating that it considered Cal-Ban to be illegal and that further marketing would violate the Federal Food, Drug and Cosmetic Act. See Government Exhibit 10 to Tolen Declaration. Based on the investigation and consumer complaints, the FDA considered Cal-Ban to be a health hazard and called for its immediate removal from the marketplace

On July 31, 1990, Health Care Products responded to the regulatory letter stating that it had ceased all distribution of Cal-Ban. By a second letter dated August 14, 1990, Health Care Products responded further by denying that Cal-Ban was a drug and contending that there were no health risks associated with the ingestion of guar gum.

Prior to the second response, however, on August 3, 1990, a Florida circuit judge approved an agreement between the State Attorney of the Thirteenth Judicial District of Florida and Health Care Products, Inc. and its principals, to settle charges that Cal-Ban had been sold through false and misleading advertising in violation of Florida law. The court entered a permanent injunction which prohibited those defendants from the manufacture, sale or delivery of Cal-Ban or any other guar gum based weight loss product in the United States. See Government Exhibit 14 to Tolen Declaration. The agreement further required that Health Care Products and its principals pay 1.3 million dollars and forfeit eight vehicles to Hillsborough County, Florida.

Several days after this agreement was approved, on August 5, 1990, Cal-Ban located at the Health Care Products facility in Lutz, Florida was shipped to Wilmington, North Carolina, evidently on its way to claimants in Nova Scotia, Canada. On September 25, 1990, the Cal-Ban was seized in Wilmington pursuant to a complaint for forfeiture which was filed on the same day. Thereafter, claimant Daco Distributing, Inc. filed a claim to the seized Cal-Ban and an answer to the complaint.

The government claims that it is entitled to summary judgment on several grounds. First, it contends that Cal-Ban is a new drug because it is not generally recognized as safe and effective. Only those new drugs which have received FDA approval may be sold in the United States and because Cal-Ban has not been approved, the government claims it is subject to forfeiture and condemnation. 21 U.S.C. § 334(a)(1) and (d)(1). The government also alleges that Cal-Ban is misbranded because its labeling is false and misleading and fails to bear adequate directions for use.

In response to the motion for summary judgment, claimant argues that Cal-Ban is not a drug, but a "food," specifically, a "food for special dietary use." 21 U.S.C. § 321. As such, claimant contends Cal-Ban is not required to meet the requirements for the distribution of a "new drug." Additionally, claimant argues that guar gum is perfectly safe for human consumption in its Cal-Ban form. Claimant also asserts that it is not responsible for or connected with the distribution practices of Health Care Products, Inc. and therefore asks that the representations contained in the advertisements described above not be held against it.

II. ANALYSIS

Summary judgment "shall be rendered ... if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." F.R.Civ.P. 56(c). The key inquiry to be made in a Rule 56 motion is whether there is a material issue of fact. If the case involves only questions of law, it may be decided by summary judgment. See Miller v. Federal Deposit Insurance Company, 906 F.2d 972, 973-74 (4th Cir.1990) (summary judgment is proper "where it is perfectly clear that no issue of fact is involved

776 F. Supp. 253
and inquiry into the facts is not desirable to clarify the application of the law")

The first issue is whether Cal-Ban is a food or a drug for purposes of the FDCA, and if it is a drug, whether it is a "new drug" requiring FDA approval before distribution. Despite...

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