UNITED STATES OF AMERICA v. BIOANUE LABORATORIES INC et al

Filing 27

ORDER FOR PERMANENT INJUNCTION. Ordered by U.S. District Judge MARC THOMAS TREADWELL on 7/23/2014. (tlh)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
BIOANUE LABORATORIES, INC.,
GLORIA D. RABER, and KELLY
RABER,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

CIVIL ACTION NO. 5:13-CV-188 (MTT)

ORDER FOR PERMANENT INJUNCTION
The Government filed a complaint for permanent injunction against BioAnue
Laboratories, Inc., Gloria D. Raber, and Kelly Raber in May 2013. (Doc. 1). Following a
hearing on July 14, 2014, at which the Defendants appeared, the Court granted the
Government’s motion for summary judgment.1 For the reasons stated in its Order
granting the Government’s motion for summary judgment, the Court finds:
1. This Court has jurisdiction over the subject matter of this action and has personal
jurisdiction over all parties to this action.
2. The complaint for permanent injunction states a cause of action against
Defendants under the Act.
3. Defendants violate 21 U.S.C. § 331(d), by introducing and/or delivering for
introduction, and causing to be introduced or delivered for introduction, into
interstate commerce new drugs within the meaning of 21 U.S.C. § 321(p) that are

1
The Court’s Order granting summary judgment to the Government is entered
contemporaneously with this Order. (Doc. __).

neither approved under 21 U.S.C. § 355(a) or (j), nor exempt from approval
pursuant to 21 U.S.C. § 355(i).
4. Defendants violate 21 U.S.C. § 331(a), by introducing and/or delivering for
introduction, and causing to be introduced or delivered for introduction, into
interstate commerce articles of drugs that are misbranded within the meaning of
21 U.S.C. § 352(f)(1) in that their labeling fails to bear adequate directions for
use.
5. Defendants violate 21 U.S.C. § 331(k), by causing articles that Defendants hold
for sale after shipment in interstate commerce to become misbranded drugs
within the meaning of 21 U.S.C. § 352(f)(1) in that their labeling fails to bear
adequate directions for use.
6. Defendants violate 21 U.S.C. § 331(a) by introducing and/or delivering, and
causing to be introduced or delivered, into interstate commerce dietary
supplements, as defined by 21 U.S.C. § 321(ff), that are adulterated within the
meaning of 21 U.S.C. § 342(g)(1) in that they have been prepared, packed, and
held under conditions that do not meet current good manufacturing practice
regulations for dietary supplements (“Dietary Supplement cGMP”), 21 C.F.R. Part
111.
7. Defendants violate 21 U.S.C. § 331(k) by causing dietary supplements that
Defendants hold for sale after shipment in interstate commerce to become
adulterated within the meaning of 21 U.S.C. § 342(g)(1).
In light of these findings, and for the reasons stated in the Order granting the
Government’s motion for summary judgment, the Government has demonstrated that

2

the Defendants are violating, and unless restrained by order of this Court, will continue
to violate, the Federal Food, Drug, and Cosmetic Act (“the Act”). 21 U.S.C. §§ 301399f. Consequently, the Court ORDERS as follows:
8. Upon entry of this Order, Defendants, and each and all of their directors, officers,
agents, representatives, employees, attorneys, successors, assigns, and any
and all persons in active concert or participation with any of them who receive
actual notice of this Order by personal service or otherwise (collectively,
“Associated Persons”), are permanently restrained and enjoined under 21 U.S.C.
§ 332(a) from introducing or delivering for introduction, and/or causing to be
introduced or delivered for introduction, into interstate commerce any drug or
dietary supplement unless and until:
A. Defendants have removed all claims from their product labels, labeling,
promotional materials, websites owned or controlled by or in an way
related to Defendants, and in any other media that cause that product to
be a drug within the meaning of the Act;
B. Defendants retain, at Defendants’ expense, an independent person or
persons (the “Labeling Expert”), who is without personal, financial (other
than the consulting agreement between the parties), or familial ties to
Defendants and their families or affiliates, who by reason of background,
experience, education, and training is qualified to assess Defendants’
compliance with the Act, to review the claims Defendants make for each of
their products on all labels, labeling, promotional materials, and any
internet websites owned or controlled by or related to Defendants

3

including, but not limited to, www.bioanuelabs.com,
www.bioanuelaboratories.com www.tumorx.com, www.cancerx.org,
www.cancerx.com, www.hopewelltechnologieslimited.com, and
www.vmhe.com. Defendants shall notify the FDA in writing of the identity
and qualifications of the Labeling Expert as soon as they retain such
expert;
C. The Labeling Expert performs a comprehensive inspection of all of
Defendants’ labels, labeling, promotional materials, and any internet
websites owned or controlled by or related to Defendants including, but
not limited to, www.bioanuelabs.com, www.bioanuelaboratories.com,
www.tumorx.com, www.cancerx.org, www.cancerx.com,
www.hopewelltechnologieslimited.com, and www.vmhe.com;
D. The Labeling Expert certifies in writing to the FDA that:
i. The Labeling Expert has inspected all of Defendants’ labels,
labeling, promotional materials, and any internet websites owned or
controlled by or related to Defendants including, but not limited to,
www.bioanuelabs.com, www.bioanuelaboratories.com,
www.tumorx.com, www.cancerx.org, www.cancerx.com,
www.hopewelltechnologieslimited.com, and www.vmhe.com;
ii. Defendants have removed all claims from each of their product
labels, labeling, promotional materials, websites owned or
controlled by or in any way related to Defendants and in any other
media that cause any of Defendants’ products to be drugs within

4

the meaning of the Act, 21 C.F.R. § 321(g); and
iii. Defendants labels, labeling, promotional materials, and websites
owned or controlled by or in any way related to Defendants are
operating in compliance with the Act. As part of the Labeling
Expert’s certification, a full and complete detailed report of the
results of the Labeling Expert’s inspection shall be provided by the
Labeling Expert to the FDA, including references to product names
and regulations addressed in the process of conducting the
inspection. The report shall also include copies of all materials
reviewed by the Labeling Expert;
E. Defendants retain, at Defendants’ expense, an independent person or
persons (the “Dietary Supplement cGMP Expert”), who is without
personal, financial (other than the consulting agreement between the
parties), or familial ties to Defendants or their families, and who by reason
of background, experience, education, and training is qualified to inspect
Defendants’ facility to determine whether the facility, methods, processes,
and controls are operated and administered in conformity with dietary
supplement cGMP, 21 C.F.R. Part 111. Defendants, if appropriate, may
retain as the Dietary Supplement cGMP Expert the same independent
party they retained as the Labeling Expert. Defendants shall notify FDA in
writing of the identity and qualifications of the Dietary Supplement cGMP
Expert as soon as they retain such expert;

5

F. The Dietary Supplement cGMP Expert performs a comprehensive
inspection of Defendants’ facility and the methods, processes, and
controls that Defendants used to manufacture, prepare, pack, label, hold,
and distribute dietary supplements and the labeling for all of Defendants’
dietary supplements to determine whether Defendants are in compliance
with 21 U.S.C. § 342(g)(1), 21 C.F.R. Part 111, and this Order;
G. The Dietary Supplement Expert certifies in writing to the FDA that:
i. The Dietary Supplement Expert has inspected the facility and the
methods, processes, and controls that Defendants use to
manufacture, prepare, process, pack, label, hold, and distribute
dietary supplements;
ii. All cGMP deviations brought to Defendants’ attention by FDA, the
Dietary Supplement Expert, or any other source have been
corrected; and
iii. The facility, methods, processes, and controls that Defendants use
to manufacture, prepare, process, pack, label, hold, and distribute
dietary supplements are in compliance with this Order, the Act, and
21 C.F.R. Part 111. As part of the Dietary Supplement Expert’s
certification, a full and complete detailed report of the results of the
Dietary Supplement Expert’s inspection shall be provided by the
Dietary Supplement Expert to the FDA;
H. Defendants report to the FDA in writing the actions they have taken to:
i. Correct all deviations brought to Defendants’ attention by the FDA,

6

the Labeling and/or Dietary Supplement Experts, and/or any other
source; and
ii. Ensure that the methods and processes used in, and the facility
and controls used for, manufacturing, preparing, processing,
packing, labeling, holding, and distributing dietary supplements are
operated, and will be continuously administered in conformity with
cGMP, 21 C.F.R. Part 111;
I. FDA representatives inspect Defendants’ facility to determine whether the
requirements of this Order have been met and whether Defendants are
operating in conformity with the Act, its implementing regulations, and this
Order; and
J. FDA notifies Defendants in writing that Defendants appear to be in
compliance with the requirements set forth in Paragraphs 8(A) - (H). In no
circumstance shall FDA’s silence be construed as a substitute for written
notification.
9. Paragraph 8 shall not apply if Defendants have in effect an approved new drug
application or abbreviated new drug application filed pursuant to 21 U.S.C. §§
355(b) or (j), and/or an investigational new drug exemption filed pursuant to 21
U.S.C. § 355(i) for all of their products, and Defendants comply with current good
manufacturing practice regulations for drugs. See 21 C.F.R. Parts 210 and 211.
10. The Defendants shall immediately secure all drugs and dietary supplements that
are in the Defendants’ possession, custody, or control. The Court will convene a

7

hearing, which counsel may attend by telephone, on Friday, August 1, 2014, at
9:30 a.m. to discuss the disposition of the drugs and dietary supplements.
11. After Defendants have complied with Paragraphs 8(A)-(H) and received FDA’s
written notification pursuant to Paragraph 8(J), Defendants shall retain an
independent person or persons who shall meet the criteria described in
Paragraphs 8(B) and 8(E) to conduct audit inspections of Defendants’ facility no
less frequently than once every six (6) months for a period of no less than five (5)
years (hereinafter, the “Auditor”). The first audit shall occur not more than six
months after Defendants have received FDA’s written notification pursuant to
Paragraph 8(J). If Defendants choose, the Auditor may be the same person or
persons retained as the Labeling Expert or Dietary Supplement cGMP Expert
described in Paragraphs 8(B) and (E).
A. At the conclusion of each audit inspection, the Auditor shall prepare a
detailed written audit report (“Audit Report”).
B. The Audit Report shall:
i. Analyze whether Defendants are in compliance with Dietary
Supplement cGMP for their dietary supplement operations and
identifying any deviations from such requirements (“Audit Report
Observations”);
ii. Contain a written certification that the Auditor has personally
reviewed all of Defendants’ product labels, labeling, promotional
materials, and websites and determined that the product labels,

8

labeling, promotional materials, and websites strictly comply with
the requirements of the Act, its regulations, and this Order.
C. As a part of every Audit Report, the Auditor shall assess the adequacy of
corrective actions taken by Defendants to correct all previous Audit Report
observations. The Audit Reports shall be delivered contemporaneously to
Defendants and FDA by courier service or overnight delivery service, no
later than fifteen (15) business days after the date the Audit Inspection is
completed. In addition, Defendants shall maintain the Audit Reports in
separate files at Defendants’ facility and shall promptly make the Audit
Reports available to FDA upon request.
D. If an Audit Report contains any observations indicating that Defendants’
drugs and/or dietary supplements are not in compliance with the Act, its
implementing regulations, and/or this Order, Defendants shall, within
fifteen (15) calendar days after receipt of the Audit Report, correct those
observations, unless FDA notifies Defendants that a shorter time period is
necessary. If, after receiving the Audit Report, Defendants believe that
correction of the deviations may take longer than fifteen (15) calendar
days, Defendants shall, within ten (10) calendar days after receipt of the
Audit Report, submit to FDA in writing a proposed schedule for completing
corrections (“Audit Correction Schedule”). The Audit Correction Schedule
must be reviewed and approved by FDA in writing prior to implementation
by Defendants. In no circumstance shall FDA’s silence be construed as a

9

substitute for written approval. Defendants shall complete all corrections
according to the approved Audit Correction Schedule.
E. Immediately upon correction, Defendants shall submit documentation of
their corrections to the Auditor. Within thirty (30) calendar days after the
Auditor’s receipt of Defendants’ documentation of corrections, unless FDA
notifies Defendants that a shorter time period is necessary, or within the
time period provided in a correction schedule approved by FDA, the
Auditor shall review the actions taken by Defendants to correct the Audit
Report Observations. Within five (5) business days after beginning that
review, the Auditor shall report in writing to FDA whether each of the Audit
Report Observations has been corrected and, if not, which Audit Report
Observations remain uncorrected.
12. Upon entry of this Order, Defendants and their Associated Persons are
permanently restrained and enjoined from directly or indirectly doing or causing
any of the following acts:
A. Violating 21 U.S.C. § 331(d), by introducing or delivering, or causing to be
introduced or delivered, into interstate commerce new drugs within the
meaning of 21 U.S.C. § 321(p) that are neither approved pursuant to 21
U.S.C. § 355(a) or (j), nor exempt from approval pursuant to 21 U.S.C. §
355(i);
B. Violating 21 U.S.C. § 331(a), by introducing or delivering, or causing to be
introduced or delivered, into interstate commerce drugs that are
misbranded within the meaning of 21 U.S.C. § 352(f)(1), or dietary

10

supplements that are adulterated within the meaning of 21 U.S.C.
§ 342(g)(1); or
C. Violating 21 U.S.C. § 331(k), by causing drugs that Defendants hold for
sale after shipment in interstate commerce to become misbranded within
the meaning of 21 U.S.C. § 352(f)(1) or by causing dietary supplements
that Defendants hold for sale after shipment in interstate commerce to
become adulterated within the meaning of 21 U.S.C. § 342(g)(1).
13. If, at any time after this Order has been entered, FDA determines, based on the
results of an inspection, a review of Defendants’ products, product labels,
labeling, promotional materials, or websites owned or controlled by or in any way
related to Defendants, a report prepared by Defendants’ Experts or the Auditor,
or any other information, that Defendants have failed to comply with any
provision of this Order, have violated the Act, or its implementing regulations, or
that additional corrective actions are necessary to achieve compliance with the
Act, applicable regulations, and/or this Order, FDA may, as and when it deems
necessary, notify Defendants in writing of the noncompliance and order
Defendants to take appropriate corrective action, including, but not limited to,
ordering Defendants to immediately take one or more of the following actions:
A. Cease manufacturing, processing, packing, labeling, holding, promoting,
and/or distributing any or all drugs and/or dietary supplements;
B. Revise, modify, expand, or continue to submit any reports or plans
prepared pursuant to this Order;
C. Submit additional reports or information to FDA as requested;

11

D. Pay liquidated damages as provided in Paragraph 21 below;
E. Recall any article(s) at Defendants’ expense; and/or
F. Take any other corrective action(s) as FDA, in its discretion, deems
necessary to bring Defendants and their products into compliance with the
Act, applicable regulations, and/or this Order. This remedy shall be
separate and apart from, and in addition to, any other remedy available to
the United States under this Order or under the law.
14. Upon receipt of any order issued by FDA pursuant to Paragraph 13, Defendants
shall immediately and fully comply with the terms of the order. Any cessation of
operations or other action described in Paragraph 13 shall continue until
Defendants receive written notification from FDA that Defendants appear to be in
compliance with this Order, the Act, and its implementing regulations, and that
Defendants may resume operations. The cost of FDA inspections, sampling,
testing, travel time, and subsistence expenses to implement the remedies set
forth in Paragraph 13 shall be borne by Defendants at the rates specified in
Paragraph 17.
15. Within ten (10) calendar days after any FDA request for labels, labeling,
promotional materials, and/or downloaded copies (on CD-Rom) of any websites
owned and controlled by or related to Defendants, Defendants shall submit a
copy of the requested materials to FDA at the address specified in Paragraph 20.
16. FDA representatives shall be permitted, without prior notice and as and when
FDA deems necessary, to make inspections of Defendants’ facilities and, without
prior notice, take any other measures necessary to monitor and ensure

12

continuing compliance with the terms of this Order. During such inspections,
FDA representatives shall be permitted immediate access to buildings,
equipment, in-process and finished materials, containers, labeling and other
materials therein; to take photographs and make video recordings; to take
samples of Defendants’ finished and unfinished materials and products,
containers, labels, labeling, and other promotional materials; and to examine and
copy all records relating to the receipt, manufacture, processing, packing,
labeling, promoting, holding, and distribution of any and all of Defendants’
products. The inspections shall be permitted upon presentation of a copy of this
Order and appropriate credentials. The inspection authority granted by this
Order is separate from, and in addition to, the authority to conduct inspections
under the Act, 21 U.S.C. § 374.
17. If Ordered by the Court, Defendants shall reimburse FDA for costs of all FDA
inspections, investigations, supervision, reviews, examinations, and analyses
specified in this Order or that FDA deems necessary to evaluate Defendants’
compliance with this Order. For the purposes of this Order, inspections include
FDA’s review and analysis of Defendants’ claims contained in product labels,
labeling, promotional materials, and any and all websites owned or controlled by
or related to Defendants. The costs of such inspections shall be borne by
Defendants at the prevailing rates in effect at the time the costs are incurred. As
of the date that this Order is signed by the parties, these rates are: $88.45 per
hour and fraction thereof per representative for inspection work; $106.03 per
hour or fraction thereof per representative for analytical or review work; $0.56 per

13

mile for travel expenses by automobile; government rate or the equivalent for
travel by air or other means; and the published government per diem rate or the
equivalent for the areas in which the inspections are performed per-day, perrepresentative for subsistence expenses, where necessary. In the event that the
standard rates applicable to FDA supervision of court-ordered compliance are
modified, these rates shall be increased or decreased without further order of the
Court.
18. Within ten (10) calendar days after the entry of this Order, Defendants shall
provide a copy of this Order, by personal service or certified mail (restricted
delivery, return receipt requested), to each and all of his Associated Persons,
and post the Order on all websites under Defendants’ control. Within thirty (30)
calendar days after the entry of this Order, Defendants shall provide to FDA an
affidavit of compliance, stating the fact and manner of compliance with the
provisions of this Paragraph and identifying the names and positions of all
Associated Persons who have received a copy of this Order and the manner of
notification. In the event that Defendants become associated, at any time after
the entry of this Order, with new Associated Persons, Defendants shall: (a)
within fifteen (15) calendar days of such association, provide a copy of this Order
to each such Associated Person by personal service or certified mail (restricted
delivery, return receipt requested), and (b) on a quarterly basis, notify FDA in
writing when, how, and to whom the Order was provided.
19. Defendants shall notify FDA, in writing, at the address specified in Paragraph 20,
at least fifteen (15) calendar days before any change in ownership, character, or

14

name of its business, such as dissolution, assignment, or sale resulting in the
emergence of a successor corporation, the creation or dissolution of subsidiaries,
franchises, affiliates, or “doing business as” entities, or any other change in the
corporate structure of BioAnue or in the sale or assignment of any business
assets, such as buildings, equipment, or inventory, that may affect compliance
with this Order. Defendants shall provide a copy of this Order to any potential
successor or assignee at least fifteen (15) calendar days before any sale or
assignment. Defendants shall furnish FDA with an affidavit of compliance with
this Paragraph no later than ten (10) calendar days prior to such assignment or
change in ownership.
20. All notifications, certifications, reports, correspondence, and other
communications to FDA required by this Order shall be addressed to the
Director, Atlanta District Office, United States Food and Drug Administration, 60
Eight Street NE, Atlanta, Georgia, 30309.
21. If Defendants fail to comply with the Act, its implementing regulations, and/or any
provision of this Order, including any time frame imposed by this Order, and upon
further Order of the Court, Defendants shall pay, as liquidated damages, to the
United States of America: (a) ten thousand dollars ($10,000) for each violation of
the Act, its implementing regulations, and/or this Order; (b) an additional one
thousand dollars ($1,000) in liquidated damages for each day on which
Defendants violate the Act, its implementing regulations, and/or this Order; and
(c) an additional sum equal to twice the retail value of any distributed drugs or
dietary supplements that are adulterated, misbranded, or otherwise in violation of

15

the Act, its implementing regulations, and/or this Order. The remedy in this
Paragraph shall be in addition to any other remedies available to the United
States under this Order or the law.
22. Should the United States bring, and prevail in, a contempt action to enforce the
terms of this Order, Defendants shall, in addition to other remedies, and upon
further order of the Court, reimburse the United States for its attorneys’ fees,
investigational expenses, expert witness fees, travel expenses incurred by
attorneys and witnesses, and administrative court costs relating to such contempt
proceedings.
23. Unless otherwise ordered, all decisions specified in this Order shall be vested in
the discretion of FDA and shall be final. If contested, FDA’s decisions under this
Order shall be reviewed by the Court under the arbitrary and capricious standard
set forth in 5 U.S.C. § 706(2)(A). Review shall be based exclusively on the
written record before FDA at the time the decision was made. No discovery shall
be taken by either party.
This Court retains jurisdiction of this action for the purpose of enforcing or
modifying this Order and for the purpose of granting such additional relief as may be
necessary or appropriate.
SO ORDERED, this 23rd day of July, 2014.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT

16