Source: https://openjurist.org/568/f2d/240/united-states-v-nova-scotia-food-products-corp
Timestamp: 2018-04-26 15:39:31
Document Index: 469909017

Matched Legal Cases: ['art 122', '§ 371', '§ 342', '§ 342', '§ 342', '§ 342', '§ 342', '§ 344', '§ 342', '§ 342', '§ 342', '§ 344', '§ 371', '§ 342', '§ 342', '§ 608', '§ 318', '§ 318', '§ 18', '§ 706', '§ 10', '§ 553', '§ 706', '§ 706', '§ 29', '§ 29']

568 F2d 240 United States v. Nova Scotia Food Products Corp | OpenJurist
568 F. 2d 240 - United States v. Nova Scotia Food Products Corp
568 F2d 240 United States v. Nova Scotia Food Products Corp
568 F.2d 240
NOVA SCOTIA FOOD PRODUCTS CORP., David Sklar and Emanuel
Sklar, Defendants-Appellants,
National Fisheries Institute, Intervenor-Appellant.
No. 758, Docket 76-6169.
Decided Dec. 15, 1977.
This appeal involving a regulation of the Food and Drug Administration is not here upon a direct review of agency action. It is an appeal from a judgment of the District Court for the Eastern District of New York (Hon. John J. Dooling, Judge) enjoining the appellants, after a hearing, from processing hot smoked whitefish except in accordance with time-temperature-salinity (T-T-S) regulations contained in 21 C.F.R. Part 122 (1977).1 The thorough analytical opinion of the District Court is reported at 417 F.Supp. 1364 (Aug. 17, 1976).
The Commissioner of Food and Drugs ("Commissioner"), employing informal "notice-and-comment" procedures under 21 U.S.C. § 371(a), issued a proposal for the control of C. botulinum bacteria Type E in fish. 34 F.R. 17,176 (Oct. 23, 1969). For his statutory authority to promulgate the regulations, the Commissioner specifically relied only upon § 342(a)(4) of the Act which provides:
* The argument that the regulation is not supported by statutory authority cannot be dismissed out of hand. See Schilling v. Rogers, 363 U.S. 666, 676-77, 80 S.Ct. 1288, 1295-96, 4 L.Ed.2d 1478 (1960); see Batterton v. Francis, 432 U.S. 416, 97 S.Ct. 2399, 53 L.Ed.2d 448 (1977). The sole statutory authority relied upon is § 342(a)(4), quoted above. As we were instructed in S. E. C. v. Chenery Corp., 318 U.S. 80, 87, 63 S.Ct. 454, 459, 87 L.Ed. 626 (1943) (Chenery I ), "(t)he grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based." Nor is the Commissioner's expressed reliance solely on § 342(a) (4) a technicality which might be removed by a later and wiser reliance on another subsection. For in this case, as the agency recognized, there is no other section or subsection that can pass as statutory authority for the regulation. The categories of "adulteration" prohibited in Section 342 all refer to food as an "adulterated" product rather than to the process of preparing food, except for subsection (a)(4) which alone deals with the processing of food.
Appellants contend that the prohibition against "insanitary conditions" embraces conditions only in the plant itself, but does not include conditions which merely inhibit the growth of organisms already in the food when it enters the plant in its raw state. They distinguish between conditions which are insanitary, which they concede to be within the ambit of § 342(a)(4), and conditions of sterilization required to destroy micro-organisms, which they contend are not.
It is true that on a first reading the language of the subsection appears to cover only "insanitary conditions" "whereby it (the food) may have been rendered injurious to health" (emphasis added). And a plausible argument can, indeed, be made that the references are to insanitary conditions in the plant itself, such as the presence of rodents or insects, e. g., United States v. Park, 421 U.S. 658, 95 S.Ct. 1903, 44 L.Ed.2d 489 (1975); United States v. Cassaro, Inc., 443 F.2d 153 (1st Cir. 1971); United States v. Hammond Milling Co., 413 F.2d 608 (5th Cir. 1969), cert. denied, 396 U.S. 1002, 90 S.Ct. 552, 24 L.Ed.2d 494 (1970).
Yet, when we are dealing with the public health, the language of the Food, Drug and Cosmetic Act should not be read too restrictively, but rather as "consistent with the Act's overriding purpose to protect the public health". United States v. Bacto-Unidisk, 394 U.S. 784, 798, 89 S.Ct. 1410, 1418, 22 L.Ed.2d 726 (1969). As Justice Frankfurter said in United States v. Dotterweich, 320 U.S. 277, 280, 64 S.Ct. 134, 136, 88 L.Ed. 48 (1943):
Thus, a provision concerning "food additives" has been held to include even poisonous substances which have not been "added" by human hands. United States v. Ewig Bros. Co., 502 F.2d 715, 721-24 (7th Cir. 1974) (Stevens, J. now Mr. Justice Stevens), cert. denied, 420 U.S. 945, 95 S.Ct. 1325, 43 L.Ed.2d 423 (1975).
Section 371(a), applicable to rulemaking under § 342(a)(4), provides: " The authority to promulgate regulations for the efficient enforcement of this chapter, except as otherwise provided in this section, is vested in the Secretary." We read this grant as analogous to the provision "make . . . such rules and regulations as may be necessary to carry out the provisions of this Act," in which case "the validity of a regulation promulgated thereunder will be sustained so long as it is 'reasonably related to the purposes of the enabling legislation.' (citations omitted)" Mourning v. Family Publications Service, Inc., 411 U.S. 356, 369, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973). When agency rulemaking serves the purposes of the statute, courts should refuse to adopt a narrow construction of the enabling legislation which would undercut the agency's authority to promulgate such rules. United States v. Midwest Video Corp., 406 U.S. 649, 92 S.Ct. 1860, 32 L.Ed.2d 390 (1972) (upholding FCC's authority to promulgate "cablecasting" regulation as "reasonably ancillary to the effective performance of the Commission's various responsibilities for the regulation of television broadcasting"); and United States v. Storer Broadcasting Co., 351 U.S. 192, 203-04, 76 S.Ct. 763, 100 L.Ed.2d 1081 (1956). The court's role should be one of constructive cooperation with the agency in furtherance of the public interest. International Harvester Co. v. Ruckelhaus, 155 U.S.App.D.C. 411, 443, 478 F.2d 615, 647 (1973). As the Supreme Court has said, "We are, in the absence of compelling evidence that such was Congress' intention, unwilling to prohibit administrative action imperative for the achievement of an agency's ultimate purposes." In re Permian Basin Area Rate Cases, 390 U.S. 747, 780, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968).
Appellant's argument, it should be noted, is not that there has been an unlawful delegation of legislative power, Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935), or even a delegation of "unfettered discretion." See Amalgamated Meat Cutters & Butcher Workers v. Connally, 337 F.Supp. 737, 757 (D.D.C.1971) (Leventhal, J.). The argument, fairly construed, is that Congress did not mean to go so far as to require sterilization sufficient to kill bacteria that may be in the food itself rather than bacteria which accreted in the factory through the use of insanitary equipment.
First, the Act deals with standards of identity and various categories that can render food harmful to health. Yet, so far as the category of harmful micro-organisms is concerned, there is only a single provision, 21 U.S.C. § 344, which directly deals with "micro-organisms." That provision is limited to emergency permit controls dealing with any class of food which the Secretary finds, after investigation, "may, by reason of contamination with micro-organisms during the manufacture, processing or packing thereof in any locality, be injurious to health, and that such injurious nature cannot be adequately determined after such articles have entered interstate commerce, (in which event) he then, and in such case only, shall promulgate regulations providing for the issuance . . . of permits . . . ." (Emphasis added.) It may be argued that the failure to mention "micro-organisms" in the "adulteration" section of the Act, which includes § 342(a)(4), means that Congress intended to delegate no further authority to control micro-organisms than is expressed in the "emergency" control of Section 344.
On the other hand, as Judge Dooling held, the manner of processing can surely give rise to the survival, with attendant toxic effects on humans, of spores which would not have survived under stricter "sanitary" conditions. In that sense, treating "insanitary conditions" in relation to the hazard, the interpretation of the District Court which described the word "sanitary" as merely "inelegant" is a fair reading, emphasizing that the food does not have to be actually contaminated during processing and packing but simply that "it may have been rendered injurious to health," § 342(a)(4), by inadequate sanitary conditions of prevention.
The other argument of some force would involve the difference in agency rulemaking procedure which results from treating the regulations in question as supported by § 342(a)(4). The Act was enacted in substantially its present form in 1938, preceding the APA by about eight years. In 1938 Congress, groping for standards for rulemaking and the scope of judicial review (as it still is) created a bifurcated structure for rulemaking and, hence, for judicial review.
The formal rulemaking with its concomitant standard of "substantial evidence of record," see United States v. Florida East Coast Railway Co., 410 U.S. 224, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973), is limited, however, to rulemaking under specific enumerated sections of the Act. Section 342, the "adulteration" section upon which the Commissioner relied for his statutory authority is not one of these. The section dealing with temporary permits for micro-organisms, § 344, is. See § 371(e)(1). Thus, a temporary suspension because of the presence of micro-organisms in food merits a formal procedure while permanent regulation of micro-organisms is achievable by informal "notice-and-comment" procedure. Even though we read the statute § 342(a)(4) broadly in terms of the authority delegated to the agency, we must, nevertheless, view with some strictness the minimal requirements for the informal "notice and comment" procedure that follows as of course a matter we shall discuss below.
We do not discount the logical arguments in support of a restrictive reading of § 342(a)(4), but we perceive a larger general purpose on the part of Congress in protecting the public health.
We come to this conclusion, aside from the general rules of construction noted above, for several reasons: First, until this enforcement proceeding was begun, no lawyer at the knowledgeable Food and Drug bar ever raised the question of lack of statutory delegation or even hinted at such a question. Second, the body of data gathered by the experts, including those of the Technical Laboratory of the Bureau of Fisheries manifested a concern about the hazards of botulism. Third, analogously, the Meat Inspection Act of 1907 (now codified as amended at 21 U.S.C. § 608), which hardly provided a clearer standard than does the "insanitary conditions" provision in the Food and Drug Act, has regulations under it concerning mandatory temperatures for processing pork muscle tissue to eliminate the hazard of trichonosis. The statute permits the Secretary "to prescribe the rules and regulations of sanitation under which such establishments shall be maintained". The current regulation, 9 C.F.R. § 318.10 (1977), provides: "All parts of the pork muscle tissue shall be heated to a temperature not lower than 137o F., and the method used shall be one known to insure such a result." 9 C.F.R. § 318.10(c)(1) (1977). The same regulation was codified as early as 1949 as 9 C.F.R. § 18.10(c)(1) (1949). These regulations have been assumed for years to have been properly promulgated by the Secretary of Agriculture under the statutory authority given to him.
The question of what is an adequate "record"11 in informal rulemaking has engaged the attention of commentators for several years.12 The extent of the administrative record required for judicial review of informal rulemaking is largely a function of the scope of judicial review. Even when the standard of review is whether the promulgation of the rule was " arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," as specified in 5 U.S.C. § 706(2)(A), judicial review must nevertheless, be based on the "whole record" (id.). Adequate review of a determination requires an adequate record, if the review is to be meaningful. Davis, Administrative Law in the Seventies, supra, at 669-71. What will constitute an adequate record for meaningful review may vary with the nature of the admininistrative action to be reviewed. Friendly, "Some Kind of Hearing,"123 U.Pa.L.Rev. 1267, 1291-92 (1975). Review must be based on the whole record even when the judgment is one of policy, except that findings of fact such as would be required in an adjudicatory proceeding or in a formal "on the record" hearing for rulemaking need not be made. Overton Park, supra,401 U.S. at 416-18, 91 S.Ct. at 823-25 (1971). Though the action was informal, without an evidentiary record, the review must be "thorough, probing, (and) in depth". Id., 401 U.S. at 415, 91 S.Ct. 814. See Scalia & Goodman, Procedural Aspects of the Consumer Product Safety Act, 20 U.C.L.A.L.Rev. 899, 934-35 (1973).
* With respect to the content of the administrative "record," the Supreme Court has told us that in informal rulemaking, "the focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court." See Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973).
In an enforcement action, we must rely exclusively on the record made before the agency to determine the validity of the regulation. The exception to the exclusivity of that record is that "there may be independent judicial fact-finding when issues that were not before the agency are raised in a proceeding to enforce non-adjudicatory agency action." Overton Park, supra, 401 U.S. at 415, 91 S.Ct. at 823 (1971). (Emphasis added.)
Though a reviewing court will not match submission against counter-submission to decide whether the agency was correct in its conclusion on scientific matters (unless that conclusion is arbitrary), it will consider whether the agency has taken account of all "relevant factors and whether there has been a clear error of judgment." Overton Park, supra, 401 U.S. at 415-16, 91 S.Ct. at 823-24; Appalachian Power Co. v. Environmental Protection Agency, 477 F.2d 495, 507 (4th Cir. 1973). In this circuit we have said that "it is 'arbitrary or capricious' for an agency not to take into account all relevant factors in making its determination." Hanly v. Mitchell, 460 F.2d 640, 648 (2d Cir.), cert. denied, 409 U.S. 990, 93 S.Ct. 313, 34 L.Ed.2d 256 (1972) (an enforcement action under NEPA).
If the failure to notify interested persons of the scientific research upon which the agency was relying actually prevented the presentation of relevant comment, the agency may be held not to have considered all "the relevant factors." We can think of no sound reasons for secrecy or reluctance to expose to public view (with an exception for trade secrets or national security) the ingredients of the deliberative process. Cf. Mobil Oil Corp. v. FPC, 157 U.S.App.D.C. 235, 256-58, 483 F.2d 1238, 1259-61 (1973). Indeed, the FDA's own regulations now specifically require that every notice of proposed rulemaking contain "references to all data and information on which the Commissioner relies for the proposal (copies or a full list of which shall be a part of the administrative file on the matter . . . )." 21 C.F.R. § 10.40(b) (1) (1977). And this is, undoubtedly, the trend. See, e. g., National Nutritional Foods v. Weinberger, 512 F.2d 688 (2d Cir.), cert. denied, 423 U.S. 827, 96 S.Ct. 44, 46 L.Ed.2d 44 (1975).16
Appellants additionally attack the "concise general statement" required by APA, 5 U.S.C. § 553, as inadequate. We think that, in the circumstances, it was less than adequate. It is not in keeping with the rational process to leave vital questions, raised by comments which are of cogent materiality, completely unanswered. The agencies certainly have a good deal of discretion in expressing the basis of a rule, but the agencies do not have quite the prerogative of obscurantism reserved to legislatures. "Congress did not purport to transfer its legislative power to the unbounded discretion of the regulatory body." F.C.C. v. RCA Communications, Inc., 346 U.S. 86, 90, 73 S.Ct. 998, 1002, 97 L.Ed. 1470 (1953) (Frankfurter, J.). As was said in Environmental Defense Fund, Inc. v. EPA, 150 U.S.App.D.C. 348, 371, 465 F.2d 528, 540-51 (1972): "We cannot discharge our role adequately unless we hold EPA to a high standard of articulation. Kennecott Copper Corp. v. EPA, . . . 149 U.S.App.D.C. 231, 462 F.2d 846 (1972)."
Even under the standard of "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law," § 706(2)(A), generally used in informal rulemaking review, "the court shall review the whole record . . . and due account shall be taken of the rule of prejudicial error." § 706 (Emphasis added.) See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 419, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); Chicago v. FPC, 147 U.S.App.D.C. 312, 323, 458 F.2d 731, 744 (1971), cert. denied, 405 U.S. 1074, 92 S.Ct. 1495, 31 L.Ed.2d 808 (1972)
See, e. g., Hamilton, Procedures for the Adoption of Rules of General Applicability, 60 Cal.L.Rev. 1276, 1333-36(1972); Verkuil Judicial Review of Informal Rulemaking, 60 Va.L.Rev. 185 (1974); Pedersen, Formal Records and Informal Rulemaking, 85 Yale L.J. 38, 45-51 (1975). And see K. Davis, Administrative Law of the Seventies § 29.01-6 (1976)
A practice developed in the early years of the APA of not making a formal contemporaneous record, but rather, when challenged, to put together a historical record of what had been available for agency consideration at the time the regulation was promulgated. "One can conclude that 'record' now means whatever the agency produces on review." Verkuil, supra, 60 Va.L.Rev. at 204. And see Deutsche Lufthansa, A.G. v. CAB, 156 U.S.App.D.C. 191, 479 F.2d 912 (1973) (record unchallenged). Professor Davis in a balanced review, has stated: "When the facts are of central importance and might be challenged, parties adversely affected by them should have a chance to respond to them. Clearly, whatever "factual information the agency has considered should be a part of the record for judicial review." K. Davis, supra, § 29.01-6, pp. 672-73
The authorities cited by appellants purporting to show the inadequacy of the record involve administrative actions required to be taken only on the basis of evidentiary hearings, e. g., Bowman Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 288 n. 4, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974), and Hamilton, Administrative Rulemaking, supra, 60 Cal.L.Rev. at 1281-82; Williams v. Robinson, 139 U.S.App.D.C. 204, 432 F.2d 637 (1970); or ratemaking for utilities by state agencies in which no evidence to support the agency's decision was produced even on appeal. Ohio Bell Tel. Co. v. PUC, 301 U.S. 292, 300, 57 S.Ct. 724, 81 L.Ed. 1093 (1937)
And see Judge Friendly's discussion of recent developments in rulemaking and judicial review in Friendly, "Some Kind of Hearing," 123 U.Pa.L.Rev. 1267, 1305-15 (1975)