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In re Search of Specialty Fulfillment Center

United States District Court, D. Idaho

February 8, 2018

In the Matter of the Search of Specialty Fulfillment Center dba AC Fillers 3 17th Ave. S., Nampa, ID

          MEMORANDUM DECISION AND ORDER

          Honorable Candy W. Dale United States Magistrate Judge.

         INTRODUCTION

         Nordic Clinical, Inc. filed a motion under Fed. R. Crim. P. 41(g) for return of property seized by the Government at the premises of Specialty Fulfillment Center, located at 3 17th Avenue South, Nampa, Idaho, on September 26, 2017, pursuant to a search warrant. Nordic contends some of the property seized was not within the scope of the search warrant, and is not contraband. Nordic alleges it will incur irreparable business losses if the property is not returned for distribution to its customers.

         The Court conducted a hearing on the motion on December 11, 2017, at which the parties appeared and provided oral argument. During the hearing, the Court requested supplementation of the record, and the parties filed their respective declarations and responses pursuant to the Court's order. The matter is now ripe for consideration. After carefully reviewing the parties' submissions and the record before the Court, [1] the Court will deny the motion as explained below.

         FACTS

         The Government applied for a search warrant on September 25, 2017, in connection with an ongoing criminal investigation being conducted for violations of 18 U.S.C. § 371-conspiracy to commit offense or defraud the United States; 21 U.S.C. § 331(a), (c), and (d)-introduction or delivery for introduction into interstate commerce of any adulterated or misbranded drug or device; and other violations of the Food, Drug and Cosmetics Act. The search warrant was executed at the premises of Specialty Fulfillment Center where several items containing products and packaging materials were seized.

         On or about October 4, 2016, affiant EF, [2] a special agent with the United States FDA's Office of Criminal Investigation, began an investigation of the Specialty Fulfillment Center in Nampa. EF received information from a medical professional that Specialty Fulfillment was distributing products to customers that included injectable botulinum toxin and dermal fillers, as well as dietary supplements labeled as intended to mitigate or relieve the symptoms of arthritis and bone and joint pain, to block collagen breakdown in cartilage and connective tissues, and suppress inflammation that underlines pain. EF testified the pain products were unapproved new drugs under the FDCA, because of their labeling. Additionally, EF discovered topical creams were being marketed as products intended to relieve arthritis and joint pain, with a “unique transdermal delivery” via a “cetylated fatty acid complex, ” which made the product an unapproved new drug under the FDCA.

         EF provided detailed information about the pain relief products Specialty Fulfillment Center was shipping from its Nampa, Idaho warehouse on behalf of Nordic. EF indicated that, on September 8, 2017, he was made aware of an FDA investigation concerning the sale and distribution of Nordic's products, labeled as dietary supplements and/or topical creams. Two such products were identified by name as Neurocet and ActaFLEX4. EF mentioned a third product, BloodBoost, was being distributed on behalf of Nordic as well. On May 17, 2017, an undercover agent received a package containing BloodBoost, ActaFLEX4 cream, and Neurocet. The flyer accompanying the order listed an address for Nordic at 3 17th Avenue South, Nampa, Idaho - Specialty Fulfillment Center's address (and the same premises the Government sought to search).

         Attachment B to the application and to the search warrant indicated the property to be seized included:

         Evidence, instrumentalities and records relating to violations of 21 U.S.C. § 331 and 18 U.S.C. § 371; involving the Specialty Fulfillment Center and occurring after November 1, 2016, including:

a. The following products:
1. Any adulterated and/or Misbranded medical devices labeled as "Acquafiller" and "Nordic Clinical " dermal fillers, as well as any other misbranded and/or adulterated medical devices;
2. All unapproved new drugs, including but not limited to products labeled as botulinum toxin or similar, intended for injection into humans;
b. All records and information….

(Ex. A, Dkt. No. 4-3, p. 6-10) (emphasis added).

         During the execution of the warrant, law enforcement officers seized, among other items, approximately 3500 bottles of various products labeled as “dietary supplements” and approximately 2800 packages of products labeled as “Actaflex” pain creams. Id. at p. 4-6. It is these products, the labeling for various products, and two folders labeled “Nordic” that are the subject of Nordic's motion. (Dkt. 4-1, p. 2-3.)

         The specific items Nordic identified from the Inventory of Evidence for which it demands return are:

• Item #1 - 36 Actaflex 4x pain relief cream OTC
• Item #2 - 6 bottles of Neuroblock Technology, Neurocet, 30 capsules pain relief
• Item #3 - 85 bottles of Neuroblock Technology, Neurocet, 30 capsules pain relief
• Item #4 - 62 bottles of Neuroblock Technology, Neurocet, 30 capsules pain relief
• Item #6 - Neuroblock Technology, Neurocet, 30 capsules labels
• Item #9 - Insert Labels KS Nordic VZ
• Item #10 - Inserts Labeled “Actaflex - TY”
• Item #11 - Neurocet Kitted Inserts
• Item #13 - Inserts labeled ...

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