Category: Drug & Cosmetic Law

Federal Criminal Drug Counterfeiting Defense

Introduction: What is Drug Counterfeiting?

Selling fake drugs may subject you to criminal liability under 21 U.S.C. § 331. Section 331 makes it illegal to sell a misbranded or adulterated drug in interstate commerce. The sale of counterfeit drugs must involve interstate commerce. If you sell a counterfeit drug and it crosses state lines, you will have violated this section. For instance, if you buy aspirin in New York and sell it as codeine in New Jersey, then you may be convicted under the federal counterfeit drug statute. In addition, 18 U.S. Code § 2320 – trafficking in counterfeit goods or services – may also apply. This section makes it a federal crime to traffic goods or services and then knowingly use a counterfeit mark in connection with the good or service. An example of a federal crime includes an individual creating a counterfeit drug that replicates a genuine drug, or selling fake drugs. Conduct under this statute includes possessing, manufacturing and then promoting and selling the counterfeit drug to the public.

You may also face liability for criminal fraud under 18 U.S.C. 1001. This section makes it illegal to knowingly and willfully falsify or cover up a material fact; make a materially false or fraudulent statement, or make or use false writing or document knowing that it is false. An example of criminal fraud includes telling a buyer that the product is a powerful painkiller when in fact it is a combination of baby aspirin and vitamins, and you know this. The above sections also apply to black market transactions. For instance, if you tell someone they are buying heroin when you know it is a combination of flour and caffeine, you just knowingly made a materially false statement. This article explains drug counterfeiting, definition, penalties, and tips for choosing a law firm.

Penalties for Drug Counterfeiting

Selling counterfeit drugs or fake drugs can lead to significant penalties. Under 21 U.S.C. §§ 331 and 333, if you are convicted of selling counterfeit drugs across interstate commerce and you had no intent to mislead, you face a fine of up to $1,000 and a sentence of one year or less imprisonment, or both. On the other hand, if you are convicted of selling counterfeit drugs across interstate commerce and you had the intent to mislead, you face a fine of up to $10,000 and up to three years imprisonment, or both. Each sale you conduct is a separate offense—meaning that if you intentionally sell a counterfeit drug to 20 people, you face charges for 20 separate accounts. This amounts to 60 years imprisonment and a $200,000 penalty.

Also, if charged with criminal fraud under 18 U.S.C. § 1001 and convicted, you could face up to five years imprisonment and/or fines of not more than two times the gross gain or loss from the counterfeit drug sale. In addition to penalties and jail time, these charges may lead to loss of your medical license or driver’s license, termination from your employment, difficulties finding another job, loss of your immigration visa, difficulty securing a home to buy or rent, and a permanent criminal record for being a drug offender. Because of this possibility, it is important to retain a federal criminal defense attorney experienced in federal counterfeiting defense. This will give you the best defense and chance of a successful outcome.

“Several years ago, the DOJ announced efforts to expand the scope and extent of its federal investigations into suspected criminal activity as well as to increase both the charges brought and the penalties for violating federal law. Further, many counterfeiting charges require intent to defraud. Without this intent element, you cannot be found guilty. Only an experienced team can tackle this challenge and provide you with a strong defense.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

Four Steps to Take When Choosing Criminal Defense Lawyers

1. Make sure the law firm is focused on federal criminal law. You must be wise when choosing a criminal defense attorney because it can mean all the difference. Now is not the time to go with a junior attorney or the attorney who offers lower costs. Do not choose an attorney who claims to have a good understanding of counterfeiting defenses but who does not have a successful track record. Grand jury subpoenas and investigations are serious matters. Serious matters demand the services of a serious defense team—a defense team with a proven track record in successfully defending clients against federal counterfeiting charges.

2. Pick a law firm with an intricate knowledge of federal counterfeiting. You would not choose a doctor who does not fully understand your medical condition. You would choose the best medical professional for a serious medical condition. Do the same with your criminal defense attorney. A good attorney can find loopholes and exceptions in the law and argue them in your favor. A good attorney will go the extra mile for you. Your attorney should be able to answer questions such as their knowledge of federal counterfeiting, defenses available, their track record of success, federal trial court experience, and experience in federal criminal law.

3. Ask about your attorney´s success rate. An attorney is only as good as the results they obtain. It is important to have an honest attorney-client relationship so make sure to get an honest answer when asking your attorney about their success rates in cases similar to yours. A good attorney is often able to keep federal criminal matters out of the news by ending the federal investigation early on. A successful track record includes obtaining the following results for clients:

  • Quashing federal subpoenas;
  • Getting clients acquitted at trial;
  • Dismissing the entire indictment;
  • Avoiding criminal charges and penalties altogether; and
  • Getting sentences of probation over charges that often call for several years’ imprisonment.

4. Pick a law firm that is dedicated and committed to your case. A good law firm demonstrates dedication and open communication to its clients. Your attorney should be committed to fighting for you. It is often easy to tell whether your attorney truly wants to help you or whether they just want to make money from handling your case. Assess the sincerity of your attorney. Similarly, you must be able to freely talk to your attorney. Without open and continuous communication channels, many clients become anxious about the next stages in the investigation.

Conclusion

Drug counterfeiting charges are not to be taken lightly. Charges of criminal drug counterfeiting crimes can be devastating to an individual’s career. Not only can such charges lead to criminal penalties and jail time, but they could also result in the permanent loss of your ability to practice medicine, thereby destroying your reputation. It is therefore critical to retain an attorney that is experienced in federal counterfeiting crimes legislation, delivering strong defenses, and vigorously defending their clients against criminal charges and prosecutions.

Oberheiden P.C. © 2022
For more about crime, visit the NLR Criminal Law/Business Crimes type of law page.

New Tools in the Fight Against Counterfeit Pharmaceuticals

The explosive growth of internet pharmacies and direct-to-consumer shipment of pharmaceuticals has provided increased access to, and reduced the cost of, important medications. Unfortunately, these same forces have increased the risks that counterfeit medicines will make their way to consumers, endangering patient safety and affecting manufacturers’ reputation in the public eye.

While the Food and Drug Administration attempts to police such misconduct through enforcement of the Food, Drug, and Cosmetics Act (FDCA), the resources devoted to enforcement are simply no match for the size and scope of the counterfeiting threat. Fortunately, pharmaceutical manufacturers are not without recourse, as several well-established tools may be used in the right circumstances to stop counterfeiters from profiting from the sale of knock-offs.

Experienced litigators can use the Lanham Act and the Racketeer Influenced Corrupt Organizations (RICO) Act to stop unscrupulous individuals and organizations from deceiving customers with counterfeit versions of trademarked drugs. Until recently, these legal weapons – including search warrants, seizures, forfeitures, and significant penalties – were typically wielded only by the government and only in criminal prosecutions.

As one recent case demonstrates, however, many of the tools that law enforcement has used for years to combat counterfeiters are also available to pharmaceutical manufacturers. In Gilead Sciences, Inc. v. Safe Chain Solutions, LLC, et al., the manufacturer of several trademarked HIV medications filed a civil complaint, under seal, alleging violations of the Lanham Act and RICO against scores of individuals and companies that were allegedly selling counterfeit versions of these drugs to patients across the country.

By deploying private investigators and techniques typically used by law enforcement, Gilead was able to gather a substantial amount of evidence before even filing the case. The company then used this evidence to secure ex parte seizure warrants and asset freezes, allowing it to locate and seize thousands of counterfeit pills and packaging before they could be shipped to unsuspecting consumers. Through the seizure of the financial proceeds of the alleged counterfeiting, Gilead prevented the dissipation of assets. If the company can successfully prove its RICO case, it stands to recover treble damages and attorneys’ fees as well.

Manufacturers of trademarked pharmaceuticals may consider using these and other tools to tackle the threat posed by counterfeiters. By drawing upon the experience and skills of trained litigators – particularly counsel who previously deployed these tools on behalf of the government while serving as federal prosecutors – companies can proactively protect their intellectual property and the consumers who depend on their products.

Article By Eric J. Beste, Anthony J. Burba and Heather F. Delgado of Barnes & Thornburg LLP

For more health law legal news, click here to visit the National Law Review.

© 2022 BARNES & THORNBURG LLP

Phantom Participants with Real-World Ramifications: Clinical Drug Trial Data Falsification

As if medical-related disinformation was not pernicious enough, unscrupulous actors seek to enrich themselves from falsifying clinical drug trial data. A Florida-based clinical research firm project manager was sentenced to 30 months in prison because of his involvement in a conspiracy to falsify clinical drug trial data. Previously, the primary investigator, clinic owner, and another senior employee at Miami-based Tellus Clinical Research were charged with various counts of mail and wire fraud, money laundering, as well as making false statements to Food and Drug Administration (FDA) inspectors. A researcher or other employee of the medical clinic could have reported this conspiracy to the government and shared in 15-25% of the government’s recovery.

Pharmaceutical companies sponsor clinical research trials to gather data on the safety and efficacy of the drugs they manufacture. Prior to commencing research trials, pharmaceutical companies or “sponsors” must submit to the FDA their “study protocol,” which identifies who can participate, drug dosages and timing, and how the study’s performance will be measured. Sponsors engage contract research organizations (CROs) to perform the clinical trials, and the CRO must ensure compliance with the study protocol and FDA regulations. In this case, a clinical research firm contracted with pharmaceutical manufacturers to conduct trials related to an opioid dependency treatment, an irritable bowel syndrome drug, and diabetic nephropathy or kidney disease medication. The sponsors would reimburse the CRO a set amount per study participant and for some fees and Tellus would pay participants in accordance with the study protocol.

How the research firm gamed the system involved the eligibility requirements for the studies: each of these clinical trials required patients to meet certain requirements for participation. Instead of honestly recruiting patients with the diagnoses needed to participate in the program, the defendants enrolled people without applicable diagnoses and falsely claimed that study participants completed all the requirements in the study protocol, to garner more payments from the clinical trial sponsors. Several of the defendants enrolled friends and family members to bump up the research firm’s participation numbers, and other research firm employees went so far as to misappropriate personal information from third parties without their knowledge or consent. The co-conspirators also falsified clinical notes and medical records of these unwitting participants, claiming to have performed medical exams, drawn blood for testing, and made payments to participants. This elaborate conspiracy served to wrongfully enrich the research firm owner and senior management at the expense of pharmaceutical companies and ultimately patients.

Clinical research fraud is harmful to consumers. As the Assistant Commissioner for the FDA Office of Criminal Investigations (OCI) stated, “Compromised clinical trial data could impact the agency’s decisions about the safety and effectiveness of the drug under review.” Consumers could end up with unsafe medications due to fraudsters’ schemes.

A whistleblower could have reported this fraud to the FDA and ensured only drugs which perform well in clinical trials on real human beings make it to market. The Department of Justice needs whistleblowers to report fraud involving clinical drug trials.

© 2022 by Tycko & Zavareei LLP
For more content about the FDA and drug trials, visit the NLR Biotech, Food & Drug section.

In Historic Vote, Alabama House of Representatives Passes Medical Cannabis Bill

In February a bill to legalize, regulate, and tax non-smokable medicinal cannabis passed through the Alabama Senate on a 21-10 vote. Progress on the bill slowed after moving to the House. The medical cannabis bill passed both House committees it was assigned to in April.

On Tuesday the medical cannabis bill was set to receive a final vote on the floor of the House. Earlier that day, the bill easily cleared two House procedural votes by a vote of 69-31 and 71-20, to allow the bill to be brought to the House floor for a final vote. However, a handful of House lawmakers filibustered the final vote through speaking objections on the House floor. On Thursday morning the medical cannabis bill was again back on the House floor for another day of debate. The morning session started off with gusto, as both supporters and detractors appeared ready to fight with amendments, counter-amendments, and impassioned floor speeches filling the morning. Around 12:30 p.m. the House finally took a final vote on the medical cannabis bill, and it passed by a vote of 68-34. The medical cannabis bill will now head back to the Senate for concurrence or conference committee.

This is a historic day in Alabama politics, as this is by far the closest Alabama has come to passing a medical cannabis bill. Similar bills had previously passed through the Alabama Senate three times, in three separate sessions. This is the first time, however, a medical cannabis bill has come up for a full vote on the House floor – much less passed the House.

We will continue to monitor this bill as the Senate again takes it up for either concurrence or further consideration. That could happen as early as today, or it could be later this month.

© 2021 Bradley Arant Boult Cummings LLP

This article was written by Whitt Steineker of Bradley law firm.

For more information about cannabis legislature, please visit the NLR Food & Drug section. 

A Warning to One, A Warning to All?

As part of their ongoing effort to combat misinformation about COVID-19, federal agencies have issued warning letters to more than 150 companies. While companies know that a warning letter is serious and requires immediate attention, perhaps the greater challenge is what often follows: the so-called “piggyback” class action lawsuit.[1] And recently, plaintiffs’ attorneys have gone one step further: they have been filing “piggyback” class actions not against the company that received the warning letter but against competitors that make similar products.

Because warning letters are publicly available and posted prominently on various agency websites, consumers can view the warning letter and then file a “piggyback” class action against the recipient of the warning letter. Indeed, oftentimes these “piggyback” class actions merely recast the government agency’s allegations as claims for violations of various state consumer protection statutes. For example, in November 2013, the U.S. Food and Drug Administration (FDA) sent a genetic testing company a warning letter ordering it to stop selling and marketing one of its genome tests because the company had failed to show that the test actually worked. Five days later, the company was hit with a proposed class action for allegedly violating several California consumer protection laws.[2] Dozens of other companies – from hotel chains to cereal manufacturers – have also been hit with piggyback class actions based on warning letters.

But things have changed recently. Consumers have targeted companies that never received a warning letter. These proposed class actions are based largely – sometimes entirely – on the allegations in a warning letter directed to another company. In these cases, the plaintiffs’ theory is that, because the products are similar, the substance of the warning letter “applies equally” to the similar products.

This trend has continued in the COVID-19 era. On January 17, 2020, a week before the first reported case of COVID-19 in the United States, the FDA sent a leading hand sanitizer manufacturer a warning letter telling the company to stop advertising its product as one that can prevent an array of diseases, including Ebola, MRSA, and the flu. The FDA explicitly challenged the product’s claim that it “kills 99.99% of most common germs” because the claim allegedly lacked adequate scientific support. On the heels of FDA’s warning letter, at least six class actions were filed against the manufacturer.[3] Although the claims differ slightly, all of the lawsuits are premised on the same basic theory articulated in the FDA warning letter—which all of the complaints cite.

Then came the copycat piggyback lawsuits. The manufacturer of a competing hand sanitizer was sued in February and March 2020.[4] In one of the complaints, the plaintiff alleged that because both products have the same active ingredient, the FDA’s allegations about labeling apply to both products. Separately, a plaintiff sued a large retailer in a class action making similar claims about its generic hand sanitizer.[5] In that case, the plaintiff argued that the retailer’s labeling was also misleading because it had the same active ingredient as the brand name and implied that its product was as effective as the brand name.

So what should companies do? Here are proactive steps to protect against these lawsuits.

Review labels and advertisements. To protect against “piggyback” class actions, companies should ensure that they have reliable scientific evidence to support their products’ stated claims and alleged benefits, particularly if a competing product that makes similar claims has received a warning letter. Additionally, if a company compares its product to competing products, companies should check to see whether those competing products have ever been the subject of a warning letter.

Monitor guidance from relevant governmental agencies. Companies should also actively monitor guidance from relevant federal or state agencies. During the COVID-19 pandemic, agencies have issued and amended guidance more often than they typically do. For example, in March 2020 the FDA issued guidance temporarily relaxing regulatory requirements for production of certain hand sanitizer products. The FDA then revised that guidance on March 28, and again on April 15, 2020. Companies should stay abreast of the most recent guidance to ensure that they are complying with laws and regulations.

Monitor warning letters and enforcement actions against competitors. Of course, a company that receives a warning letter should seek legal advice to determine how to respond. But even if a company does not itself receive a warning letter, companies might learn about federal agencies’ warning letters and enforcement actions against other companies, particularly competitors or companies that make similar products. Where the products are similar, enterprising plaintiffs’ attorneys could repurpose a warning or enforcement action against one company’s product into the basis for a class action against its competitors. If a competitor has received a warning letter or been the target of an agency enforcement action, legal counsel may help assess their situation compared to the company’s.

Conclusion

It is a challenging time for companies in so many ways. These lawsuits might be the beginning of a trend of class actions filed both against companies whose products appear on the radar of governmental agencies during the COVID-19 pandemic and against companies that make similar products. The plaintiffs’ bar is closely monitoring agency warning letters. Companies should take that into consideration.

[1] John E. Villafranco and Daniel S. Blynn, The Case of the Piggyback Class Action, Nutritional Outlook (Sept. 2012) (defining a piggyback lawsuit as “a class action lawsuit filed by a private litigant against an advertiser or manufacturer after a federal agency…has already taken regulatory action against the same company on behalf of the public.”)

[2] Aeron v. 23andMe, Inc., No. 13-cv-02847 (S.D. Cal. filed Nov. 27, 2013); see also Dan Munro, Class Action Filed Against 23andMe, Forbes (Dec. 2, 2013, 11:04 PM), https://www.forbes.com/sites/danmunro/2013/12/02/class-action-law-suit-f….

[3] DiBartolo v. GOJO Industries, Inc., No. 20-cv-01530 (E.D.N.Y. filed Mar. 24, 2020); Miller v. GOJO Industries, Inc., No. 20-cv-00562 (N.D. Ohio filed Mar. 13, 2020); Jurkiewicz v. Gojo Industries, Inc., No. 20-cv-00279 (N.D. Ohio filed Feb. 9, 2020); Gonzalez v.Gojo Industries, Inc., No. 20-cv-00888 (S.D.N.Y. filed Feb. 1, 2020); Aleisa v. Gojo Industries, Inc., No. 20-cv-01045 (C.D. Cal. filed Jan. 31, 2020); Marinovich v. Gojo Industries, Inc., No. 20-cv-00747 (N.D. Cal. filed Jan. 31, 2020).

[4] David v. Vi-Jon, Inc., No. 20-cv-00424 (S.D. Cal. filed Mar. 5, 2020); Sibley v. Vi-Jon, Inc., No. 20-cv-00951 (N.D. Cal. filed Feb. 7, 2020).

[5] Taslakian v. Target Corp., No. 2:20-cv-02667 (C.D. Cal. filed Mar. 20, 2020)

© 2020 Schiff Hardin LLP

For more on product’s COVID-19 claims, see the National Law Review Coronavirus News section.

New York Compounding Pharmacy Settles Fraudulent Billing and Kickback Allegations in Whistleblower Lawsuit

Upstate New York pharmaceutical companies FPR Specialty Pharmacy (now defunct) and Mead Square Pharmacy, along with their owners, agreed to pay $426,000 to settle fraudulent claims and kickback allegations brought forth by a whistleblower. According to the U.S. government, the pharmacies submitted fraudulent claims for reimbursement to federal healthcare programs for compounded prescription drugs in violation of the False Claims Act and the Anti-Kickback Statute. The pharmacies allegedly sold prescription drugs to federal healthcare program beneficiaries in states without a license, improperly induced patients to purchase expensive custom compounded medications by waiving all or part of the substantial co-payments required under the federal healthcare programs, and paid sales representatives per-prescription commissions to illegally induce writing more prescriptions.

“The rules governing federal healthcare programs require pharmacies dispensing prescriptions to their members to be licensed with the appropriate state authorities to request reimbursement for the cost of the medications.  The pharmacies violated the False Claims Act by dispensing and requesting reimbursement for hundreds of prescriptions of “Focused Pain Relief” cream dispensed to federal healthcare program beneficiaries located in states where the pharmacies were not licensed to operate by the appropriate state authorities, and by failing to disclose that they were not licensed.  The Pharmacies also violated the False Claims Act by billing federal healthcare programs for prescriptions dispensed in states where they had obtained their state licenses under false pretenses, including by failing to inform state authorities that they had previously dispensed drugs in the states without a license and by failing to disclose” one of the pharmacy owners’ “criminal history on pharmacy license applications.”

Additionally, the pharmacies violated the Anti-Kickback Statute by engaging in two separate illegal practices, according to the government.  First, the pharmacies regularly charged federal healthcare program beneficiaries co-payments substantially below program requirements (which often exceeded $100) to induce them to purchase its pain cream, “Focused Pain Relief,” for which the federal healthcare programs paid hundreds and sometimes thousands of dollars each.  Second, the Pharmacies often paid illegal kickbacks to their sales representatives by giving sales commissions for the number of prescriptions written by the physicians the sales reps marketed.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Pharmacies, like other participants in the healthcare industry, must follow the rules.  The defendants here brazenly flouted basic rules on licensing and kickbacks to line their pockets with dollars from federal healthcare programs.  That is a prescription for intervention by my office and our partners.”

Similar to this case, there have been many instances in which whistleblowers exposed company fraud against the Medicare system.

© 2020 by Tycko & Zavareei LLP

For more on pharmaceutical fraud, see the National Law Review Biotech, Food & Drug law section.

New York City Ban on Pre-Employment Drug Testing Takes Effect May 10, 2020

Starting May 10, 2020, New York City employers may not require prospective employees to submit to testing for the presence of marijuana or tetrahydrocannabinols (or THC, the main psychoactive component of marijuana) in an individual’s system as a condition of employment. Currently, neither New York state nor New York City have any general ban on drug testing during employment.

The long-awaited ban, which was passed in April 2019 and is included as an amendment to the New York City Human Rights Law, outlines several exceptions based on the employer’s industry and the prospective position. These include, for example, police or peace officers, positions requiring a commercial driver’s license or those governed by Department of Transportation regulations, positions subject to testing under federal or state regulations or grant conditions, and positions requiring the supervision or care of children, medical patients or vulnerable persons. The new law also exempts positions that will be subject to a collective bargaining agreement that already addresses pre-employment drug testing for those prospective employees. The amendment also includes an exception for positions with the potential to impact the health or safety of employees or the public as identified by the New York City Commission.

In March 2020, the New York City Human Rights Commission issued proposed rules, which include proposed categories for safety sensitive roles, including positions that require regularly working on an active construction site, or power or gas utility lines, positions regularly operating heavy machinery, positions in which an employee operates a motor vehicle on an approximately daily basis, or positions in which impairment would pose an immediate risk of death or serious physical harm to the employee or others. The public comment period for the proposed rules has passed, but the expected finalizations of these rules has been delayed as a result of the COVID-19 pandemic.

The amendment bans only pre-employment testing for marijuana; it does not address testing for any other substance or mid-employment marijuana testing. However, all New York state employers should be mindful of the potential application of the New York medical marijuana law and applicable employment-related protections, including its relation to disability protections and accommodations under antidiscrimination laws.

Failure to adhere to the new ban on pre-employment screening can result in civil penalties up to $250,000 as well as consequential and punitive damages and attorneys’ fees.

Employers in New York City should review their existing drug-testing policies to confirm that they are in compliance with the new law, as well as contact their testing vendors to ensure any pre-employment tests comply with the new law.

 

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.

ARTICLE BY Nicole A. Truso of Faegre Drinker, legal clerk Kerry C. Zaroogian contributed.
For more on drug testing, see the National Law Review Labor & Employment Law section.

U.S. District Court Issues Temporary Restraining Order for Silver Products Fraudulently Promoted as a Treatment for COVID-19

On April 29, 2020, the U.S. District Court for the District of Utah issued a temporary restraining order (TRO) to halt the sale of a fraudulent coronavirus (COVID-19) treatment.  The U.S. Department of Justice (DOJ) announced the court’s decision in an effort to halt the sale of silver products fraudulently claimed to prevent and cure COVID-19.

DOJ filed a civil complaint on April 27, 2020, against defendants Gordon Pedersen of Cedar Hills, Utah and his companies, My Doctor Suggests LLC and GP Silver LLC.  The complaint alleges that defendants began fraudulently promoting and selling various silver products in early 2020 with claims that the silver products would treat and prevent COVID-19.  Some of the alleged false and misleading claims made by defendants include that having silver particles in the bloodstream would block the virus from attaching to cells, that silver would “usher” the virus out of the body, and that silver would destroy all forms of viruses and protect against COVID-19.

The U.S. Food and Drug Administration (FDA) issued a statement on the Utah case that “FDA will continue to help ensure those who place profits above the public health during the COVID-19 pandemic are stopped” and that FDA is “fully committed to working with the Department of Justice to take appropriate action against those jeopardizing the health of Americans by offering and distributing products with unproven claims to prevent or treat COVID-19.”

The enforcement action will be prosecuted in a coordinated action by the U.S. Attorney’s Office for the District of Utah and the DOJ Civil Division Consumer Protection Branch, with the assistance of the FDA’s Office of Criminal Investigations and Office of the Chief Counsel.  In addition to the TRO, prosecutors obtained a separate court order temporarily freezing the defendants’ assets in order to preserve the court’s ability to grant effective final relief and to maintain the status quo.  A hearing on the DOJ’s request for a preliminary injunction is set for May 12, 2020.  If the case proceeds to trial, the government will need to prove its allegations to obtain a permanent injunction against the defendants.

In another case, DOJ announced on April 17, 2020, that the United States District Court for the Southern District of Florida issued a TRO to halt the sale of an unapproved and potentially dangerous industrial bleach product being marketed as a “miracle” treatment for COVID-19.  The FDA and the U.S. Federal Trade Commission (FTC) had issued a warning letter to the defendant, Genesis II Church of Health and Healing, on April 8, 2020.  According to the FDA, oral ingestion of the defendant’s product called the Miracle Mineral Solution can cause nausea, vomiting, diarrhea, and severe dehydration.  The FDA and the FTC have issued nearly 40 separate warning letters in 2020 to companies selling unapproved or misbranded products with claims to prevent or to treat COVID-19.

Commentary

Particulate elemental silver and silver salts can be effective antimicrobial agents, and numerous products containing these active ingredients are currently registered for various antimicrobial uses.  The U.S. Environmental Protection Agency, along with other federal agencies, are working to ensure that necessary reviews and approvals of legitimate products intended to address COVID 19 are as expeditious as possible.  Products that need these regulatory reviews and approval, but that are marketed without them, are and will likely continue to be a current enforcement focus.

©2020 Bergeson & Campbell, P.C.

For more in COVID-19 fraud prevention, see the National Law Review Coronavirus News section.

Mary Jane and the Remote Workplace

As shelter in place orders were rolled out in California, many businesses transitioned their workforce to remote work for the first time. Employers had to determine how to track hours worked or what qualified as a business expense. However, other unique questions arise with a remote workforce, such as how to handle employees using marijuana while working from home.

Over a decade ago, when California passed the Compassionate Use Act, an employee questioned an employer’s right to prohibit marijuana use. The California Supreme Court in Ross v. Ragingwire held the employer need not accommodate medicinal marijuana use, irrespective of the Compassionate Use Act of 1996. Ross reasoned that since the California Fair Employment and Housing Act (FEHA) does not require employers to accommodate illegal drug use, the employer could lawfully deny employment to individuals using medical marijuana, which remains illegal under federal law.

More recently, in 2016 California legalized marijuana for recreational use, which further complicated employee marijuana use at work. Despite the change in marijuana’s legal status, the law reiterated that an employer could have a policy against the use of drugs while working or at the workplace.

While the law permits employers to prohibit drug use at work, now a large portion of workers are working remotely, Unfortunately, the lines for employees may be blurred since they are in their own homes (and many people seem to need a little extra help getting through this pandemic).

Employers should remind employees that during working hours, the expectation is that employees will comply with all policies of the company, including drug and alcohol policies. If the company does not have a drug and alcohol policy, it may want to include information prohibiting the use of drugs and alcohol while performing work in a remote work agreement or work from home policy.

If a manager or supervisor suspects that an employee is using marijuana or other drugs while performing work for the company, the supervisor should be instructed to reiterate the company’s policies.

The more difficult aspect of a remote workplace is handling an employee who is clearly under the influence while working, such as appearing intoxicated at a video conference. In California, an employer can only request an employee undergo a drug test under limited circumstances, including if there is reasonable suspicion that the employee is under the influence. While there may be sufficient evidence to request a drug test, due to concerns surrounding COVID-19 including overwhelmed medical providers, an employer will need to more carefully consider whether to insist an employee submit to a drug test at this time. Similarly, as some employers are actually hiring new employees during COVID-19, they too may wish to consider whether to postpone typical post-offer, pre-hire drug tests until the current health crisis has calmed down. Of course, drug tests are still necessary for employees in safety-sensitive positions, but they typically are not working remotely.

If an employee voluntarily requests leave for drug rehabilitation, assuming the employer’s workforce is over 25 employees, the employer should grant the leave pursuant to California Labor Code Section 1025, unless the leave would result in an undue hardship. Other leaves may also apply, so employers should consult with their Jackson Lewis attorney. However, of note, all the new COVID-19 California Paid Sick Leaves are limited to either actual COVID-19 diagnosis or exposure, caring for family, or childcare issues only. As such there will be no need to grant paid sick leave to an employee who claims pandemic stress-induced drug use.

Employers should also be cautious that they are not overstepping into trying to control an employee’s lawful off-duty activities. This may include, for instance, seeing social media posts from employees using marijuana at home. Unless it’s clear from the post that the marijuana usage occurred during working hours, employers should refrain from taking any action.

Jackson Lewis P.C. © 2020

For more on remote working considerations, see the National Law Review Employment Law section.