Justice Department, USPlabs Haggle over DSHEA in Criminal Case

In 2015, the U.S. Department of Justice (DOJ) announced a criminal prosecution in Texas as part of a widespread crackdown against unlawful activity in the dietary supplement industry. Now, federal prosecutors and defense attorneys in the case are divided over what’s required to establish a dietary supplement is unlawful or “adulterated."

USPlabs LLC, an own-label distributor of dietary supplements whose OxyElite Pro was implicated in a 2013 hepatitis outbreak in Hawaii, and SK Laboratories Inc., a contract manufacturer that produced USPlabs’ products, have been charged with fraud and other criminal activity in a superseding indictment. The companies’ executives, including USPlabs co-founder and CEO, Jacob Geissler, also have been named in the indictment.

In a May 1 brief seeking dismissal of count 10 of the superseding indictment, lawyers for the defense suggested FDA must go through a rulemaking to show a dietary supplement poses “a significant or unreasonable risk of illness or injury"—as FDA did in 2004 when it published a final rule banning dietary supplements containing ephedrine alkaloids.

Government lawyers countered an administrative rulemaking is not required before the DOJ may enforce the relevant federal statute, the 1994 Dietary Supplement Health and Education Act (DSHEA).

According to count 10 of the indictment, the defendants shipped on or about Feb. 21, 2013 an adulterated product in interstate commerce, OxyElite Pro New Formula, which was also known as OxyElite Pro Super Thermo and Purple Top.

OxyElite Pro contained, among ingredients, aegeline, which USPlabs said is a constituent of the bael tree. Amid the outbreak of liver injuries, FDA advised USPlabs four years ago that aegeline was not proven to be safe and constituted an "adulterated" substance. While USPlabs said it was unaware of any safety concerns regarding aegeline or OxyElite Pro, the company agreed to reformulate its product that same year and discontinue the use of aegeline in the United States.

According to the superseding indictment, USPlabs “first imported aegeline in 2011, and instructed its Chinese supplier to label the bag as ‘green coffee’ in order to avoid scrutiny by regulatory agencies."

Under federal law, introduction into interstate commerce of a food that is adulterated or misbranded is a misdemeanor punishable by up to one year in prison, and the crime is known as a strict-liability offense because it doesn’t require an intent to violate the law.

Defense lawyers argued count 10 should be dismissed because it lacks the specificity required by the federal rules of criminal procedure and the U.S. Constitution.

“Specifically, the indictment fails to allege any specific facts supporting the allegation that the shipment posed a ‘significant or unreasonable risk of illness or injury’ or what conditions of use were ‘recommended or suggested in labeling,’ wrote the lawyers in their 13-page brief.  “As such, this count fails to give defendants notice as to what they must defend at trial."

The attorneys argued only two allegations could raise the inference that USPlabs’ product was adulterated as claimed in count 10: first, that another OxyElite Pro supplement called Advanced Formula contained a Chinese herb that could purportedly cause liver harm; and second, that an outbreak of injuries occurred in the fall of 2013 following the sale of Advanced Formula.

The indictment, however, failed to cite expert or scientific evidence to support the allegations above, and the defendants didn’t sell Advanced Formula until around August 2013, six months after the shipment of New Formula noted in count 10, the brief proclaimed.

“Those allegations therefore cannot support a charge of adulteration for a product shipped nearly six months earlier, in or around February 2013," the defense lawyers wrote in the brief. “Second, the allegations regarding the purported outbreak of liver injuries merely ‘associated’ with USPlabs do not sufficiently establish a connection between the alleged New Formula shipment and the alleged injuries. The indictment does not cite to any scientific evidence or expert testimony supporting a claim that aegeline posed a risk of injury to any consumer (because there is none). In fact, contemporaneous evidence strongly points to alternative etiologies for the injuries that comprised the purported ‘outbreak.’"

Any causal relationship between OxyElite Pro and the reported injuries, the attorneys argued, is refuted based on an analysis of the patients’ medical histories.

In its response brief, the DOJ countered the defendants have improperly challenged the evidence upon which the indictment is based, and the government declared the indictment cannot be dismissed based on the defense raising factual questions. Government lawyers cited, for example, the defendants’ contention that OxyElite Pro didn’t cause the outbreak of injuries.

“However, whether the product is associated with a liver injury outbreak is a question for the petit jury," federal prosecutors wrote in their May 15 response brief. “Such a determination is not appropriate at the motion to dismiss stage, at which all of the allegations in the indictment must be taken as true."

The indictment conveys sufficient information to make the defendants aware of the charges, enabling them to prepare their defense, according to the government.

Commenting on count 10 in the superseding indictment, federal prosecutors proclaimed, “In other words, the defendants created and shipped a risky dietary supplement (using at least one ingredient that the conspirators fraudulently mislabeled when they first brought it into the country) that, from all appearances, hurt people who consumed it.

“All of these concepts are perfectly understandable to ordinary people, and the indictment therefore presents exactly the plain, concise, and definite written statement that the defendants seek," prosecutors added. “There is no requirement that the government specify all of its theories of the case, or (as the defendants suggest) provide expert testimony, in the indictment."

Interpretation of DSHEA

In the motion seeking dismissal of count 10, defense lawyers laid out the purported requirements for FDA to establish that a dietary supplement is adulterated under DSHEA.

“A finding of adulteration by FDA … depends on FDA establishing that a significant or unreasonable risk of illness or injury exists under the actual conditions of use recommended by the particular dietary supplement producer," the barristers wrote, adding, “A determination of adulteration requires a dose-specific analysis through rulemaking."

The attorneys distinguished FDA’s rulemaking on ephedrine-alkaloid dietary supplements (EDS) from the pending criminal case.

“In contrast to the FDA’s proceedings on EDS, here, the government never undertook an administrative proceeding, as DSHEA requires, to declare aegeline or [OxyElite Pro] adulterated," the brief observed. “If FDA believed that any USPlabs product fell within the contemplated definition of an ‘adulterated’ dietary supplement, it could have pursued regulatory action by proposing a rule declaring that the product was adulterated and permitted defendants to submit evidence-based comments as to why the product should not be deemed adulterated."

Added the defendants’ lawyers: “Rather than initiating this more deliberative, fact-driven regulatory action in this case, it has conveniently avoided any regulatory fact-finding by skipping this process and criminally charging defendants with adulteration as a strict-liability misdemeanor."

The DOJ countered it can enforce the statute even if FDA does not engage in a rulemaking. Prosecutors also noted a 1994 Senate report quoted by the defendants in support of their position related to a different version of the statute that was not incorporated in DSHEA; the different version would have declared a product adulterated based on a finding by the Secretary of Health.

“In other words, the unpassed statute discussed in the Senate report cited by the defendants would have required FDA to conduct a rulemaking before a supplement could be considered adulterated under this provision, but the final version of the law did not contain that requirement," the government wrote in its response brief. “The defendants’ citation to the Senate report is, in fact, proof that a rulemaking was not required prior to charging the defendants with count ten."

Sam A. Lindsay, the federal judge in Dallas who is overseeing the USPlabs criminal case, hasn’t ruled yet on the defendants’ motion. On May 1, defense lawyers also filed a separate motion, seeking to dismiss counts 9 and 10 of the superseding indictment because the counts are “unconstitutionally vague."