Court Rules that Consent Decree Overrules Company's Claims of FDA Inspector Malfeasance
Posted 24 January 2013 | By
The Sixth Circuit Court of Appeals has ruled against a company attempting to sue a compliance officer of the US Food and Drug Administration (FDA), saying the supplement manufacturer has forfeited the right to sue as the result of a consent decree it entered into with the agency in 2009.
The court's decision, authored by Judge Jeffery Sutton, at times adopts a tongue-in-cheek style to explain the facts of the case. LG Sciences had promised that its product would produce, "explosive muscle gains and skyrocketing strength that surpasses your wildest dreams," Sutton explained. "But when FDA claimed that LG's product were improperly labeled and seized them, the company decided to settle rather than flex its muscles in response."
The facts of the case are thus: In April 2008, FDA filed a forfeiture complaint against approximately 26,000 of LG's "dietary supplements," claiming that they were in fact "unapproved food additives" and "new dietary ingredients" that were not proven to be safe and were thus potentially dangerous to consumers. The US Marshals service carried out the forfeiture complaint the same day, seizing the products.
Though the company initially contested the forfeiture in court, it entered into a consent decree with FDA a year later, and agreed to destroy all products seized by FDA.
Ordinarily, that's where many similar court cases end, as companies can be eager to put bad publicity behind them and focus on marketing other, legal products. Not so, however, for LG, which filed a claim against FDA compliance officer Judith Putz, arguing that she had "falsified information in the forfeiture complaint."
The effect of that falsification would have nullified any probable cause that FDA would have had to seize the products, much in the same way that an illegal search conducted by police would invalidate any evidence found in the course of that search.
LG went on to claim that its Fourth Amendment rights against unreasonable search and seizure had been violated, and cited the court case Bivens v. Six Unknown Named Agents.
Putz fired back in her own legal filings, arguing that the consent decree precluded-and thus invalidated-the company's claim, and that she possessed "qualified immunity" under her position.
A lower court agreed with her point on at least the first claim, causing LG to file an appeal. The Sixth Circuit Court upheld that court's decision, ruling that the consent judgment "has the full effect of final judgment for purposes of claim preclusion."
As LG entered into the consent decree of its own free volition, it lost standing to sue over the matter, the court wrote.
"The company had the chance to litigate whether the forfeiture complaint was based on false information in the first action. It instead opted to deal away its right to litigate by signing a consent decree," Sutton wrote. "There is an identity of claims because the two claims 'arose out of the same core of operative facts,'" he added.
The entire case, LG Sciences v. Judith Putz, may be found online here.