United States of America v. 2035 Inc. et al

Filing 71

ORDER denying 56 Motion to Stay; granting in part and denying in part 59 Motion for Clarification. Signed by Chief Judge Jeffrey L. Viken on 2/23/15. (SB)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
vs.

CIV. 14-5075-JLV
SECOND ORDER DENYING STAY
AND DENYING CONTINUANCE

2035, INC., a corporation, and
ROBERT L. LYTLE, an individual,
d/b/a 2035 PMA and QLASERS PMA,
Defendants.
On January 14, 2015, the court entered a preliminary junction against
defendants 2035, Inc., a corporation, and Robert L. Lytle, an individual,
d/b/a 2035 PMA and QLASERS PMA. (Docket 48). On January 20 and 21,
2015, defendant Robert L. Lytle filed an emergency motion to stay
enforcement of the preliminary injunction and other motions. (Dockets 49,
50 & 51). On January 23, 2015, the court denied Mr. Lytle’s motion for stay
of the preliminary injunction and other motions. (Docket 52). On the same
day, the court entered an order requiring the parties to file a report and
indicate the earliest date by which they can proceed to trial on plaintiff’s
motion for a permanent injunction. (Docket 53). On January 26, 2015, Mr.
Lytle filed an emergency notice of interlocutory appeal. (Docket 54). On
January 28, 2015, Mr. Lytle filed a second emergency motion to stay the
preliminary injunction and continue the trial date during the pendency of his
appeals to the United States Court of Appeals for the Eighth Circuit. (Docket

56). On February 6, 2015, the government filed its brief in opposition to Mr.
Lytle’s second request for an emergency stay of the preliminary injunction.
(Docket 65). In the meantime, Mr. Lytle filed a verified emergency motion for
clarification. (Docket 59).
Mr. Lytle has appeals in two cases pending before the Eighth Circuit.
Those are United States v. 2035 Inc., et al., CIV. 14-5075 (Docket 54) and Dr.
Larry Lytle v. United States Department of Health and Human Services, et al.,
CIV. 13-5083. (Docket 32).
Unless this court rules otherwise, there is no automatic stay following
an appeal from an interlocutory order which grants a preliminary injunction.
Fed. R. Civ. P. 62(a). The Federal Rules of Appellate Procedure require that a
party seeking a stay pending appeal must first make the motion in the district
court. Fed. R. App. P. 8(a)(1)(c). In determining whether to grant a stay
pending an appeal, the court considers the following factors: “(1) whether
the stay applicant has made a strong showing that he is likely to succeed on
the merits; (2) whether the applicant will be irreparably injured absent a stay;
(3) whether issuance of the stay will substantially injure the other parties
interested in the proceeding; and (4) where the public interest lies.” Hilton v.
Braunskill, 481 U.S. 770, 776 (1987). See also Reserve Mining Co. v. United
States, 498 F.2d 1073, 1076-77 (8th Cir. 1974) (applying the same four
factors to analyze a motion for stay of a preliminary injunction under Fed. R.
Civ. P. 62 and Fed. R. App. P. 8).
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“A stay is not a matter of right, even if irreparable injury might
otherwise result. . . . It is instead an exercise of judicial discretion, and the
propriety of its issue is dependent upon the circumstances of the particular
case. . . . The party requesting a stay bears the burden of showing that the
circumstances justify an exercise of that discretion.” Nken v. Holder, 556
U.S. 418, 433-34 (2009) (internal citations, quotation marks and brackets
omitted). For the reasons stated in the order granting preliminary injunction
(Docket 47), the court makes the following findings.
First, Mr. Lytle is not likely to succeed on the merits of his appeals.
Based on the plaintiff’s “well developed record,” the court found Mr. Lytle is
“violating 21 U.S.C. § 331(a). . . .[and he has] shown no intent to discontinue
[his] activities and voluntarily comply with the FDCA.” (Docket 47 at p. 14).
“[A[ stay should not ordinarily be granted if the court determines that the
injunction will ultimately take effect in any event.” Reserve Mining Co., 498
F.2d at 1077.
Second, while Mr. Lytle may be financially compromised absent a stay
of the preliminary injunction, these consequences result only because the
defendants chose to engage in a course of conduct with the intent to avoid
compliance with the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 332 et
seq. (“FDCA”).
Third, the interests of the United States and the public will continue to
suffer harm through the actions of the defendants if a stay of the preliminary
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injunction is granted. For purposes of granting the preliminary injunction
the court adopted the opinions of Dr. Ilev, one of plaintiff’s witnesses. Dr.
Ilev testified “the 808 and Q1000 lines of QLaser devices could be dangerous
to health when used in the dosage or manner, or with the frequency or
duration prescribed, recommended, or suggested in their labeling. . . . [and]
[a]pplying any of these devices directly over the open eye [as Mr. Lytle’s
manual instructs] could lead to temporary or permanent damage to the eye.”
(Docket 47 at p. 12 [citing Docket 12 at ¶ 20]). “[F]oremost consideration
must be given to any demonstrable danger to the public health.” Reserve
Mining Co., 498 F.2d at 1077.
Fourth, the public interest lies in having every commercial enterprise
and individual subject to the FDCA comply with the federal law. “[P]rotecting
consumer health and safety is a primary purpose of the FDCA.” United
States v. Lane Labs-USA Inc., 427 F.3d 219, 226 (3d Cir. 2005).
After balancing all four factors, the court finds Mr. Lytle has not carried
his burden to warrant a stay of the preliminary injunction. No good cause
has been shown to stay enforcement of the preliminary injunction. The
court denies Mr. Lytle’s motion to stay enforcement of the preliminary
injunction during the pendency of his appeals to the Eighth Circuit.
The court retains jurisdiction to resolve plaintiff’s application for a
permanent injunction against the defendants. “[T]he pendency of an
interlocutory appeal from an order granting . . . a preliminary injunction does
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not wholly divest the District Court of jurisdiction over the entire case.” West
Publishing Co. v. Mead Data Central, Inc., 799 F.2d 1219, 1229 (8th Cir.
1986). “When it is tried, and when judgment is entered, another appeal can
be filed.” Id. See also Thomas v. Board of Education, 607 F.2d 1043, 1055
n.7 (2d Cir. 1979) (“an appeal from an interlocutory order granting . . .
preliminary injunctive relief does not strip the district court of jurisdiction to
proceed with the action on the merits.”) (internal citations omitted); Shevlin v.
Schewe, 809 F.2d 447, 451 (7th Cir. 1987) (“an appeal from an order granting
. . . a preliminary injunction does not divest the district court of jurisdiction to
proceed with the action on the merits.”) (citing 9 Moore’s Federal Practice
¶ 203.11 (2d ed. 1986) (footnote omitted)).
The court entered an order setting the trial on plaintiff’s application for
a permanent injunction. (Docket 64). Consistent with the order, the court
provides the following clarifications to Mr. Lytle:
1. The court is prohibited from acting as Mr. Lytle’s attorney. See
Docket 47 at p. 2 n.3.;
2. Defendants are required to comply with the preliminary injunction.
See Docket 48.; and
3. Hearing on plaintiff’s application for a permanent injunction is set.
See Docket 64.
Accordingly, it is hereby

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ORDERED that defendant Robert L. Lytle’s emergency motion to stay
the preliminary injunction and continue the trial date during appeal (Docket
56) is denied.
IT IS FURTHER ORDERED that defendant Robert L. Lytle’s emergency
motion for clarification (Docket 59) is granted in part and denied in part
consistent with this order.
Dated February 23, 2015.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
CHIEF JUDGE

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