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United States v. an Undetermined Number of Shipping Packages

May 27, 1965

UNITED STATES OF AMERICA
v.
AN UNDETERMINED NUMBER OF SHIPPING PACKAGES, ETC., VITASAFE CORPORATION, APPELLANT. UNITED STATES OF AMERICA V. VITASAFE CORPORATION, A CORPORATION, NUTRITIONAL QUALITY CONTROLS, INC., A CORPORATION, THE DOLLAR VITAMINE PLAN, INC., A CORPORATION, LIFE NUTRITION, INC., A CORPORATION, INTERNATIONAL OIL AND METALS CORPORATION, A CORPORATION, DR. PARKER MEDICINE COMPANY, A CORPORATION, PHILIP S. VOLOSOV, AN INDIVIDUAL AND HENRY D. COHEN, AN INDIVIDUAL, APPELLANTS.



Author: Kalodner

Before McLAUGHLIN, KALODNER and HASTIE, Circuit Judges.

KALODNER, Circuit Judge.

The District Court, in an in rem proceeding under the Federal Food, Drug and Cosmetic Act*fn1 (Appeal No. 14964), condemned and forfeited (1) some 900 seized packages of Vitasafe vitamin-mineral capsules, which it found to be "foods"*fn2 and "drugs"*fn3 introduced into interstate commerce, with "labeling" claims that were false and misleading, and with inadequate directions for their use*fn4; and (2), approximately 3,730,000 pieces of written, printed and graphic material designed to promote the sale of the capsules, seized in the warehouse of the Vitasafe Corporation in Middlesex, New Jersey, which were held to be "labeling"*fn5

The District Court, in a subsequent injunction proceeding (Appeal No. 15066), granted a Preliminary Injunction imposing restrictions on the defendants named therein with respect to the distribution of their products, their "labeling," and accompanying literature.

The critical issues presented by this consolidated appeal from the Condemnation Decree and Preliminary Injunction are:

(1) Were the District Court's factfindings that the condemned capsules were misbranded "clearly erreoneous."

(2) Did the District Court err in ruling that the 3,730,000 pieces of promotional literature seized in the warehouse of Vitasafe Corporation constituted "labeling".

(3) Did the District Court, in its Preliminary Injunction, abuse its legal discretion in imposing challenged restraints on the defendants' sale and distribution of its vitamin-mineral capsules.

The record discloses that the Vitasafe Corporation carried on a mail-order business for the sale of a vitamin-mineral dietary supplement. It purchased large quantities of vitamins from various manufacturers, and repackaged them under its own label at its headquarters in Middlesex, New Jersey.It thereafter sold to persons who responded to its advertising and promotional literature which appeared in magazines, newspapers and Sunday supplements throughout the United States. It also made sales to persons to whom it had mailed its promotional literature. It did not retain a record of persons to whom the literature was sent.

The Libel of Information alleged that the "labeling" which accompanied the Vitasafe product, a series of ten different pieces of promotional literature, falsely implied and suggested (1) that Vitasafe "Formula M" and Vitasafe "Formula W" were designed to satisfy the special nutritional needs of men and women respectively; (2) that the nutritional value of the Vitasafe capsule was enhanced by the addition of several ingredients which were in fact of "no nutritional significance for dietary supplementation;" (3) that the minimum adult daily requirements of vitamins and minerals, specified in the "labeling", were the recommendations of the Food and Nutrition Board, National Academy of Science, National Research Council and (4) that large amounts of common foods would be needed to provide the nutrients supplied by one Vitasafe capsule.

The Libel also alleged that the "labeling" falsely and misleadingly implied and suggested that Vitasafe, as a drug, was an adequate and effective treatment for several common maladies; that practically everyone in the country was suffering from, or in danger of suffering from, a dietary deficiency of vitamins, minerals and proteins, which was likely to cause certain deficiency diseases; and that the deficiencies suggested were caused by a loss of nutritive value due to the soil in which food was grown, and the storage, processing and cooking of foods.

The Libel further alleged that the "labeling" represented Vitasafe to be "a lipotropic factor or agent" without adequately stating directions for its use as such.

The Government, in condemnation proceeding, presented several expert witnesses in support of its position. Vitasafe Corporation, as claimant, also presented expert witnesses.

The District Court, 226 F. Supp. 266 (D.N.J.1964) found that Vitasafe was a "food" within the meaning of 21 U.S.C.A. § 321(f) because its "labeling" recommended "its use and [represented] it to be of value as a dietary and nutritional supplement;" that it was also a "drug" within the meaning of 21 U.S.C.A. § 321(g) because its "labeling" recommended "its use and [represented] it to be of value as a curative or preventive of disease conditions in man affecting the structure and function of the body of man". It further found that the seized packages of Vitasafe were "misbranded when introduced into, while in, and while held for sale after shipment in interstate commerce," in that their "labeling" was false and misleading*fn6, and that there did not appear adequate directions for the use of Vitasafe as a lipotropic factor or agent*fn7

The District Court on the basis of the stated fact-findings, held that the seized 900 packages of Vitasafe capsules were subject to condemnation as "misbranded", under 21 U.S.C.A. § 334, and so ordered. The record amply supports both the fact-findings and the order of condemnation with respect to these seized packages. It would serve no useful purpose to dwell on this aspect of this appeal in view of the exhaustive analysis relating to these packages in the District Court's opinion.

We are, however, of the opinion that the District Court erred as a matter of law in ruling that the 3,730,000 pieces of promotional literature seized while at rest in the Vitasafe warehouse in Middlesex, New Jersey, were "labeling" within the meaning of 21 U.S.C.A. § 321(m), and as such subject to condemnation under 21 U.S.C.A. § 334.

The Government urges with respect to these 3,730,000 pieces that "all of the promotional matter seized was obviously intended to promote Vitasafe, and had no other useful purpose," and that "it supplements the label on the bottle of capsules, and was intended by the claimants to be ultimately used in the sale of Vitasafe," and thus it was "labeling" subject to condemnation under the Act.

The claimant, Vitasafe Corporation, does not deny the alleged intended use of the seized material, but contends that it was never actually employed for such purposes, and therefore could not have been subject to condemnation under the Act.

Under Section 321(m) the term "labeling" applies inter alia to "written, printed, or graphic matter" which appears upon any article or any of its containers or wrappers or ...


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