Court Opinion

ID: 9451420
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:17:11.193216+00
Date Added: 2024-06-11T17:32:44.047865
License: Public Domain

SETH, Circuit Judge
(dissenting).
I differ with the conclusion reached by the majority, and feel constrained to express a contrary view in the following opinion:
The Food, Drug and Cosmetic Act of 1938 (21 U.S.C. §§ 301 and following) makes express provision that after condemnation of a drug the court may, upon the claimant furnishing bond, order that the drug be delivered to the owner to be brought into compliance with the provisions of the Act. This compliance is to be under the supervision of an employee of the Administration (21 U.S.C. § 334(d)). This procedure is intended by Congress to be used by the courts when in their discretion a salvage of the drug is possible through some change in the product or label. The Act contemplates that the court enter an order requiring such action to be taken.
The law thus provides for what is commonly referred to as a salvage of the condemned drug. This is a remedy available to the claimant in judicial proceedings which are then pending when the court in the exercise of its discretion determines that salvage is proper. This is an important and much used provision of the Act, vesting in the courts the post-condemnation authority over destruction or salvage. This exists independently of any administrative functions of the agency.
The Government here seeks to eliminate this judicial remedy through its construction of other sections of the Act which were amended in 1962. The provision for salvage has been in effect since at least 1938, and the section providing for it was not amended in 1962. The trial court in the instant case used the statutory salvage authority and set up guidelines for relabeling the product under agency supervision and cooperation. There was no finding nor real contention that the drug in question was in any way harmful, dangerous, or adulterated. Instead it simply did not live up to the claims made in its labeling as to its effectiveness, but was found by the court to be effective in certain circumstances.
The appellee pursuant to the court’s order in conferences with the agency made proposals for changes in labeling to bring the drug into compliance. The agency replied to the proposals in some detail, refusing to agree, but concluded by saying: “However, because the Court found that the article was misbranded * * * thus rendering relabeling necessary, we believe that the ‘grandfather clause’ no longer applies, this for the reason that under any revised labeling, the product would no longer be intended ‘solely for use under conditions prescribed, recommended, or suggested in labeling with respect to such drug’ on October 9, 1962, which is the cut-off date under the ‘grandfather clause’ exception.”
Thus apparently no relabeling was possible with the cooperation of the Food and Drug Administration because it relied on its legal opinion, expressed above, to the effect that under no revised labeling could the product be marketed under the salvage provisions of the Act. Thus the trial court entered an order for relabeling. This action the Government now says constituted an overruling of “the administrative determinations and substituted those of the Court.” It is difficult to see how this argument could be made in view of the fact that the administrative determination was in reality one of law, and the court substituted its opinion. The Government in its brief discusses at length the agency’s functions in salvage proceedings, but again this has little significance when it took the position that no salvage was *721possible under its construction of the Act.
The 1962 amendments to 21 U.S.C. § 321 (p) (1) and § 355 brought about substantial changes in the scope of these certain sections of the statute, especially in relation to the definition of new drugs. Where the law had theretofore applied to drugs not generally recognized as “safe,” it was extended by the addition of words “and effective” or “and effectiveness” after the words “safe” or “safety” to include the matter of whether the drug was efficacious. Upon such an issue the burden of persuasion and time expended to persuade became particularly important, as is demonstrated by the position taken by the parties in this case. The Government would have the appellee drug company climb the administrative vine from the bottom, while appellee, having lost the libel portion of the case, sought instead and obtained the judicial salvage remedy under 21 U.S.C. § 334(d) in the court where the proceedings were already pending.
If we confine our analysis to the 1962 amendments and especially as they changed the section defining a “new drug” (21 U.S.C.A. § 321 (p) (1)), the logic of the Government’s argument is persuasive. Under Section 321 (p) (1), a drug not recognized as effective is not a “new drug” if among other things its labeling prior to the amendment date “ * * * contained the same representations concerning the conditions of its use” as at the time in question. A drug is thereby possibly confined to the exact labeling used on the effective date of the amendment of 1962, and if any deviations thereafter occur or are required, the drug may automatically become a “new drug.” Thus under the Government’s argument the appellee’s labeling claims were found by the trial court to be false, a change was necessary; and therefore, it was not, or would not be, as labeled on the effective date of the amendment of 1962; therefore, it was a “new drug”; therefore, administrative application under § 355 was required and appellee was thus required to start anew the administrative procedure to qualify to sell at all.
When this analysis is followed, it is to entirely ignore 21 U.S.C. § 334(d), above described, and to assume that it has been rendered ineffective as to this case by the amendment of other sections. It is difficult to see how it could have been so changed when nothing in the legislative history indicates any intention to eliminate a judicial remedy under the circumstances of this case. H.R. Rep. No. 2464, 87th Cong., 2d Sess.; Cong.Record Senate, August 23, 1962, p. 16305, note following 21 U.S.C.A. § 321.
The construction urged also prevents any maker of a drug, presently under the grandfather clause, from changing the label to even reduce the claim of effectiveness should new information become available or for any other good reason a change to conform to the facts should be made. It would seem that the purpose of the Act is to encourage label corrections rather than to discourage them.
Instead a construction of the 1962 amendments should be adopted which preserves the remedies in the portions of the Act not amended and not intended to be changed. The trial court did this under a construction which generally considers the words, “conditions of use,” in 21 U.S.C. § 321(p) (1) as used in the Act to refer to the general purposes for which the drug is to be used, and not to specific claims of effectiveness. Thus there was no change in the case at bar as to “conditions of use.”
On this point the case of Merritt Corp. v. Folsom, D.C., 165 F.Supp. 418, cited by the Government, shows the position of the Food and Drug Administration under the old wording relating to “safe.” There the question was the application of an old drug preparation to a new use or new disease. It was held that the new use made it a new drug for that purpose. This was a new “condition of use” as above described. The Government refers also to the case of United States v. 354 Bulk Cartons * * * Trim Reducing-Aid Cigarettes, D.C., 178 *722F.Supp. 847, where the real question was whether the cigarettes were a drug, the claimant contending they were not. The court found they were a drug and hence by the same finding they had to be new since claimant had not maintained they were a drug at all. These two cases, in my opinion, do not hold that under the old section an unsafe drug has been held to be a “new drug,” nor is there authority that an ineffective drug is a “new drug.”
Instead of the trial court’s view, which has much to recommend it, I would construe 21 U.S.C. § 334 relating to judicial salvage orders as not being inferentially limited by the amendment of 1962 to 21 U.S.C. § 321(p) (1) relating to the definition of new drugs. I would hold that involuntary label changes are not contemplated by Section 321 (p) (1) when ordered as a part of a court’s salvage decision and order. Such changes cannot be those contemplated in the new drug definition simply because no intention appears to eliminate judicial salvage in situations such as the one before us. If the contention of the Food and Drug Administration is adopted, the United States District Court when it has exercised its discretion to order salvage, as here by relabeling, thereby loses jurisdiction to proceed under the statute. The salvage is thereby thwarted. Or if the Government’s view is adopted, it may be said that the court’s order to relabel is then subject to administrative review by the requirement that the claimant start anew through administrative channels. In either view the statutory judicial remedy is eliminated.
A construction should be followed which would give effect to both sections; and this may be done, as above described, by construing Section 321 (p) (1) as not applicable to involuntary relabeling as part of the court’s salvage order. This is entirely reasonable and proper, and would carry out the intentions of the Act and also preserve the intended relationship between judicial and administrative functions.
I would affirm.