Alaska Injury Law Blog

The Texas Attorney General's office has announced that its litigation against Mannatech has been concluded with a settlement agreement. The agreement mandates that Mannatech return $4m to customers and its founder, Sam Caster, must pay $1m in fines. Caster is also barred from serving as a director, officer, or employee of the company for 5 years, and cannot participate in any multilevel marketing program for 5 years. Caster had been sued twice before by the Texas AG's office for deceptive marketing of another company he ran, Eagle Shield.

The litigation was filed in 2007, and accused Mannatech of using an illegal marketing scheme to defraud consumers Mannatech markets supplements called "glyconutrients" that supposedly provide the body with "essential sugars" that promote "better communication" between cells and support the immune system. Leading scientists are critical of the company's theory of "glycobiology," and one was prompted to characterize the product as literally, a sugar pill (well known in science as a placebo with no active ingredients).

Still pending is the litigation against three other defendants named in the litigation, H. Reginald McDaniel, a Mansfield physician who has been long associated with the company, and two charitable organizations tied to the company, MannaRelief Ministries and Fisher Institute for Medical Research. The litigation accused them of violating the Texas Deceptive Trade Practices Act and the Texas Food, Drug and Cosmetic Act.

We often look to the FDA to regulate this industry, and forget the excellent work done by state agencies. Remember, it was the Texas FDA that began the work against the dangerous marketing of ephedra, which the FDA later took over. In the past, state agencies in California, New York and Florida have also taken strong positions against dangerous or deceptively marketed supplements. The fundamental problem, however, is that we cannot rely on state-by-state regulation; the problem requires a federal solution. Only a few states are large enough to fund their state FDA adequately or support litigation efforts like those of the Texas AG. (And then there is Utah, where the diet supplement industry is treated like a state-sponsored drug cartel.) While we must encourage the efforts of states like Texas, the states should not be left to clean up the industry themselves. The fact that Texas had to bring the litigation at all speaks volumes about the larceny DSHEA permits and the harm that has come from the FDA's inaction. The FDA should be handling these problems with a consistent and unrelenting regulatory effort, and Congress should amend DSHEA to permit the FDA to do its job.

Sources:

Star-Telegram, Feb. 27, 2009

Texas AG's Complaint

Final Judgment against Caster

Final Judgment against Mannatech

Neil O'Donnell has been selected for inclusion in the 2009 Edition of The Best Lawyers in America. The publication states that selection to Best Lawyers is based on an exhaustive and rigorous peer-review survey by the top attorneys in the country and is considered a singular honor.

Recent congressional testimony by the Legislative Director of the Consumer Federation of America (CFA) catalogued several major trends in the insurance industry over the past two decades. Most of these trends are extremely adverse to consumers including small businesses. The first trend is the "hollowing out" of the benefits provided in many insurance policies through more restrictive coverage provisions and expanding exclusions that are poorly understood by the insureds who purchase these legally complex documents. The second trend is that many major insurance companies have turned their "claims operations into 'profit centers' by using computer programs and other techniques designed to routinely underpay policy holder claims." As a result, the percentage of each premium dollar that goes to pay claims has fallen dramatically over the past 20 years, producing "unprecedented profits" for insurance company shareholders and insurance company executives at the expense of the insureds. The full report can be found at:
Testimony of Travis V. Plunkett, Legislative Director, Consumer Federation of America, 7/29/08.

Best Lawyers in America has now released its law firm rankings for 2009, and has ranked Atkinson, Conway & Gagnon #1 in the Products Liability category in both the Alaska and Anchorage surveys. The Alaska Personal Injury Law Group is the practice group within the firm of Atkinson, Conway & Gagnon handling claims in the specialty areas of law such as products liability, negligence, wrongful death, catastrophic injury, and insurance bad faith claims.

Benchmark: Litigation has released its 2009 rankings, as well. Reprising its 2008 listing by the organization, Atkinson, Conway & Gagnon was again listed as one of five law firms in Alaska selected for its premier "highly recommended" listing.

Both organizations utilize peer review surveys of practicing lawyers as an independent and objective means of determining which law firms are regarded by their peers as performing exceptional legal work.

Richard E. Vollertsen, one of the Alaska Personal Injury Law Group's attorneys, has just been selected as "Lawyer Of The Year" by Best Lawyers In America. Mr. Vollertsen is one of three lawyers to be recognized from Alaska, and the only lawyer recognized in the specialty practice of Personal Injury Litigation. Another lawyer from his firm, Bruce E. Gagnon, was also selected by Best Lawyers as "Lawyer of the Year" in the specialty practice of Corporate Law.

Best Lawyers in America is one of the oldest publications rating lawyers in the United States, and is the gold standard for accuracy and integrity. Best Lawyers in American compiles its lists of outstanding attorneys by conducting exhaustive peer-review surveys in which thousands of leading lawyers confidentially evaluate their professional peers. The lawyers being honored as “Lawyers of the Year” received particularly high ratings in their surveys by earning a high level of respect among their peers for their abilities, professionalism, and integrity. Steven Naifeh, Managing Editor of Best Lawyers, says, “We continue to believe – as we have believed for more than 25 years – that recognition by one’s peers is the most meaningful form of praise in the legal profession. We would like to congratulate Richard E. Vollertsen on being selected as the ‘Alaska Best Lawyers Personal Injury Litigator of the Year’ for 2009.”

The bright spot in today's news is that the FDA has announced its initiative against "contaminated weight loss products." One has to applaud the agency's efforts because diet supplements, in general, and weight loss products, in particular, have been "spiked" with pharmaceutical drugs for some time. The reason diet supplement marketers do this is because: 1.) drugs work, whereas diet supplements rarely do; and 2.) they can get away with it. The agency has been manacled in its enforcement efforts by the restrictions imposed by DSHEA, but it has also been substantially impaired in its efforts because of a lack of political will to regulate this wayward industry where it can. Thus, these kinds of initiatives are a breath of fresh air.

Imagine for a moment that it has been discovered that Pfizer had "spiked" its new blockbuster drug with a different, undisclosed drug, (or for that matter a diet supplement!). The FDA and the industry would be embroiled in immediate inquiries, and heads would roll. On the other hand, the FDA has known for decades about the illegal "spiking" of diet supplements with pharmaceuticals and has simply let the matter fester.

Be that as it may, the FDA has now released warnings as to a number of supplements, and has indicated that it will be seeking recalls of some of them. The supplements were found to contain sibutramine (a controlled substance), rimonabant (a drug not approved for marketing in the United States), phenytoin (an anti-seizure medication), phenolphthalein (a solution used in chemical experiments and a suspected cancer causing agent) or bumetanide (a diuretic). These substances all have pharmaceutical properties that include the laundry list of adverse effects one would expect. We have previously written about the deadly consequences of this type of adulteration here, and here, and we commend the agency for its efforts. Regardless whether the FDA is getting it or just getting around to it, this heightened scrutiny is long overdue.

Sources:

FDA News, January 8, 2009

FDA News, January 27, 2009

New York Times, February 9, 2009

Minnesota Star Tribune, February 9, 2009

International Herald Tribune, February 10, 2009

Judge Jack T. Camp, of the U.S. District Court, has sentenced the CEO of Hi-Tech Phamaceuticals, Jared Wheat, to 50 months in prison for illegally selling knock-off prescription drugs over the internet. He was also fined $50,000, and was required, along with the company and other defendants, to forfeit $3 million in proceeds received in the scheme. In the proceeding, the defendants admitted to operating a facility in Belize that manufactured generic versions of pharmaceutical drugs, such as Xanax, Valium, Ambien, Vioxx, Ambien, Zoloft, Viagra and Cialis, and selling the drugs over the internet without requiring a prescription.

A co-defendant, Sergio Oliveira, a sales associate, was sentenced to 20 months in prison and fined $20,000. The judge had previously sentenced two other Hi-Tech officials, Stephen D. Smith and Tomasz Holda, to 27 months and 16 1/2 months respectively.

Hi-Tech’s supplements include Stamina-Rx, which it claims to be a "maximum sexual stimulant," Lipodrene, supposedly capable of "advanced appetite control and metabolic stimulation," and Metanabol, marketed as a "revolutionary catalyst for increasing lean mass and strength."

Sources:

MSNBC, 2/3/09