## Facts

- Universal Management Services, Inc. (UMS) and related entities, managed by Paul M. Monea and Paul A. Monea, marketed and sold the “Stimulator” and an accessory, the “Xtender.”
- The Stimulator was an electric igniter modified with finger grips and sold as a pain-relief device; users pressed a plunger to deliver an electric current to the body.
- Promotional materials claimed the Stimulator relieved various conditions when applied to acupressure points; the Xtender enabled use on hard-to-reach areas such as the spine.
- UMS acquired the underlying igniters for about $1 per unit and sold the product for about $88.30, distributing roughly 800,000 units.
- The government treated the Stimulator and Xtender as “medical devices” under the Federal Food, Drug, and Cosmetic Act (FDCA) based on intended therapeutic use; the devices lacked required FDA authorization.
- In May 1995, the FDA seized inventory valued at more than $1.2 million and warned that continued distribution without FDA authorization could prompt further enforcement.
- UMS continued distributing the devices after the seizure and warning.
- The United States filed a civil FDCA enforcement action seeking injunctive and equitable relief; the district court granted summary judgment, issued a permanent injunction barring further sales without FDA authorization, and ordered restitution requiring refund offers to purchasers who bought after the May 1995 seizure.

## Issues

1. Whether a federal court hearing an FDCA enforcement action seeking an injunction has authority to order restitution as equitable relief even though the FDCA does not expressly mention restitution.
2. Whether the district court abused its discretion by ordering restitution requiring full refund offers to consumers who purchased the devices after the May 1995 seizure and warning.

## Decision

- The Sixth Circuit affirmed the district court’s judgment.
- The court held that, in FDCA injunction actions, courts retain traditional equitable powers that include restitution absent a clear statutory limitation.
- The court held the restitution order was within the district court’s discretion, emphasizing continued unlawful distribution after notice and the tailored post-seizure scope.
- The court upheld the permanent injunction prohibiting manufacture and sale of the devices without FDA authorization.

## Legal Principles

- When Congress authorizes the government to seek injunctive relief to restrain statutory violations, it generally invokes the full equitable powers of the federal courts unless the statute clearly restricts those powers.
- Ancillary equitable remedies, including restitution, may be ordered to effectuate a statute’s remedial purposes, prevent unjust enrichment, and protect the public.
- FDCA’s injunction provision (21 U.S.C. § 332) does not, by silence alone, limit courts to forward-looking injunctive relief; equitable monetary relief may be appropriate to remove the financial benefits of unlawful distribution.
- A restitution remedy may be considered properly tailored where it is limited to sales made after clear regulatory notice of illegality.

## Conclusion

The Sixth Circuit held that federal courts enforcing the FDCA through injunction actions may order restitution as ancillary equitable relief and affirmed a refund remedy limited to post-seizure purchasers where defendants continued distributing unapproved medical devices after explicit warning.


United States v. Universal Mgmt. Servs., Inc., 191 F.3d 750 (6th Cir. 1999)