## Facts

- Lane Labs-USA Inc., led by its president and sole shareholder Andrew J. Lane, manufactured and sold health products directly and through distributors.
- The United States alleged Lane Labs marketed three products—BeneFin (shark cartilage supplement), SkinAnswer (skin cream), and MGN-3 (dietary fiber supplement)—as treatments for serious diseases such as cancer and HIV.
- FDA officials observed promotional materials in 1997 promoting BeneFin as a cancer treatment and warned Lane Labs that such marketing violated the Federal Food, Drug, and Cosmetic Act (FDCA).
- FDA inspections found Lane Labs used Dr. I. William Lane (Andrew Lane’s father and a paid consultant) to promote BeneFin and SkinAnswer as cancer treatments and relied on his reputation and endorsements in advertising and packaging.
- The FTC pursued deceptive-practices enforcement that resulted in a consent decree and a monetary judgment.
- Separately, the United States (through DOJ) sued under the FDCA seeking a permanent injunction and restitution to consumers based on the sale of unapproved and misbranded drugs.

## Issues

1. Whether the FDCA’s authorization to seek an injunction “to restrain violations” (21 U.S.C. § 332(a)) permits a federal court to order consumer restitution as an equitable remedy.
2. Whether the FDCA’s remedial scheme, or other Supreme Court precedent limiting monetary relief under particular statutes, implies restitution is unavailable in FDCA enforcement actions.

## Decision

- The Third Circuit affirmed the district court.
- The court held that § 332(a)’s grant of equitable jurisdiction to “restrain violations” includes traditional equitable remedies, including restitution, absent a clear statutory restriction.
- The court upheld the restitution order as properly tied to the unlawful sales, returning consumers’ money paid for misbranded or unapproved products rather than imposing punitive relief.

## Legal Principles

- When Congress grants equitable jurisdiction and does not clearly limit remedies, courts may employ the full range of traditional equitable powers, including restitution, unless restricted “in so many words” or by “necessary and inescapable inference.”
- The FDCA’s injunction provision, 21 U.S.C. § 332(a), is a broad authorization that can support equitable monetary relief ancillary to injunctive enforcement.
- Restitution is appropriate where it is closely connected to the statutory violations and functions to restore the status quo by returning funds obtained through unlawful conduct.
- Limits on equitable monetary relief found in other statutes do not control when the FDCA lacks an “elaborate” remedial scheme indicating congressional intent to exclude restitution.

## Conclusion

The Third Circuit held that the FDCA’s authorization for courts to “restrain violations” permits equitable restitution to consumers in government enforcement actions, and it affirmed an order requiring Lane Labs and its principal to return money paid for products unlawfully marketed as disease treatments.


United States v. Lane Labs-USA Inc., 427 F.3d 219 (3d Cir. 2005)