Court Opinion

ID: 8884287
Source: CourtListenerOpinion
Date Created: 2022-11-26 21:26:21.417597+00
Date Added: 2024-06-11T17:06:50.001237
License: Public Domain

PELL, Circuit Judge
(dissenting).
After careful consideration of additional briefs and oral argument and of the present majority opinion of this court, I remain completely unpersuaded that an incorrect result was reached in the majority opinion by the three-judge panel of this court which first heard the appeal. Therefore, I must respectfully record this dissent.
I adhere to the views and propositions previously expressed in the majority opinion of July 15, 1970, which opinion, so as not to extend unduly the length of this dissent, I incorporate herein by reference. Nor-Am v. Hardin, 435 F.2d 1133 (7th Cir. 1970).
However, because of the wide-spread and significant implications of the present majority decision, establishing, as I believe it does, an invitation to government by administrative fiat, I feel compelled to further observations.
I join my brothers of the present majority opinion in allegiance to the general proposition that administrative remedies should be exhausted prior to judicial review and that such review should not interrupt and should not interfere with the full exercise of administrative expertise prior to finality thereof. However, as indicated in the original opinion in this appeal of July 15, 1970, there was finality involved in the decision of the secretary determining that Panogen constituted an imminent hazard to the public, and I reiterate the reasons expressed in the original opinion in support of that proposition.
The crucial and basic question here involved, however, in my opinion, is whether judicial intervention is permissible in the event of arbitrary and capricious administrative action. I do not find in the present majority opinion confrontation with this issue. The record before us cries out that the governmental suspension of Panogen as an economic poison was bottomed on the emotional *1162impact of a single incident, one which was tragic and yet one which there was no reason for thinking would be repeated. When a product has been successfully used on the market for more than twenty years and is essential for agriculture, and when there has been no other recorded incident that the use of the product has been detrimental to the public health, I can reach no conclusion other than that the suspension was, in the technical and legal sense, an arbitrary and capricious one.1
In considering the definition of arbitrary, the Supreme Court has given recognition to the standard dictionary definition such as “without adequate determining principle” and “arrived at through an exercise of will or by caprice, without consideration or adjustment with reference to principles, circumstances, or significance, * * * decisive but unreasoned; * * United States v. Carmack, 329 U.S. 230, 243-244 n. 14, 67 S.Ct. 252, 258, 91 L.Ed. 209 (1946)1 One of the dictionary definitions recognized by Carmack was “apt to change suddenly.” The facts on the record of this appeal, which will be further developed hereinafter, point clearly to the conclusion that the administrative suspension of the registration of Panogen was without adequate determining principle necessarily applicable to a determination that Panogen was an imminent hazard to the public and that said action was arrived at through an exercise of will without any proper consideration with reference to principle, circumstances or significance. In other words, it was decisive and therefore had all the elements of finality but was unreasoned.
As was developed in the opinion of July 15, 1970, on the evening of February 17, 1970 there was a national television broadcast on the Huntley-Brinkley newscast which discussed and portrayed the Alamogordo, New Mexico tragic incident. On the very next day, the registration was suspended. It takes no particular application of judicial knowledge to be aware of the nationwide coverage achieved by the particular television program. It takes no great perception in reading the record to conceive the emotional impact involved when three young children are rendered virtually vegetables.
When it is considered that the particular product had been on the market for over twenty years and had been registered as an economic poison for many years as required by the statutes in effect, the sudden suspension in the context of the emotional impact of the television program can only point, by the sudden change, to capricious action.
In Carmack, supra at p. 243, 67 S.Ct. 252, the Supreme Court said in the case before it that it was unnecessary to determine whether a particular selection could have been set aside by the courts as unauthorized by Congress if the officials had acted arbitrarily and capriciously so that their action was without adequate determining principle or was unreasoned. The Court stated that the procedure followed in making the selection involved in Carmack showed extraordinary effort to arrive at a fair and reasoned conclusion. I find the action of the secretary in reaching the extraordinarily stringent decision achieved here did not exhibit even an ordinary effort to arrive at a fair and reasoned conclusion.
In my view this is not merely a situation where a reviewing court could reach a decision contrary to that reached by the agency. That is not deemed arbitrary and capricious in the legal sense. Pauley v. United States, 419 F.2d 1061, 1066 *1163(7th Cir. 1969). Rather, here the action seems insupportable on any rational basis.
In the opinion of July 15, 1970, reference is made to the reasoning of Congress in according to administrative officials the drastic and emergency power of acting with regard to matters determined to be an imminent hazard to public health. (See p. 1142 of 435 F.2d). The rationale of congressional pronouncements in this respect seem obvious. If a new product were to come on the agricultural market, as to which there had been no experience in relation to the public health, and the product in its marketed form when used was found to emanate fumes which caused serious and painful skin irritations, all of which resulted from lack of proper testing prior to marketing, obviously some agency of the government should have the authority to remove the product instanter from the market. Even here, of course, there should eventually be a hearing to determine with administrative expertise the various factual questions such as whether the product when properly manufactured did in fact cause the skin irritation, whether the product when properly used would produce the fumes and the value of the product not only to the agricultural community but to the public at large. Such a hypothetical situation which would occasion the use of the drastic emergency powers inherent in the imminent hazard determination does not by any realistic view exist in the case before us.
As this dissent was being prepared, the Nobel Peace Prize was awarded to an American agricultural scientist for studies that developed wheat strains giving bigger yields in older types, thereby helping the world’s hunger problems. The scientist had pioneered in breeding new varieties of disease-resistant wheat plants. Disease resistance was the purpose of Panogen’s development. Such research highlights the belief of many informed individuals that three or four more decades will bring upon us a real crisis in feeding the world’s population. Whether, as might be argued, the minimal dangers to a few people through misuse of a valuable agricultural product is less important than the overall threat of eventual failure to be able to feed the world is not a problem to which this court need address itself. It is a problem, however, to which in my opinion the administrative agency should have addressed itself, and in depth, prior to exercising its extraordinary power of immediate suspension.
At the hearing in the district court on a motion for the preliminary injunction, the evidence, which was not contradicted, reflected that no product as economical nor as efficacious was available as a satisfactory substitute for liquid methylmercuri seed treatment.
Obviously, of course, the work of a governmental department is easier when the opinion is entertained that if some product is hazardous to the public it should simply be taken off the market, putting the manufacturer in the broad sense on the defensive with regard to the product. This approach, however, ignores any significance in the crucial word “imminent.”
The Agricultural Department is obviously aware of the significance of the word “imminent” as reflected in the action of a director of a different division of the department in a report to the United States Court of Appeals for the District of Columbia Circuit which had ordered the Secretary of Agriculture either to ban the use of DDT or to state to the court its reasons for not doing so. BNA Environment Reporter, June 5, 1970, p. 115.
In the Department’s statement to the court the following was set forth:
“The scientific evidence now available does not establish that the use of DDT constitutes an imminent hazard to human health.
“Scientific evidence indicates that there are some adverse effects upon certain species of fish and wildlife but such effects do not constitute an im*1164minent hazard to fish and wildlife or the environment.
“DDT has indisputably important and beneficial uses in connection with human health and agriculture, and there are not yet available suitable substitutes for all essential uses.
“The use of DDT should continue to be reduced in an orderly, practical manner which will not deprive mankind of uses which are essential to the public health and welfare.” BNA Environment Reporter, July 3, 1970, p. 238.
In this parallel factual situation, which lacked the emotional impact of the Alamogordo incident, the Secretary of Agriculture displayed an awareness of the differentiation between something which might or might not be ultimately hazardous to the public and something which was imminently hazardous to the public.
The lack of awareness of the crucial necessity of imminency is reflected in the present majority opinion which sets forth the evidence produced by the government on the hearing of a motion for a preliminary injunction. The government testimony reflected that the only permanent human injuries to the knowledge of the department were to the three Alamogordo children. Hogs owned by the children’s father had died, but they had been fed poisoned feed as a result of a misuse of the treated seed which was never intended for feed purposes. The testimony further indicated that the effect of mercury compounds had been reported in laboratory animals. But again this is not surprising because obviously these laboratory animals had been fed such products, and no contention has been made that the injection of mercury products into any living organism will not produce deleterious results. Next, the testimony indicated that the effects had been observed in pheasant, quail and other wildlife, but the effects of DDT had also been so observed. The scientific community, according to the testimony, has discovered no effective antidote for alkylmercury compounds. In varying degrees, this is no doubt true of many poisonous substances, but they are tolerated if in their proper use they serve a worthwhile purpose. The testimony next referred to the fact that there had been a number of grain seizure actions taken by the Food and Drug Administration after discovering treated seed in grain. This fact and the accompanying fact that there had been no known additional instances of animals or humans suffering from ingestion of Panogen indicates that the red dye which the manufacturers of Panogen had put on their products was effective to avoid misuse.
This then was the evidence supporting a determination of imminent hazard to the public, and it seems clear that the evidence wholly fails to support the determination of imminency.
In this country I dare say there are very few barns, medicine chests or even kitchen cupboards which do not have products contained therein which would be extremely detrimental to people if misused. In the case on appeal the evidence amply supports a misuse of the product in the Alamogordo situation. The fact that misuse may result in damage does not in my opinion make a product imminently hazardous in the absence of an evidentiary showing that such misuse is frequent or was reasonably likely to occur.
The doctrine of exhaustion of administrative remedies is pragmatic in origin. It wears no constitutional halo. I can conceive no valid justification for its wooden and mechanistic application where the expertise which the rationale of the rule seeks to protect is so singularly not exercised, as in the case before us. Nor does the practicality of the doctrine in the overall scheme of governmental operation necessarily require slavish homage to it.
While the present majority opinion concludes that there was no finality in the determination of the secretary that Panogen was an imminent hazard to the *1165public and therefore judicial intervention was not appropriate, I must also respectfully disagree with this conclusion for the reasons set forth in the opinion of July 15, 1970. In addition, it is to be observed that in one sense no action of an administrative body or even of a court is final since the same body or court can subsequently take other different action. However, this does not preclude finality impact in an order such as the one here involved. Further administrative proceedings in the present case will be for a determination of whether there is a hazard to the public which would require preclusion from the marketplace. On the other hand, the issue which precipitated this litigation, determined without hearing and indeed without proper consideration, was not the hazard question per se but the imminent hazard question.
The present majority opinion expresses fear of the effects of interference with the administrative process by premature judicial intervention. We are dealing, however, with a narrow issue in that we are concerned with the imminent hazard situation only.
This emergency power is one which it seems reasonable to assume is used only sparingly, or at least should be used sparingly, where a genuine imminent hazard situation exists which would be detrimental to the public. Such cases will arise only infrequently. But when the emergency power is exercised, the administrative agency should be, in my opinion, subject to judicial intervention and review, likewise on an immediate basis, if the emergency action was taken without adequate determining principle or was unreasoned.
One further aspect of the case before us requires consideration. The district judge, who heard the testimony and observed the witnesses,, made certain findings of fact and conclusions of law in his order granting the preliminary injunction. He found that the suspension of the Panogen seed treatment products on the basis that they constituted an imminent hazard to the public was arbitrary and capricious in that there was no evidence to support the alleged incidents nor was there any evidence that Panogen was so unsafe as to create an imminent hazard to the public which could not be corrected by means other than suspension without a hearing. The present majority opinion does not consider the question of whether the statement that the action was arbitrary and capricious was a finding of fact, a conclusion of law or a mixture of the two.
While in the opinion of July 15, 1970 we did assume arguendo with regard to whether a motion to dismiss admitted that the actions were arbitrary and capricious that these were legal conclusions, the determination of the matter was not necessary for the result reached. Now that the district court, however, is being reversed, it is necessary that a determination be made on this issue.
The necessity of meeting this issue arises from Rule 52(a) of the Federal Rules of Civil Procedure, which in effect states that findings of fact should not be set aside unless clearly erroneous and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses. Where the trial court findings of fact are not clearly erroneous they must stand undisturbed on appeal. G. C. Kirn Advertising Sign Co. v. Admiral Corp., 170 F.2d 499, 501 (7th Cir. 1948). See also Dearborn National Casualty Co. v. Consumers Petroleum Co., 178 F.2d 277, 279 (7th Cir. 1949). The question of what is a finding of fact and what is a conclusion of law is often a difficult one of solution.
Professor Wright in 2B Barron & Holtzoff, Federal Practice & Procedure, § 1137 (1969 pocket part p. 203), states the following:
The Ninth Circuit has endeavored to formulate a test for distinguishing between findings of fact and conclusions of law. “A finding of fact, to which the clearly erroneous rule applies,” it says, “is a finding based on the ‘fact-finding tribunal’s experience with the mainsprings of human conduct.’ A conclusion of law would be a eonclu*1166sion based on application of a legal standard.” [footnote citation is to Lundgren v. Freeman, 307 F.2d 104, 115 (9th Cir. 1962)] On this analysis it concluded that a finding of mutual mistake was derived, in part at least, from the trial judge’s experience with human affairs, and thus could not be set aside unless clearly erroneous.
On the foregoing basis it would appear that the determination that action was arbitrary and capricious is a finding based on the mainsprings of human conduct rather than on the application of a legal standard; and that being so, I am not persuaded that the majority opinion has developed any basis for a suspension of Rule 52(a), particularly in view of the fact that this is an appeal from the granting of an interlocutory injunction.
In any event, however, I do not deem it necessary in order to sustain the trial court’s granting of the motion for a temporary injunction that we determine that the characterization as arbitrary and capricious was fact or law because independently the record does, in my opinion, show that the action was arbitrary and capricious.
On rehearing, counsel for the government was asked if the government contended that there was no immediate judicial review of arbitrary and capricious action on the part of the secretary. Counsel parried the question by stating that it was inconceivable to him that the secretary could act arbitrarily and capriciously. When pressed with the hypothetical question and reminded that historians had recorded the fact that arbitrary and capricious action on the part of governmental leaders was not unknown, counsel conceded that if the secretary had committed arbitrary and capricious action, which he still would not concede, it would seem to be the basis for prompt judicial intervention.
The result for which I contend in this dissenting opinion, which was the result reached in the opinion of July 15, 1970, would not have stopped administrative procedures on the issue of whether Panogen should eventually be removed from the market. The opinion carefully pointed out that the decision would permit a rational and objective administrative procedure to go forward, giving due weight to all phases of the matter, including that which is probably of long range concern to the government, the ecological aspects. The opinion made it possible for the determination to be made with a thorough airing of the adequate determining principles. United States v. Carmack, 329 U.S. 230, 243, 67 S.Ct. 252, 91 L.Ed. 209 (1946).
A recent news item concerns a charge by a radiologist to the effect that radioactive exhaust gas from a nuclear power reactor in an electrical generating plant in Illinois had caused an alarming increase in infant mortality in that state. The Atomic Energy Commission denied the charge. If statutory authority were accorded to this or to any other agency to take action without notice in case of imminent hazard, the commission could have issued an order shutting down the plant. Such drastic power, which is still exercised by human beings, could well lead to government by whim. The relationship between the public health and the side effects from the operation of various types of manufacturing operations as well as from the product made by such operations is, because of burgeoning population, bound to be a matter of greater and greater intensive study. Charges can be easily made, often times by a person seeking publicity. There is a strong undercurrent of emotional appeal in these charges, particularly when children and the impairment of their health is involved. The emergency power is one which should not be invoked without real and convincing cause and not on a prima facie basis.
Even with regard to the Alamogordo incident, which apparently was the real basis of the secretary’s order of suspension, this was not an established fact but was assumed for the purpose of the case to have been caused by the Panogen. As the district judge stated on the *1167assumption basis, “the record establishes a unique combination of circumstances which are unlikely to recur, including diversion of treated material to animal feed, disregard of label cautions and warnings, slaughter of a hog after it showed signs of illness, and continued eating by a single family of contaminated food from a slaughtered hog after twelve of the same pen of hogs had died and two had become blind.”
Just as counsel for the government was unwilling to concede the possibility of arbitrary and capricious action on the part of the secretary, the courts generally have apparently been somewhat reluctant to find that governmental action was so bottomed. Implicit, however, in the cases has been the recognition that if this were the fact the administrative action would be struck down. See, for example, United States v. Carmack, 329 U.S. 230, 243, 67 S.Ct. 252, 91 L.Ed. 209 (1946); Pauley v. United States, 419 F.2d 1061, 1066 (7th Cir. 1969).
Arbitrary or capricious action must be set aside. Lewis v. Flemming, 176 F. Supp. 872, 874 (E.D. Ark. 1959); Williams v. Celebrezze, 243 F.Supp. 103, 107 (E.D. Ark. 1965).
In Preferred Insurance Co. v. United States, 222 F.2d 942, 947 (9th Cir. 1955), the statute there involved did not provide for a judicial review of administrative action on claims, “but even if it did, administrative findings of fact would have to be accepted by a court unless arbitrary, capricious or without evidentiary support.” (emphasis added).
Another significant aspect in the present case is that the plaintiffs and the other distributors and manufacturers were not required to recall existing stocks from customers. While it is true that problems of disposition presented themselves, these have been surmounted where a real and hazardous situation existed of significant proportions such as in the nerve gas situation. If Panogen were of the caliber of imminent hazard to the public requiring a suspension order, certainly it would seem that an absolute recall would have been necessary.
The present majority opinion asserts that once the district court has inserted itself into the administrative process it becomes wasteful or pointless to return the matter to the agency. I cannot agree. In fact, the preliminary injunction permitted the government to issue its notices of cancellation of the registration after public hearings permitted by the act. Both the order of the district court and our opinion of July 15, 1970 contemplated that all that was being done was that the suspension from the market without hearing was being eliminated but that further hearings on the ultimate question of manufacturing and marketing of this particular product would proceed expeditiously.
The present majority opinion also states that the plaintiff’s direct and immediate concern is the impact of suspension on their business rather than the claimed danger to farmers and consumers from removal of their product. No doubt this is true although the profit motive is not a dishonorable one in our country. Even if it is true, this makes the detriment of the elimination of the product no less real to the farmers and consumers.
It is with regret that I have had to disagree with my brothers of the court but I have done so, and have done so at length, because of my sincere conviction not only that an incorrect result was reached in an individual case but that the ease would seem to permit, if - not encourage, a type of governmental procedure without hearing which is inconsistent with the protection that we, except in very unusual or emergency situations, attempt to afford to each citizen, no matter how mean or humble he may be.
I therefore would affirm the district court’s order granting the preliminary injunction.

. “The words ‘arbitrary and capricious’ are a technical legal phrase. They are not used in their popular sense and in this connection have no opprobrious connotation. In the eyes of the law an administrative action not supported by evidence or lacking a rational basis, is deemed arbitrary and capricious. Decisions of administrative officers may not be predicated on their personal desires or views, no matter how sincere they may be, O’Boyle v. Coe, D.C., 155 F.Supp. 581, 584.” O’Beirne v. Overholser, 193 F.Supp. 652, 656 (D.D.C.1961).