Opinion ID: 156153
Heading Depth: 2
Heading Rank: 1

Heading: Proper Construction of the Orders

Text: Before addressing the sufficiency of the evidence, we must determine how the orders should be construed. Themy contends that the 1989 Order applies only to the Ster-O-Lizer and that the 1994 Order applies only to the AIDS Treating Machine. It is true that the first order refers to the Ster-O-Lizer by name and the second order refers to the AIDS Treating Machine by name. However, neither order is limited to just one product. The 1989 Order prohibits the shipping, sale, or offering for sale of “the condemned articles [i.e., the Ster-O-Lizers] or any other articles of device” unless a Department of Health and Human Services representative releases them for sale. 1989 Order at ¶ VII.B.4 (emphasis added); see also id. at ¶ II (finding specifically that the Ster-O-Lizer is a device within the meaning of the FDCA). That order also prohibits Themy from introducing “any device” into interstate commerce, or holding for sale “any device” after shipment of one or more of its components in interstate commerce, until the FDA has informed him in writing that he is compliance with the FDA’s CGMP. Id. at IX.A.4. Because the 1989 Order repeatedly specifies that it covers “any device,” Themy’s contentions that it covers only the Ster-O-Lizer are without merit. Likewise, the terms of the 1994 Order are not limited to the AIDS Treating -5- Machine, but also cover any “device.” See 1994 Order at ¶ III.A (prohibiting Themy from conducting a clinical investigation of “the AIDS Treating Machine or any other article of device” without obtaining an exemption from the FDA (emphasis added)); id. at ¶ III.B (prohibiting Themy from “[m]anufacturing, processing, labeling, packing, promoting, distributing, or holding for sale the AIDS Treating Machine or any other article of device” (emphasis added)). Moreover, the 1994 Order clearly states that it is intended to supplement but not supersede the 1989 Order. Thus, Themy’s contentions that the 1994 Order is limited to the AIDS Treating Machine also is without merit. In short, the language of each order is broad enough to cover both the Ster-O-Lizer and the AIDS Treating Machine, regardless of whether those products are mentioned by name. Themy also asserts that the term “device” is ambiguous. We disagree. Each order specifically refers to the statutory definition of “device” contained at 21 U.S.C. § 321. See 1989 Order at ¶ II (referring to 21 U.S.C. § 321(h)); 1994 Order at ¶ II (referring to 21 U.S.C. §§ 321(g), (h) and also to the regulatory definitions found at 21 C.F.R. §§ 201.128 and 801.4). Further, the 1994 Order specifically sets forth a definition of device, i.e., articles “intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or function of the body -6- of man.” 1994 Order at ¶ II, III.B. II. Evidence of Acts in Violation of the 1989 and 1994 Orders A. Promoting and Holding for Sale the AIDS Treating Machine and Ster-O-Lizer The injunction prohibits Themy from promoting or holding for sale the AIDS Treating Machine or any other article of device. The government introduced evidence that Themy had promoted the AIDS Treating Machine and both promoted and held for sale the Ster-O-Lizer within weeks of the entry of the 1994 Order.
Themy sent at least two letters to different individuals promoting the AIDS Treating Machine. First, Themy sent a letter to Mr. Edward Cerullo in New York in which Themy claimed that the AIDS Treating Machine was a “multi-billion dollar making opportunity.” Appellee’s App. at 307 (letter dated 7/25/94). Second, in a letter to Fidel Castro of Cuba, Themy promised that his machine “will treat all the HIV-AIDS carriers and free them from the desease [sic].” Id. at 308 (letter dated 8/15/94). 2. Promotion and Holding for Sale of the Ster-O-Lizer At about the same time that he was promoting the AIDS Treating Machine, Themy solicited Steve Nielsen of the General Medical Corporation in Richmond, Virginia, to act as the “exclusive sales agent” for the Ster-O-Lizer. Id. at 309 -7- (letter dated 7/25/94). Themy also placed an ad in the Salt Lake Tribune seeking a salesman to work on commission and possibly become “national sales director.” Id. at 311 (ad dated 7/3/94). Joseph Cormier testified that he answered the ad, that Themy trained him to sell Ster-O-Lizers, and that Themy tried to sell him a Ster-O-Lizer. Cormier testified that he and Themy together visited the officers of several physicians in the Salt Lake City area, demonstrating, promoting, and attempting to sell the Ster-O-Lizers. These facts constitute sufficient evidence that Themy promoted the AIDS Treating Machine and promoted and held for sale the Ster-O-Lizers in violation of the 1994 Order. B. Sale and Shipment of Ster-O-Lizers in Interstate Commerce The 1989 Order prohibits Themy from “[i]ntroducing or causing the introduction into interstate commerce of any device, or holding for sale any device after shipment of one or more of its components in interstate commerce” until the FDA informed Themy that he was in compliance with the FDA’s CGMPs. See 1989 Order at ¶ IX.A. It is undisputed that the FDA never notified Themy that he was in compliance with the CGMPs. 1. Sale and Shipment of the Ster-O-Lizer to Spain In May 1995, Themy had an air freight company pick up a package containing a Ster-O-Lizer for delivery to an international freight forwarder. The -8- package was marked for shipment to Barcelona, Spain. The package, which was called to the FDA’s attention by the international freight company and eventually seized by the U.S. Marshal, had an invoice showing a price of $7,000. This attempted shipment to Spain violated the injunction for two reasons. First, it meant that Themy introduced the Ster-O-Lizer into interstate commerce. Second, it meant that he held the device for sale after shipment of one of its components in interstate commerce. (Themy concedes that gauges used in the Ster-O-Lizer came from a company in Ohio.) Themy asserts that the shipment of the Ster-O-Lizer to Spain constituted foreign commerce, not interstate commerce, and thus does not violate the terms of the injunction. We agree with the district court that interstate commerce, for purposes of the FDCA, includes foreign commerce. The FDCA defines “interstate commerce” as “commerce between any State or Territory and any place outside thereof.” 21 U.S.C. § 321(b)(1) (emphasis added); see also United States v. Food, 2,998 Cases, 64 F.3d 984, 992 (5th Cir. 1995) (“The plain words of the statute expansively define ‘interstate commerce’ to effectively include foreign commerce.”). It is insignificant that the Ster-O-Lizer did not actually reach Spain. It is sufficient that Themy introduced the package into interstate commerce by having the package delivered to the international freight company, even though it did not reach its intended destination. Cf. Baltimore & O.S.W.R. -9- Co. v. Settle, 260 U.S. 166 (1922) (focusing on the intent with which railroad lumber shipment was made in order to determine whether it was intrastate or interstate in nature). Even assuming that the injunction did not extend to shipments intended for foreign commerce, the shipment to Spain still would have violated the terms of the injunction. The injunction not only prohibits the introduction of nonconforming devices into interstate commerce, but also prohibits the sale of a nonconforming device whose components have been shipped in interstate commerce. As noted above, Themy admitted that the gauges on the Ster-O-Lizers had originated in Ohio and had been shipped in interstate commerce. Themy next contends that his shipment to Spain was for research purposes and was not a sale. He points to a statutory provision permitting shipments of non-FDA approved devices to other countries. See 21 U.S.C. § 381(e). However, one must meet certain statutory prerequisites in order to be allowed to export devices under this provision, see id., and Themy has not demonstrated that his devices meet those prerequisites. Moreover, devices that fail to meet a requirement of section 360d or 360e (relating to performance standards and premarket approval) are not eligible for export under section 381(e), unless the FDA grants an exception. Themy has not shown that he has met the requirements of sections 360d and 360e, and the FDA has not granted him an exception. - 10 - The evidence, when viewed in the light most favorable to the government, also rebuts Themy’s assertion that his shipment of the Ster-O-Lizer to Spain was for research purposes. The box containing the Ster-O-Lizer had an invoice for $7,000, indicating that it was a sale, not a loan for research purposes. Moreover, Themy wrote a letter to his contact in Spain before the shipment was sent, explaining that he could buy a Ster-O-Lizer “by wiring directly to our Bank the sum of $7,000.00.” Appellee’s App. at 318 (letter dated 5/4/95). Themy has produced no evidence supporting his assertion that the shipment was for research purposes.
Themy also sent a “reconditioned” Ster-O-Lizer to a hospital in Greece. This action, like the shipment of the Ster-O-Lizer to Spain, violates the 1989 Order’s prohibition of the shipment of the Ster-O-Lizer or any other device in interstate commerce. The action also appears to be a sale in violation of the 1989 Order’s prohibition after the shipment of a component in interstate commerce. Although Themy claimed on the invoice that the shipment was a donation, the invoice indicated a price of $1,000. In sum, we find that Themy’s activities promoting both the AIDS Treating Machine and the Ster-O-Lizer, and his two sales and shipments of Ster-O-Lizers to foreign countries, violated the explicit terms of the 1989 and 1994 Orders. - 11 -