Supreme Court won’t hear $40 million sanctions case against supplement maker


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Nov 29, 2000
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Hi-Tech Pharmaceuticals Inc. has exhausted its appeals in a long-running battle with the federal government—and it will cost the supplement company dearly.
Josh Long | Nov 02, 2020

A manufacturer of dietary supplements and two individuals are on the hook for $40 million in sanctions for violating a 2008 court injunction by failing to support advertising statements with “competent and reliable scientific evidence.”

The U.S. Supreme Court on Tuesday denied a petition for a writ of certiorari filed by Hi-Tech Pharmaceuticals Inc. and several others.

Related: Appeals court affirms $40 million in sanctions against dietary supplement maker

Through its refusal to hear the case, the nation’s highest court left undisturbed a 2019 federal appeals court ruling, which upheld a previous order that imposed $40 million in sanctions against Hi-Tech, its president Jared Wheat and a sales executive, Stephen Smith. A fourth defendant was ordered to pay $120,000 in sanctions after being found in contempt for violating a separate injunction.

The hefty sanctions were re-imposed in 2017 after years of litigation between Hi-Tech and the Federal Trade Commission over advertisement statements that touted four fat-burning and weight loss products. After conducting a bench trial, Federal Senior Judge Charles A. Pannell Jr. concluded in 2017 that the defendants lacked the necessary evidence—specifically randomized, double-blind, placebo-controlled clinical trials—to support their advertising statements.

Related: FTC Obtains $40 Million in Sanctions in Weight Loss Advertising Battle with Beleaguered Supplement Manufacturer

In FTC’s civil action against Hi-Tech, Wheat and Smith, the judge explained the sanctions he imposed corresponded to the gross receipts for the sales of four weight loss products over a period in which the defendants “engaged in contumacious conduct."

“The court recognizes that the compensatory sanctions are significant, but so, too, was the defendants’ contumacious conduct," Pannell wrote in his 132-page order in 2017. “While the defendants essentially claim that several of the violations were honest mistakes, the record is replete with evidence—both direct and circumstantial—showing an intentional defiance of the court’s injunctions."

In 2019, the U.S. Court of Appeals for the Eleventh Circuit upheld Pannell's order and denied a request for a rehearing en banc, which prompted Hi-Tech to seek review with the Supreme Court.

Neither Wheat nor Anne Voigts, a lawyer who filed the petition with the Supreme Court, immediately commented on Tuesday's decision in response to a reporter's email. An FTC spokesman declined to comment.


May 11, 2023
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This is a significant case that highlights the importance of ensuring that advertising claims in the dietary supplement industry are supported by credible scientific evidence. The imposition of $40 million in sanctions against Hi-Tech Pharmaceuticals and the individuals involved shows the seriousness of violating court injunctions and making unsupported advertising statements.

The decision by the U.S. Supreme Court to deny the petition for a writ of certiorari upholds the previous ruling and sends a clear message about the consequences of engaging in contumacious conduct. It emphasizes the need for companies in the dietary supplement industry to adhere to regulations and provide reliable evidence to back their claims.

This case serves as a reminder to businesses to act responsibly and ethically when marketing their products, prioritizing the safety and well-being of consumers. The FTC's efforts in enforcing compliance with advertising standards are essential in maintaining the integrity of the industry and protecting consumers from misleading claims.