United States District Court, D. Columbia.
For HI TECH PHARMACEUTICALS INC, Plaintiff: Jack Wenik, SILLS CUMMIS & GROSS, PC, Newark, NJ.
For FEDERAL TRADE COMMISSION, Defendant: Drake S. Cutini, LEAD ATTORNEY, DEPARTMENT OF JUSTICE, Consumer Protection Branch, Washington, DC.
MEMORANDUM OPINION AND ORDER
Emmet G. Sullivan, United States District Judge.
Plaintiff Hi-Tech Pharmaceuticals, Inc. (" Hi-Tech" ) has brought an action for declaratory and injunctive relief against the Federal Trade Commission (" FTC" ). On April 12, 2013, the Court ordered Hi-Tech
to show cause why the case should not be transferred to the United States District Court for the Northern District of Georgia, where an underlying Enforcement Action at issue in this case has been pending before Judge Charles A. Pannell, Jr. since 2004. See Fed. Trade Comm'n v. Nat'l Urological Group, Inc., No. 04-cv-3294 (CAP) (hereinafter, the " Enforcement Action" ). Plaintiff filed a response to the Court's order on April 26, 2013. The FTC filed its own response on June 5, 2013 arguing that the case should be transferred to the Northern District of Georgia, and Hi-Tech filed a reply on June 20, 2013. Upon review of the parties' filings, the applicable law, and the entire record, the Court hereby TRANSFERS this action to the Northern District of Georgia.
Hi-Tech is a Georgia corporation that manufactures and distributes dietary supplements, including weight loss products. Compl. ¶ 1; Plaintiff's Mem. of Law Showing Cause (" Show Cause Mem." ) at 2. In this action, Hi-Tech seeks an order declaring that the term " competent and reliable scientific evidence," as used in a Final Judgment and Permanent Injunction issued in the Enforcement Action, " has no fixed meaning" and " requires case, product and claim specific adjudication and may result in different meanings even in the same case." Compl. ¶ 3a. Hi-Tech alleges that the FTC has adopted a new standard for " competent and reliable scientific evidence" that requires " two double blind, placebo controlled, product specific studies." Id. Hi-Tech argues instead that a particular claim about a product is substantiated by " competent and reliable scientific evidence" if it is supported by evidence that: " (i) is based on the expertise of professionals in the relevant area; (ii) is conducted and evaluated in an objective manner by a person qualified to do so; (iii) uses procedures generally accepted in the profession to yield accurate and reliable results; and (iv) has a causal connection to the particular claim being challenged as interpreted by the Court." Compl. ¶ 3b.
The parties have a long history of litigating the substantiation standard for product claims and Hi-Tech has raised similar arguments regarding the FTC's purported attempt to change the standard several times before. In 2008, the Court granted summary judgment for the FTC in the Enforcement Action and held that Hi-Tech had violated Section 5 of the FTC Act. See Fed. Trade Comm'n v. Nat'l Urological Group, Inc., 645 F.Supp.2d 1167 (N.D.Ga. 2008), aff'd, 356 F.Appx. 368 (11th Cir. 2009), cert. denied, 131 S.Ct. 505, 178 L.Ed.2d 370 (2012). The Court accepted the FTC expert's conclusions regarding the appropriate level of substantiation for any claims made by Hi-Tech regarding its products, holding that to substantiate weight loss claims, including those for dietary supplements, a party must present " appropriately analyzed results of independent, well-designed, randomized, double-blind, placebo-controlled clinical trials, given at the recommended dosage involving an appropriate sample population in which reliable data on appropriate end points are collected over an appropriate period of time." Id. at 1202. Moreover, the Court ruled that " some form of clinical trial must have been conducted on the product itself or an exact duplicate of the product to substantiate the defendants' claims regarding the overall product." Id. at 1202-03. These standards were incorporated in a permanent injunction entered in December 2008. See Enforcement Action, ECF No. 230.
In May 2012, in an Order granting a motion by the FTC for an order to show cause why Hi-Tech should not be held in contempt, the Court again noted that it had already adopted the FTC's definition
as to what constituted " competent and reliable scientific evidence" in its 2008 opinion. See Fed. Trade Comm'n v. Nat'l Urological Group, Inc., No. 04-cv-3294, ECF No. 390 at 7. In granting the FTC's motion for an order to show cause, the Court noted that the FTC's substantiation standard was " part of the law of the case" and therefore " not subject to relitigation." Id. at 8-9. Following extensive briefing in which Hi-Tech made almost identical arguments to those it has made in its Complaint regarding the substantiation standard, the Court granted the FTC's motion to hold Hi-Tech and other defendants in ...