## Facts

- The United States brought in rem libel proceedings under the Federal Food, Drug, and Cosmetic Act (FDCA) against quantities of “Nue‑Ovo,” a proprietary drug made and sold by Research Laboratories, Inc., an Oregon corporation.
- In one seizure, about 600 units of Nue‑Ovo (each unit containing three bottles) were taken into custody after a libel was filed in federal district court; related libels involving other quantities and written materials were also filed.
- The proceedings were consolidated for trial in federal court, and Research Laboratories intervened as claimant to contest condemnation.
- Nue‑Ovo was advertised to consumers for conditions such as arthritis and related ailments. The government’s challenge centered on written materials (pamphlets, circulars, letters, and similar matter) sent in connection with the product, which the government treated as “labeling” under the FDCA.
- The labeling represented, directly or by implication, that Nue‑Ovo was effective in relieving arthritis symptoms and in treating related conditions, and it included testimonials and references framed to suggest medical support.
- The government presented medical testimony, clinical testing evidence, and recognized medical authorities to show that the product’s ingredients, as formulated, had no demonstrated therapeutic value for the claimed uses and that the labeling created a false impression through selective presentation and omission of material facts.
- A jury found for the United States on misbranding, and the district court entered decrees condemning and ordering destruction of the seized goods and certain associated written materials.
- Research Laboratories moved for release of the articles under bond; the district court denied the request.
- Research Laboratories appealed, arguing that the therapeutic statements were nonactionable opinions and that differences among medical witnesses prevented a finding that the labeling was false or misleading.

## Issues

1. Whether Nue‑Ovo was misbranded under 21 U.S.C. § 352(a) because its labeling falsely or misleadingly represented that it was effective for arthritis and related conditions.
2. Whether therapeutic claims about a drug’s effectiveness can be treated as factual representations under the FDCA, rather than protected statements of opinion.
3. Whether the government may prove falsity or misleadingness of therapeutic labeling claims through medical testimony, clinical studies, and standard medical authorities.
4. Whether the district court abused its discretion by refusing to release the seized articles under bond after the misbranding verdict and condemnation decrees.

## Decision

- The Ninth Circuit affirmed the judgments and decrees of condemnation and destruction.
- The court held that the labeling’s therapeutic representations could be found false or misleading under 21 U.S.C. § 352(a) where the proof showed the product lacked therapeutic value for the claimed conditions.
- The court rejected the argument that the claims were insulated as mere opinion; assertions of therapeutic value may be treated as representations capable of being proved true or false in light of competent medical evidence.
- The court accepted that labeling may mislead not only by affirmative misstatements but also by omission of material facts and by the use of statements that are technically accurate yet deceptive in context (including the use of testimonials and selective references).
- The court held that denial of release under bond was within the district court’s discretion given the verdict and the condemnation judgment.

## Legal Principles

- Under 21 U.S.C. § 352(a), a drug is misbranded if its labeling is false or misleading in any particular.
- Labeling can be misleading by omission of material facts and by half‑truths, even when some statements are literally true.
- Statements that a drug is effective for a disease or condition may be treated as factual claims subject to proof under the FDCA, not shielded as opinion simply because some disagreement exists.
- The United States may rely on competent medical testimony, clinical testing evidence, and recognized medical authorities to show a lack of therapeutic value and thereby establish that efficacy claims are false or misleading.
- After a misbranding verdict and condemnation, release of seized articles under bond is discretionary; denial will be upheld absent abuse of discretion.

## Conclusion

Research Laboratories, Inc. v. United States affirmed condemnation of seized Nue‑Ovo under the FDCA because associated labeling misleadingly claimed arthritis relief despite competent medical proof of no therapeutic value, and the Ninth Circuit also upheld the trial court’s discretionary refusal to release the goods under bond.


Research Laboratories, Inc. v. United States, 167 F.2d 410 (1948)