Court Decisions Offer Insight on Adulteration & Botanical Constituents

In two recent opinions issued by the Eleventh Circuit, the federal appeals court applied the Federal Food, Drug, and Cosmetic Act (FDCA) to examine adulteration in relatively novel ways that could potentially have far-reaching effects.

In the first case, Debernardis v. IQ Formulations LLC, the court found that a procedural defect—specifically, a failure to submit a new dietary ingredient (NDI) notice—that renders a product adulterated is sufficient to also cause a product to be economically “worthless.” In the second case, U.S. v. Undetermined Quantities of All Articles of Finished and In-Process Foods, Hi-Tech Pharmaceuticals, Inc., and Jared Wheat, the court conducted an intensive analysis into the meanings of specific terms as used in the FDCA (“botanical” and “constituent”) and functionally adopted a more stringent standard for how a product may qualify as a dietary supplement.

Debernardis v. IQ Formulations LLC
The Eleventh Circuit found that alleging adulterated dietary supplements were “worthless” was sufficient to grant standing to plaintiffs in its decision vacating the District Court’s order granting a motion to dismiss and remanding the case for further proceedings.

In Debernardis, the plaintiffs alleged that products they purchased (“Synedrex”) were adulterated because they contained DMBA, which is an NDI. The FDCA allows the sale of a product containing an NDI if that product falls into one of two categories: if they either 1) contain “dietary ingredients which have been present in the food supply as an article used for food in a form in which the food has not been chemically altered” prior to October 1994 under 21 U.S.C. § 350b(a)(1); or 2) the manufacturer of the NDI submits an NDI Notification to FDA containing information demonstrating that there is a “history of use or other evidence of safety” for the ingredient and that it is reasonably expected to be safe when used under the recommended conditions.

The parties only addressed the second pathway, with the plaintiffs arguing that 1) the absence of an NDI Notification established that Synedrex was adulterated, 2) as an adulterated product, Synedrex could not be lawfully resold, and 3) an adulterated product that could not be resold was, in effect, worthless. The court, in agreeing with the plaintiffs, noted that economic loss is usually viewed from the lens of how a party is deprived of the “benefit of the bargain,” which it explained was “the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered.” Thus, a defective product could nevertheless retain some residual value under this theory.

However, in rare circumstances a defect may be so severe that it essentially renders the entire product worthless. Here, the plaintiffs successfully argued that adulteration was a fatal defect that rendered the Synedrex worthless, and, in making their purchasing decisions, they would not have purchased the products if they were aware of the adulteration.

Significance of the Decision
The main takeaway from this case was the Eleventh Circuit explicitly declaring that adulterated dietary supplements have no value because they cannot lawfully be sold. However, the decision was solely limited to the issue of standing in the context of a grant of a motion to dismiss. When a court hears a motion to dismiss, it reviews the pleadings in the light most favorable to the party defending the motion to dismiss. The court merely accepted the allegation of adulteration as sufficient to allow a case to proceed but did not examine the arguments for whether or not the products were adulterated.

Going forward, this opinion signals that courts—or at least the Eleventh Circuit—are willing to consider adulterated supplements to be economically worthless if the plaintiffs can successfully establish adulteration.

U.S. v. Undetermined Quantities of All Articles of Finished and In-Process Foods
The Eleventh Circuit utilized a holistic analysis to determine the definitions of key words in a second case where the crucial inquiry was whether a substance could be considered a “botanical” or “constituent” of a botanical under the FDCA.

This case centers on FDA’s seizure action against products from Hi-Tech that contained DMAA. The U.S. filed a forfeiture action against the products while Hi-Tech and its CEO, Jared Wheat, intervened as claimants. Hi-Tech also filed an action against FDA and other claimants. Both actions were consolidated in the District Court. The District Court ultimately granted FDA’s motion for summary judgment, declaring the seizure to be proper from both a substantive and procedural standpoint, while also denying a motion to reconsider that contained a request to reopen discovery.

On appeal, the Eleventh Circuit examined the question of whether DMAA should be considered a food additive or a dietary supplement, with the significance being that food additive status would render DMAA-containing products adulterated whereas dietary supplement status would not.

To be considered a dietary supplement under the FDCA, a product must conform to the requirements under 21 U.S.C. § 321(ff). The part at issue in the Hi-Tech case was § 321(ff)(1)(C) & (ff)(1)(F), which deems a product to be a dietary supplement if it contains “an herb or other botanical” or “a concentrate, metabolite, constituent, extract, or combination of” an herb or other botanical. Once established as a dietary supplement, FDA may designate a product as adulterated under § 342(f)(1)(A) if it is able to show the product presents a “significant or unreasonable risk of illness or injury” when used under specified usage conditions. However, because FDA did not argue that DMAA products presented such a risk, if the court found DMAA to be a dietary supplement then the appeal would effectively be decided in Hi-Tech’s favor.

Hi-Tech unsuccessfully argued that DMAA was a dietary supplement as a constituent of a botanical. In reaching its conclusion against Hi-Tech, the court came to two conclusions: that 1) the phrase “herb or other botanical,” as used in the FDCA, did not include a synthetic substance that was produced in a laboratory, found in only trace amounts in plants, and has never been derived from a plant for use in any medicinal, cosmetic, or dietary product, and 2) a substance did not meet the FDCA’s definition of “constituent” when it is only present in plants in trace amounts and has never been derived from a plant for use in any medicinal, cosmetic, or dietary product.

On the first conclusion, the court engaged in a lengthy factual analysis about the history of DMAA, noting that while DMAA was found in trace amounts in geraniums, testimony included in the record showed there is no known way for geraniums to produce DMAA. Thus, it was very likely the DMAA content in geraniums could actually originate in fertilizers. The fact that DMAA is coincidentally present in trace amounts in a plant does not overcome the fact that the DMAA at issue was synthetically produced. The court utilized these facts along with the Merriam-Webster Dictionary definition of “botanical” (“a substance obtained or derived from a plant”) to conclude DMAA is not a botanical.

On the second conclusion, the court answered in the negative as to whether DMAA would be considered a “constituent” of a botanical. While Hi-Tech argued that “constituent” should mean “anything contained in” a plant or botanical, the court found such an interpretation to be overly broad when considered in the context of the rest of the statutory definition. The court once again considered the dictionary definition of “constituent” along with the statutory construction of § 321(ff)(1)(F) in concluding that Hi-Tech’s interpretation should be rejected in favor of one where DMAA is not a “constituent” of a botanical.

Significance of the Decision
It is common for manufacturers to rely on a substance’s presence in a plant, no matter how miniscule, as the basis for establishing that a product containing the substance is a dietary supplement that can be lawfully marketed. In this case, the Eleventh Circuit declared the mere presence in a plant is not enough, that other factors should be considered, and that no single factor is dispositive.

For example, the court did not explicitly say that a substance would be a dietary supplement if a plant was able to produce it. Instead, the court considered the factors holistically and did not allow any single factor to be dispositive of a substance’s status. In rejecting a request to reopen discovery, the court also hinted that whether DMAA has in fact been derived from geraniums would have bearing on its decision, and that Hi-Tech should have foreseen that (instead of arguing that actual derivation did not matter). The court noted that if Hi-Tech could establish that DMAA has been derived from geraniums, that would have supported its argument that DMAA was contained in geraniums—a key point of contention.

Going Forward
Between these two decisions, the Eleventh Circuit presents many interesting points for consideration that could redefine how the dietary supplement industry analyzes legal risks. While the impact is currently confined to just one circuit, it will be interesting to see if others reach similar conclusions or if these two decisions will exist as outliers in the regulatory framework for supplements. Nevertheless, these decisions present a strong incentive for supplement manufacturers to do the right thing and ensure their supplements are safe and can be lawfully marketed. 

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Todd Harrison
Venable

Todd Harrison is partner with Venable, which is located in Washington, D.C. He advises food and drug companies on a variety of FDA and FTC matters, with an emphasis on dietary supplement, functional food, biotech, legislative, adulteration, labeling and advertising issues. He can be reached at 575 7th St. NW, Washington, D.C. 20004, Tel: 202-344-4724; E-mail: taharrison@venable.com.