Source: https://law.justia.com/cases/federal/appellate-courts/F2/644/729/358996/
Timestamp: 2020-01-26 09:24:56
Document Index: 601837989

Matched Legal Cases: ['§ 321', '§ 321', '§ 107', '§ 392', '§ 351', '§ 351', '§ 262', '§ 392', '§ 392', '§ 1', '§ 130', '§ 7', '§ 321']

Grand Laboratories, Inc., Appellee, v. Patricia Harris, Secretary of Health, Education and Welfare,appellant, 644 F.2d 729 (8th Cir. 1981) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Eighth Circuit › 1981 › Grand Laboratories, Inc., Appellee, v. Patricia Harris, Secretary of Health, Education and Welfare,a...
Grand Laboratories, Inc., Appellee, v. Patricia Harris, Secretary of Health, Education and Welfare,appellant, 644 F.2d 729 (8th Cir. 1981)
US Court of Appeals for the Eighth Circuit - 644 F.2d 729 (8th Cir. 1981) Submitted Jan. 14, 1981. Decided March 25, 1981
This case presents the question whether animal biologics constitute drugs within the meaning of the Federal Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. § 321(g) (1) (1976).
In February 1979, two field officers from the Food and Drug Administration (FDA) attempted to inspect the facilities of Grand Laboratories, Inc. (Grand) in Freeman, South Dakota. They were denied entrance. In August 1979, the FDA obtained a warrant from a United States magistrate to inspect Grand's facility. Before the warrant was enforced, Grand brought suit in the United States District Court for the District of South Dakota seeking declaratory and injunctive relief against the FDA on the grounds that the FDA is without jurisdiction to regulate the manufacture and sale of animal biologics. After issuing a temporary restraining order, the District Court held a hearing on whether a preliminary injunction should issue against the FDA. On February 21, 1980, the District Court filed a memorandum opinion and issued a preliminary injunction. Grand Laboratories, Inc. v. Harris, 488 F. Supp. 618 (D.S.D. 1980). The Secretary of Health, Education and Welfare filed a timely appeal.
Under the Virus, Serum, Toxin Act of 1913, the USDA has limited commerce clause jurisdiction. The agency does not have jurisdiction over animal biologics manufactured and distributed wholly within one state, even though a component used in the biologic may have passed through interstate commerce. See Animal Health Institute v. USDA, 487 F. Supp. 376 (D. Colo. 1980).
21 U.S.C. § 321(g) (1) (1976).
Grand Laboratories, Inc., 488 F. Supp. at 622.
"The starting point in every case involving construction of a statute is the language itself." Teamsters v. Daniel, 439 U.S. 551, 558, 99 S. Ct. 791, 795, 58 L. Ed. 2d 808 (1979). In spite of the use of animal biologics at the time of the original enactment of the predecessor to the FDCA, the Pure Food Act of 1906, animal biologics were mentioned in neither the statute nor the legislative history of the FDCA, nor in the Pure Food Act of 1906. Despite this lack of any support, in the form of congressional intent, for the inclusion of animal biologics, the FDA maintains that animal biologics are "articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals," and therefore come within the literal definition of section 321(g) (1) (B) of title 21.
Neither we nor Grand nor the FDA disagree that a literal reading of the above section includes animal biologics. The "essential question for our determination is whether Congress intended the definition of drug (as set forth in the FDCA) to have the broad coverage" that the literal language would allow. United States v. Bacto-Unidisk, 394 U.S. 784, 793, 89 S. Ct. 1410, 1415, 22 L. Ed. 2d 726 (1969). Reviewing the legislative history of the FDCA and the Virus, Serum, Toxin Act of 1913 and the lack of prior enforcement activity by the FDA, we find that Congress did not intend to include animal biologics within the meaning of the definition of the term "drug" in the FDCA. In so finding, we recognize the remedial nature of the FDCA and give due deference to the FDA's interpretation of the act. Id., 394 U.S. at 798, 89 S. Ct. at 1418; see Teamsters v. Daniel, 439 U.S. at 566 n.20, 99 S. Ct. at 800; National Nutritional Foods Association v. Mathews, 557 F.2d 325, 336 (2d Cir. 1977).
In reviewing the legislative history of the pertinent acts, we are mindful of the Supreme Court's warning that "(o)nly when a literal construction of a statute yields results so manifestly unreasonable that they could not fairly be attributed to congressional design will an exception to statutory language be judicially implied." United States v. Rutherford, 442 U.S. 544, 555, 99 S. Ct. 2470, 2477, 61 L. Ed. 2d 68 (1979). In order to fully understand the complex interplay of the FDCA and the Virus, Serum, Toxin Act of 1913, it is necessary to review congressional action in the human as well as the animal biologics area, in relation to congressional regulation of traditional drugs.
The first explicit congressional connection between the Virus, Serum, Toxin Act of 1913 and the FDCA occurred with the passage of the Animal Drug Amendments of 1968, Pub. L. No. 90-399, § 107, 82 Stat. 342 (codified at 21 U.S.C. § 392(b) (1976)). This amendment expanded the "not affecting, modifying, repealing or superseding" language to include the Virus, Serum, Toxin Act of 1913.
Our review of the statutory history of the meaning of the term "drug" in the FDCA and its forerunner, the Pure Food Act of 1906, reveals that for a period of over 55 years, Congress never considered animal biologics to be drugs under the FDA's jurisdiction. In fact, when the relationship between human biologics and the FDCA was first explicitly considered in 1944, Congress reacted by making clear that human biologics were to be subject to the FDCA. In the Virus, Serum, and Toxin Act of 1944, ch. 373, Title III, § 351, 58 Stat. 702, relating to human biologics, Congress intended that the FDCA also apply to human biologics.4 "Subsection (g) (of § 351, codified at 42 U.S.C. § 262(g) (1976)) is an explicit statement, confirming the present legal situation, that products subject to this section are not exempted from the Federal Food, Drug, and Cosmetic Act, * * *."5 H.R.Rep. No. 1364, 78th Cong., 2d Sess. ---, reprinted in (1944) U.S.Code Cong.Serv. 1211, 1234; see United States v. Calise, 217 F. Supp. 705, 708-09 (S.D.N.Y. 1962) (human blood both a drug and a human biologic).
Later, in 1968, when Congress considered the relationship between the FDCA and animal biologics, the reaction was markedly different. The FDA admits that section 107 of the Animal Drug Amendments of 1968, codified at 21 U.S.C. § 392(b) added the Virus, Serum, Toxin Act of 1913 "to the exempting provisions of section 902(c) of the FDC Act, 21 U.S.C. § 392(b)." Appellant's brief at 20. As stated by the District Court, the "intended effect of section 392(b) (1968 amendment) is maintenance of the status quo." Grand Laboratories, Inc., 488 F. Supp. at 622. We agree. Animal biologics are not to be considered drugs within the meaning of the FDCA.
The FDA also argues that we should defer to its interpretation of the meaning of the term "drug" in the FDCA, the statute which the FDA is responsible for administering. "But there are limits, grounded in the language, purpose, and history of the particular statute, on how far an agency may go in its interpretative role." Teamsters v. Daniel, 439 U.S. at 566, 99 S. Ct. at 794. Since 1938, the FDA has acknowledged in regulations that animal biologics subject to the Virus, Serum, Toxin Act of 1913 "shall not be deemed subject" to the drug provisions of the FDCA. 3 Fed.Reg. 1847 § 1.02 (1938); 21 Fed.Reg. 5577 § 130.2 (1956). Even the FDA's regulations dealing with enforcement actions do not explicitly include animal biologics within their scope. 21 C.F.R. § 7.1(f) (1980) defines products to include "an article subject to the jurisdiction of the Food and Drug Administration, including any food, drug, and device intended for human or animal use, any cosmetic and biologic intended for human use, * * *." If the FDA considered all biologics, both animal and human, to be within its jurisdiction, there would have been no need to modify the term biologic by the phrase "intended for human use." Not until 1979 did the FDA, through litigation, attempt to exert any jurisdictional authority over animal biologics.
The FDA argues that excluding animal biologics from inclusion in the FDCA would result in a "loophole" in the regulation of intrastate animal biologics. Congress, in passing the Virus, Serum, Toxin Act of 1913, did not fully exercise its power under the commerce clause, as construed in later Supreme Court decisions. See, e. g., Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 258-59, 85 S. Ct. 348, 358, 13 L. Ed. 2d 258 (1964); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 36-41, 57 S. Ct. 615, 624, 81 L. Ed. 893 (1937). Animal biologics manufactured and distributed wholly in one state remain free from the strictures of federal regulation. The legislative issue over whether a modern-day "loophole" exists is unrelated to the judicial question of whether animal biologics were included in the meaning of the term "drug" in the Pure Food Act of 1906 and later the FDCA.
The existence of the Virus, Serum, Toxin Act of 1913, coupled with the FDA's lack of enforcement activity during the past century, severely undercut all arguments for extending the FDCA to animal biologics. The statutory history leaves little doubt but that Congress believed it was filling a regulatory void when it enacted the Virus, Serum, Toxin Act of 1913. If Congress believed animal biologics were included within the term "drug" in the Pure Food and Drug Act of 1906, there would have been no need for a separate animal biologics act. Even if additional regulatory powers were perceived to be needed in the area of animal biologics, Congress could have remedied the matter by amending the 1906 act. Instead, Congress enacted a separate, independent statute to regulate animal biologics. Cf. Teamsters v. Daniel, 439 U.S. at 569-70, 99 S. Ct. at 801-802. Animal biologics were not thought to be regulated under the Pure Food Act of 1906 and the FDC Act of 1938 at the time of their enactment. Animal biologics have been accorded separate and different treatment under the Virus, Serum, Toxin Act of 1913 from the treatment accorded more traditional medications under the FDCA. Animal biologics at this time do not constitute drugs within the meaning of the FDCA. If federal jurisdiction is deemed advisable, Congress can fill this alleged void at any time it seems fit.
(g) (1) The term "drug" means ... (B) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals ....
When we find the terms of the statute unambiguous, judicial inquiry is complete, except "in 'rare and exceptional circumstances.' " TVA v. Hill, 437 U.S. 153, 187 n. 33, 98 S. Ct. 2279, 2298 n. 33, 57 L. Ed. 2d 117 (1978) (quoting Crooks v. Harrelson, 282 U.S. 55, 60, 51 S. Ct. 49, 50, 75 L. Ed. 156 (1930)).
Rubin v. United States, --- U.S. ----, ----, 101 S. Ct. 698, 700, 66 L. Ed. 2d 633 (U.S.1981).1 That Court has affirmed this principle with special force in respect of the very definition at issue in this case. In United States v. An Article of Drug ... Bacto-Unidisk ...., 394 U.S. 784, 89 S. Ct. 1410, 22 L. Ed. 2d 726 (1969), the question was whether a laboratory aid known as an antibiotic sensitivity disc, used in a screening test for help in determining the proper antibiotic drug to administer to patients, was a "drug" within the meaning of 21 U.S.C. § 321(g) (1) (B), notwithstanding the fact that it was used exclusively in laboratory work and never came in contact with any part of the patient's body. The Supreme Court reversed holdings by two courts below that the antibiotic discs were not drugs. The Court said:
The Court persuasively argues that the result advocated by the Food and Drug Administration here would be illogical, in that certain kinds of animal biologics, those shipped across state lines, would be regulated by the Department of Agriculture, whereas certain other kinds, those not shipped across state lines but composed in part of ingredients that had been so shipped, would be regulated by the Food and Drug Administration. The resulting regulatory scheme, to be sure, is not so symmetrical as it could be, and if one were casting a vote in Congress, the arguments for placing the regulation of all animal biologics in the Department of Agriculture, as opposed to the Food and Drug Administration, would be strong indeed. It seems to me, however, that judges should usually resist the temptation to superimpose their own ideas of reason and logic on the clear words of a congressional enactment. I cannot bring myself to believe that a literal construction of this statute would yield "results so manifestly unreasonable that they could not be attributed to congressional design ...." United States v. Rutherford, 442 U.S. 544, 555, 99 S. Ct. 2470, 2477, 61 L. Ed. 2d 68 (1979). It is no more reasonable, in my view, to conclude that Congress, despite the concededly unambiguous words of the 1906 statute, did not intend in that enactment to regulate animal biologics at all.
Originally, responsibility for enforcement of the Pure Food and Drug Act of 1906, the Virus, Serum, Toxin Act of 1913, and the FDCA of 1938 were placed in divisions of the Department of Agriculture. These were, respectively, the Bureau of Chemistry, the Bureau of Animal Husbandry, and the Food and Drug Administration. Subsequently, the FDA became part of the Department of Health, Education and Welfare, now Health and Human Services. See Grand Laboratories, Inc., 488 F. Supp. at 620-21
Jurisdiction to enforce the human biologics acts originally was placed in the Public Health Service, which in 1902 was a division of the Treasury Department. In 1939 the Public Health Service was transferred from Treasury to the newly created Federal Security Agency which was transferred to Health, Education and Welfare, now Health and Human Services. In 1940, the FDA and its functions were transferred to the Federal Security Agency. Therefore, as contrasted with animal biologics, see note 3, supra, human biologics, both as a drug under the FDCA and as human biologics under the 1944 act, have been administered by the same department since the date of the enactment of the 1944 act. See Grand Laboratories, Inc., 488 F. Supp. at 620-21
See also United States Railroad Retirement Bd. v. Fritz, --- U.S. ----, ----, 101 S. Ct. 453, 463, 66 L. Ed. 2d 368 (U.S.1980): "the language of the statute is clear, and we have historically assumed that Congress intended what it enacted."