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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION UNITED STATES OF AMERICA, VS. CIVIL ACTION NO. H-10-759 CHUNG’S PRODUCTS LP, et al, Defendants.

§ § § § § § §

DECREE OF PERMANENT INJUNCTION

The Court, having considered Plaintiff’s Motion for Summary Judgment and supporting

documents, Defendants’ opposition thereto, and the entire record in this case; having found that

Chung’s Products, LP (“Chung’s”), and individuals, Charlie A. Kujawa and Gregory S. Birdsell

(collectively, “Defendants”), violate the Federal Food, Drug, and Cosmetic Act (“the Act”), 21

U.S.C. § 331(a), by introducing and causing to be introduced into interstate commerce, and

delivering and causing to be delivered for introduction into interstate commerce, articles of food

that are adulterated within the meaning of 21 U.S.C. § 342(a); and the Act, 21 U.S.C. § 331(k),

by adulterating, or causing the adulteration of, fish or fishery products within the meaning of 21

U.S.C. § 342(a)(4); and having found that Defendants, unless restrained by Order of this Court,

will continue to violate the Act;

HEREBY ORDERS AND ADJUDGES that:

1. Plaintiff’s Motion for Summary Judgment is granted.

2. This Court has jurisdiction over the subject matter of this action and has personal

jurisdiction over all parties to this action.

3. The Complaint for Permanent Injunction states a cause of action against Defendants

under the Act.

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4. Defendants violate the Act, 21 U.S.C. § 331(a) by introducing or delivering, or

causing to be introduced or delivered, into interstate commerce articles of food, within the

meaning of 21 U.S.C. § 321(f) (“food”), namely fish or fishery products that are adulterated

within the meaning of 21 U.S.C. § 342(a)(4). Defendants also violate 21 U.S.C. § 331(k) of the

Act by adulterating, or causing the adulteration of, fish or fishery products within the meaning of

21 U.S.C. § 342(a)(4). The articles of food are adulterated within the meaning of 21 U.S.C. §

342(a)(4) in that they have been prepared, packed, or held under insanitary conditions whereby

they may have become contaminated with filth or been rendered injurious to health.

5. Modified Atmosphere Packaging (“MAP”) is the packaging of a product in an

atmosphere which has had a one-time modification of gaseous composition so that it is different

from that of air, which normally contains 78.08% nitrogen, 20.96% oxygen, and 0.03% carbon

dioxide. For the purposes of this order, MAP includes any packaging method that directly

modifies the amount of oxygen in the package.

6. Defendants and each and all of their agents, representatives, employees, attorneys,

successors, assigns, and any and all persons in active concert or participation with any of them

(including individuals, directors, corporations, subsidiaries, affiliates, and partnerships) who

receive actual notice of this Order, are hereby permanently restrained and enjoined, under the

provisions of 21 U.S.C. § 332(a) and the inherent equitable authority of this Court, from

receiving, processing, preparing, packing, holding, and distributing, at or from Chung’s

processing facility located at 3907 Dennis Street, Houston, Texas 77004-2520 (the “Chung’s

facility”) and at or from any other or future locations at which Defendants may receive, process,

prepare, pack, hold, and distribute food, including, but not limited to, any fish or fishery products

held in MAP, unless and until:

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A. Defendants retain, at Defendants’ expense, an independent person or persons

(“expert” or “experts”), who is without any personal or financial ties (other than the consulting

agreement) to Defendants or their families, and who by reason of background, education,

training and experience, is qualified to:

(1) Conduct hazard analyses and to develop adequate written hazard analysis critical

control point (“HACCP”) plans for the processing of fish or fishery products at Chung’s,

including, but not limited to, those held in MAP, as required by 21 C.F.R. § 123.6(a)-(c);

(2) Evaluate and verify the adequacy of HACCP plans, as required by 21 C.F.R.

§ 123.8;

(3) Develop adequate Sanitation Standard Operating Procedures (“SSOPs”) specific to

Chung’s, as required by 21 C.F.R. § 123.11;

(4) Evaluate Defendants’ monitoring of key sanitation conditions and practices, as set

forth in 21 C.F.R. § 123.11(b); and

(5) Develop and conduct employee training programs on seafood HACCP, sanitation

controls in seafood processing, MAP, and control strategies specific to Defendants’ HACCP

plans. Defendants shall notify the United States Food and Drug Administration (“FDA”) in

writing of the identity of the expert and provide FDA with information in writing regarding the

expert’s qualifications, background, education, training, and experience with regard to

Subparagraphs (1)-(5) of Paragraph 6A as soon as such expert is retained;

B. The expert retained by Defendants has:

(1) Developed adequate, written HACCP plans for each type of fish or fishery product

received, processed, prepared, packed, held, and distributed by Defendants, such plan to include

critical control points and critical limits, as required by 21 C.F.R. § 123.6;

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(2) Developed written corrective action plans, as an element of each HACCP plan, to be

taken whenever there is a deviation from a critical limit, as described in 21 C.F.R. § 123.7(b);

(3) Evaluated each plan to assess its adequacy, as required by 21 C.F.R. § 123.8;

(4) Developed adequate SSOPs for Chung’s, as required by 21 C.F.R. § 123.11;

(5) Evaluated Defendants’ monitoring of key sanitation conditions and practices, as set

forth in 21 C.F.R. § 123.11(b), including the development and implementation of a testing

program to evaluate, at appropriate frequencies, environmental samples collected from food

contact and non-food contact surfaces to identify, prevent and correct contamination of seafood

products by undesirable microorganisms; and

(6) Developed and conducted employee training programs on seafood HACCP,

sanitation controls in seafood processing, MAP, and control strategies specific to Defendants’

HACCP plans.

C. Defendants have in place and consistently implement SSOPs that, at a minimum,

ensure that Defendants have thoroughly cleaned, sanitized, and rendered the facility and all

equipment contained therein suitable for receiving, processing, preparing, packing, holding, and

distributing fish or fishery products and to prevent the contamination of the food;

D. Defendants have in place and consistently implement an HACCP plan that, at a

minimum:

(1) Monitors key sanitation conditions and practices, as set forth in 21 C.F.R.

§ 123.11(b);

(2) Identifies all food safety hazards reasonably likely to occur for all fish or fishery

products Defendants manufacture, including, but not limited to, fish or fishery products held in

MAP;

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(3) Lists the critical control points for all food safety hazards reasonably likely to occur,

as provided for in 21 C.F.R. § 123.6(c)(2). Defendants’ HACCP plans must include critical

control points for the receipt, processing, and storage of fish or fishery products held in MAP

through to the point where the consumer opens the packaging;

(4) Identifies and lists the critical limits that must be met at each of the critical control

points, as required by 21 C.F.R. § 123.6(c)(3);

(5) Lists the procedures and the frequencies that will be used to monitor each of the

critical control points to ensure compliance with the critical limits, as required by 21 C.F.R. §

123.6(c)(4);

(6) Includes a corrective action plan that has been developed in accordance with 21

C.F.R. § 123.7(b), to be followed in response to deviations from critical limits at critical control

points;

(7) Lists the verification procedures, and frequency thereof, that Chung’s will use in

accordance with 21 C.F.R. § 123.8(a), as required by 21 C.F.R. § 123.6(c)(6); and

(8) Includes a record keeping system that documents the monitoring of the critical

control points, as required by 21 C.F.R. § 123.6(c)(7). The records shall contain the actual

values and observations obtained during monitoring and identify the person recording the

information, date, and time of the observation. These records shall be accessible to FDA, and be

provided to FDA immediately upon request.

E. Should Defendants eliminate the Clostridium botulinum (“C. botulinum”) toxin

formation hazard in all fish or fishery products held in MAP by either: (1) including a label that

the product be kept frozen with wording such as “IMPORTANT: Keep frozen, thaw under

refrigeration immediately before use”; or (2) changing the packaging material to one that has an

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oxygen transmission rate of at least 10,000 cc/m2/24hrs at 24°C in its final thickness,

Defendants’ expert shall explain in detail such steps in a separate report to FDA, the C.

botulinum toxin formation control report (“C. botulinum report”). If FDA determines, upon

review of this report, that Defendants have eliminated the C. botulinum toxin formation hazard,

FDA will notify Defendants in writing;

F. Defendants’ expert has submitted to FDA in writing, prior to FDA’s first inspection of

the Chung’s facility after entry into this Order and as directed by FDA thereafter, the HACCP

plans, SSOPs, the HACCP control program, and the C. botulinum toxin formation control report

(if any), as specified in Paragraphs 6 B-E, for review by FDA;

G. The Defendants, under the supervision of and in accordance with methods acceptable

to FDA, have examined all lots of fish or fishery products intended to be held in MAP or other

reduced-oxygen packaging present at the facility on the day this order is entered, and have:

(1) Destroyed all fish or fishery products held in MAP at Defendants' expense under

FDA’s supervision; or

(2) Brought into compliance with the law all fish or fishery products held in MAP, under

FDA’s supervision pursuant to a plan approved in writing by an FDA representative. The plan

must be submitted within 45 days of the entry of this Order and approved by FDA prior to

implementation; and

(3) Paid all expenses of such supervision and examination by the FDA at the rates

specified in Paragraph 19.

H. FDA, as it deems necessary, has inspected the Chung’s facility or any other

processing facility at which Defendants receive, process, prepare, pack, or hold fish or fishery

products, including all records relating to the receiving, processing, preparing, packing, holding,

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and distribution of food. The costs of FDA inspections conducted pursuant to this Paragraph

(including sampling, testing, travel, document preparation and review time, and subsistence

expenses) shall be borne by Defendants at the rates specified in Paragraph 19; and

I. FDA has notified Defendants, in writing, that Defendants appear to be in compliance

with the requirements specified in Paragraphs 6(A)-(H) of this Order, the Act, and all applicable

regulations.

7. Upon resumption of operations after satisfying all requirements of Paragraph 6 and

receiving the notice described in Paragraph 6(I), Defendants shall have in place and continuously

implement a HACCP plan for their fish or fishery products held in MAP or other reduced oxygen

packaging that identifies C. botulinum toxin formation as a food safety hazard. This Paragraph

shall not apply if Defendants implement, to FDA’s satisfaction and with FDA’s written approval,

the procedures set forth in Paragraph 6(E).

8. After Defendants receive written notification from FDA as specified in Paragraph 6(I)

above, Defendants and each and all of their agents, representatives, employees, attorneys,

successors, assigns, and any and all persons in active concert or participation with any of them

are permanently restrained and enjoined from directly or indirectly doing or causing to be done

any of the following acts:

A. Introducing or delivering for introduction, or causing the introduction or delivery for

introduction, into interstate commerce of any article of food that is adulterated within the

meaning of 21 U.S.C. § 342(a)(4);

B. Causing any article of food to become adulterated, within the meaning of 21 U.S.C.

§ 342(a)(4), while such food is held for sale after shipment in interstate commerce; and

C. Failing to implement and continuously maintain the requirements of this Order.

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9. Representatives of FDA shall be permitted, without prior notice and as and when FDA

deems necessary, to make inspections of Defendants’ processing facility, or of any new

location(s) at which Defendants receive, process, prepare, pack, hold, and distribute food, and,

without prior notice and as and when FDA deems necessary, to take any other measures

necessary to monitor and ensure continuous compliance with the terms of this Order. Such

inspections may, at FDA’s discretion, include the taking of photographs and samples and the

examination and copying of all records that relate to the receiving, processing, preparing,

packing, holding, and distribution of fish or fishery products. Such inspections shall be

permitted upon presentation of a copy of this Order and appropriate credentials. During

inspections, the Defendants shall cooperate fully with FDA by, among other things, promptly

providing FDA investigators with requested documents and materials. Such inspection authority

granted by this Order is apart from, and in addition to, the authority to make inspections under

the Act, 21 U.S.C. § 374.

10. Defendants shall promptly provide any information or records to FDA regarding the

receiving, processing, preparing, packing, holding, and distribution of fish or fishery products

upon request. Defendants shall maintain copies of their HACCP plans, and all records required

by their HACCP plans and 21 C.F.R. Part 123, at the processing facilities in a location where

they are readily available for reference and inspection by FDA representatives. All records

required to be kept by the HACCP plans and by regulation shall be retained for at least three (3)

years after the date they are prepared and shall be presented immediately to FDA investigators

upon request.

11. If, at any time after entry of this Order, FDA determines, based on the results of an

inspection, analysis of a sample or samples, or other information, that Defendants have failed to

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comply with any provision of this Order, have violated the Act, or its implementing regulations,

or that additional corrective actions are necessary to achieve compliance with this Order, the Act,

or its implementing regulations, FDA may, as and when it deems necessary, order Defendants in

writing to take appropriate action, including, but not limited to, ordering Defendants immediately

to take one or more of the following actions:

A. Cease receiving, processing, preparing, packing, holding, and distributing food,

including any fish or fishery products;

B. Recall all articles of Defendants’ food that have been distributed or are under the

custody and control of Defendants’ agents, distributors, customers, or consumers;

C. Institute or re-implement any of the requirements set forth in this Order; or

D. Take any other corrective actions as FDA deems necessary to protect the public

health or bring Defendants into compliance with this Order, the Act, and its implementing

regulations. All costs of such recall(s) and corrective actions shall be borne by Defendants. The

costs of FDA inspections, sampling, testing, document preparation and review time, travel time,

and subsistence expenses to implement the remedies set forth in this Paragraph shall be borne by

Defendants at the rates specified in Paragraph 19. This provision shall be separate and apart

from, and in addition to, all other remedies available to FDA.

12. Any cessation of operations or other corrective actions as described in Paragraph 11

shall be implemented immediately and continue until Defendants receive written notification

from FDA that Defendants appear to be in compliance with the Order, the Act, and its

implementing regulations.

13. Within fifteen (15) calendar days after the entry of this Order, Defendants shall

provide a copy of the Order, by personal service or by certified mail, return receipt requested, to

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each and all of Defendants' agents, representatives, employees, attorneys, successors, assigns,

and any and all persons in active concert or participation with any of them. Defendants shall also

post a copy of this Order in the employee common areas at the processing facilities.

14. Within twenty (20) calendar days after the entry of this Order, Defendants shall

provide the Director, FDA Dallas District Office, at the address set forth in Paragraph 22, an

affidavit, from a person with personal knowledge of the facts stated therein, stating the fact and

manner of Defendants’ compliance with Paragraph 13, and identifying the names and positions

of all persons who were notified pursuant to Paragraph 13.

15. Upon entry of the Order, Defendants shall, within ten (10) calendar days of

employment of any new employee, provide a copy of the Order, by personal service or by

certified mail, return receipt requested, to such new employee.

16. Defendants shall notify in writing the FDA Dallas District Director, at the address

specified in Paragraph 22 of this Order, at least twenty (20) calendar days before any change in

location, ownership or character of their business such as dissolution, assignment, bankruptcy, or

sale resulting in emergence of a successor corporation, the creation or dissolution of subsidiaries,

or any other change in the corporate structure of Chung’s, or the sale or assignment of any

business assets, such as buildings, equipment, or inventory, that may affect compliance with this

Order. Defendants shall provide a copy of this Order to any proposed successor or assignee at

least thirty (30) calendar days prior to making any assignment or transferring any interest in the

company as described in this Paragraph. Defendants shall furnish FDA with an affidavit of

compliance with this Paragraph no later than fifteen (15) calendar days prior to such assignment

or change in ownership.

17. Should Vreij A. Kolandjian become affiliated with Defendant Chung’s or any other

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entity that receives, processes, prepares, packs, holds, and distributes fish and fishery products,

Defendants must notify FDA in writing at the address specified in Paragraph 22.

18. If any Defendant(s) fails to comply with any of the provisions of this Order, then

Defendant(s) shall pay to the United States of America liquidated damages in the sum of three

thousand dollars ($3,000) for each day the Defendant(s) fails to comply with this Order and an

additional sum of one thousand dollars ($1,000) in liquidated damages per day for each violation

of the Act, its implementing regulations, and/or this Order. In addition, should any Defendant(s)

distribute any adulterated fish or fishery product, such Defendant(s) shall, in addition to the

foregoing, pay to the United States as liquidated damages a sum equal to twice the retail value of

such fish or fishery product. Defendants understand and agree that the liquidated damages

specified in this Paragraph are not punitive in nature and their imposition does not in any way

limit the ability of the United States to seek, or the power of the Court to impose, additional civil

or criminal penalties to be paid by Defendants, or remedies based on conduct that may also be

the basis for payment of liquidated damages pursuant to this Paragraph.

19. Defendants shall pay the costs of FDA’s supervision, inspection, analysis, review,

and examination conducted pursuant to this Order at the standard rates prevailing at the time the

activities are accomplished and Defendants shall make payment in full to FDA within thirty (30)

days of receiving written notification from FDA of the costs. As of the date of entry of this

Order, these rates are: $87.57 per hour and fraction thereof per representative for inspection and

supervision work other than laboratory and analytical work; $104.96 per hour and fraction

thereof per person for laboratory and analytical work; $0.50 per mile for travel by automobile;

the government rate or equivalent for travel by air; and the published government per diem rate,

or the equivalent, for the areas in which the inspections are performed, per representative for

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subsistence expenses, where necessary. In the event that the standard rates generally applicable

to the FDA supervision of court-ordered compliance are modified, these rates shall be increased

or decreased without further order of the Court.

20. Should the United States bring, and prevail in, a contempt action to enforce the terms

of this Order, Defendants shall, in addition to other remedies, reimburse the United States for its

attorneys’ fees, investigational expenses, expert witness fees, travel expenses incurred by

attorneys and witnesses, and administrative court costs relating to such contempt proceedings.

21. Defendants shall abide by the decisions of FDA, which decisions shall be final. FDA

decisions under this Order shall be reviewed by the Court, if contested, under the arbitrary and

capricious standard set forth in 5 U.S.C. § 706(2)(A). Review shall be based exclusively on the

written record before FDA at the time the decision was made. No discovery shall be taken by

either party.

22. All notifications, correspondence, and communications to FDA required by the terms

of this Order shall be submitted to the Dallas District Director, Food and Drug Administration,

4040 N. Central Expressway, Suite 300, Dallas, TX 75204.

23. This Court retains jurisdiction of this action and the parties hereto for the purpose of

enforcing and modifying this Order and for the purpose of granting such additional relief as may

be necessary and appropriate.

SIGNED at Houston, Texas, this 3rd day of April, 2013.

___________________________________ MELINDA HARMON UNITED STATES DISTRICT JUDGE