6004. Enerjol capsules.    (F.D.C. No. 41276.    S. Nos. 85-201/4 M.)
QUANTITY:   5,213 btls. of double strength capsules, and 2,733 btls. of single
strength capsules, at Chicago, Ill., in possession of Owen Laboratories. 
SHIPPED :   11-18-57 and 12-5-57, from Long Island City, N.T.
LABEL IN PART: "60 (or other number) Capsules Lot No. 30019 ENERJOL 
DOUBLE STRENGTH Each Capsule contains: Thiamin Chloride 20 mgm. 
Riboflavin 10 mgm. Vitamin E (as D-alpha tocopherol acid succinate) 
10 I. U. Vitamin B-12 Gobalamin cone. 10 megm. Iron (from ferrous gluco- 
nate) 20 mgm. Oyster Shell Powder 25 mgm. Royal Jelly 25 mgm. Iodine 
(from potassium iodide) 0.2 mgm. For use as a Dietary Supplement: One 
capsule daily." or "SINGLE STRENGTH Each capsule contains: Thiamin 
chloride 10 mgm. Riboflavin 5 mgm. Vitamin E (as D-alpha tocopherol acid 
succinate) 5 I. U. Vitamin B-12 Oobalamin cone. 5 megm. Iron (from fer- 
rous gluconate) 10 mgm. Oyster Shell Powder 20 mgm. Royal Jelly 12.5 
mgm. Iodine (from potassium iodide) 0.1 mgm. For use as a dietary 
supplement."
ACCOMPANYING LABELING : Circulars entitled "Owen Laboratories. The Enerjol 
Plan With Royal Jelly The Queen Bees Answer to Long Life" and "Discovered: 
New Wonder Capsule so Potent It Actually 'Combats Ills of Old Age* * * * 
Helps Put back Power Into Important Bodily Functions."
LIBELED :   12-9-57, N. Disk Ill.; libel amended 12-19-57.
CHARGE: 502(a)-while held for sale, the labeling which accompanied the 
article contained false and misleading representations that the article was an 
adequate and effective treatment for glandular diseases, tiredness, sexual 
deficiency, nervous tension, dizziness, lack of sleep, loss of mental and physical 
ambition, lack of appetite, increasing longevity, and weakened, tired eyes; and 
505(a)-the article was a new drug within the meaning of the law and an 
application filed pursuant to the law was not effective with respect to such 
drug. 
/
DISPOSITION: Owen Laboratories appeared as claimant and filed an answer V 
denying that the drug was misbranded or a new drug. Thereafter, the 
Government filed written interrogatories against the claimant. On 4-30-58, 
the claimant requested additional time to answer the interrogatories, which 
was granted. Thereafter, on 5-8-58, the claimant filed objections to the inter- 
rogatories. Susbequently the Government filed a motion to have the objections 
stricken since additional time had not been granted for claimant to object 
to the interrogatories.    The court thereupon, on 5-21-58, ordered that the
r
objections to the interrogatories be stricken.   The court further ordered, on 
5-26-58, that the interrogatories be answered.
On 6-4-58, the claimant then filed a motion to dismiss and for summary 
judgment. The court, on 9-8-58, entered the following memorandum opinion 
denying the claimant's motion to dismiss and for summary judgment:
SULLIVAN, District Judge: "This is a libel of information brought by the 
Government under Title 21 U.S.C. ? 334, for the condemnation of certain bottles 
of a drug called 'Enerjol.' The condemnation is sought on the grounds that 
the contents of the bottles are misbranded under Sec. 352(a), and that 
'Enerjol' is a 'new drug' under Section 355(a), as to which no effective 
application has been filed under Section 355(b).
"The claimant has moved to dismiss the libel and for a summary judgment. 
The sole basis for the motion is that in September, 1957, claimant entered 
into an agreement with the Post Office Department in an action brought 
against claimant by that Department under the provisions of Title 39 U.S.C. 
Sections 259 and 732, and allegedly concerned with the same product and 
same labels as those here involved. It is claimant's position that in view 
of the former proceedings, and the agreement, the present libel subjects 
claimant to a 'multiplicity of actions' and 'unjust harassment,' and that the 
agreement in the post office action is a bar 'in effect akin to the legal prin- 
ciples of res adjudicata.'
"The last argument is clearly in error. The doctrine of res adjudicata 
applies only when there has been an actual adjudication of the same issues 
in a prior proceeding. (United States v. International Building Co., 345 
U.S. 502, 505(1953)). Such is not the case here. In the Post Office proceed- 
ing, the issue was actual intent to deceive by means of false or of fraudulent 
pretenses (Reilly v. Pinkus, 338 U.S. 27,6(1949)). Here, the issue is whether 
the article is misbranded. It is settled in this Circuit that 'the offense of 
using the mails to defraud and the offense of introducing or delivering for 
introduction into interstate commerce misbranded drugs are not the same, 
and hence there is no res judicata.' (United States v. Eaadt, 171 F. 2d 600, 
at 605 (7th dr. 1949) ; see also United States v. 42 Jars, etc. 160 F. Supp. 
818, 821  (D.N.J. 1958).
"Claimant argues that he is not contending that the traditional doctrine 
of res adjudicata applies, but that something 'akin' to it is involved. This 
argument also must fail. However far one might stretch the traditional 
doctrine, it must at least involve some form of prior adjudication definite 
enough to form a standard against which the current action can be measured. 
In the instant situation there was no adjudication of any sort in the Post 
Office action. The agreement (attached to the motion) shows that claimant 
there merely agreed to refrain from making certain representations in the 
future. If this amounts to anything, it is an admission by claimant against 
his interests in this suit. Finally, the agreement provides that it 'will not 
act as a defense for violation of any other statute.' This in itself should 
preclude its use here.
"The argument that claimant is being subjected to 'multiplicity of actions' 
and 'undue harassment' is a specious one. It is perfectly apparent that the 
purposes and effect of the Post Office action and one for condemnation are 
entirely different and that the two remedies are properly distinct and co- 
existant. (United States v. One Dozen Bottles, 146 F. 2d 361, 363 (4th Cir., 
1944)).
"For the foregoing reasons, the motions to dismiss and for a summary 
judgment are denied."
On 10-8-58, the Government filed a motion for entry of default decree 
since the claimant had failed to answer the interrogatories as ordered by the 
court. A default decree of condemnation was entered on 10-22-58. The 
claimant then filed notice of appeal to the United States Court of Appeals 
for the Seventh Circuit. On 3-31-59, the court of appeals handed down the 
following opinion affirming the judgment of the district court (265 F. 2d 332) :
HASTINGS, Circuit Judge. "The Government, libelant-appellee, brought this 
action under the provisions of the Federal Food, Drug and Cosmetics Act, 21 
U.S.C.A. ??301 et seq., for the condemnation and seizure of a drug called 
'Enerjol.' The corporate claimant, Owen Laboratories, Inc., refused to answer 
the libelant's interrogatories on the ground of self-incrimination and the dis- 
trict court thereupon entered a default decree of condemnation. This appeal (- 
is taken from that decree and from an order of the district court denying ( 
claimant's motion for dismissal of the libel and for summary judgment.
"The instant suit was commenced in December of 1957. The amended libel 
charged that the drug, 'Enerjol,' was misbranded while held for sale after 
shipment in interstate commerce within the meaning of 21 U.S.C.A. ? 352(a), 
and also alleged that the drug was a 'new drug' which was introduced into 
interstate commerce without an effective new drug application as provided in 
21 U.S.C.A. ? 355 (a) and (b).
"Prior to this action, in September of 1957, the Post Office Department had 
issued a fraud complaint against Owen Laboratories, Inc., charging it with 
having obtained money through the mails by means of fraudulent representa- 
tions regarding the nature of and benefits to be obtained from the so-called 
'Enerjol Capsules.' In order to avoid having a fraud order entered against it, 
Owen Laboratories filed an 'Affidavit of Agreement' in which it consented to 
cease making the representations charged to be fraudulent in the Post Office 
complaint.
"Claimant moved for a dismissal of the instant suit and for summary judg- 
ment, on the ground that the agreement with the Post Office, entered into after 
initiation of the mail fraud proceeding, was, in effect, an adjudication1 with 
respect to the identical product, the identical literature and identical issues 
involved in this libel; and that the agreement 'constitutes a bar to the present 
action and is in effect akin to the legal principle of res adjudicata.' The 
district court denied this motion setting forth its reasoning in a brief memo- 
randum opinion which indicates that it fully understood and rejected claim- 
ant's arguments made before that court and renewed in this appeal. We hold 
that the district court committed no error in denying this motion.
"The mail fraud proceeding could not possibly be a bar, to the instant action. 
In the first place, the agreement executed by claimant in connection with the 
mail fraud proceeding is, by its own express terms and contrary to claimant's 
contentions, not an approval or ratification of any business conducted or to be 
conducted by claimant. The agreement further states expressly that 'its filing 
will not act as a defense or relieve the undersigned [claimant's president] of 
responsibility for violation of any other statute * * *.'
"Further, when stripped of its refinements, claimant's position appears to 
be that the Postmaster General, with his limited authority under the mail 
fraud statutes, could and should have somehow effectively enforced the provi- 
sions of the Federal Food, Drug and Cosmetics Act; and that, since he did 
take some action, as evidenced by the agreement, the Government is now 
barred from enforcing that Act against the offending product.
"Viewing claimant's contentions in this light merely points up the fact that 
. the proceeding under the mail fraud statute and the instant one differ not 
only as to issues involved, but also as to purpose and effect. The Postmaster 
General has only the limited authority to prohibit the fraudulent use of the 
mails, and the sole purpose of a mail fraud proceeding is to enjoin the 
continuation of conduct found fraudulent. Donaldson v. Read Magazine, Inc., 
333 U.S. 178, 191 (1948). There must be proof of a fraudulent purpose, an 
actual intent to deceive, on the part of the alleged violator. Reilly v. Pinkm, 
338 U.S. 269, 276 (1949).
"On the other hand, the present suit under the Food, Drug and Cosmetics , 
Act has as its purpose the seizure and actual removal of the allegedly offending V 
articles from the channels of trade.   Under this Act, no proof of wrongful or 
fraudulent intent is required either in criminal proceedings brought under its 
provision, United States v. Dotterweich, 320 U.S. 277, 281, 284-285 (1943), or 
; in seizure cases such as the instant one.   Research Laboratories v. United
JBy "adjudication" claimant refers to any type of administrative action. It argues 
extensively in its brief for the adoption by this court of a new rule of "res administrata" 
embodying principles "akin to the legal principle of res adjudicata" but tailored to fit 
problems peculiar to administrative law.
States, 9 Cir., 167 F. 2d 410, 420-421 (1948) ; United States v. Five Cases, etc., 
2
Cir., 156 F. 2d 493, 495 (1946). The Supreme Court in Dotterweich pointed 
out that by this Act, as amended in 1938:
* * * Congress extended the range of its control over illicit and noxious 
articles * * *. The purposes of this legislation thus touch phases of the 
lives and health of people Which, in the circumstances of modern 
industrialism, are largely beyond self protection. * * * In the interest 
of the larger good it puts the burden of acting at hazard upon a person 
otherwise innocent but standing in responsible relation to a public danger." 
United States v. Dotterweich, supra at 280-281.
In the libel in this case the drug is alleged to be subject to seizure not only as 
misbranded (falsely labeled) but also as a new drug introduced into interstate 
commerce without an effective new drug application to establish its safety as 
is required by law. The proceeding and resulting agreement under the mail 
fraud act could be no bar to this suit.
"Reliance by claimant on United States v. Willard Tablet Co., 7 Cir., 141 
F. 2d 141 (1944) is misplaced. In that case, a prior decision by the Federal 
Trade Commission had approved statements used by an alleged violator and 
Tuled that the statements were not false representations. We held that a 
subsequent condemnation proceeding, under the Federal Food, Drug and 
Cosmetics Act based on identical statements as to the same product was 
barred, on principles of res adjudicata, because the same issues and elements 
of proof were involved in both proceedings. The case of George S. Lee Co. 
y. Federal Trade Commission, 8 Cir., 113 F. 2d 583 (1940) also cited by 
claimant is to the same effect.
"Claimant also relied heavily, in its brief, on the case of United States v. 
Radio Corporation of America and National Broadcasting Company, Inc., 
E.D. Pa., 158 F. Supp. 333 (1958). In that case the district court decided that 
approval by the Federal Communications Commission of a proposed exchange 
of radio and television stations, precluded a subsequent suit in which the 
?Government sought to upset the transaction as violative of the anti-trust laws. 
However, just prior to oral argument in the present case, the Supreme Court 
of the United States, having noted probable jurisdiction at 357 U.S. 918 
(1958), unanimously reversed the district court. United States v. Radio 
?Corporation of America and National Broadcasting Company, Inc.,.... U.S. 
.... (1959) .a The Supreme Court held that the Federal Communications 
Commission had no power to decide anti-trust issues as such and that, con- 
sequently, its determination that the 'public interest, convenience and neces- 
sity' would be served by the proposed exchange of radio and television sta- 
tions did not bar the subsequent anti-trust suit. In so doing the Court found 
res judicata principles inapplicable since, as in the instant case, different 
issues were involved. Id. at ... . In our view, this holding alone would be 
completely dispositive of claimant's contention.
"It is next contended that the district court erred in entering the default 
?decree of condemnation upon claimant's failure to answer libelant's interro- 
gatories. The refusal of the corporation to answer was based on an assertion 
of a claim of privilege against self-incrimination. However, it is settled 
beyond possible doubt that a corporation has no such privilege to assert. 
United States v. White, 322 U.S. 694 (1944). In the White case, the Supreme 
Court stated clearly and unequivocally :
The constitutional privilege against self-incrimination is essentially 
a personal one applying only to natural individuals.
* * * [I]t cannot be utilized by or on behalf of any organization, such 
as a corporation.   (Emphasis added.) (id. at 698-699).
See also Fleming v. Montgomery Ward, 7 Cir., 114 F. 2d 384, 386-387 (1940), 
cert, den., 311 U.S. 690.
"In the face of this, claimant urges that a corporation may somehow 
assert the privilege against self-incrimination on behalf of itself, and a broad 
class of corporate officers and agents, because of what it terms the unique
* Mr. Justice Frankfurter and Mr. Justice Douglas took no part in the consideration or 
decision of the case.
nature of the Federal Food, Drug and Cosmetics Act which imposes criminal 
liability on officers and agents of the corporation without requiring proof of 
wrongful intent or consciousness of wrongdoing.
"It is true that this Act is an example of the so-called "public welfare 
statute' which requires no proof of wrongful intent Morissette v. United 
States, 342 U.S. 246, 255-256 (1952) ; United States v. Dotterweich, 320 U.S. 
277 (1943). However, criminal liability is not, as claimant seems to contend, 
imposed automatically under this type of law upon every officer or agent 
no matter how remote his connection with the offending corporation. In 
Dotterweich, the Supreme Court clearly enunciated the proper test. Criminal 
responsibility for violation of the Federal Food, Drug and Cosmetics Act 
attaches to those who have a responsible share in the furtherance of the 
transaction which the statute outlaws. 'Whether an accused shares re- 
sponsibility in the business process resulting in unlawful distribution depends 
on the evidence produced at the trial and its submission-assuming the 
evidence warrants it-to the jury under proper guidance.' (Emphasis 
added.)    U.S. v. Dotterweich, supra at 284.
"It was the duty of this corporate claimant to select an agent who, with- 
out fear of self-incrimination, could provide the information requested. The 
interrogatories were addressed to the corporation and the answer sought 
was that of the corporation. There is no merit in claimant's suggestion that 
the answers to the interrogatories must be verified by an officer or managing 
agent of the corporation. Rule 33 of the Federal Rules of Civil Procedure, 
28 U.S.C.A., provides that 'any officer or agent' of a corporate party 'shall 
furnish such information as is available to the party.' It would indeed be 
incongruous to permit a corporation to select an individual to verify the 
corporation's answers, who because he fears self-incrimination may thus 
secure for the corporation the benefits of a privilege it does not have.
"The default decree was entered by the district court pursuant to Rule 
37(d) F.R.C.P., 28 U.S.C.A., which provides:
If a party or an officer or managing agent of a party wilfully fails 
to appear before the officer who is to take his deposition, after being 
served with proper notice, or fails to serve answers to interrogatories 
submitted under Rule 33, after proper service of such interrogatories, the 
court on motion and notice may * * * enter a judgment by default 
against the party.
Claimant asserts that there was no wilful failure to answer since the 
officer of the corporation, in this case the president, properly asserted his 
constitutional privilege against self-incrimination even if the corporation 
had no such privilege. "We have answered this contention above. Claimant 
had a duty to appoint an agent who could, without fear of self-incrimination, 
furnish such requested information as was available to the corporation. No 
attempt was made to do so.
"The disjunctive wording of the rule, above, would seem to indicate that a 
showing of wilfulness is necessary only on failure to appear for deposition. 
Assuming that such is not the case, however, we hold that what is intended 
by 'wilful failure' to comply with the rule is any intentional failure as 
distinguished from involuntary noncompliance. No wrongful intent need be 
shown.   Brookdale Mill Inc. v. Rowley, 6 Cir., 218 F. 2d 728, 729 (1954).
"But beyond that, we are singularly unimpressed with claimant's arguments, 
in view of the following statement made by claimant's president in an 
affidavit accompanying the motion to dismiss and for summary judgment: 
'I have not made any false or improper claims in connection with the 
marketing of this product. My products are marketed based upon extensive / 
research and consultation with experts.' Thus, though first representing to V. 
the court that it had such information available and implicitly offering it in 
support of this motion, when it was later served with interrogatories seeking 
details of such 'extensive research and consultation,' claimant asserted its 
claimed privilege.
"Finally, Societe Internationale v. Rogers, 357 U.S. 197 (1958) relied on by 
claimant is inapposite since in that case the Supreme Court felt that dismissal 
under Rule 37 was too harsh a remedy where there was evidence of -a good 
faith effort to comply with the rule. No attempt was made to comply in 
this case.
"We hold that the trial court did not err in entering the default decree upon 
proper motion by the Government and notice to claimant.3 
"The judgment and decree of condemnation is AFFIRMED."
Thereafter, the claimant filed a petition for writ of certiorari with the 
United States Supreme Court, which petition was denied on 6-29-59 (360 
U.S. 931). The article and the accompanying circulars were subsequently 
destroyed in accordance with the terms of the decree of condemnation.
DRUG IN VIOLATION OF PRESCRIPTION LABELING REQUIREMENTS