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FDA Running Extortion Racket: Natural Supplement Companies Threatened with Arrest if They Don't Pay Up

 

Tuesday, October 21, 2008 by: Mike Adams (see all articles by this author)

 

(NaturalNews)

NaturalNews has learned the U.S. Food and Drug Administration is

running a criminal extortion racket designed to drain cash from health

supplement companies and shift it into the pockets of top FDA

contractors. This organized crime operation has been running for years,

and it has operated with impunity because each company targeted by the

scam feels isolated and alone, unable to face the astronomical legal

bills of going to court and battling the FDA. So one by one, they agree

to "settle" with the FDA for crimes they never committed. Part of the

settlement, of course, involves the payment of FDA employees or

contractors who pocket the money extorted from health companies.

 

NaturalNews has interviewed executives from three

different companies who have been targeted for extortion by U.S. Food

and Drug Administration employees. At their request, the names of those

companies are being kept confidential until legal action being taken

against them is resolved. Interviews have been recorded, with

permission, with two of those companies and will be released to the

public at a later date. Documents proving this FDA extortion racket are

included here.

How the FDA extorts money from nutritional supplement companies

The

FDA extortion racket works like this: FDA employees use

keyword-scanning software to scan the web pages of natural health

product and supplement companies, searching for terms like cancer,

cures, treatment, remedies and other "forbidden" words. FDA employees

then review the discovered pages to determine if they contain any words

that might inform consumers of the health benefits of the nutritional

products. FDA employees also look for links that might point web users

to scientific articles from peer-reviewed medical journals that further

explain the health benefits of specific foods, supplements or nutrients.

 

When offending words or links are found by the FDA, their extortion

team goes into full swing. First, they contact the company and warn

them to remove all information and links from their websites. This is

the most important step from the FDA's standpoint, because by doing

this, they can keep the health-conscious public in a state of

nutritional ignorance about the scientifically-supported healing

properties of natural supplements. Cherry products, for example, cannot

link to scientific articles explaining the simple biological fact that

cherries ease inflammation in human beings. Such links are considered

"drug claims" by the FDA.

 

NaturalNews has even learned that companies are now being targeted for

simply posting customer testimonials, even when those testimonials make

absolutely no health claims. FDA and FTC agents are now threatening the

owners of such companies with imprisonment if they do not immediately

remove all customer testimonials from their websites and marketing

materials.

 

If the company being targeted for extortion refuses to fully comply

with the FDA's requests to remove all educational information from

their website, the FDA then escalates the extortion tactics by

threatening the company principals with arrest and seizure unless they

agree to pay hundreds of thousands of dollars to top FDA contractors

and sign a "consent decree" where the company "admits" to committing

various crimes (see below). This consent decree is a blatant violation

of the Constitutional rights of U.S. citizens, of course, and it

violates numerous sections of the Bill of Rights (Amendments #1 and #5,

at the very least).

 

The FDA employees or contractors receiving the extorted money, it is

claimed, are being paid to "review web pages" to make sure they don't

contain anything that might inform consumers about the

scientifically-validated benefits of the health products being sold.

FDA extortion agreements specify that FDA employees should be paid the

rate of $100 per hour, with no limit on the number of hours they may

bill the company for. The extortion agreement also requires companies

to pay for all the following:

 

• $100 per hour for the travel time of FDA employees.

• Hotel rooms for FDA employees.

• Storage fees for all products seized by the FDA.

 

The same agreement also requires the company to comply with FDA demands

by never placing any links or "illegal" information on its website,

where "illegal" means anything that offers an accurate descriiption of

the health benefits offered by natural health products.

The Consent Decree

Part of the FDA's strategy for oppression

and control is to force targeted companies to sign a "consent decree"

where they admit to crimes they never committed. NaturalNews obtained a

copy of a public court document the FruitFast company was forced to

sign due to FDA threats and extortion tactics.

 

You can view this document yourself at: http://www.NaturalNews.com/investigatio...

 

This document requires the FruitFast company to admit to crimes it did not commit; namely:

 

"Violating the Act, by introducing or delivering for introduction,

or causing to be introduced or delivered for introduction, into

interstate commerce articles of drug that are misbranded within the

meaning of 21 U.S.C. SS 352(f)(1)."

 

What "drugs" did the FruitFast company introduce that were "misbranded?" Cherries,

it turns out. Cherry juice concentrate was being sold with the accurate

statement that it helped eliminate gout (which it does). This,

according to the FDA, was enough to magically transform cherry juice

into an "unapproved drug" and cause it to be "misbranded."

 

It also requires targeted companies to contractually agree that they have:

 

"...removed all claims from Defendants' product labels, labeling,

promotional materials, websites owned or controlled by Defendants, and

in any other media that cause that product to be a drug and/or contain

unapproved or unauthorized health claims within the meaning of the Act;

and

 

(ii) removed, from their product labels, labeling, promotional materials, and websites owned or controlled by Defendants, references to or endorsements of any other website

that conveys information about Defendants' products that cause those

products to be a drug and/or contain unapproved or unauthorized health

claims within the meaning of the Act."

 

This means, of course, that these companies can no longer even LINK to

other websites, including websites of scientific journals that discuss

the proven health benefits of such natural products (foods, herbs, etc.)

The truth is now subject to FDA approval

Once a company removes all educational

information and links from their website, they are then required to

submit to draconian measures of "censorship enforcement" by the FDA.

This is fully explained in this section of the FDA's Consent Decree:

(bolding added for emphasis)

 

Within ten (10) calendar days of FDA's request for any labels,

labeling, promotional materials, and/or downloaded copies (on CD-Rom)

of any internet websites owned or controlled by Defendants or websites

referenced by, endorsed, or adopted directly or indirectly by

Defendants, Defendants shall submit a copy of the requested materials to FDA at the address specified in paragraph 19.

 

Within twenty (20) calendar days of entry of this Decree, Defendants shall submit to FDA a certification of compliance, signed by each of the individually-named Defendants in this matter,

each Defendant stating that he: (a) has personally reviewed all of

Defendants' product labels, labeling, promotional materials, and the

internet websites referred to in paragraph 8 above; and (b) personally

certifies that the product labels, labeling, promotional materials, and

internet websites strictly comply with the requirements of the Act

and its regulations and do not include unapproved or unauthorized

claims that the products cure, mitigate, treat, prevent and/or reduce

the risk of disease. Thereafter, Defendants shall submit certifications of compliance every three (3) months for a period of two (2) years.

 

Furthermore, the FDA then requires that the company being targeted by

the extortion racket hire a person (called the "expert") to enforce all

this censorship the company has agreed to.

 

As you'll note in the language below, this "expert" must be paid $100

an hour, for an unlimited number of hours, to conduct surprise

inspections of the company's administrative offices, warehouses and

fulfillment centers:

 

Within fourteen (14) calendar days of entry of this Decree, Defendants shall retain an independent person or persons (the "expert")...

who by reason of background, experience, education, and training is

qualified to assess Defendants' compliance with the Act, to review the

claims Defendants make for all of their products on their product

labels, labeling, promotional material, any internet websites owned or

controlled by Defendants, including, but not limited to, the websites

referred to in paragraph 8 above. At the conclusion of the expert's

review, the expert shall prepare a written report analyzing whether

Defendants are operating in compliance with the Act and in particular,

certify whether Defendants have omitted all claims from their product

labels, labeling, promotional materials, websites owned or controlled

by Defendants, and in any other media, that make any of their

products drugs and/or constitute unapproved or unauthorized health

claims within the meaning of the Act. The expert shall also review

Defendants' product labels, labeling, promotional materials, and

websites owned or controlled by Defendants to determine whether

these include any references to or endorsements of any other websites

that convey information about Defendants' products that cause those

products to be a drug and/or contain unapproved or unauthorized health

claims within the meaning of the Act, and certify in the written report

whether Defendants have omitted any such references or endorsements.

The expert shall submit this report to FDA and Defendants within

thirty-five (35) calendar days of the entry of this Decree. If the

expert reports any violations of the Act, Defendants shall, within

seven (7) calendar days of receipt of the report, correct those

deviations, unless FDA notifies Defendants that a shorter time period

is necessary.

 

In other words, this section requires the company being targeted to pay

the "Expert" huge fees to make sure it doesn't "illegally" link to

other websites that might tell the truth about the health products in

question.

FDA tyranny unleashed

So what happens if the company slips up

and does something illegal like, let's say, posting a clickable link to

a science journal that discusses research citing the health benefits of

cherries? As you'll see below, there are no limits to the action the FDA can take in retribution, including the seizure of all company assets and the arrest of its principals.

 

Specifically, the Consent Decree forces company owners to agree to the following:

 

If, at any time after this Decree has been entered, FDA determines,

based on the results of an inspection, the analyses of Defendants'

product labels, labeling, promotional materials, websites owned or

controlled by Defendants, or websites referenced by, endorsed, or

adopted directly or indirectly by Defendants that convey information

about Defendants' products, a report prepared by Defendants' expert, or

any other information, that additional corrective actions are necessary

to achieve compliance with the Act, applicable regulations, or this

Decree, FDA may, as and when it deems necessary, direct Defendants, in

writing, to take one or more of the actions:

 

A. Cease manufacturing, processing, packing, labeling, holding, and/or distributing any article(s);

 

B. Submit additional reports or information to FDA;

 

C. Recall any article(s) at Defendants' expense; or

 

D. Take any other reasonable corrective action(s) as FDA,

in its discretion, deems necessary to bring Defendants and their

products into compliance with the Act, applicable regulations, and this

Decree.

Surprise inspections, secret police and non-stop persecution

Just to keep the targeted company in a

state of constant fear (which is why I have labeled the FDA a terrorist

organization), the FDA forces it to agree to surprise inspections

where it must pay FDA "compliance officers" to rummage through their

product shelves and paperwork, looking for evidence of non-compliance:

 

Duly authorized representatives of FDA shall be permitted, without

prior notice and as and when FDA deems necessary, to make [surprise]

inspections of Defendants' facilities and, without prior notice, take

any other measures necessary to monitor and ensure continuing

compliance with the terms of this Decree. During such inspections, FDA

representatives shall be permitted prompt access to buildings,

equipment, in-process and finished materials, containers, labeling and

other materials therein; to take photographs and make video recordings;

to take samples of Defendants' finished and unfinished materials and

products, containers, labels, labeling, and other promotional

materials; and to examine and copy all records relating to the receipt,

manufacture, processing, packing, labeling, promoting, holding, and

distribution of any and all Defendants' products in order to ensure

continuing compliance with the terms of this Decree. The inspections

shall be permitted upon presentation of a copy of this Decree and

appropriate credentials. The inspection authority granted by this

Decree is separate from, and in addition to, the authority to conduct

inspections under the Act, 21 U.S.C. §374.

 

And just to make sure the company is further driven into bankruptcy,

the FDA requires them to PAY for all these surprise "compliance"

investigations! As stated in the Consent Decree:

 

Defendants shall reimburse FDA for the costs of all FDA inspections,

investigations, supervision, reviews, examinations, and analyses

specified in this Decree or that FDA deems necessary to evaluate

Defendants' compliance with this Decree. The costs of such inspections

shall be borne by Defendants at the prevailing rates in effect at the

time the costs are incurred. As of the date that this Decree is signed

by the parties, these rates are: $78.09 per hour and fraction thereof per representative for inspection work; $93.61 per hour or fraction thereof per representative for analytical or review work; $0.485 per mile

for travel expenses by automobile; government rate or the equivalent

for travel by air or other means; and the published government per diem

rate or the equivalent for the areas in which the inspections are

performed per-day, per-representative for subsistence expenses, where

necessary. In the event that the standard rates applicable to FDA

supervision of court-ordered compliance are modified, these rates shall be increased or decreased without further order of the Court."

 

Are you getting the picture here? The FDA can simply show up on a

"surprise" inspection, bring ten FDA agents, bill the company for

thousands of hours, and bankrupt the company while padding its own

pockets.

 

Doesn't this sound a lot like the King's Consent Decree against the

American colonies? The FDA's agreement reads amazingly like a document

a King might force his subjects to sign as he's taking over their land

and gold, imprisoning them in his kingdom.

 

But it gets better: The FDA also requires the Defendants to reveal all sorts of details about their business operations:

 

"Within ten (10) calendar days of entry of this Decree, Defendants shall provide FDA a list of all domain names and IP addresses they use to market or describe any product, regardless of whether such sites mention specific products Defendants sell.

 

Defendants shall notify the District Director, FDA Detroit District

Office, in writing at least fifteen (15) calendar days before any

change in ownership, character, or name of its business.

 

If Defendants fail to comply with any of the provisions of this Decree,

including any time frame imposed by this Decree, then, on motion of the

United States in this proceeding, Defendants Brownwood Acres and/or

Cherry Capital shall pay to the United States of America the sum of one

thousand dollars ($1,000) in liquidated damages per violation per day

so long as such violation continues.

 

Should the United States bring, and prevail in, a contempt action to

enforce the terms of this Decree, Defendants shall, in addition to

other remedies, reimburse the United States for its attorneys* fees,

investigational expenses, expert witness fees, travel expenses incurred

by attorneys and witnesses, and administrative court costs relating to

such contempt proceedings.

 

And finally, just to make sure everybody knows who's in charge, here's what the agreement says about final judgment:

 

All decisions specified in this Decree shall be vested in the discretion of FDA and shall be final.

 

In other words, the FDA is the King. It is above the law. It answers to no one but itself.

 

Welcome to the United States of Tyranny, FDA style.

 

The full text of the FDA's agreement, including the names of the top

FDA criminals who signed it, is included at the end of this article.

This brand of tyranny is reserved for health supplement companies

While the FDA gives drug companies a free

pass of easy approval for dangerous drugs, this Consent Decree is the

kind of treatment it slams down upon health product companies. As you

can see from the text in the decree, above, this is a document of outright tyranny and oppression.

 

Any company signing this document gives the FDA all the tools it needs

to drive that company completely out of business. Sadly, dozens of

companies have signed this in just the last year. The FDA's reign of

terror is working. It's putting health companies out of business and

forcing them to censor themselves. It even forces them to remove all web links to information sources like NaturalNews.com or peer-reviewed science journals.

 

This is all part of the FDA's campaign of health illiteracy -- a war of disinformation being waged against the American people.

It is a secret war being fought out of the view of the mainstream media

(which refuses to report this story) and far from the scrutiny of the

U.S. Dept. of Justice (which doesn't care about the real tyrants

running loose in this country).

 

As I have often stated here on NaturalNews.com, the FDA is an out-of-control, rogue agency engaged in acts of terrorism against the American people.

By itself, it is negligent in the deaths of tens of millions of

Americans, and it has taken it upon itself to increase the body count

by making sure consumers have zero access to honest, truthful,

scientifically-validated information about the healing properties of

health supplements.

 

The FDA, by any account, is a much greater threat to the security and

safety of the American people than any terrorist group, and if the U.S.

really wanted to fight terror and tyranny, it would start by arresting

top FDA officials at gunpoint. Those targeted for arrest and

prosecution should also include the lawyers and paper pushers involved

in this very agreement (see their names on the legal documents at the

end of this article).

 

In my view, these people are the real criminals at work here. They are

the masterminds of this campaign of extortion and terror being leveled

against health companies by the rogue U.S. Food and Drug

Administration. Much like Hitler's top generals, they play an important

role in the mass disinformation that's resulting in the needless death

of millions of people. By any account, they are all guilty of crimes

against humanity and should be arrested and prosecuted as such. We

should all be so fortunate to live to the day where we can see these

white-collar criminals behind bars, perhaps sharing their jail cells

with other war criminals from the Bush Administration.

Sign this or you'll be arrested

What you haven't yet seen in all this is

the barrage of threats leveled against companies if they don't sign

this Consent Decree! Company executives receive both written and verbal

threats from top FDA "enforcement officers" who claim they will "throw

you in prison" if you don't sign the agreement.

 

Every major health trade show hosts an FDA compliance officer

(much like a Nazi Gestapo officer) whose job it is to walk the show

floor and threaten companies into compliance. This includes shows like

Expo West and Expo East, where show organizers also serve as de facto

FDA agents themselves, barring the participation of exhibitors who dare

to tell the truth about their natural products. This smacks of KGB

secret police operations in the former Soviet Union. But secret FDA

police are now a reality in the United States of America.

 

NaturalNews has learned of numerous verbal threats from FDA compliance

officers directed at health supplement companies during trade shows,

including threats to "put you out of business,throw you in prison"

or "take every last dollar you've ever earned."

 

FDA compliance officers are the foot soldiers of the agency's war

against the truth. They seek out any health claim that might inform

consumers about the properties of nutritional supplements, then they

work to squash such statements before they become too well known. In

essence, they are censorship officers who enforce nutritional

illiteracy and prevent knowledge from being shared.

 

As such, they are acting not merely as secret police on a mission to

destroy small American businesses; they are actually agents of

disinformation, bent on destroying knowledge and enforcing a system of

mandatory ignorance. This is entirely consistent with the FDA's history

of ordering the destruction of recipe books that promoted the use of

the natural herb stevia, among many other examples of information

suppression.

The FDA's campaign of health illiteracy and enforced ignorance

It is the FDA's position that there is no

such thing as any food, beverage, supplement or herb that has any

health benefit whatsoever. Merely making such a claim instantly

qualifies your product as a "new and unapproved drug," according to the

FDA.

 

Officially, the FDA claims all health products are inert and have no

properties other than their macronutrients (fiber, carbohydrates,

protein, etc.).

 

There is only one class of substances that have any biological effect

on the human body, the FDA claims: Pharmaceuticals. Only those

patented, synthetic chemicals are allowed to be described as having

benefits to human health.

 

This convenient position is entirely consistent with the protection of

the profits of drug companies. It's no coincidence that the drug

companies fund the FDA through "user fees," and most FDA employees are

dependent on drug company money... except, of course, those FDA people

earning their living by extorting millions of dollars from health

product companies.

 

The upshot of the FDA's campaign against health supplements is that

most of the American people remain nutritionally illiterate, oblivious

to the scientifically-validated health benefits offered by tens of

thousands of different nutrients, plants, supplements and products. To

say that zinc speeds healing, or that vitamin D prevents cancer, or

that resveratrol lowers high cholesterol is common sense in the

scientific community, but it's a crime in the eyes of the FDA.

It's time to stop the FDA's reign of terror over health supplements

It is time to end the FDA's extortion

racket, restore Free Speech rights to health supplements, and bring the

organized crime kingpins at the FDA to justice.

 

NaturalNews is organizing a list of companies who wish to help fund

legal action against the FDA. We intend to take part in a lawsuit

against the FDA that would reign in the FDA's control over nutritional

supplements and defend health freedoms for American consumers.

 

To do this, we need to gather information from those companies who are

willing to help fund this legal action, which may cost several hundred

thousand dollars. If you represent a company willing to take part in this legal action against the FDA, contact us now at StopTheFDA

 

Simply email us your name and contact phone number. We'll contact you

to continue the conversation. Any information sent to us is kept

strictly confidential. We will refuse to turn over such information

even with a court order.

 

With enough support from the natural products community, we will take

part in the reporting and grassroots organization of this legal action.

We must stop the FDA now

It is the belief of NaturalNews that the FDA is being run as a system of organized crime,

using the exact same extortion tactics as the Mob. Through

intimidation, censorship and threats of imprisonment, the FDA is right

now extorting tens of millions of dollars from the very same health

supplement companies you depend on to bring you lifesaving,

disease-reversing products.

 

Even worse, the FDA is getting away with it. Backed by the threat of

imprisonment and the ability to conduct armed raids against health

product companies (see the history of armed FDA raids against vitamin

companies here: http://www.naturalnews.com/021791.html ), the FDA is able to overpower health product companies when they stand alone.

 

The industry must band together if it hopes to defend itself against this tyranny.

A lone villager cannot defend himself against a band of marauders, but

an organized and well-defended band of villagers can fight off

attackers many times their size. If it wishes to survive, the natural

products industry must band together and defend itself against the FDA.

It must take back its right to tell the truth about health supplements,

and it must forever banish censorship and ignorance from the health

products marketplace.

 

The FDA will not stop its reign of terror, you see, until every health

supplement companies is silenced, every company founder is imprisoned

and every consumer is enslaved in a state of outright nutritional

illiteracy. They will seize products and let them rot in warehouses;

they'll recruit armed law enforcement personnel to conduct SWAT-style

raids on vitamin shops; they'll extort millions of dollars from health

companies and pocket the profits; and they'll do it all while burning

taxpayer dollars and claiming they're working to "protect" consumers

from natural health products like cherry juice concentrate,

which is of course so incredibly dangerous that we need an entire

government agency just to make sure we don't find out it might ease

arthritis inflammation.

What you can do right now to help halt the FDA's reign of terror

As a consumer, you can use your voice to help stop the FDA from destroying the natural products marketplace. Simply go to www.ReformFDA.org and sign the petition there.

 

It's sponsored by the American Association for Health Freedom (AAHF),

an organization fighting to end the FDA's tyrannical rule over the

health of the American people.

 

Sign that petition and spread the word: NaturalNews and the AAHF are

working together to bring back honesty, freedom and free speech to the

health supplements industry, and we need your help to get it done.

 

You can also protest the FDA with your Congressperson or Senator.

Contact them and insist that they support efforts to end the reign of

FDA tyranny and reestablish Free Speech rights for nutritional

supplement companies.

 

Notably, Rep. Ron Paul has sponsored the Health Freedom Protection Act, which you can read here: http://www.StopFDACensorship.org

Grab your cameras, folks

Finally, NaturalNews urges those in the natural health community to go out and buy video cameras and still cameras. One video can change the world. It's up to you to get that video recorded and get it to us here at NaturalNews. Use our feedback form to contact us: www.NaturalNews.com/feedback.html

 

We've also opened up an audio tips line, where FDA employees who wish

to leak information to NaturalNews can anonymously call us and leave a

message: (323) 924-1664

 

With your help, we will soon start publishing videos and photos showing

FDA agents directly engaged in acts of tyranny against health

companies. And for those who'd like to earn some extra money snapping

photos, we're willing to pay you

 

It's time to shed light on the real actions of the FDA. We can no

longer sit back and allow this criminal organization to operate in

secret. But grabbing the public's attention all comes down to getting this on video.

This is the YouTube era. If it's not on video, it doesn't exist. But if

it's on video, we can likely get it on mainstream news. (I can see it

now: the FDA raids a warehouse and handcuffs the screaming, crying

business owner. And why? Because their bottle said, "Eases

inflammation." The public won't stand for it.)

 

The FDA, of course, will have its own people doing the same thing to

people like me. They're trying to catch us eating at McDonald's or

going through the local pharmacy drive-thru. All I can say about that

is they'll be waiting a long, long time to see that day!

 

Please forward this story to everyone you know. We the People

must either prevail in this fight for our freedom, or we will all end

up illiterate, imprisoned or silenced. The FDA will take away your

rights, your speech and your health, and it will laugh all the way to

the bank while it steals your hard-earned money. It will break every

law, ignore every court order and commit every crime necessary to bring

health companies into line... UNLESS we fight back and do our part to

end this grave threat to our health, safety and freedoms.

 

The FDA is the enemy of the People. It is a criminal organization bent

on destroying American freedoms and consumer health. It operates with

impunity, using its own secret compliance officers, wreaking death and

destruction across our nation like a dark plague unleashed. If we hope

to ever regain our health, our freedoms and the basic human right to

tell the truth about the healing properties of simple foods, then we

must bring this agency to justice and prosecute its mob bosses for

their many crimes against the People.

 

It is time to stand up for your health freedoms, or lose them forever.

Please join me in this courageous stand against tyranny and oppression.

 

- Mike Adams, the Health Ranger, editor of NaturalNews.com

and start snapping photos of rogue FDA agents arresting people, seizing

products, accepting bribes or other outrageous acts. We cannot simply

lie down and let the FDA march in to our company warehouses and seize

products. for photos of FDA "compliance officers" walking trade show

floors where they threaten companies in person. Contact us for details

if you're a photographer with a long lens who would like to start

earning money snapping photos of FDA agents engaged in their dirty work.

The Full Consent Decree of Permanent Injunction

Here's the full text of the Consent Decree in case you want to read it yourself.

 

February 12, 2008 3:11 PM

 

RONALD C. WESTON, SR., CLERK

 

U.S. DISTRICT COURT WESTERN DISTRICT OF MICHIGAN

 

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

 

UNITED STATES OF AMERICA,

 

Plaintiff,

 

v.

 

BROWNWOOD ACRES FOODS, INC., and CHERRY CAPITAL SERVICES, INC. d.b.a.

FLAVONOID SCIENCES, corporations, and STEPHEN C. de TAR and ROBERT L.

UNDERWOOD, individuals,

 

Defendants.

 

Plaintiff, United States of America, having commenced this action by

filing its Complaint for Permanent Injunction, and Brownwood Acres

Foods, Inc. ("Brownwood Acres") and Cherry Capital Services, Inc.,

d.b.a. Flavonoid Sciences ("Cherry Capital"), corporations, and Stephen

C. de Tar and Robert L. Underwood, individuals (hereafter collectively,

"Defendants"), having appeared and consented to the entry of this

Decree without contest and before any testimony was taken, and the

United States of America, having consented to this Decree;

 

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows: 1. This Court

has jurisdiction over the subject matter of this action and has

personal jurisdiction over all parties to this action.

 

CIVIL NO

 

1:08-cv-148

 

HON Paul L Maloney

 

US District Judge

 

CONSENT DECREE OF PERMANENT INJUNCTION

 

2. The Complaint for Permanent Injunction states a cause of action

against Defendants under the Federal Food, Drug, and Cosmetic Act, 21

U.S.C. §§ 301-397 (the "Act").

 

3. Defendants violate the Act, 21 U.S.C. § 331 (d), by introducing or

delivering for introduction, or causing to be introduced or delivered

for introduction, into interstate commerce new drugs within the meaning

of 21 U.S.C. § 321 (p) that are neither approved under 21 U.S.C. §

355(a), nor exempt from approval pursuant to 21 U.S.C. § 355(t).

 

4. Defendants violate the Act, 21 U.S.C. § 331 (a), by introducing or

delivering for introduction, or causing to be introduced or delivered

for introduction, into interstate commerce articles of drug that are

misbranded within the meaning of 21 U.S.C. § 352(f)(1).

 

5. Defendants violate the Act, 21 U.S.C. § 331(a), by introducing or

delivering for introduction, or causing to be introduced or delivered

for introduction, into interstate commerce food that is misbranded

within the meaning of 21 U.S.C. §343®(1)(B).

 

6. Upon entry of this Decree, Defendants and each and all of their

directors, officers, agents, representatives, employees, attorneys,

successors, assigns, and any and all persons in active concert or

participation with any of them who receive actual notice of this Decree

by personal service or otherwise, are permanently restrained and

enjoined from introducing or delivering for introduction, or causing to

be introduced or delivered for introduction, into interstate commerce

any product unless and until:

 

A. An approved new drug application or abbreviated new drug application

filed pursuant to 21 U.S.C. § 355(a) or (j) is effective with respect

to the product; or

 

B. An effective investigational new drug exemption filed pursuant to 21 U.S.C. § 355(i) is in effect for the product; or

 

C. The product's claims comport with an authorized health claim set forth in 21 C.F.R. § 101.72-101.83; or

 

D. Defendants have received a letter of enforcement discretion for a qualified health claim from FDA for that product; or

 

E. Defendants have:

 

(i) removed all claims from Defendants' product labels, labeling,

promotional materials, websites owned or controlled by Defendants, and

in any other media that cause that product to be a drug and/or contain

unapproved or unauthorized health claims within the meaning of the Act;

and

 

(ii) removed, from their product labels, labeling, promotional

materials, and websites owned or controlled by Defendants, references

to or endorsements of any other website that conveys information about

Defendants' products that cause those products to be a drug and/or

contain unapproved or unauthorized health claims within the meaning of

the Act.

 

7. Upon entry of this Decree, Defendants and each and all of their

directors, officers, agents, representatives, employees, attorneys,

successors, assigns, and any and all persons in active concert or

participation with any of them who receive actual

 

notice of this Decree by personal service or otherwise, are permanently

restrained and enjoined from directly or indirectly doing or causing to

be done any act that:

 

A. Violates 21 U.S.C. § 331(d), by introducing or delivering for

introduction, or causing to be introduced or delivered for

introduction, into interstate commerce new drugs within the meaning of

21 U.S.C. § 321 (p) that are neither approved pursuant to 21 U.S.C. §

355(a), nor exempt from approval pursuant to 21 U.S.C. §355(i);

 

B. Violates 21 U.S.C. § 331(a), by introducing or delivering for

introduction, or causing to be introduced or delivered for

introduction, into interstate commerce articles of drug that are

misbranded within the meaning of 21 U.S.C.

 

§ 352(f)(1); and

 

C. Violates 21 U.S.C. § 331(a), by introducing or delivering for

introduction, or causing to be introduced or delivered for

introduction, into interstate commerce food that is misbranded within

the meaning of 21 U.S.C. § 343®(1)(B).

 

8. Within ten (10) calendar days of FDA's request for any labels,

labeling, promotional materials, and/or downloaded copies (on CD-Rom)

of any internet websites owned or controlled by Defendants or websites

referenced by, endorsed, or adopted directly or indirectly by

Defendants, Defendants shall submit a copy of the requested materials

to FDA at the address specified in paragraph 19.

 

9. Within twenty (20) calendar days of entry of this Decree, Defendants

shall submit to FDA a certification of compliance, signed by each of

the individually-named Defendants in this matter, each Defendant

stating that he: (a) has personally reviewed

 

all of Defendants' product labels, labeling, promotional materials, and

the internet websites referred to in paragraph 8 above; and (b)

personally certifies that the product labels, labeling, promotional

materials, and internet websites strictly comply with the requirements

of the Act and its regulations and do not include unapproved or

unauthorized claims that the products cure, mitigate, treat, prevent

and/or reduce the risk of disease. Thereafter, Defendants shall submit

certifications of compliance every three (3) months for a period of two

(2) years.

 

10. Within fourteen (14) calendar days of entry of this Decree,

Defendants shall retain an independent person or persons (the

"expert"), without personal, financial (other than the consulting

agreement between the parties), or familial ties to Defendants or their

immediate families, who by reason of background, experience, education,

and training is qualified to assess Defendants' compliance with the

Act, to review the claims Defendants make for all of their products on

their product labels, labeling, promotional material, any internet

websites owned or controlled by Defendants, including, but not limited

to, the websites referred to in paragraph 8 above. At the conclusion of

the expert's review, the expert shall prepare a written report

analyzing whether Defendants are operating in compliance with the Act

and in particular, certify whether Defendants have omitted all claims

from their product labels, labeling, promotional materials, websites

owned or controlled by Defendants, and in any other media, that make

any of their products drugs and/or constitute unapproved or

unauthorized health claims within the meaning of the Act. The expert

shall also review Defendants' product labels, labeling, promotional

materials, and websites owned or controlled by Defendants to determine

whether these include any references to or endorsements of any other

 

websites that convey information about Defendants' products that cause

those products to be a drug and/or contain unapproved or unauthorized

health claims within the meaning of the Act, and certify in the written

report whether Defendants have omitted any such references or

endorsements. The expert shall submit this report to FDA and Defendants

within thirty-five (35) calendar days of the entry of this Decree. If

the expert reports any violations of the Act, Defendants shall, within

seven (7) calendar days of receipt of the report, correct those

deviations, unless FDA notifies Defendants that a shorter time period

is necessary.

 

11. If, at any time after this Decree has been entered, FDA determines,

based on the results of an inspection, the analyses of Defendants'

product labels, labeling, promotional materials, websites owned or

controlled by Defendants, or websites referenced by, endorsed, or

adopted directly or indirectly by Defendants that convey information

about Defendants' products, a report prepared by Defendants' expert, or

any other information, that additional corrective actions are necessary

to achieve compliance with the Act, applicable regulations, or this

Decree, FDA may, as and when it deems necessary, direct Defendants, in

writing, to take one or more of the actions:

 

A. Cease manufacturing, processing, packing, labeling, holding, and/or distributing any article(s);

 

B. Submit additional reports or information to FDA;

 

C. Recall any article(s) at Defendants' expense; or

 

D. Take any other reasonable corrective action(s) as FDA, in its

discretion, deems necessary to bring Defendants and their products into

compliance with the Act, applicable regulations, and this Decree.

 

12. Any cessation of operations as described above shall continue until

FDA notifies Defendants in writing that Defendants appear to be in

compliance with the.Act and the requirements of this Decree, and that

Defendants may resume operations. Such notification by FDA may not be

unreasonably delayed.

 

13. Duly authorized representatives of FDA shall be permitted, without

prior notice and as and when FDA deems necessary, to make inspections

of Defendants' facilities and, without prior notice, take any other

measures necessary to monitor and ensure continuing compliance with the

terms of this Decree. During such inspections, FDA representatives

shall be permitted prompt access to buildings, equipment, in-process

and finished materials, containers, labeling and other materials

therein; to take photographs and make video recordings; to take samples

of Defendants' finished and unfinished materials and products,

containers, labels, labeling, and other promotional materials; and to

examine and copy all records relating to the receipt, manufacture,

processing, packing, labeling, promoting, holding, and distribution of

any and all Defendants' products in order to ensure continuing

compliance with the terms of this Decree. The inspections shall be

permitted upon presentation of a copy of this Decree and appropriate

credentials. The inspection authority granted by this Decree is

separate from, and in addition to, the authority to conduct inspections

under the Act, 21 U.S.C. §374.

 

14. Defendants shall reimburse FDA for the costs of all FDA

inspections, investigations, supervision, reviews, examinations, and

analyses specified in this Decree or that FDA deems necessary to

evaluate Defendants' compliance with this Decree. For the purposes of

this Decree, inspections include FDA's review and

 

analysis of Defendants' claims for their products in the product

labels, labeling, promotional materials, any and all websites owned or

controlled by Defendants, and any and all websites referenced by,

endorsed, or adopted directly or indirectly by Defendants that convey

information about Defendants' products. The costs of such inspections

shall be borne by Defendants at the prevailing rates in effect at the

time the costs are incurred. As of the date that this Decree is signed

by the parties, these rates are: $78.09 per hour and fraction thereof

per representative for inspection work; $93.61 per hour or fraction

thereof per representative for analytical or review work; $0,485 per

mile for travel expenses by automobile; government rate or the

equivalent for travel by air or other means; and the published

government per diem rate or the equivalent for the areas in which the

inspections are performed per-day, per-representative for subsistence

expenses, where necessary. In the event that the standard rates

applicable to FDA supervision of court-ordered compliance are modified,

these rates shall be increased or decreased without further order of

the Court.

 

15. Within ten (10) calendar days after the entry of this Decree,

Defendants shall provide a copy of this Decree, by personal service or

certified mail (restricted delivery, return receipt requested), to each

and all of its directors, officers, agents, representatives, employees,

successors, assigns, attorneys, and any and all persons in active

concert or participation with any of them (including "doing business

as" entities) (hereafter collectively referred to as "associated

persons"). Wthin thirty-five (35) calendar days of the date of entry of

this Decree, Defendants shall provide to FDA an affidavit of

compliance, stating the fact and manner of compliance with the

provisions of this paragraph and identifying the names and positions of

all associated persons who

 

have received a copy of this Decree and the manner of notification. In

the event that Defendants become associated, at any time after the

entry of this Decree, with new associated persons, Defendants shall:

(a) within fifteen (15) calendar days of such association, provide a

copy of this Decree to each such associated person by personal service

or certified mail (restricted delivery, return receipt requested), and

(b) on a quarterly basis, notify FDA in writing when, how, and to whom

the Decree was provided.

 

16. Within ten (10) calendar days of entry of this Decree, Defendants

shall post a copy of this Decree on a bulletin board in a common area

at any of their manufacturing or distribution facilities, and shall

ensure that the Decree remains posted for a period of twelve (12)

months at each location.

 

17. Wthin ten (10) calendar days of entry of this Decree, Defendants

shall provide FDA a list of all domain names and IP addresses they use

to market or describe any product, regardless of whether such sites

mention specific products Defendants sell. Defendants thereafter shall

notify FDA within ten (10) days of any change to this list (either

additions or deletions).

 

18. Defendants shall notify the District Director, FDA Detroit District

Office, in writing at least fifteen (15) calendar days before any

change in ownership, character, or name of its business, such as

dissolution, assignment, or sale resulting in the emergence of a

successor corporation, the creation or dissolution of subsidiaries,

franchises, affiliates, or "doing business as" entities, or any other

change in the corporate structure of Defendants Brownwood Acres or

Cherry Capital, or in the sale or assignment of any business assets,

such as buildings, equipment, or inventory, that may affect compliance

with this Decree. Defendants shall provide a copy of this Decree to any

potential successor or assignee at least fifteen (15) calendar days

before any sale or assignment. Defendants shall furnish FDA with an

affidavit of compliance with this paragraph no later than ten (10)

calendar days prior to such assignment or change in ownership.

 

19. All notifications, certifications, reports, correspondence, and

other communications to FDA required by this Decree shall be addressed

to the Director, FDA Detroit District Office, 300 River Place, Suite

5900, Detroit, Michigan 48207.

 

20. If Defendants fail to comply with any of the provisions of this

Decree, including any time frame imposed by this Decree, then, on

motion of the United States in this proceeding, Defendants Brownwood

Acres and/or Cherry Capital shall pay to the United States of America

the sum of one thousand dollars ($1,000) in liquidated damages per

violation per day so long as such violation continues. For the purposes

of this paragraph, a "violation" is defined as each time any Defendant

introduces or delivers for introduction into interstate commerce any

product that is accompanied by (on the product's label, labeling,

promotional materials, websites owned or controlled by Defendants, or

in any other media) a claim(s) that causes the product to be a drug or

constitutes a health claim within the meaning of the Act, unless the

product is an approved new drug or such claim is authorized by FDA.

 

21. Should the United States bring, and prevail in, a contempt action

to enforce the terms of this Decree, Defendants shall, in addition to

other remedies, reimburse the United States for its attorneys* fees,

investigational expenses, expert witness fees, travel expenses incurred

by attorneys and witnesses, and administrative court costs relating to

such contempt proceedings.

 

22. All decisions specified in this Decree shall be vested in the

discretion of FDA and shall be final. If contested, FDA's decisions

under this Decree shall be reviewed by the Court under the arbitrary

and capricious standard set forth in 5 U.S.C. § 706(2)(A). Review shall

be based exclusively on the written record before FDA at the time the

decision was made. No discovery shall be taken by either party.

 

23. If, in FDA's judgment, Defendants maintain a continuous state of

compliance with this Decree and the Act for a period of three (3) years

after the date of entry of this Decree, and FDA has not notified

Defendants that there has been a significant violation of this Decree

or the Act during such time, the government will not oppose Defendants'

petition to the Court to dissolve the Decree.

 

24. This Court retains jurisdiction of this action for the purpose of

enforcing or modifying this Decree and for the purpose of granting such

additional relief as may be necessary or appropriate.

 

IT IS SO ORDERED:

 

Dated this_day of_, 2008.

 

UNITED STATES DISTRICT JUDGE

 

 

FOR PLAINTIFF

 

CHARLES R. GROSS

United States Attorney Western District of Michigan

 

W. FRANCESCA FERGUSON

Assistant U.S. Attorney

 

ALAN J. PHELPS

Trial Attorney

Office of Consumer Litigation Department of Justice Civil Division P.O. Box 386 Washington, D.C. 20044

 

OF COUNSEL:

 

JAMES C. STANSEL

Acting General Counsel

 

GERALD F. MASOUDI

Chief Counsel

Food and Drug Division

 

ERIC M. BLUMBERG

Deputy Chief Counsel, Litigation

 

MICHELE LEE SVONKIN

Associate Chief Counsel for Enforcement United States Department of Health and Human Services Office of the General Counsel

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