A Georgia federal court has dismissed Hi-Tech Pharmaceutical’s action seeking a declaratory judgment relating to U.S. Federal Trade Commission (FTC) product-advertising substantiation requirements, finding that Hi-Tech was merely attempting to collaterally attack an enforcement action that imposed $40 million in sanctions, required product recalls and limited the company’s advertising practices. Hi-Tech Pharm. v. FTC, No. 13-4306 (U.S. Dist. Ct., N.D. Ga., Atlanta Div., order entered July 23, 2014).
FTC initially sued Hi-Tech, National Urological Group and three individuals in 2004, alleging that they made unsubstantiated claims about weight-loss supplements Benzedrine, Fastin, Lipodrene, and Stimerex-ES. In 2008, the court enjoined the defendants from advertising their products without reliable scientific evidence, and in 2013, at FTC’s urging, the court found the defendants in contempt of the injunction for circulating advertisements with claims that violated the court’s order. Hi-Tech then filed an action for “a narrow and specific declaratory judgment relating to the ‘competent and reliable scientific evidence’ substantiation standard for advertising claims.” The company argued that the action for declaratory judgment was not a collateral attack on the enforcement action but merely a request for clarification, but the court agreed with FTC and dismissed the case for lack of subject-matter jurisdiction.