US v. UNDETERMINED QUANTITIES OF AN ART. OF DRUG, No. 87 Civ. 7779 (RWS).

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtBass & Ullman, New York City, for claimant; Jacob Laufer, Susan C. Stolzer, of counsel
Citation716 F. Supp. 787
PartiesUNITED STATES of America, Plaintiff, v. UNDETERMINED QUANTITIES OF AN ARTICLE OF DRUG LABELED AS "EXACHOL," et al., Defendants-in-Rem, U.S. Health Club, Inc., Claimant.
Docket NumberNo. 87 Civ. 7779 (RWS).
Decision Date11 July 1989

716 F. Supp. 787

UNITED STATES of America, Plaintiff,
v.
UNDETERMINED QUANTITIES OF AN ARTICLE OF DRUG LABELED AS "EXACHOL," et al., Defendants-in-Rem,
U.S. Health Club, Inc., Claimant.

No. 87 Civ. 7779 (RWS).

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

July 11, 1989.


716 F. Supp. 788

Benito Romano, U.S. Atty., S.D.N.Y., New York City, for plaintiff; Paula T. Dow, Asst. U.S. Atty., of counsel.

Bass & Ullman, New York City, for claimant; Jacob Laufer, Susan C. Stolzer, of counsel.

OPINION

SWEET, District Judge.

Plaintiff the United States Federal Food and Drug Administration ("the FDA") moves for summary judgment pursuant to Rule 56, Fed.R.Civ.P. against defendant U.S. Health Club, Inc. ("Health Club") seeking to condemn the seized Exachol as a misbranded and unapproved new drug. Because Exachol is entitled to be considered under the Health Claims for Food Policy, the motion for summary judgment is denied.

The Parties

The FDA is an agency of the United States Government. It develops regulations and information programs and conducts research required to ensure the nutritional adequacy of the national food supply, to enhance the ability of the American consumer to utilize the food supply effectively, and to improve use of modern nutrition principles for dietary management of disease and injury.

Health Club is a New York corporation with its principal place of business in New York. It is the owner of the seized product.

Defendant-in-rem Exachol is the article that has been seized in addition to related catalogs, letters and brochures that constitute advertisements for the product. They were shipped in interstate commerce from New Jersey to New York and are now located in New York.

Prior Proceedings

The FDA filed a complaint in this action on October 30, 1987. Pursuant to an in rem arrest warrant issued by this Court the United States Marshal seized the article on November 6, 1987. The FDA filed an amended complaint on May 20, 1988. On November 30, 1987, Health Club filed a claim to the seized drug. The instant motion was considered on affidavits, argued and fully submitted on March 17, 1989. The facts set forth below are uncontested except as noted.

The Facts

1. The Distribution of Exachol

Health Club manufactures and sells a product which until April 1987 was known as the Atherex Institute Formula and thereafter was distributed under the name "Exachol". Exachol is comprised of lecithin, phosphatidyl ethanolamine, phosphatidyl choline, lethicon, phosphatidyl inositol, extract of chondrus crispus, carrageenan extract, silicon, niacin, and "compounded plant extract," all apparently natural products found in food. It is manufactured by Phoenix Laboratories, Inc., in Hicksville, New York. It is then repackaged and labelled by Health Club in Hastings-on-Hudson. According to Health Club, the ingredients used in Exachol are commonly available as food supplements for which scientific data as to their effectiveness is publicly available.

In 1985, 1986 and 1987, the FDA received complaints and inquiries from physicians, consumers, and state health departments about literature being distributed by Health Club stating that Exachol is useful for the prevention and treatment of coronary disease. According to the FDA, an inspection conducted on December 8, 1986, revealed that the labelling and promotion of Exachol asserts that Exachol is effective in the prevention and treatment of coronary thrombosis, arteriosclerosis, atherosclerosis and angina. The labelling also stated that Exachol will prevent cholesterol deposits from forming on the walls of a

716 F. Supp. 789
person's arteries. The FDA also obtained promotional literature including a catalog, brochure, pamphlet and business reply card

According to Health Club, each package for sale is accompanied by an instructional brochure which explains the purpose and use of the comprehensive Exachol three-way plan. The three steps of the plan are: (1) proper eating; (2) moderate exercise; and (3) inclusion of the Exachol supplement. The instructions state that:

Exachol is a nutritional, dietary supplement, invaluable for the maintenance and protection of health and nutrition.

Health Club solicits orders through a mail order brochure which states in part:

The Exachol Program is a preventive plan designed to help you keep your cholesterol under control by a combined approach including moderate exercise, proper eating and Exachol capsules. It is not intended as a substitute for any medical treatment your medical condition may require.

2. FDA Enforcement

On April 9, 1987, FDA sent Health Club a regulatory letter which stated that Exachol was a drug within Section 201(g) of the Federal Food, Drug and Cosmetic Act. The letter indicated that the continued marketing of the product would constitute a violation of sections 502(a), 502(f)(1) and 505(a) of the Act. On May 1, Health Club responded by letter disagreeing with the FDA's conclusion that Exachol does not fall within the health information guidelines of the FDA's Center for Food Safety and Applied Nutrition.

On May 4, 1987, FDA wrote to Health Club asking whether it would discontinue distribution of Exachol as a misbranded and unapproved new drug in interstate commerce. Health Club responded on May 12, 1987 that it would not.

On July 27, 1987, and August 14, 1987 FDA conducted an inspection of Health Club to determine whether the firm was continuing to distribute Exachol in interstate commerce and concluded that it was. The investigators obtained copies of promotional literature which Health Club was still mailing.

A meeting between FDA officials and Health Club's attorney occurred September 15, 1987. According to Health Club, as a result of this meeting it ceased distribution of certain of its promotional literature and submitted a revised labelling plan to be utilized for the Exachol program. The FDA was not satisfied with the revisions and thereafter instituted this seizure action against the product Exachol.

Around the same time the FDA issued thirty-four other regulatory letters to companies that marketed vitamin and mineral products similar to Exachol warning manufacturers that their products would be subject to Government seizure if they continued to use labelling which made therapeutic claims. The FDA discovered only one other company that continued to market its food supplement as a drug after receiving such a regulatory letter. The FDA proceeded against this company. See United States v. Undetermined Quantities of Nu-Path, 86-1027, (D.S.D., June 16, 1986). The FDA has also sent regulatory letters to sixty-four fish oil supplement manufacturers which were promoted for use "in the treatment and prevention of heart disease, and the lowering of cholesterol and triglyceride levels."

3. The Proposed Rule on Health Messages

On August 4, 1987, the FDA published the Health Claims for Food Policy in the form of a Notice of Proposed Rulemaking concerning the content of health-related claims or information placed on food labelling and the criteria applied to evaluate the propriety of such labelling. Pending the rulemaking proceeding, the FDA decided to apply the proposed criteria to any questioned labelling:

(1) Information on the labelling must be truthful and not misleading to the consumer
(2) The claims should be supported by valid, reliable, scientific evidence that is
716 F. Supp. 790
publicly available (prior to any health related claim being made)
(3) The claims must be consistent with generally recognized medical and nutritional principles.
(4) Food labels containing a health-related claim must also contain the nutrition labelling information required by 21 CFR § 101.9.

The FDA also indicated that it would apply the same criteria to dietary supplements, noting that it may be more difficult for dietary supplements to meet the criteria.

4. Application of the Rule

The FDA's policy and application of the Health Claims for Food Policy to at least two products is relevant here. In 1984, the Kellogg Company ("Kellogg") began to promote its All-Bran cereal ("All-Bran") with labelling that recommended in connection with the prevention of cancer that consumers "eat high fiber foods, eat foods low in fat, eat fresh fruits and vegetables, eat a well-balanced diet and avoid being overweight." The FDA drafted a regulatory letter to Kellogg's suggesting that the labelling could be misleading and that the label promotes All-Bran as a product effective and adequate in the prevention of cancer. The letter charged Kellogg's with violations of both the food and drug provisions of the Act. However, the letter was never sent, and there was no action taken against Kellogg's regarding the All-Bran product.

On February 12, 1988, Congressman Theodore Weiss made a request for an assessment of whether the Kellogg labelling met the standards of the FDA's health claims proposal. The FDA responded that it would wait until it had developed a single standard for considering health related information or food labels before determining whether Kellogg's claims were misleading. The FDA contended that All-Bran is both a food and a drug and that, as is its right, it will decline to treat All-Bran as a drug and will not prosecute Kellogg on the basis of scientific evidence which indicates that the labelling is not misleading.

With respect to the fish oil products the FDA advised the manufacturers to identify those claims each would remove from the labels and to propose the appropriate claims they would include. On June 1, 1988 the FDA advised the Council for Responsible Nutrition ("CRN"), an agency which had responded on behalf of the manufacturers, that the FDA was reviewing the scientific basis for the fish oil labelling claims and would not initiate any proceeding until it had completed such review. This letter further stated that the labelling would be judged by the criteria contained in FDA's health messages proposal...

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5 practice notes
  • United States v. Hakim, 18 Civ. 5726 (ER)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • May 26, 2020
    ...depends upon its intended use. See id. ; see also United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol" , 716 F. Supp. 787, 791 (S.D.N.Y. 1989). The key factor in whether a product may be regulated as a drug is the "vendor's intent in the sale of the product to......
  • Kellogg Co. v. Mattox, Civ. A. CA 3-90-2005-G.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • April 12, 1991
    ...and reasonable inferences to be drawn therefrom. United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol," 716 F.Supp. 787, 791 (S.D.N.Y.1989); see also Kordel v. United States, 335 U.S. 345, 69 S.Ct. 106, 93 L.Ed. 52 (1948); United States v. 250 Jars, Etc., of U.......
  • US v. Pro-Ag, Inc., Civ. No. 4-89-560.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • July 15, 1991
    ...a repetition of the offense."); 796 F. Supp. 1226 United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol", 716 F.Supp. 787, 791 (S.D.N.Y. 1989) (holding that "courts have recognized that where years later customers purchase a product in reliance on the therapeuti......
  • Kisser v. Cisneros, No. 92-5206
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 11, 1994
    ..."employee" versus "independent contractor" status); United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol", 716 F.Supp. 787, 793-95 (S.D.N.Y.1989) (FDA's uneven and inconsistent application of regulatory policy with regard to "special dietary 6 Kisser does not c......
  • Request a trial to view additional results
5 cases
  • United States v. Hakim, 18 Civ. 5726 (ER)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • May 26, 2020
    ...depends upon its intended use. See id. ; see also United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol" , 716 F. Supp. 787, 791 (S.D.N.Y. 1989). The key factor in whether a product may be regulated as a drug is the "vendor's intent in the sale of the product to......
  • Kellogg Co. v. Mattox, Civ. A. CA 3-90-2005-G.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • April 12, 1991
    ...and reasonable inferences to be drawn therefrom. United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol," 716 F.Supp. 787, 791 (S.D.N.Y.1989); see also Kordel v. United States, 335 U.S. 345, 69 S.Ct. 106, 93 L.Ed. 52 (1948); United States v. 250 Jars, Etc., of U.......
  • US v. Pro-Ag, Inc., Civ. No. 4-89-560.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • July 15, 1991
    ...a repetition of the offense."); 796 F. Supp. 1226 United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol", 716 F.Supp. 787, 791 (S.D.N.Y. 1989) (holding that "courts have recognized that where years later customers purchase a product in reliance on the therapeuti......
  • Kisser v. Cisneros, No. 92-5206
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 11, 1994
    ..."employee" versus "independent contractor" status); United States v. Undetermined Quantities of an Article of Drug Labeled as "Exachol", 716 F.Supp. 787, 793-95 (S.D.N.Y.1989) (FDA's uneven and inconsistent application of regulatory policy with regard to "special dietary 6 Kisser does not c......
  • Request a trial to view additional results

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