Source: https://supreme.justia.com/cases/federal/us/387/158/
Timestamp: 2019-04-19 02:20:38+00:00

Document:
"may immediately suspend certification service to such person and may continue such suspension until adequate corrective action has been taken."
Petitioners, cosmetics distributors, manufacturers, and an association of cosmetics manufacturers, challenged this regulation and three others on the ground that the Commissioner exceeded his authority under the Act, and maintained that this regulation is impermissible, since the Food and Drug Administration has long sought congressional authorization for free access to facilities, processes and formulae, which was denied except for prescription drugs. The District Court held that the Act did not prohibit this type of pre-enforcement action, that a case and controversy existed, that the issues were justiciable, and that the Government presented no reasons to warrant declining jurisdiction on discretionary grounds. In light of a later conflicting decision by the Court of Appeals for the Third Circuit in Abbott Laboratories v. Celebrezze, 352 F.2d 286, the District Court reaffirmed its rulings, but certified the question of jurisdiction to the Court of Appeals for the Second Circuit. The Court of Appeals sustained the Government's contention that judicial review was improper as to the regulation involved here, although it affirmed the District Court's judgment that it had jurisdiction as to the other challenged regulations.
Held: Pre-enforcement judicial review of the regulation involved here is not appropriate as the controversy is not ripe for adjudication under the standards set forth in Abbott Laboratories v. Gardner, ante, p. 387 U. S. 136. Pp. 387 U. S. 160-166.
(a) The legal issue as presently framed is not appropriate for judicial resolution, as it is not known whether or when the Commissioner will order an inspection, what reasons he will give to justify his order, and whether the statutory scheme as a whole, notwithstanding Congress' refusal to include a specific statutory section authorizing such inspections, justified promulgation of the regulation. Pp. 387 U. S. 162-164.
(b) The regulation will not affect the primary conduct of petitioners' business, and, since only minimal, if any, adverse consequences will face petitioners if they challenge the regulation upon enforcement, they should exhaust the administrative process before obtaining judicial review. Pp. 387 U. S. 164-166.
the issues presented were justiciable, and that no reasons had been presented by the Government to warrant declining jurisdiction on discretionary grounds. 235 F.Supp. 648. Recognizing that the subsequent decision of the Court of Appeals for the Third Circuit in Abbott Laboratories v. Celebrezze, 352 F.2d 286, appeared to conflict with its holding, the District Court reaffirmed its earlier rulings, but certified the question of jurisdiction to the Court of Appeals for the Second Circuit under 28 U.S.C. § 1292(b). The Court of Appeals affirmed the judgment of the District Court that jurisdiction to hear the suit existed as to three of the challenged regulations, but sustained the Government's contention that judicial review was improper as to a fourth. 360 F.2d 677.
Each side below sought review here from the portions of the Court of Appeals' decision adverse to it, the Government as petitioner in Gardner v. Toilet Goods Assn., No. 438, and the Toilet Goods Association and other plaintiffs in the present case. We granted certiorari in both instances, 385 U.S. 813, as we did in Abbott Laboratories v. Gardner, No. 39, 383 U.S. 924, because of the apparent conflict between the Second and Third Circuits. The two Toilet Goods cases were set and argued together with Abbott Laboratories.
the standards set forth in Abbott Laboratories v. Gardner, the controversy is not presently ripe for adjudication.
"(a) When it appears to the Commissioner that a person has:"
"(4) Refused to permit duly authorized employees of the Food and Drug Administration free access to all manufacturing facilities, processes, and formulae involved in the manufacture of color additives and intermediates from which such color additives are derived;"
"he may immediately suspend certification service to such person and may continue such suspension until adequate corrective action has been taken."
The petitioners maintain that this regulation is an impermissible exercise of authority, that the FDA has long sought congressional authorization for free access to facilities, processes, and formulae (see, e.g., the proposed "Drug and Factory Inspection Amendments of 1962," H.R. 11581, 87th Cong., 2d Sess.; Hearings before the House Committee on Interstate and Foreign Commerce on H.R. 11581 and H.R. 11582, 87th Cong., 2d Sess., 67-74; H.R. 6788, 88th Cong., 1st Sess.), but that Congress has always denied the agency this power except for prescription drugs. § 704, 21 U.S.C. § 374. Framed in this way, we agree with petitioners that a "legal" issue is raised, but nevertheless we are not persuaded that the present suit is properly maintainable.
In determining whether a challenge to an administrative regulation is ripe for review, a two-fold inquiry must be made: first, to determine whether the issues tendered are appropriate for judicial resolution, and second, to assess the hardship to the parties if judicial relief is denied at that stage.
As to the first of these factors, we agree with the Court of Appeals that the legal issue, as presently framed, is not appropriate for judicial resolution. This is not because the regulation is not the agency's considered and formalized determination, for we are in agreement with petitioners that, under this Court's decisions in Frozen Food Express v. United States, 351 U. S. 40, and United States v. Storer Broadcasting Co., 351 U. S. 192, there can be no question that this regulation -- promulgated in a formal manner after notice and evaluation of submitted comments -- is a "final agency action" under § 10 of the Administrative Procedure Act, 5 U.S.C. § 704.
See Abbott Laboratories v. Gardner, ante, p. 387 U. S. 136. Also, we recognize the force of petitioners' contention that the issue as they have framed it presents a purely legal question: whether the regulation is totally beyond the agency's power under the statute, the type of legal issue that courts have occasionally dealt with without requiring a specific attempt at enforcement, Columbia Broadcasting System v. United States, 316 U. S. 407; cf. Pierce v. Society of Sisters, 268 U. S. 510, or exhaustion of administrative remedies, Allen v. Grand Central Aircraft Co., 347 U. S. 535; Skinner & Eddy Corp. v. United States, 249 U. S. 557.
the goals of the Act, and the safeguards devised to protect legitimate trade secrets (see 21 CFR § 130.14(c)). We believe that judicial appraisal of these factors is likely to stand on a much surer footing in the context of a specific application of this regulation than could be the case in the framework of the generalized challenge made here.
We are also led to this result by considerations of the effect on the petitioners of the regulation, for the test of ripeness, as we have noted, depends not only on how adequately a court can deal with the legal issue presented, but also on the degree and nature of the regulation's present effect on those seeking relief. The regulation challenged here is not analogous to those that were involved in Columbia Broadcasting System, supra, and Storer, supra, and those other color additive regulations with which we deal in Gardner v. Toilet Goods Assn., post, p. 387 U. S. 167, where the impact of the administrative action could be said to be felt immediately by those subject to it in conducting their day-to-day affairs. See also Federal Communications Comm'n v. American Broadcasting Co., 347 U. S. 284.
of inspection. Unlike the other regulations challenged in this action, in which seizure of goods, heavy fines, adverse publicity for distributing "adulterated" goods, and possible criminal liability might penalize failure to comply, see Gardner v. Toilet Goods Assn., post, p. 387 U. S. 167, a refusal to admit an inspector here would, at most, lead only to a suspension of certification services to the particular party, a determination that can then be promptly challenged through an administrative procedure, [Footnote 2] which in turn is reviewable by a court. [Footnote 3] Such review will provide an adequate forum for testing the regulation in a concrete situation.
the regulation. [Footnote 4] Whether or not this assumption is correct, given the fact that only minimal, if any, adverse consequences will face petitioners if they challenge the regulation in this manner, we think it wiser to require them to exhaust this administrative process through which the factual basis of the inspection order will certainly be aired and where more light may be thrown on the Commissioner's statutory and practical justifications for the regulation. Compare Federal Security Adm'r v. Quaker Oats Co., 318 U. S. 218. [Footnote 5] Judicial review will then be available, and a court at that juncture will be in a better position to deal with the question of statutory authority. Administrative Procedure Act § 10(e)(B)(3), 5 U.S.C. § 706(2)(C).
MR. JUSTICE DOUGLAS dissents for the reasons stated by Judge Tyler of the District Court, 235 F.Supp. 648, 651-652.
The Color Additive Amendments provide for listings of color additives by the Secretary "if and to the extent that such additives are suitable and safe. . . ." § 706(b)(1), 21 U.S.C. § 376(b)(1). The Secretary is further authorized to provide "for the certification with safe diluents or without diluents, of batches of color additives. . . ." § 706(c), 21 U.S.C. § 376(c). A color additive is "deemed unsafe" unless it is either from a certified batch or exempted from the certification requirement, § 706(a), 21 U.S.C. § 376(a). A cosmetic containing such an "unsafe" additive is deemed to be adulterated, § 601(e), 21 U.S.C. § 361(e), and is prohibited from interstate commerce. § 301(a), 21 U.S.C. § 331(a).
See 21 CFR §§ 8.28(b), 130.1130.26. We recognize that a denial of certification might, under certain circumstances, cause inconvenience and possibly hardship, depending upon such factors as how large a supply of certified additives the particular manufacturer may have, how rapidly the administrative hearing and judicial review are conducted, and what temporary remedial or protective provisions, such as compliance with a reservation pending litigation, might be available to a manufacturer testing the regulation. In the context of the present case, we need only say that such inconvenience is speculative, and we have been provided with no information that would support an assumption that much weight should be attached to this possibility.
The statute and regulations are not explicit as to whether review would lie, as Judge Friendly suggested, 360 F.2d at 687, to a court of appeals under §§ 701(f) and 706(d) of the Act, or to a district court as an appeal from the Commissioner's "final order," 21 CFR § 130.26, under § 10 of the Administrative Procedure Act. See 21 CFR § 130.31; compare § 505, 21 U.S.C. § 355. For purposes of this case it is only necessary to ascertain that judicial review would be available to challenge any specific order of the Commissioner denying certification services to a particular drug manufacturer, and we therefore need not decide the statutory question of which forum would be appropriate for such review.
Petitioners also cite the Commissioner's refusal, in the context of a public hearing on certain drug regulations, to entertain objections to his statutory authority to promulgate them on the ground that "This is a question of law, and cannot be resolved by the taking of evidence at a public hearing." 31 Fed.Reg. 7174.
See 3 Davis, Administrative Law Treatise § 20.03, at 69 (1958).

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