Earlier this month, the U.S. Department of Justice (DOJ) Civil Division's Consumer Protection Branch (CPB) released its first-ever annual "recent highlights" report. The report describes the CPB's accomplishments from October 2020 through December 2021 and gives some insight into the enforcement trends companies can expect in the future as CPB's enforcement activities continue to ramp up.
The CPB has both civil and criminal authority that its nearly 100 attorneys exercise through criminal prosecutions and civil enforcement actions across several subject areas, including violations of consumer health, safety, economic activity, and identity integrity laws and regulations.
The full text of the report is available here. We provide some of the high-level takeaways and summarize the FDA cases below:
Summary of 2021
In the slightly more than a year covered by the report, the CPB resolved cases resulting in $6.38 billion in payments to the U.S. and victims. CPB attorneys filed actions against 200 defendants, handled 55 defensive cases, and entered into more than 50 corporate resolutions. In their efforts, CPB personnel defended the Food and Drug Administration (FDA), the Consumer Product Safety Commission (CPSC), and other federal agencies against challenges to their programs and decisions. This work included actions responding to the ongoing opioid epidemic and COVID-19 pandemic, drug and device hazards, pathogen outbreaks, youth smoking, and product harms, as well as fraud and deception affecting the elderly, recent immigrants, and other vulnerable populations.
CPB attorneys utilized new legal tools at their disposal, including criminal provisions of the Consumer Product Safety Act, civil sections of the Controlled Substances Act, and numerous statutes and rules administered by the Federal Trade Commission (FTC).
Consumer Health and Safety
A large portion of the CPB's resources is devoted to enforcement work aimed at protecting consumer health and safety.
Case Summaries
Drugs and Devices
Opioids
COVID-19
Clinical Trial Fraud
Defensive Litigation
Conclusion
The CPB has more than tripled in size over the last several years, and this report reinforces the CPB's ongoing desire to aggressively use its enforcement mechanisms. As the report demonstrates, the CPB is an active partner in filing cases based on investigations conducted by the FDA and other agencies. Searching for FDA violations will not always indicate enforcement action, however. Cases are often tried as wire fraud and other violations.
Where, for example, the FDA seeks to resolve investigations involving civil penalty matters, companies may need to engage in negotiations with the FDA, FTC, and the DOJ, as civil penalty matters must be referred to the DOJ before they can be filed. Companies operating in areas subject to the CPB's enforcement authority should take steps to become familiar with its powers, processes, and procedures. Charges may be filed as violations of the FDCA, 21 USC, but also as false statements or wire fraud under 18 USC Chapter 47 or 63, respectively.
It is already clear that in 2021 the CPB had a significant presence in the enforcement of consumer protection laws. We expect that trend to increase in 2022 and beyond as the CPB continues to creatively use the statutes under its authority to prosecute individuals and corporations.
For more information about the CPB's report or any related matter, please contact Georgia Ravitz, Eva Yin, or another member of Wilson Sonsini's FDA regulatory, healthcare, and consumer products practice.
[1] U.S. v. Fresenius Kabi Oncology Ltd (FKOL), 2:21-CR-020-JAD-BNW (D. Nev. Aug. 11, 2021).
[2] U.S. v. Avanos Medical, Inc. (N.D. Tex.); “Avanos Medical to Pay $22 Million to Resolve Criminal Charge Related to Fraudulent Misbranding of MicroCool Surgical Gowns” (July 8, 2021).
[3] "Federal Court Orders California Company and Owner to Stop Distribution of Unapproved, Misbranded and Adulterated ‘Poly-MVA’ Products" (Aug. 6, 2021).
[4] U.S. v. Bolos, et al. (E.D. Tenn.); “Federal Jury Convicts Pharmacy Owner Of Conspiracy, Mail Fraud, And Misbranding For Role In Multi-Million Dollar Telemedicine Pharmacy Fraud Scheme” (Dec. 2, 2021).
[5] "Five New Guilty Pleas in Nationwide Telemedicine Pharmacy Health Care Fraud Conspiracy" (Jan. 25, 2021).
[6] "Telemarketer and His Companies Agree to Pay $2.5 Million to Settle Allegation That They Operated Telemedicine Schemes Involving Illegal Kickbacks and Unnecessary Prescription" (Aug. 2, 2019).
[7] "Four Men and Seven Companies Indicted for Billion-Dollar Telemedicine Fraud Conspiracy, Telemedicine Company and CEO Plead Guilty in Two Fraud Schemes" (Oct. 15, 2018).
[8] "Indivior Solutions Sentenced as Part of $2 Billion Resolution of False Safety Claims Concerning Suboxone" (Nov. 12, 2020).
[9] "Former Medical Director of Suboxone Manufacturer Indivior Sentenced in Connection with Drug Safety Claims" (Dec. 17, 2020).
[10] "Suboxone Manufacturer Indivior's Former Chief Executive Officer Sentenced to Jail Time in Connection with Drug Safety Claims" (Oct. 22, 2020).
[11] "Justice Department Obtains $1.4 Billion from Reckitt Benckiser Group in Largest Recovery in a Case Concerning an Opioid Drug in United States History" (July 11, 2019).
[12] "Justice Department Announces Global Resolution of Criminal and Civil Investigations with Opioid Manufacturer Purdue Pharma and Civil Settlement with Members of the Sackler Family" (Oct. 21, 2020).
[13] https://www.ftc.gov/legal-library/browse/cases-proceedings/202-3188-quickwork-llc-eric-nepute.
[14] https://www.ftc.gov/legal-library/browse/statutes/covid-19-consumer-protection-act-2021-consolidated-appropriations-act.
[15] https://www.ftc.gov/system/files/documents/cases/2023188eneputecomplaint_0.pdf.
[16] https://www.ftc.gov/system/files/documents/cases/consent_order.pdf.
[17] https://www.govinfo.gov/content/pkg/USCOURTS-moed-4_21-cv-00437/pdf/USCOURTS-moed-4_21-cv-00437-0.pdf.
[18] https://casetext.com/case/xlear-inc-v-focus-nutrition-llc-1.
[19] https://www.ftc.gov/system/files/documents/cases/filed_complaint_xlear_v_jones_v.1.pdf.
[20] https://www.ftc.gov/legal-library/browse/statutes/covid-19-consumer-protection-act-2021-consolidated-appropriations-act.
[21] https://www.linkedin.com/in/ralph-fucetola-58416/.
[22] https://www.linkedin.com/in/rima-laibow-8b435/.
[23] U.S. v. Natural Solutions Foundation, et al.
[24] Complaint for Injunction at https://www.justice.gov/opa/press-release/file/1336991/download.
[25] ”Florida Medical Doctor Pleads Guilty to Conspiring to Falsify Clinical Trial Data” (Jan. 8, 2021).
[26] “Florida Co-Owner of Clinical Trial Company Pleads Guilty to Obstructing FDA Inspection” (Jan. 12, 2021).
[27] ”Clinical Researchers Sentenced in Connection with Scheme to Falsify Drug Trial Data” (Aug. 11, 2021).
[28] ”Florida Study Coordinator Sentenced in Scheme to Falsify Clinical Drug Trial Data” (Jan. 20, 2021).
[29] ”Doctor, Clinic Owner and Staff Charged with Falsifying Clinical Trial Data” (March 8, 2021).
[30] ”Former Blue Bell Creameries President Charged In Connection With 2015 Ice Cream Listeria Contamination” (Oct. 21, 2020).
[31] US V. BLUE BELL CREAMERIES; US V. PAUL KRUSE (RELATED) (Feb. 11, 2021).
[32] U.S. v. Kruse (W.D. Tex).
[33] Consent Decree of Permanent Injunction at https://www.govinfo.gov/content/pkg/USCOURTS-waed-1_20-cv-03191/pdf/USCOURTS-waed-1_20-cv-03191-0.pdf.
[34] U.S. v. Valley Processing, Inc., et al. (E.D. Wash.).
[35] https://casetext.com/case/united-states-v-affinitylifestylescom-inc.
[36] U.S. v. AffinityLifestyles.com, Inc. (D. Nev.); “Nevada Bottled Water Companies And Owners Ordered To Stop Distributing Adulterated And Misbranded Water Products” (June 1, 2021).
[37] MediNatura, Inc. v. FDA (D.D.C.).
[38] Ipsen Biopharms., Inc. v. Becerra (D.D.C.).
[39] https://www.courtlistener.com/docket/60329126/childrens-health-defense-v-food-drug-administration/.