The Federal Food, Drug, and Cosmetic Act (FDCA)
protects the public health and safety in a variety of ways. It forbids
the manufacture or distribution of foods, drugs, medical devices, and
cosmetics that are adulterated or misbranded. In general, the FDCA requires
that drugs and devices be safe and effective for their intended uses,
and that food, drugs, and devices be accurately labeled and handled
in ways that prevent them from becoming contaminated.
A. The FDCA Case Referral Process
FDA uses multiple routes for case referrals. First, certain cases are developed
through FDA's network of field offices, reviewed by FDA headquarters, and
then sent, pursuant to longstanding DOJ policy, to CPB. CPB reviews the
referral and determines whether to pursue civil or criminal remedies. If
the referral is accepted, CPB usually attempts to enlist the assistance
of the USAO in the district in which the case will be brought. Nevertheless,
CPB generally maintains the lead on such cases, or acts as co-counsel with
Actions seeking the condemnation of food, drugs, or devices that are adulterated
or misbranded, are handled similarly within FDA to the cases described above.
However, FDA refers such cases directly to USAOs for filing, concurrently
notifying CPB. More and more in recent years, these actions lead to litigation
of complex issues under the FDCA when the owner of the item contests the
validity of the condemnation. USAOs should work closely with CPB on such
cases, as they frequently raise legal and factual questions familiar to
One case started as the condemnation of gas grill igniters that were packaged
and sold as pain relief devices, violating the FDCA. This led to an injunctive
action against the manufacturer, the first restitution order ever imposed
in an FDA civil case, and, ultimately, to the prosecution of the company's
lawyer who had stolen checks sent to the manufacturer for the device after
their distribution was enjoined. The lawyer pled guilty to money laundering
charges and in 1998 was sentenced to 33 months in prison.
A third avenue of case referrals has opened in recent years. FDA created
an Office of Criminal Investigations in the early 1990's. That Office investigates
only criminal cases, as its name implies. It has brought some cases directly
to USAOs. These matters can be initiated by an agent seeking a search warrant,
a grand jury subpoena, or a prosecution. The Office of Criminal Investigations
relies on DOJ to coordinate various USAOs where similar cases are pending.
CPB has helped coordinate the activities of USAOs in such cases, for example,
in various matters involving bootleg infant formula. In addition, USAOs
have brought these matters to CPB's attention in order to take advantage
of CPB's expertise, and to obtain the other benefits that are discussed
As a procedural matter, any criminal prosecution and any civil penalty
or injunctive proceeding under the statutes for which CPB is responsible
must be approved by the Assistant Attorney General for the Civil Division.
That approval can be most readily obtained when CPB has been consulted and
involved in the case early in the process. CPB involvement also helps ensure
uniform nationwide implementation of the nation's consumer protection laws.
B. Criminal Prosecutions Under the FDCA — Felonies and Misdemeanors
The FDCA lists prohibited acts in 21 U.S.C. Â§ 331. Violations include adulterating
or misbranding a food, drug, or device, and putting an adulterated or misbranded
food, drug, or device into interstate commerce. Any person who commits a
prohibited act violates the FDCA. A person committing a prohibited act "with
the intent to defraud or mislead" is guilty of a felony punishable by three
years imprisonment. 21 U.S.C. Â§ 333(a)(2). The intent to defraud or mislead
required to establish a felony exists where the object of the fraud is either
the ultimate consumer of the product, or a governmental authority such as
the FDA. That is, a person whose fraudulent conduct is directed at the FDA
rather than at consumers is guilty of felony behavior, and can be prosecuted
on that basis.
CPB attempts wherever possible to bring felony charges to deal with fraudulent
behavior. Nevertheless, misdemeanor liability can attach to behavior that,
due to lack of proof of intent or other considerations, may not merit felony
1. Felony Behavior: Fraud on Consumers
The most obvious application of the felony provision of the FDCA is to
situations in which a supplier does not provide customers or consumers
the product purportedly sold. Such activity constitutes monetary fraud
under any definition and has traditionally satisfied the "intent to
defraud" requirement for felony behavior. See, e.g., the cases
involving the substitution of cheap undeclared ingredients in food discussed
2. Felony Behavior: Fraud on FDA
CPB has prosecuted a variety of cases on the theory that non-monetary
frauds against FDA satisfy the felony requirement of the FDCA. Generally,
there are two kinds of fraud against FDA. One involves black market
operations in which defendants attempt to hide their entire business
operation from FDA. The other involves firms actively regulated by FDA,
but which engage in fraudulent behavior by, for example, submitting
fraudulent data to FDA.
a. Felonious Behavior in the Black Market Context
A variety of black markets exist in which defendants sell products
regulated by FDA, but attempt to evade that regulation. Where individuals
take steps to hide from FDA activities that by law should be regulated,
the courts have not hesitated to find that they are defrauding FDA of
its regulatory authority, and therefore satisfy the "intent to defraud"
requirement of a felony FDCA violation. United States v. Arlen,
947 F.2d 139, 143 (5th Cir. 1991) (defendant attempting to hide black
market steroid distribution activities from FDA acted with "intent to
defraud"), cert. denied, 112 S. Ct. 1480 (1992); United States
v. Bradshaw, 840 F.2d 871, 874 (11th Cir.) (black market steroid
dealer acting with intent to defraud state or federal law enforcement
agency satisfies "intent to defraud" element), cert. denied,
488 U.S. 924 (1988).
Similarly, courts have viewed intent of this nature as meriting sentencing
under the sentencing guideline that governs fraud. E.g., United States
v. Andersen, 45 F.3d 217, 220 (7th Cir. 1995) (black market in animal
drugs -- failure to register animal drug manufacturing facility with
FDA so drugs could be made without FDA's knowledge leads to sentencing
based on amount of fraud); United States v. Cambra, 933 F.2d
752, 755 (9th Cir. 1991) (counterfeit steroid dealer trying to hide
activities from FDA sentenced on basis of fraud).
b. Felonious Behavior by Regulated Firms
CPB has prosecuted numerous cases in which regulated entities defrauded
FDA by submitting bogus data to the agency. In United States v. Marcus,
82 F.3d 606 (4th Cir. 1996), for example, the President of a generic
drug manufacturing firm did not report to FDA a change his firm made
in a drug formula. The change was hidden from FDA to avoid additional
testing the defendant feared FDA would have required, satisfying the
fraud requirement for a felony.
3. FDCA Misdemeanors
A misdemeanor conviction under the FDCA, unlike a felony conviction,
does not require proof of fraudulent intent, or even of knowing or willful
conduct. Rather, a person may be convicted if he or she held a position
of responsibility or authority in a firm such that the person could
have prevented the violation. United States v. Park, 421 U.S.
658, 674-77 (1975), United States v. Dotterweich, 320 U.S. 277,
However, a person committing any violation of the FDCA, if previously convicted,
is guilty of a felony and subject to three years in prison. 21 U.S.C. Â§
C. Criminal Prosecutions Under the FDCA — Individuals as Defendants
Individuals who are responsible for criminal behavior are normally named
as defendants along with corporate entities through which crimes are committed.
A corporate defendant's willingness to enter a plea of guilty is accordingly
not a basis for dismissal of charges against an individual.
Individual defendants are generally the highest ranking officials in
a firm who made decisions that violated the law, along with others who
actively participated in fraudulent activity. Thus, presidents of corporations
and managers of facilities where violations take place are often appropriate
defendants. E.g., United States v. Marcus, 82 F.3d 606 (4th Cir.
1996) (President/CEO of generic drug manufacturing firm prosecuted for
altering heart medication formula without adequate testing or FDA approval);
United States v. James V. Mays, 77 F.3d 906 (6th Cir. 1996),
and United States v. Samuel and Patsy Mays, 69 F.3d 116 (6th
Cir. 1995), cert. denied, 116 S. Ct. 2504 (1996) (President,
Secretary/Treasurer, and Operations Manager of juice concentrate company
prosecuted for secretly adding 20,000,000 pounds of sugar to product
sold as pure 100% orange concentrate); United States v. Azeem,
983 F.2d 1057 (4th Cir. 1993) (table), 1993 WL 5902 (Vice President
in charge of Technical Service, and responsible technician at generic
drug company prosecuted for fabricating drug testing data); United
States v. Beech-Nut Nutrition Corp. et al., 871 F.2d 1181 (2d Cir.),
cert. denied, 493 U.S. 933 (1989), subsequent opinion, 925 F.2d
604 (2d Cir. 1991) (President/CEO and Vice President in Charge of Operations
prosecuted for selling phony apple juice); United States v. Hiland,
909 F.2d 1114 (8th Cir. 1990) (president of generic drug maker, and
president and executive vice-president of distributor, prosecuted for
manufacturing and distributing injectable drug that caused deaths of
D. Criminal Prosecutions Under the FDCA — Sentencing Goals
The goals of criminal prosecutions include deterrence and punishment. 18
U.S.C. Â§ 3553. White collar crime is best deterred and punished by terms
of imprisonment. Accordingly, in all prosecutions of fraudulent activity,
CPB seeks a sentence that reflects the serious injury to the public that
the defendants caused. This is true both in cases where consumers are the
victims, and where FDA is the defrauded party.
Under guidelines that govern federal sentencing, the dollar amount of loss
defendants cause through fraud has a direct relationship to the length of
sentence imposed. United States Sentencing Guidelines, Â§ 2F1.1. This guideline
controls sentencing of felony FDCA violations pursuant to Guidelines Â§ 2N2.1(b)(1).
Many probation offices and courts have employed realistic loss estimates
that CPB recommended, estimates reflecting the large losses frequently
caused by FDCA violations. E.g., United States v. Shulman (D.
Md.) (over $80,000,000 in gross sales of drug proper measure of loss
where FDA approval of drug based on fraudulent data and resulting drug
was of unknown safety and efficacy -- resulting in 5 year sentence,
which the Fourth Circuit affirmed, 1997 WL 82620 (February 27, 1997);
United States v. Marcus, 82 F.3d 606, 608-10 (4th Cir. 1996)
(over $10,000,000 in gross sales of drug that varied from FDA approved
formula appropriate measure of loss -- resulting in 41 month sentence);
United States v. Mays, (W.D. Kentucky) (district court found
consumer loss of over $10,000,000 from economic adulteration of 68,000,000
gallons of orange juice products -- sentenced lead defendant to 104
months' imprisonment, and two co-defendants to 80 months); United
States v. Kohlbach, 38 F.3d 832, 840-42 (6th Cir. 1994) (affirming
consumer loss finding of $10.3 million based on comparative price of
ingredient declared in 37,000,000 gallons of orange juice products sold
versus what was actually provided, to wit, sugar); United States
v. Jekot, (C.D. California) (district court found doctor who sold
steroids and human growth hormone outside his medical practice caused
over $200,000 in loss, and imposed a five year sentence, which the Ninth
Circuit affirmed in an unpublished opinion, 47 F.3d 1176 (9th Cir. 1995)
(table), 1995 WL 77438).
E. Civil Cases
CPB conducts both affirmative and defensive civil litigation under the
FDCA. Affirmatively, CPB handles suits seeking various remedies for FDCA
violations. These include suits for injunction, product condemnation, and
civil penalties. Defensively, CPB represents FDA and its officers in litigation
challenging agency action or inaction.
Courts may enter injunctions to restrain conduct that violates the
FDCA. 21 U.S.C. Â§ 332. CPB has sought injunctions under the FDCA in
a wide variety of contexts. Injunctions have been obtained to enforce
compliance with FDA's good manufacturing practice regulations, e.g.,
United States v. Richlyn Laboratories, Inc., 822 F. Supp. 268
(E.D. Pa. 1993); to enjoin the distribution of unapproved drugs or devices,
e.g., United States v. Vital Health Products, Ltd., 786 F. Supp.
761 (E.D. Wis. 1992), aff'd, 985 F.2d 563 (7th Cir. 1993); to ensure
proper sanitation in food-processing facilities, e.g., United States
v. Union Cheese Co., 902 F. Supp. 778 (N.D. Ohio 1995); and to control
drug residues in food-producing animals, e.g., United States v. Tuentes
Livestock, 888 F. Supp. 1416 (S.D. Ohio 1995).
Injunctions can have far-reaching effects in an industry. For example,
CPB negotiated a consent decree of injunction against the American Red Cross.
That decree, negotiated after the AIDS virus threatened America's blood
supply, established procedures to ensure the proper handling of blood products
at Red Cross facilities across the country so as to ensure the safety of
the blood. The decree also established what became industry standards for
ensuring the safety of the blood supply.
CPB frequently files a motion for preliminary injunction along with
a complaint for injunction. Temporary restraining orders are less frequently
requested, but may be necessary in certain cases to protect the consumer.
The standards for preliminary injunctive relief under the FDCA differ
from the standards applied in private cases. Once a violation of the
FDCA has been proven, a preliminary injunction may issue without proof
of irreparable harm. This is because harm is presumed where an FDCA
violation exists. See, e.g., United States v. Odessa Union Warehouse
Co-op, 833 F.2d 172, 175 (9th Cir. 1987); United States v. Diapulse
Corp., 457 F.2d 25, 28 (2d Cir. 1972).
If a defendant violates an injunction, CPB can seek criminal or civil remedies
for contempt of court. E.g., United States v. 22 Rectangular or Cylindrical
Finished Devices, 941 F. Supp. 1086 (D. Utah 1996) (criminal contempt
where defendant shipped medical device in violation of court order).
2. Condemnation Actions
Foods, drugs, or devices which are misbranded or adulterated, or which
have not received required FDA approval, may be condemned pursuant to
21 U.S.C. Â§ 334. For example, the United States filed a seizure complaint
against approximately 15,000,000 pounds of cocoa beans that were stored
in unsanitary conditions in warehouses in Norfolk, Virginia. This inventory
constituted a significant portion of the world's supply of cocoa beans
at the time. U.S. v. 155/137 Pound Burlap Bags, et al., No. 2:93cv63
(E.D. Va., filed January 27, 1993).
Thirteen parties filed claims to these beans, requiring a trial of whether
the beans were adulterated. After the trial, the court concluded that approximately
90 percent of the beans were adulterated, because they had been stored in
unsanitary conditions, and ordered them condemned. Ultimately, FDA approved
a plan for "reconditioning" the beans, which made them safe for use as food.
a. Case Referrals
Unlike requests for criminal prosecution or for injunction, which are referred
to CPB, FDA's requests for condemnation are referred simultaneously to CPB
and to the appropriate U.S. Attorney's Office. Simultaneous referral helps
expedite the seizure of violative product to prevent distribution to consumers.
Many condemnation actions are routine matters (involving, for example,
contaminated or decomposed food) that can be quickly resolved by default
or consent decree.
Sometimes, a condemnation action raises significant issues under the
FDCA. Medical device cases in particular often present complex questions
concerning the reach of FDA's regulatory authority. For example, CPB
has prevailed in litigation against specimen collection cups and silicone-filled
bags used in breast self-examinations, overcoming contentions that these
articles were not "devices" under the FDCA. See United States v.
Undetermined No. of Unlabeled Cases, 21 F.3d 1026 (10th Cir. 1994)
(collection cups); United States v. 25 Cases, More or Less, 942
F.2d 1179 (7th Cir. 1991) (Sensor Pads).
A condemnation action is an in rem proceeding against a violative article.
The action is commenced under admiralty rules with the filing of a verified
complaint and a request for a civil seizure warrant. The seizure warrant
is issued by the clerk of court, rather than by a judge or magistrate
judge, and requires no showing of probable cause beyond the allegations
in the verified complaint. See Rule C(3), Supplemental Rules for Certain
Admiralty and Maritime Claims, Federal Rules of Civil Procedure; United
States v. Argent Chemical Laboratories, 93 F.3d 572 (9th Cir. 1996),
cert. denied, 117 S. Ct. 1244 (1997). Notice of the action must
be made by publication. Rule C(4), Supplemental Rules.
Condemnation renders the violative articles subject to disposal or destruction
by the government. However, the court may release condemned goods for reconditioning,
or for re-export in the case of imported goods, if certain conditions are
satisfied. 21 U.S.C. Â§ 334(d). Court costs and storage fees may be assessed
against any claimant who intervenes in the action. 21 U.S.C. Â§ 334(e).
3. Civil Penalties
Monetary penalties may be awarded for violations of the FDCA involving
medical devices, 21 U.S.C. Â§ 333(f), and for certain prohibited acts relating
to radiation-emitting electronic products, 21 U.S.C. Â§ 360pp (discussed
under a separate heading, below).
4. Defensive Litigation On Behalf Of FDA
Suits are often filed challenging FDA action or inaction. Generally,
these suits seek declaratory or injunctive relief. In some cases monetary
damages are also requested. Plaintiffs might challenge an agency policy
or regulation, e.g., Professionals and Patients for Customized Care
v. Shalala, 56 F.3d 592 (5th Cir. 1995); a decision to approve (or
not to approve) a drug or device for marketing, e.g., A.L. Pharma,
Inc. v. Shalala, 62 F.3d 1484 (D.C. Cir. 1995); or a response to
a petition requesting that the agency take (or refrain from taking)
certain action, e.g., Heckler v. Chaney, 470 U.S. 821 (1985).
Frequently, a plaintiff seeks to enjoin FDA from regulating a product,
for example, cigarettes. See Coyne Beahm, Inc., et al., v. FDA,
966 F. Supp. 1374 (M.D. N.C. 1997), rev'd sub nom., Food and
Drug Admin. v. Brown & Williamson Tobacco Corp., 153 F.3d 155 (4th
Cir. 1998), aff'd, 529 U.S. 120 (2000). When FDA has manifested
its intention to regulate the product through rulemaking or other final
agency action, CPB defends the agency's action under the FDCA. Plaintiffs
do not always await final agency action before bringing suit, however.
In those circumstances, CPB has often successfully won dismissals by
invoking the doctrines of ripeness and exhaustion of remedies. E.g.,
Dietary Supplement Coalition, Inc. v. Sullivan, 978 F.2d 560 (9th
Cir. 1992), cert. denied, 508 U.S. 906 (1993). Another defense
is that federal courts lack jurisdiction to enjoin FDA from taking enforcement
action. See Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594
(1950); United States v. Alcon Laboratories, 636 F.2d 876, 882
(1st Cir.), cert. denied, 451 U.S. 1017 (1981).
F. FDA Inspection Warrants
Administrative inspections under the FDCA are conducted pursuant to 21
U.S.C. Â§ 374. Section 374 provides authority for, and defines the limits
of, nonconsensual warrantless inspections of factories, warehouses, and
establishments that are subject to the requirements of the FDCA.
FDA generally refers requests for inspection warrants to CPB. In emergencies,
FDA will refer warrant requests directly to United States Attorneys' Offices.
When a referral comes directly from FDA, CPB should be notified at once.
Coordination and cooperation among FDA, the United States Attorney's Office,
and the Consumer Protection Branch is of great importance in these cases.
Requests for inspection warrants frequently raise sensitive policy issues
for both the agency seeking to inspect and the Justice Department.
2. Initial Refusal to Permit Inspection
An establishment which has refused to allow inspection under the FDCA is
subject to criminal penalties under 21 U.S.C. Â§Â§ 331(f) and 333. However,
because a prosecution does not lead to an immediate inspection, the agency
should apply to a court for an administrative inspection warrant when it
Occasionally an establishment will allow an inspection to begin but
balk at some aspect of the inspection, such as the taking of photographs.
Photographs can provide persuasive evidence of violations. See, e.g.,
United States v. Union Cheese Co., 902 F. Supp 778, 780, 782
(N.D. Ohio 1995). The taking of photographs during an inspection is
appropriate agency activity. United States v. Gel Spice Co.,
Inc., 601 F. Supp. 1214, 1220-22 (E.D.N.Y. 1985); United States v.
ACRI Wholesale Grocery Co., 409 F. Supp. 529, 532-33 (S.D. Iowa
1976). Accordingly, a refusal to allow photographs is considered a partial
refusal to permit inspection, and may also result in a request for an
3. Application for a Warrant
The application for the warrant is ex parte and in writing before a United
States Magistrate Judge. The application should be made by a representative
of FDA, and should be entitled, e.g., In Re Establishment Inspection of
[name of establishment]. The application is generally signed by an FDA compliance
officer or investigator before the Magistrate. The officer should be accompanied
by an Assistant United States Attorney or CPB attorney when the application
The application proceeding should not become a contested hearing. The application
need not demonstrate "probable cause" under the standards of a criminal
search warrant. Because FDA is authorized to inspect without a warrant,
the application need not demonstrate modified "probable cause" under
standards frequently applied in the administrative warrant arena pursuant
to Marshall v. Barlow's Inc., 436 U.S. 307 (1978). However, to
facilitate the issuance of the warrant, the application should be drafted
to meet this modified probable cause standard. Because administrative
warrants are seldom needed unless there has been a prior refusal, modified
probable cause almost always exists.
4. Failure to Allow Inspection Pursuant to a Warrant
Because FDA agents do not claim the right to enter a business' premises
by employing physical force, a Deputy United States Marshal may accompany
an FDA investigator pursuant to a warrant, and can use force to compel
the inspection authorized by the judicial officer. See 18 U.S.C. Â§ 3109;
Marshall v. Shellcast Corp., 592 F.2d 1369, 1372 n.7 (5th Cir.
1979). Thus, where resistance to honoring the terms of a warrant is
anticipated,and where the enforcement power is available, a Marshal
can accompany the FDA investigator when the warrant is served.
If an establishment refuses to comply with an administrative warrant,
CPB should be contacted immediately before further action is taken by
a United States Attorney's Office.
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