A ‘permanent injunction’ might not be what you think it is

Natural Products Insider’s Josh Long explores how Balance of Nature bounced back swiftly from an injunction after being sued by the feds.

Josh Long, Associate editorial director, Natural Products Insider

January 19, 2024

9 Min Read

At a Glance

  • Manufacturers subject to an injunction may be closed for a long spell, if they ever get the green light to reopen at all.
  • FDA's grievances against Balance of Nature were focused on disease claims and how the company handled customer complaints.
  • The government publicized the Balance of Nature injunction but was tight-lipped about something else.

Read the Nov. 16, 2023, press release from the U.S. Department of Justice (DOJ) about the “consent decrees of permanent injunction” entered against the manufacturers of Balance of Nature supplements, and your conclusion might be, “The government has shut these guys down. Case closed.”

That’s a reasonable assumption considering many manufacturers sued by the feds — and consequently subject to an injunction — must close their operations for a long stretch amid efforts to come into regulatory compliance or permanently exit the business due to a cash crunch.

Esquire Marc Ullman of Rivkin Radler is aware of the rigorous requirements that supplement manufacturers subject to an injunction typically must satisfy before getting authorization to resume operations. He’s been advising dietary supplement firms on FDA regulations and the law for decades, and per his biography, has served as an instructor at a training seminar offered several times a year on the manufacturing rules applicable to supplements (cGMPs or current good manufacturing practices).

“These injunctions generally require certification by an independent consultant that the facility is in compliance with all aspects of Part 111, not just the specific issues cited in a 483 or a warning letter,” Ullman explained in an email, referencing the cGMPs incorporated in 21 CFR Part 111. “This is generally a significant undertaking. Once the consultant is able to provide the certification, the FDA needs to agree that there is total compliance with Part 111, something that under normal circumstances the agency is extremely cautious about doing; after all, they are by definition dealing with a company that has a long history of noncompliance.”

Six days

But it didn’t take Balance of Nature — a high-performing brand sold on Amazon within the whole food supplements subcategory — years to satisfy the injunction. Or months. Or even weeks.

A consent decree signed on Nov. 15 by U.S. District Judge David Nuffer in Utah prohibited Evig LLC (aka Balance of Nature) from manufacturing, holding or distributing supplements for all of six days.

How did Balance of Nature barely miss a beat in the face of a “permanent injunction?” Before answering that question, let’s turn to how Evig found itself in U.S. District Court in the first place.

According to the Nov. 16 news release from DOJ, which files lawsuits on behalf of FDA, Evig and its CEO, David Lex Howard, “claimed their dietary supplements can cure, treat and prevent a variety of diseases and health conditions, including cancer, heart disease, diabetes and coronavirus.”

Per the release, the complaint further alleged “FDA inspections showed the defendants had no system in place to handle customer complaints, despite receiving reports asserting that their products may have caused allergic reactions from ingredients not identified on the label.”

The consent decree in Utah federal court barred the defendants from operating without meeting several conditions related to their handling of product complaints and their representations on product labels and other materials.

Among the measures Evig needed to satisfy before getting authorization from FDA to resume operations:

  • Retain an independent expert to inspect the establishment to determine if the defendants are handling product complaints in conformity with cGMPs, and notify FDA of the person’s identity and qualifications.

  • In addition to conducting a thorough inspection of the firm’s complaint handling program, the expert must certify in writing to FDA that the program, in their view, complies with the consent decree, Federal Food, Drug & Cosmetic Act (FDCA) and its implementing regulations.

  • The expert must submit an inspection report to FDA that “shall include, but not be limited to, a determination that defendants have methods, processes and controls to ensure that they: i. Establish and follow written procedures for reviewing and investigating product complaints … and ii. Document and investigate all complaints as required by 21 C.F.R. § 111.560 and 21 CFR § 111.570.”

The consent decree further necessitated retaining an independent labeling expert qualified to inspect the establishment and review the defendants’ representations on product labels, websites or social media pages. The expert is required to submit a report to FDA certifying certain statements, including most notably (in my opinion) that “defendants are no longer causing any of their products to be drugs within the meaning of the Act for indications for which they do not have FDA approval.”

FDA letter of authorization

On Nov. 21 — six days after the permanent injunction was signed and five days after DOJ announced the court order — Balance of Nature issued a press release with the following headline, “Balance of Nature Announces Normal Operations and Shipping Timelines for Holiday Demands.”

“I’m pleased to share that we are in full operation. We are excited and well-prepared to meet the heightened demand and expectations of our amazing customers,” Howard shared in the press release.

Upon reading the announcement, my immediate reaction was, “Huh? I thought these guys were subject to a ‘permanent injunction.’” That’s when I read through the injunction and found a section about FDA notifying “defendants in writing that they appear to be in compliance with the requirements set forth in paragraphs 6.A-F of this decree.”

These paragraphs are the ones related to defendants’ product complaint procedures and their representations on social media, product labels and websites.

Rebecca Wood, an attorney with Sidley Austin in the nation’s capital and former FDA lawyer who represented the defendants, confirmed in an email to me that FDA provided Balance of Nature written notice on Nov. 21 to resume operations. She quoted language from the FDA letter that Evig appeared to be compliant with the consent decree, FDCA and its implementing regulations.

Premium injunction

DOJ’s Nov. 16 press release mentioned a few other defendants, Premium Productions LLC (Premium) and the company’s manager Ryan Petersen, who were accused of manufacturing adulterated supplements and subjects of a separate injunction. According to DOJ, the supplements involved all are marketed in the U.S. under the Balance of Nature brand name. (The relevant consent decree identifies as defendants Petersen and Premium Production (no ‘s’)).

Lawyers representing Petersen and Premium did not respond to my question whether these defendants also received a separate letter of authorization from FDA. To receive the letter, the injunction requires (among other things) the hiring of a cGMP consultant, comprehensive inspection of the establishment and certification in writing that all the cGMP deviations raised by FDA have been corrected.

The terms of the injunction against Petersen and Premium are distinguishable from the terms against Evig and Howard. For example, the expert’s inspection report to FDA on behalf of Petersen and Premium must include a determination that defendants have the controls, methods and processes to ensure they meet certain cGMP requirements, including:

  • Establishing and following written procedures setting out the duties of quality control operations.

  • Establishing product specifications for the identity, purity, strength and composition of the finished batch of dietary supplements and for limits on contamination.

  • Establishing component specifications.

  • Preparing and following written master manufacturing records.

(Sidebar: I’ve written for years ad nauseum about the requirements above, including in this article about the top cGMP violations in FY23. These violations can be avoided or remedied, considering cGMP resources are widely available. For instance, the Council for Responsible Nutrition is hosting a two-part virtual training on Jan. 23-24, “What to Do When the FDA Comes Knocking”).

‘Very modest’ requirements

Former FDA official Bob Durkin is a partner with the law firm Arnall Golden Gregory. He didn’t find it all that surprising that Evig got written authorization to resume business so soon after the consent decree was entered.

He suggested an executive at Balance of Nature, or its lawyer, would have received a heads-up from DOJ about the pending complaint before the government moved for an injunction in court.

“And from that day forward, you’re kind of negotiating the consent decree,” he explained in a phone interview.

Durkin reviewed the Evig consent decree and didn’t believe it was onerous in terms of the requirements needed to be satisfied before Balance of Nature could resume operations.

“This was a very, very modest ‘unless and until’ paragraph,” he concluded.

He pointed out the consent decree didn’t require an expert to review all facets of the firm’s manufacturing operations and determine whether it complied with every section of the cGMPs incorporated in 21 CFR Part 111.

“This was somebody coming in and looking at a very small part of 111: consumer complaints” and the firm’s representations on things like labels, which the company probably started addressing before the consent decree was signed, Durkin said.

I was unsuccessful in my efforts to obtain FDA’s letter from Balance of Nature’s counsel. However, CBS News obtained a copy of the letter from Daryl Farnsworth of Balance of Nature and linked to it in a Dec. 1 article.

“We wish to remind you that the terms of the injunction under which your firm is operating require that you maintain compliance with the decree, the Act and implementing regulations,” the FDA letter addressed to Howard concluded. “Our approval to resume operations should not be construed as approval for any conditions that may be found in the future. Should it be determined during any future inspection or other activities that you have failed to maintain compliance, we will take the steps necessary and appropriate to ensure compliance.”

Tight lips

Curiously, FDA wouldn’t confirm that Balance of Nature had received authorization to resume operations under the terms of the consent decree. And DOJ didn’t respond to my inquiry.

“As a general matter, FDA does not discuss ongoing matters pertaining to specific firms,” the Office of Regulatory Affairs told me via email. “The terms of the Evig consent decree are publicly available. Any questions about implementation of that consent decree should be directed to the firm.”

It’s Ullman’s opinion that such a response is fundamentally unfair to the company.

“One part of the federal government [DOJ] announces to the world this is a bad company. We have shut them down,” he reflected in a phone interview. “Another part of the federal government [FDA] says they’ve fixed their problems. We’ll send them a private letter that they can get back in business, but we’re not going to tell the world that we have done this.”

I’m siding with Ullman. This policy seems unfair and frankly ridiculous — unless there is some regulation or law that prohibits FDA from answering my basic question.

FDA’s “hands might have been tied” if the FDA letter to Evig wasn’t a document that could be shared with the public, according to Durkin.

“But on its face, it seems very odd,” the lawyer acknowledged regarding FDA declining to confirm whether Evig had been granted the green light to resume operations. “It should be an easy question to answer and … in the interest of the public health to answer it.”

To wrap up this column, the next time the Justice Department announces a permanent injunction against a manufacturer of dietary supplement products, don’t assume that’s “all she wrote.”

There may be more to the story; but the government isn't the go-to source to share it.

About the Author(s)

Josh Long

Associate editorial director, Natural Products Insider, Informa Markets Health and Nutrition

Josh Long directs the online news, feature and op-ed coverage at Natural Products Insider, which targets the health and wellness industry. He has been reporting on developments in the dietary supplement industry for over a decade, with a focus on regulatory issues, including at the Food and Drug Administration.

He has moderated and/or presented at industry trade shows, including SupplySide East, SupplySide West, Natural Products Expo West, NBJ Summit and the annual Dietary Supplement Regulatory Summit.

Connect with Josh on LinkedIn and ping him with story ideas at [email protected]

Education and previous experience

Josh majored in journalism and graduated from Arizona State University the same year "Jake the Snake" Plummer led the Sun Devils to the Rose Bowl against the Ohio State Buckeyes. He also holds a J.D. from the University of Wyoming College of Law, was admitted in 2008 to practice law in the state of Colorado and spent a year clerking for a state district court judge.

Over more than a quarter century, he’s written on various topics for newspapers and business-to-business publications – from the Yavapai in Arizona and a controversial plan for a nuclear-waste incinerator in Idaho to nuanced issues, including FDA enforcement of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

Since the late 1990s, his articles have been published in a variety of media, including but not limited to, the Cape Cod Times (in Massachusetts), Sedona Red Rock News (in Arizona), Denver Post (in Colorado), Casper Star-Tribune (in Wyoming), now-defunct Jackson Hole Guide (in Wyoming), Colorado Lawyer (published by the Colorado Bar Association) and Nutrition Business Journal.

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