Source: https://supreme.justia.com/cases/federal/us/387/136/
Timestamp: 2019-04-25 03:57:14+00:00

Document:
The ripeness doctrine permits judicial review of a regulation if there is a purely legal issue involved and a direct, immediate impact on the party seeking to challenge the regulation.
An amendment to the Food, Drug, and Cosmetic Act required manufacturers to list the established, government-issued names of drugs on their labels. Formerly, manufacturers had used their proprietary names to market the drugs. The amendment was intended to make prescribing doctors aware that the same drugs that were being marketed under proprietary names were also available under established names for a lower cost. The drug manufacturers and their trade association argued that the FDA Commissioner had exceeded his statutory authority in making these regulations. They sought declaratory relief to that effect and an injunction against the enforcement of the regulations.
The central issue in the case is whether the Commissioner properly interpreted the law giving rise to the regulations, which is a purely legal issue. Since the regulations provide an authoritative interpretation of a law that has a substantial effect on the regular business of the manufacturers, there is a direct and immediate impact. The courts should be allowed to resolve the dispute so that the manufacturers are not faced with choosing between the cost of compliance and the risk of criminal prosecution for violating the regulations.
The manufacturers succeeded in framing their issue in such a way that it was concrete enough for an Article III court to rule on it. They focused on whether the Commissioner had overreached his statutory authority rather than a more specific challenge.
The Commissioner of Food and Drugs, exercising authority delegated to him by the Secretary of Health, Education, and Welfare, issued regulations requiring that labels and advertisements for prescription drugs which bear proprietary names for the drugs or the ingredients carry the corresponding "established name" (designated by the Secretary) every time the proprietary or trade name is used. These regulations were designed to implement the 1962 amendment to § 502(e)(1)(B) of the Federal Food, Drug, and Cosmetic Act. Petitioners, drug manufacturers and a manufacturers' association, challenged the regulations on the ground that the Commissioner exceeded his authority under the statute. The District Court granted the declaratory and injunctive relief sought, finding that the scope of the statute was not as broad as that of the regulations. The Court of Appeals reversed without reaching the merits, holding that pre-enforcement review of the regulations was unauthorized and beyond the jurisdiction of the District Court, and that no "actual case or controversy" existed.
1. Preenforcement review of these regulations is not prohibited by the Federal Food, Drug, and Cosmetic Act. Pp. 387 U. S. 139-148.
(a) The courts should restrict access to judicial review only upon a showing of "clear and convincing evidence" of a contrary legislative intent. Rusk v. Cort, 369 U. S. 367, 369 U. S. 379-380. Pp. 387 U. S. 139-141.
(b) The statutory scheme in the food and drug area does not exclude pre-enforcement judicial review. Pp. 387 U. S. 141-144.
(c) The special review provisions of § 701(f) of the Act, applying to regulations embodying technical factual determinations, were simply intended to assure adequate judicial review of such agency decisions, and manifest no congressional purpose to eliminate review of other kinds of agency action. P. 387 U. S. 144.
(d) The saving clause of § 701(f)(6), which states that the "remedies provided for in this subsection shall be in addition to and not in substitution for any other remedies provided by law," does not foreclose pre-enforcement judicial review, and should be read in harmony with the policy favoring judicial review expressed in the Administrative Procedure Act and court decisions. Pp. 387 U. S. 144-146.
(e) Ewing v. Mytinger & Casselberry, Inc., 339 U. S. 594, which did not concern the promulgation of a self-operative industry-wide regulation, distinguished. Pp. 387 U. S. 146-148.
2. This case presents a controversy "ripe" for judicial resolution. Pp. 387 U. S. 148-156.
(a) The issue of statutory construction is purely legal, and the regulations are "final agency action" within § 10 of the Administrative Procedure Act. Columbia Broadcasting System v. United States, 316 U. S. 407, and similar cases followed. Pp. 387 U. S. 149-152.
(b) The impact of the regulations upon petitioners is sufficiently direct and immediate as to render the issue appropriate for judicial review at this stage. Pp. 387 U. S. 152-154.
(c) Here, the pre-enforcement challenge by nearly all prescription drug manufacturers is not calculated to delay or impede effective enforcement of the Federal Food, Drug, and Cosmetic Act. Pp. 387 U. S. 154-155.
"If the label or labeling of a prescription drug bears a proprietary name or designation for the drug or any ingredient thereof, the established name, if such there be, corresponding to such proprietary name or designation shall accompany each appearance of such proprietary name or designation."
21 CFR § 1.104(g)(1). A similar rule was made applicable to advertisements for prescription drugs, 21 CFR § 1.105(b)(1).
drugs. They challenged the regulations on the ground that the Commissioner exceeded his authority under the statute by promulgating an order requiring labels, advertisements, and other printed matter relating to prescription drugs to designate the established name of the particular drug involved every time its trade name is used anywhere in such material.
The District Court, on cross-motions for summary judgment, granted the declaratory and injunctive relief sought, finding that the statute did not sweep so broadly as to permit the Commissioner's "every time" interpretation. 228 F.Supp. 855. The Court of Appeals for the Third Circuit reversed without reaching the merits of the case. 352 F.2d 286. It held first that, under the statutory scheme provided by the Federal Food, Drug, and Cosmetic Act, pre-enforcement [Footnote 1] review of these regulations was unauthorized, and therefore beyond the jurisdiction of the District Court. Second, the Court of Appeals held that no "actual case or controversy" existed, and, for that reason, that no relief under the Administrative Procedure Act, 5 U.S.C. §§ 701-704 (1964 ed., Supp. II), or under the Declaratory Judgment Act, 28 U.S.C. § 2201, was, in any event, available. Because of the general importance of the question, and the apparent conflict with the decision of the Court of Appeals for the Second Circuit in Toilet Goods Assn. v. Gardner, 360 F.2d 677, which we also review today, post, p. 387 U. S. 158, we granted certiorari. 383 U.S. 924.
Procedure Act's "generous review provisions" must be given a "hospitable" interpretation. Shaughnessy v. Pedreiro, 349 U. S. 48, 349 U. S. 51; see United States v. Interstate Commerce Comm'n, 337 U. S. 426, 337 U. S. 433-435; Brownell v. Tom We Shung, supra; Heikkila v. Barber, supra. Again in Rusk v. Cort, supra, at 369 U. S. 379-380, the Court held that only upon a showing of "clear and convincing evidence" of a contrary legislative intent should the courts restrict access to judicial review. See also Jaffe, Judicial Control of Administrative Action 336-359 (1965).
"The mere fact that some acts are made reviewable should not suffice to support an implication of exclusion as to others. The right to review is too important to be excluded on such slender and indeterminate evidence of legislative intent."
"There is always an appropriate remedy in equity in cases where an administrative officer has exceeded his authority and there is no adequate remedy of law, . . . [and that] protection is given by the so-called Declaratory Judgments Act. . . ."
"As a matter of fact, the entire subsection is really unnecessary, because even without any express provision in the bill for court review, any citizen aggrieved by any order of the Secretary, who contends that the order is invalid, may test the legality of the order by bringing an injunction suit against the Secretary, or the head of the Bureau, under the general equity powers of the court."
Against this background, we think it quite apparent that the special review procedures provided in § 701(f), applying to regulations embodying technical factual determinations, [Footnote 11] were simply intended to assure adequate judicial review of such agency decisions, and that their enactment does not manifest a congressional purpose to eliminate judicial review of other kinds of agency action.
regulations under the sections specifically enumerated in 701(e). This is a conceivable reading, but it requires a considerable straining both of language and of common understanding. The saving clause itself contains no limitations, and it requires an artificial statutory construction to read a general grant of a right to judicial review begrudgingly, so as to cut out agency actions that a literal reading would cover.
". . . saved as a method to review a regulation placed in effect by the Secretary whatever rights exist to initiate a historical proceeding in equity to enjoin the enforcement of the regulation, and whatever rights exist to initiate a declaratory judgment proceeding."
other types of review whose supposed inadequacy was the very reason for the special review provisions.
Under the Government's view, indeed, it is difficult to ascertain when the saving clause would even come into play: when the special provisions apply, presumably they must be used and a court would not grant injunctive or declaratory judgment relief unless the appropriate administrative procedure is exhausted. [Footnote 13] When the special procedure does not apply, the Government deems the saving clause likewise inapplicable. The Government, to be sure, does present a rather far-fetched example of what it considers a possible application of the relief saved by § 701(f)(6), but merely to state it reveals the weakness of the Government's position. [Footnote 14] We prefer to take the saving clause at its face value, and to read it in harmony with the policy favoring judicial review expressed in the Administrative Procedure Act and this Court's decisions.
the injury or damage of the purchaser or consumer." § 304(a), 21 U.S.C. § 334(a). Multiple seizures were ordered through libel actions. The manufacturer of the drug brought an action to challenge directly the Administrator's finding of probable cause. This Court held that the owner could raise his constitutional, statutory, and factual claims in the libel actions themselves, and that the mere finding of probable cause by the Administrator could not be challenged in a separate action. That decision was quite clearly correct, but nothing in its reasoning or holding has any bearing on this declaratory judgment action challenging a promulgated regulation.
The Court in Ewing first noted that the "administrative finding of probable cause required by § 304(a) is merely the statutory prerequisite to the bringing of the lawsuit," at which the issues are aired. 339 U.S. at 339 U. S. 598. Such a situation bears no analogy to the promulgation, after formal procedures, of a rule that must be followed by an entire industry. To equate a finding of probable cause for proceeding against a particular drug manufacturer with the promulgation of a self-operative industry-wide regulation, such as we have here, would immunize nearly all agency rulemaking activities from the coverage of the Administrative Procedure Act.
Second, the determination of probable cause in Ewing has "no effect in and of itself," 339 U.S. at 339 U. S. 598; only some action consequent upon such a finding could give it legal life. As the Court there noted, like a determination by a grand jury that there is probable cause to proceed against an accused, it is a finding which only has vitality once a proceeding is commenced, at which time appropriate challenges can be made. The Court also noted that the unique type of relief sought by the drug manufacturer was inconsistent with the policy of the Act favoring speedy action against goods in circulation that are believed on probable cause to be adulterated.
Also, such relief was not specifically granted by the Act, which did provide another type of relief in the form of a consolidation of multiple libel actions in a convenient venue. 339 U.S. at 339 U. S. 602.
The drug manufacturer in Ewing was quite obviously seeking an unheard-of form of relief which, if allowed, would have permitted interference in the early stages of an administrative determination as to specific facts, and would have prevented the regular operation of the seizure procedures established by the Act. That the Court refused to permit such an action is hardly authority for cutting off the well established jurisdiction of the federal courts to hear, in appropriate cases, suits under the Declaratory Judgment Act and the Administrative Procedure Act challenging final agency action of the kind present here.
parties. The problem is best seen in a two-fold aspect, requiring us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.
As to the former factor, we believe the issues presented are appropriate for judicial resolution at this time. First, all parties agree that the issue tendered is a purely legal one: whether the statute was properly construed by the Commissioner to require the established name of the drug to be used every time the proprietary name is employed. [Footnote 16] Both sides moved for summary judgment in the District Court, and no claim is made here that further administrative proceedings are contemplated. It is suggested that the justification for this rule might vary with different circumstances, and that the expertise of the Commissioner is relevant to passing upon the validity of the regulation. This, of course, is true, but the suggestion overlooks the fact that both sides have approached this case as one purely of congressional intent, and that the Government made no effort to justify the regulation in factual terms.
"Such regulations have the force of law before their sanctions are invoked as well as after. When, as here, they are promulgated by order of the Commission and the expected conformity to them causes injury cognizable by a court of equity, they are appropriately the subject of attack. . . ."
316 U.S. at 316 U. S. 418-419.
Two more recent cases have taken a similarly flexible view of finality. In Frozen Food Express v. United States, 351 U. S. 40, at issue was an Interstate Commerce Commission order specifying commodities that were deemed to fall within the statutory class of "agricultural commodities." Vehicles carrying such commodities were exempt from ICC supervision. An action was brought by a carrier that claimed to be transporting exempt commodities, but which the ICC order had not included in its terms. Although the dissenting opinion noted that this ICC order had no authority except to give notice of how the Commission interpreted the Act, and would have effect only if and when a particular action was brought against a particular carrier, and argued that "judicial intervention [should] be withheld until administrative action has reached its complete development," 351 U.S. at 351 U. S. 45, the Court held the order reviewable.
Again, in United States v. Storer Broadcasting Co., 351 U. S. 192, the Court held to be a final agency action within the meaning of the Administrative Procedure Act an FCC regulation announcing a Commission policy that it would not issue a television license to an applicant already owning five such licenses, even though no specific application was before the Commission. The Court stated: "The process of rulemaking was complete. It was final agency action . . . by which Storer claimed to be aggrieved.'" 351 U.S. at 351 U. S. 198.
We find decision in the present case following a fortiori from these precedents. The regulation challenged here, promulgated in a formal manner after announcement in the Federal Register and consideration of comments by interested parties [Footnote 17] is quite clearly definitive. There is no hint that this regulation is informal, see Helco Products Co. v. McNutt, 78 U.S.App.D.C. 71, 137 F.2d 681, or only the ruling of a subordinate official, see Swift & Co. v. Wickham, 230 F.Supp. 398, 409, aff'd, 364 F.2d 241, or tentative. It was made effective upon publication, and the Assistant General Counsel for Food and Drugs stated in the District Court that compliance was expected.
they have the status of law and violations of them carry heavy criminal and civil sanctions. Also, there is no representation that the Attorney General and the Commissioner disagree in this area; the Justice Department is defending this very suit. It would be adherence to a mere technicality to give any credence to this contention. Moreover, the agency does have direct authority to enforce this regulation in the context of passing upon applications for clearance of new drugs, § 505, 21 U.S.C. § 355, or certification of certain antibiotics, § 507, 21 U.S.C. § 357.
"Either they must comply with the every time requirement and incur the costs of changing over their promotional material and labeling or they must follow their present course and risk prosecution."
228 F.Supp. 855, 861. The regulations are clear-cut, and were made effective immediately upon publication; as noted earlier the agency's counsel represented to the District Court that immediate compliance with their terms was expected. If petitioners wish to comply they must change all their labels, advertisements, and promotional materials; they must destroy stocks of printed matter, and they must invest heavily in new printing type and new supplies.
Steel Co., 310 U. S. 113. But there is no question in the present case that petitioners have sufficient standing as plaintiffs: the regulation is directed at them in particular; it requires them to make significant changes in their everyday business practices; if they fail to observe the Commissioner's rule, they are quite clearly exposed to the imposition of strong sanctions. Compare Columbia Broadcasting System v. United States, 316 U. S. 407; 3 Davis, Administrative Law Treatise, c. 21 (1958). This case is, therefore, remote from the Mellon and Perkins cases.
The Government further contends that the threat of criminal sanctions for noncompliance with a judicially untested regulation is unrealistic; the Solicitor General has represented that, if court enforcement becomes necessary, "the Department of Justice will proceed only civilly for an injunction . . . or by condemnation." We cannot accept this argument as a sufficient answer to petitioners' petition. This action at its inception was properly brought and this subsequent representation of the Department of Justice should not suffice to defeat it.
is that the courts are well equipped to deal with such eventualities. The venue transfer provision, 28 U.S.C. § 1404(a), may be invoked by the Government to consolidate separate actions. Or actions in all but one jurisdiction might be stayed pending the conclusion of one proceeding. See American Life Ins. Co. v. Stewart, 300 U. S. 203, 300 U. S. 215-216. A court may even, in its discretion, dismiss a declaratory judgment or injunctive suit if the same issue is pending in litigation elsewhere. Maryland Cas. Co. v. Consumers Finance Service, 101 F.2d 514; Carbide & Carbon C. Corp. v. United States I. Chemicals, 140 F.2d 47; Note, Availability of a Declaratory Judgment When Another Suit Is Pending, 51 Yale L.J. 511 (1942). In at least one suit for a declaratory judgment, relief was denied with the suggestion that the plaintiff intervene in a pending action elsewhere. Automotive Equip., Inc. v. Trico Prods. Corp., 11 F.Supp. 292; see Allstate Ins. Co. v. Thompson, 121 F.Supp. 696.
Further, the declaratory judgment and injunctive remedies are equitable in nature, and other equitable defenses may be interposed. If a multiplicity of suits are undertaken in order to harass the Government or to delay enforcement, relief can be denied on this ground alone. Truly v. Wanzer, 5 How. 141, 46 U. S. 142; cf. Brillhart v. Excess Ins. Co., 316 U. S. 491, 316 U. S. 495. The defense of laches could be asserted if the Government is prejudiced by a delay, Southern Pac. Co. v. Bogert, 250 U. S. 483, 250 U. S. 488-490; 2 Pomeroy's Equity Jurisprudence §§ 419c-d (5th ed. Symons, 1941). And courts may even refuse declaratory relief for the nonjoinder of interested parties who are not, technically speaking, indispensable. Cf. Samuel Goldwyn, Inc. v. United Artists Corp., 113 F.2d 703; 6A Moore, Federal Practice ¦ 57.25 (2d ed.1966).
nothing in the record to indicate that petitioners have sought to stay enforcement of the "every time" regulation pending judicial review. See 5 U.S.C. § 705. If the agency believes that a suit of this type will significantly impede enforcement or will harm the public interest, it need not postpone enforcement of the regulation, and may oppose any motion for a judicial stay on the part of those challenging the regulation. Ibid. It is scarcely to be doubted that a court would refuse to postpone the effective date of an agency action if the Government could show, as it made no effort to do here, that delay would be detrimental to the public health or safety. See Associated Securities Corp. v. SEC, 283 F.2d 773, 775, where a stay was denied because "the petitioners . . . [had] not sustained the burden of establishing that the requested stays will not be harmful to the public interest . . . "; see Eastern Air Lines v. CAB, 261 F.2d 830; cf. Scripps-Howard Radio v. FCC, 316 U. S. 4, 316 U. S. 10-11; 5 U.S.C. § 705.
"To preclude judicial review under this bill a statute, if not specific in withholding such review, must upon its face give clear and convincing evidence of an intent to withhold it. The mere failure to provide specially by statute for judicial review is certainly no evidence of intent to withhold review."
See also S.Rep. No. 752, 79th Cong., 1st Sess., 26 (1945).
See, e.g., the discussion of judicial review under the equity power in the House of Representatives during the debate on these provisions. 83 Cong.Rec. 7891-7896 (1938).
See, e.g., 83 Cong.Rec. 7783 (remarks of Representative Leavy) (1938); Statement of Professor David F. Cavers before a Subcommittee of the Senate Committee on Commerce on S.1944, 73d Cong., 2d Sess. (1933), reprinted in Dunn, Federal Food, Drug, and Cosmetic Act, A Statement of Its Legislative Record 1110 (1938).
See, e.g., 83 Cong.Rec. 7772-7773, 7781-7784, 7893-7899 (1938).
See, e.g., the discussion of the conference report, 83 Cong.Rec. 9096-9098 (1938).
See, e.g., 83 Cong.Rec. 7772, 7892, 9092-9093 (1938).
"The agency determinations specifically reviewable under § 701(e) relate to such technical subjects as chemical properties of particular products and the formulation and application of safety standards for protecting public health; Congress naturally did not wish courts to consider such matters without the benefit of the agency's views after an evidentiary hearing before it."
H.R.Conf.Rep. No. 2716, 75th Cong., 3d Sess., 25 (1938); 83 Cong.Rec. 8731-8738 (1938) (Senate agreement to the conference report).
See Notes of the Advisory Committee on Federal Rule of Civil Procedure 57, reprinted in 28 U.S.C.App. at 6136: "A declaration may not be rendered if a special statutory proceeding has been provided for the adjudication of some special type of case. . . ." See also 6A Moore, Federal Practice § 57.08 (2d ed.1966).
The Government apparently views the clause as applying only when regulations falling within the special review procedure are promulgated without affording the required public notice and opportunity to file objections and to request a public hearing. In such a case alone, the Government asserts, "an equity proceeding or a declaratory judgment action . . . might be entertained on the ground that the statutory procedures had not been followed." Brief, p. 28.
See 3 Davis, Administrative Law Treatise, c. 21 (1958); Jaffe Judicial Control of Administrative Action, c. 10 (1965).
While the "every time" issue has been framed by the parties in terms of statutory compulsion, we think that its essentially legal character would not be different had it been framed in terms of statutory authorization for the requirement.
Compare similar procedures followed in Frozen Food Express, supra, at 351 U. S. 41-42, and Storer, supra, at 193-194. The procedure conformed with that prescribed in § 4 of the Administrative Procedure Act, 5 U.S.C. § 1003.
See S.Rep. No. 1005, 73d Cong., 2d Sess., 2-3 (1934); Borchard, Challenging "Penal" Statutes by Declaratory Action, 52 Yale L.J. 445, 454 (1943).
Section 502(e)(1)(B) declares a drug not complying with this labeling requirement to be "misbranded." Section 301, 21 U.S.C. § 331, designates as "prohibited acts" the misbranding of drugs in interstate commerce. Such prohibited acts are subject to injunction, § 302, 21 U.S.C. § 332, criminal penalties, § 303, 21 U.S.C. § 333, and seizure, § 304(a), 21 U.S.C. § 334(a).
The issue of construction is whether § 1391(c) should be read as defining corporate venue only when the corporation is a defendant, or whether it should either (1) be adopted for corporate residence in all cases when a corporation is a plaintiff, or (2) at least as the definition of "resides" as used in § 1391(e)(4).
This question is a difficult one, with far-reaching effects, and we think it is appropriate to dismiss our writ of certiorari as to this question for the following two reasons. First, the Court of Appeals, in affirming the District Court on this issue, did not explicitly endorse the lower court's ruling, but held only: "We find no prejudicial error in the dismissal of the complaint as to these plaintiffs. . . ." 352 F.2d 524, 525. Review of an issue of this importance is best left to a case where it has been fully dealt with by a court of appeals. Second, one of the plaintiffs whose complaint was not dismissed is the Pharmaceutical Manufacturers Association, of which all the corporate petitioners are members, and we think it should be considered that they are adequately protected in this suit by its participation, as well as by the participation of the remaining drug companies whose interests are identical to those of the petitioners whose complaints were dismissed. Cf. Mishkin v. New York, 383 U. S. 502, 383 U. S. 512-514. Moreover, in the further course of this litigation, it will be open to the dismissed plaintiffs to seek amicus curiae status.

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