United States v. Caputo

AbTox, the manufacturer of two sterilizer devices, received limited Food and Drug Administration (FDA) approval for its small Plazlyte—but not for its larger Plazlyte, which was not approved for any use. The approval limited use of the small device to solid stainless-steel instruments. However, AbTox marketed and sold its larger model without FDA approval in violation of federal law and numerous instructions from the FDA to cease doing so. After it was discovered that the large Plazlyte was being sold in the United States and causing serious problems for some eye surgery patients, the FDA informed AbTox in warning letters that the large Plazlyte was being misbranded in violation of FDA regulations and the Food, Drug, and Cosmetic Act. AbTox did not change its behavior. Eventually the FDA ordered an inspection of AbTox and issued a warning to all hospitals that the large Plazlyte was not approved for any use. The FDA instructed AbTox to recall its large Plazlyte, ordered seizure of AbTox inventory, and criminally prosecuted AbTox. Corporate officers Caputo and Riley were convicted, and an order was issued to make restitution of $17.2 million, which was the list price of all Plazlyte units ever sold. The jury specifically found that Caputo and Riley lied to the FDA when it sought approval for the small Plazlyte and that the large Plazlyte was not a modification of the small Plazlyte but was instead different enough from the small model in that it significantly affected the safety or effectiveness of the device and constituted a major change in the intended use of the device so that it was a new device and required separate approval under 21 C.F.R. § 807.81. Caputo and Riley appealed and argued that § 807.81 was too vague to be enforceable.