Petition — Colahan v. United States

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Office-Supreme Court, U.S.

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80 - 2 0 6 7 oe 2 1981 |

I

In the Supreme Court of the United States

October Term, 1980

JERRY J. COLAHAN, et al.,

Petitioners,

VS.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

To the United States Court of Appeals

For the Sixth Circuit

STANLEY M. FISHER

Counsel of Record

THOMAS H. SHUNK

650 Terminal Tower

Cleveland, Ohio 44113

(216) 696-8550

Counsel for Petitioners

May 29, 1981

THE GATES LEGAL PUBLISHING CO., CLEVELAND, OHIO—TEL. (216) 621-5647

QUESTIONS PRESENTED

1. Does the proviso of Section 502(f) of the Food,

Drug & Cosmetic Act, 21 U.S.C. §352(f), (“§502(f)”), au-

thorizing the Secretary of Health and Human Services to

promulgate regulations exempting certain drugs from the

statutory requirement of “adequate directions for use” only

when adequate directions for use are “not necessary for

the protection of the public health”, impliedly authorize the

Food and Drug Administration to require that animal drugs

designated by it be sold only under a veterinarian’s pre-

scription and meet other certain mandatory conditions?

The District Court said it did not; the Court of Appeals

for the Sixth Circuit said it did.

2. Does Section 502(f) authorize the Secretary of

Health and Education to define, by regulation, “prescription

drug” to include “veterinary drug”? The District Court

said it did not; the Court of Appeals for the Sixth Circuit

said it did.

3. Does §502(f) prevent a person charged with “mis-

branding” under that section for selling animal drugs that

bear a prescription legend from presenting, as a complete

defense, that those drugs bore “adequate directions for

use”? The District Court has not yet reached this issue;

the Court of Appeals for the Sixth Circuit said it did not.

LIST OF ALL PARTIES

Parties Petitioner:

Jerry J. Colahan

Norman F. Bauer

Robert L. Berkshire

John D. Burrows

Russell C. Humphrey, Jr.

Simon E. Miller

Ralph A. Scharver

Parties Respondent:

United States of America

TABLE OF CONTENTS

Questions Presented I

List of All Parties n

Opinions Below . 1

Jurisdiction ' 2

Statutory Provisions Involved 2

Statement of the Case 4

Reasons for Granting the Writ 15

Conclusion 24

Appendix:

Memorandum Opinion and Order of the United

States District Court (October 9, 1979) ................ Al

Order of the United States District Court (Feb-

ruary 12, 1980) Al0

Opinion of the United States Court of Appeals for

the Sixth Circuit (December 11, 1980) ................ Al4

Order of the United States Court of Appeals for the

Sixth Circuit Denying Motion for Rehearing

(March 5, 1981) A22

TABLE OF AUTHORITIES

Cases

Becton, Dickinson & Co. v. Food and Drug Administra-

tion, 589 F.2d 1175 (2d Cir. 1978) 10

Federal Maritime Commission v. Seatrain Lines, Inc.,

411 U.S. 726, 93 S. Ct. 1773 (1973) 19-20

Florida Citrus Exchange v. Folsom, 246 F.2d 850 (5th

Cir. 1957) rev. on other grounds, 385 U.S. 153, 79

S. Ct. 160 (1958) reh. denied, 358 U.S. 948, 79 S. Ct.

349 (1958) 20

Gardner v. Westinghouse Broadcasting, 437 U.S. 478

(1978) 22

NLRB v. Brown, 380 U.S. 278, 85 S. Ct. 980 (1965) . 19

Shea v. Vialpando, 416 U.S. 251, 94 S. Ct. 1746 (1974) 20

62 Cases More Or Less Each Containing Six Jars Of

Jam v. United States, 340 U.S. 593, 71 S. Ct. 515

(1951) 20

Toilet Goods Association v. Finch, 419 F.2d 21 (2d Cir.

1969) 19, 21

United States v. Articles of Drug... Mykocert, 625 F.2d

665 (5th Cir. 1980) 14

United States v. El-O-Pathic Pharmacy, 192 F.2d 62

(9th Cir. 1951) 14

United States v. Goldenberg, 168 U.S. 95, 18 S. Ct. 3

(1897) 20

United States v. Sullivan, 332 U.S. 689, 68 S. Ct. 331

(1948) 15, 16, 17, 20

*

Statutes and Regulations

21 C. F. R. 5201. 100 5

21 C. F. R. 5201. 105 2, 5, 6, 9, 12, 13, 17, 18, 20, 21

21 U.S.C. 8352 (f) (Food, Drug & Cosmetic Act)

9502 (f) 2, 4, 5, 6, 8, 14, 15, 16, 17, 18, 20, 21, 22

21 U.S.C. 8353 (b) (1) 12, 14

21 U.S.C. §502(f) (1) . 2, 4, 5, 9, 13, 17, 18, 20, 21

21 U.S.C. 8502 (N) 5

21 U.S.C. 8503 (b) (1) 5, 6, 10, 14

28 U.S.C. 81292 (a) (1) 8, 22, 23

28 U.S.C. §1292(b) 7

Miscellaneous

Collins, Federal Drug Regulations As They Apply To

Veterinarians, 18 Foop Druc Cosmetic LAw Jour-

NAL 333 (May 1953) 11

HEW Pub. No. (FDA) 74-6012, Rvd. May, 1978 10

Kushen, FDA: A Case Study In Administrative

“Legislation”, 24 THE Business LAWYER 261 (1968)

6, 12,13

TouLtmin, Law Or Foop Druc Anp Cosmetics (1963) 14

Stanfill, Chief of Philadelphia District of FDA, Facts

About The Food & Drug Administration, Pennsyl-

vania Veterinary Medical Association, Lancaster,

Pennsylvania, October, 1957 11

—

In the Supreme Court of the United States

October Term, 1980

JERRY J. COLAHAN, et al.,

Petitioners,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

To the United States Court of Appeals

For the Sixth Circuit

The Petitioners, Jerry J. Colahan, et al., respectfully

ask that a Writ of Certiorari issue to review the final opin-

ion of the United States Court of Appeals for the Sixth

Circuit entered in this proceeding on December 11, 1980.

Rehearing was denied on March 5, 1981, which action over-

ruled and denied Petitioners’ Petition for Rehearing or in

the Alternative Rehearing En Banc of the Court’s decision

entered December 11, 1980.

OPINIONS BELOW

The opinion of the Court of Appeals for the Sixth

Circuit is reported at 635 F.2d 564; the District Court for

the Northern District of Ohio’s opinions are unreported.

All opinions appear in the Appendix hereto.

JURISDICTION

The opinion of the Court of Appeals for the Sixth Cir-

cuit was entered on December 11, 1980. A timely Petition

for Rehearing or, in the Alternative, Rehearing En Banc

was denied on March 5, 1981, and this petition was filed

within 90 days of that date. The jurisdiction of this Court

is invoked under 28 U.S.C. §1254 (1).

STATUTORY PROVISIONS INVOLVED

United States Code, Title 21:

§352 (f)—

A drug or device shall be deemed to be misbranded —

(f) Unless its labeling bears (1) adequate di-

rections for use .. provided, that where any re-

quirement of clause (1) of this subsection, as

applied to any drug or device, is not necessary for

the protection of the public health, the Secretary

shall promulgate regulations exempting such drug

or device from such requirement.

Code of Federal Regulations, Title 21:

§201.105 Veterinary drugs.

A drug intended for veterinary use which, because of

toxicity or other potentiality for harmful effect, or the

method of its use, is not safe for animal use except under

the supervision of a licensed veterinarian, and hence for

which “adequate directions for use” cannot be prepared,

shall be exempt from section 502(f)(1) of the act if all

the following conditions are met:

(a) The drug is:

(1) In the possession of a person (or his agents

or employees) regularly and lawfully engaged in the

manufacture, transportation, storage, or wholesale or

retail distribution of veterinary drugs and is to be sold

only to or on the prescription or other order of a

licensed veterinarian for use in the course of his

professional practice; or

(2) In the possession of a licensed veterinarian

for use in the course of his professional practice.

(b) The label of the drug bears:

(1) The statement “Caution: Federal law re-

stricts this drug to use by or on the order of a licensed

veterinarian”; and

(2) The recommended or usual dosage; and

(3) The route of administration, if it is not for

oral use; and

(4) The quantity or proportion of each active

ingredient as well as the information required by sec-

tion 502(e) of the act; and

(5) If it is for other than oral use, the names

of all inactive ingredients, except that:

(i) Flavorings and perfumes may be desig-

nated as such without naming their components.

(ii) Color additives may be designated as

coloring without naming specific color components

unless the naming of such components is required

by a color additive regulation prescribed in Sub-

chapter A of this chapter.

4

(iii) Trace amounts of harmless substances

added solely for individual product identification

need not be named.

If it is intended for administration by parenteral in-

jection, the quantity or proportion of all inactive in-

gredients, except that ingredients added to adjust the

pH or to make the drug isotonic may be declared by

name and a statement of their effect; and if the ve-

hicle is water for injection, it need not be named.

(6) An identifying lot or control number from

which it is possible to determine the complete manu-

facturing history of the package of the drug;

Provided, however, That in the case of containers too small

or otherwise unable tc accommodate a label with sufficient

space to bear all such information, but which are packaged

within an outer container from which they are removed

for dispensing or use, the information required by para-

graphs (b) (2) (3), and (5) of this section may be contained

in other labeling on or within the package from which it

is to be so dispensed, and the information referred to in

paragraph (b)(1) of this section may be placed on the

crimp of the dispensing tube.

STATEMENT OF THE CASE

This petition arises from a complaint brought by the

Food and Drug Administration (“FDA”) alleging that

the petitioners (also referred to as “Colahan”) received and

sold animal drugs that were misbranded under §502(f) (1)

of the Federal Food, Drug & Cosmetic Act (“FDCA”), 21

U.S.C. 8352 (f) (1) [“§502(f)”]. Section 502 (f) (1) deems

a drug “misbranded”, unless its labeling bears adequate

directions for use”.

Pursuant to this section, the FDA promulgated regula-

tion 21 C.F.R. §201.105 (“201.105”), which, on its face re-

lieves an animal drug from the requirement of §502(f) (1)

for “adequate directions for use” if the label bears a “pre-

scription legend“: Caution: Federal law restricts this

drug to sale by or on order of a licensed veterinarian.”

The effect of the regulation however is that:

1. the definition of “prescription drugs” now includes

“veterinary drugs” by regulatory fiat rather than by

legislative determination.

2. a manufacturer may insure marketing of its drugs

only through veterinarians simply by adding the

“restriction label” to the animal drug.

3. petitioners cannot overcome a charge of misbrand-

ing under §502(f) by establishing, through credible

expert evidence, that the directions on the label

constitute “adequate directions for use” if the drug

bears a “restriction legend“.

None of these results are authorized by 8502 (f).

1. §502(f), which deems a drug misbranded unless its label-

ing bears edequate directions for use, authorized the issuance

of exempting regulations only where such labeling directions are

“not necessary for the protection of the public health.” Exempt-

ing regulations were issued for human “prescription drugs” 21

C.F.R. 201.100. The heading of §201.100 is “Prescription Drugs

for Human Use”, and the regulation explicitly states that “A drug

subject to the requirements of Section 503(b)(1) of the Act

shall be exempt from Section 502(f)(1) if all of the following

conditions are met: * * *” Only human drugs subject to Section

503(b)(1) are referred to. §201.105 is headed simply: “Veter-

inary Drugs” and the initial paragraph makes no reference to its

statutory authority for designating “veterinary drug” to be in-

cluded under “prescription drugs.” Thus the separate sections

for “prescription drugs” dealing with humans and “veterinary

drugs” dealing with animals are a recognition of the Congressional

distinction. Section 502(N), added by the Drug Amendments of

1962, deems a “prescription drug” to be misbranded unless it

complies with the requirements set forth therein for “prescription

(Continued on following page)

The District Court and petitioners contend that no

simple change in regulatory language can properly define

“prescription drug” to include “veterinary drug”, since the

sole statutory basis for the definition of “prescription drugs”

clearly limits it to drugs for use by man, and the sole au-

thority for §201.105 is §502(f), which deals only with

labeling [see footnote 1, supra]. The FDA charged these

petitioners with misbranding of certain animal drugs, even

though the labels on each of said drugs bears “adequate

directions for use” simply because of the presence of the

manufacturer’s caution legend. The FDA contends, and

the Court of Appeals agreed, such legend on the label fore-

closes petitioners from establishing that said animal drugs

are not misbranded by demonstrating that each bears ade-

quate directions for use, pursuant to §201.105.

A. Proceedings in the Trial Court

Upon filing the Complaint, the FDA obtained an ex

parte temporary restraining order (“TRO”). On November

9, 1978, the parties entered into a stipulated order “in

lieu of extending the Temporary Restraining Order” and

the ex parte TRO expired.”

The FDA, in the District Court, claimed that the animal

drugs were misbranded under 8502 (f), pursuant to §201.105,

Footnote continued—

drug” advertisements. The FDCA on June 27, 1968 defined

prescription drug to include drugs defined in section 503(b) (1)

of the Act which dealt with human drugs only. Section 201.105

was issued pursuant to §502(f), which deals only with labeling

and not “prescription drugs” as did 503(b)(1). Kushen, FDA:

A Case Study In Administrative Legislation“, 24 THe BUSINESS

LAWYER 261, 265-266, 1968.

2. The stipulated order was specifically stated to be “in lieu

of continuation of the Temporary Restraining Order” and pro-

vided that it would remain in effect “until further order of this

Court [District Court]”. It thus was, by its terms, subject to

being vacated by the District Court, which is what happened upon

motion of petitioner.

7

solely because the labels bore the cautionary veterinarian

legend but did not contend, in the District Court, that said

drugs could not bear adequate directions for use.“

On October 9, 1979, following extensive briefs and oral

hearings, the District Court vacated, on the Motion of Peti-

tioners, the stipulated order, as provided by the terms of the

order itself, while ordering the case advanced for hearing

on the merits of the FDA’s requested preliminary and per-

manent injunctive relief. The District Court denied only

the FDA’s motion to certify its October 9, 1979, order as an

interlocutory order pursuant to 28 U.S.C. §1292(b) on

the ground that it had not issued a final order in vacating

the stipulated order in accordance with its terms which

specifically permitted the District Court’s action. The Dis-

trict Court never denied or issued an order denying FDA’s

Motion for Preliminary Injunction.‘

B. Proceedings in the Court of Appeals

The Court of Appeals for the Sixth Circuit reversed

the District Court in an opinion filed December 11, 1980.

The timely request of petitioners for a rehearing or, in the

alternative, rehearing en banc, was denied on March 5,

1981.

3. As will be noted the Court of Appeals accepted FDA “new”

argument, contrary to its position in the District Court, that if an

animal drug bears the cautionary legend then it is impossible

to have “adequate directions for use”. The Circuit Court’s de-

cision fails to explain what federal law so states as to animal

drugs—there simply is none.

4. The District Court ordered the FDA’s Motion for Pre-

liminary and Permanent Injunction advanced to a hearing on the

merits. The FDA, instead of proceeding to a hearing on the

merits, filed a motion to stay all proceedings and filed a notice of

appeal from the Order of October 9, 1979, to the United States

Court of Appeals for the Sixth Circuit.

The FDA, in its appeal, requested relief that was not

even properly before the Court of Appeals.“ The Court

of Appeals also denied petitioners’ motion to dismiss the

appeal pursuant to Rule 8(a), Rules of the Court of Ap-

peals for the Sixth Circuit, on the grounds there was no

interlocutory order by the District Court “granting, con-

tinuing, modifying or dissolving injunctions” pursuant to

28 U.S.C. §1292(a) (1).°

The Court of Appeals, in reversing the District Court,

unilaterally changed the terms of the stipulated order,

previously agreed to by the parties with the consent of the

District Court and, in effect, granted the FDA’s request

for preliminary and permanent injunction against petition-

ers without affording petitioners an opportunity for a hear-

ing on the merits of said requested injunctive relief and

effectively foreclosing petitioners from establishing said

drug bore “adequate directions for use” so as not to be con-

sidered misbranded under §502(f).

C. Animal Drugs vs. Human Drugs

The Court of Appeals accepted the unsupported asser-

tion by the FDA that the “plain meaning” interpretation

5. “Because the October, 1979 Order vacating the stipulated in-

junction, granting Colahan’s motion for a preliminary injunc-

tion and denying the government’s motion for an injunction

was based on clear legal error, it should be reversed. * * *

For the reasons stated, the order of the district court should

be reversed and the injunction vacated.” (U.S. Brief, p. 32,

before the Court of Appeals—italicized portion represents

issues not appealed).

6. The District Court di? not deny or dissolve any motion

for preliminary injunction. Theve was no injunction granted, dis-

solved or denied. To the contrary, the District Court ordered

FDA’s motion for preliminary and permanent injunction advanced

for hearing. The FDA, instead of proceeding to a hearing on

the merits, filed a motion to stay all proceedings and filed a

notice of appeal from the Order of October 9, 1979, to the

United States Court of Appeals for the Sixth Circuit.

of 8502 (f) (1) would allow unrestricted over-the-counter

sale of all veterinary drugs and require withdrawal of

useful animal drugs from the market that FDA considers

dangerous unless sold by prescription. There was abso-

lutely no evidence in the record before the Court of Appeals

to support such an assertion, and it simply is not accurate.

The record below, however, did establish that all or

some of these restricted animal drugs are available as un-

restricted over-the-counter drugs under different names.’

There is no evidence that these drugs fail to bear adequate

directions for use.“ The FDA has more than adequate

statutory authority, other than §201.105, to protect against

misuse of dangerous animal drugs, including authority to

protect against (1) drug residues in animals raised for

human consumption and (2) misuse of animal drugs by

humans.

D. FDA “Long-Standing”’ Interpretation

The Court of Appeals indicated it was persuaded by

the FDA’s “long-standing exercise of authority to issue and

7. Petitioners contend that the animal drugs are not mis-

branded since the labeling of each bears directions adequate for

the intended use. The fact that a veterinarian caution legend

is indiscriminately placed upon the label by the manufacturer,

for reasons other than safety and unrelated to public health, such

as marketing and distribution policy, does not render a layman

incapable of following adequate label instructions to direct him

in the intended use of the animal drug. The Court of Appeals

decision would foreclose such evidence.

8. One of the questions and answers in the 1951 House hear-

ings on H.R. 3598, August 1, 1951, the Durham-Humphrey Bill,

was as follows, at 9323:

Twenty-Ninth Question: Why should some manufac-

turers desire to restrict drugs to sale on prescription only,

although they would safely be sold over the counter without

a prescription?

Answer: Several drug manufacturers have traditionally

in their trade catered to physicians and registered pharmacists.

— 1 2 prefer to buy or promote medicines of firms

who their drugs this way.

10

enforce §201.105” and that the administrative interpretation

over many years was entitled to great weight. The de-

cision misconstrues the FDA’s “long-standing” interpreta-

tion prior to petitioners’ challenge. The Court of Appeals

must not accept as “interpretation” that which is nothing

more than the current FDA’s “belief” as to what is best

for the public—a belief held despite contrary expressions

by Congress and its own agency. The Court of Appeals

totally ignored the continuing congressional emphasis on

the recognized distinction between human and animal drugs

—specific congressional authority was granted for exempt-

ing prescription human drugs by enactment of 8503 (b) (1)

(B)—no similar statutory authority was granted as to

animal drugs. Under these circumstances it is clear that

the Court of Appeals’ opinion was not warranted by the

principle requiring due regard be given to administrative

interpretation. Becton, Dickinson & Co. v. Food and Drug

Administration, 589 F.2d 1175, 1181 (2d Cir. 1978).

The conclusion of the Court of Appeals that its deci-

sion was based upon a “long-standing agency interpreta-

tion” is and was contrary to the record before that Court.

As recently as 1974-79, when the complaint was filed, the

FDA’s official position was this:

“The Congress specifically omitted animal drugs from

prescription legend requirements on the basis that a

man’s animals are his private property and he may

diagnose and treat their ailments as he sees fit. This

means that in any case where adequate directions for

lay use may be written, the animal drug must be freely

marketed. . .” (Emphasis supplied). Bureau of Vet-

erinary Medicine, HEW Pub. No. (FDA) 74-6012, Rvd.

May, 1978.°

9. After the District Court’s Order, the FDA amended said

release to conform to its “new” interpretation.

11

This was the official FDA interpretation prior to the instant

action.

In 1953, another spokesman for the FDA stated the of-

ficial interpretation as follows:

“Officially, we must take the position that every

owner of animals has the unalienable human right

to make his own diagnosis and to attempt treatment

of his own animals, which admittedly are his prop-

„. .. We must recognize that Congress sets policy

when it enacts laws, and, in this instance, the medi-

cation of animals by their owners has been accepted

as public policy. . .” (Emphasis supplied). Collins,

Federal Drug Regulations As They Apply To Veteri-

narians, 8 Foop Druc CosMeTic JOURNAL, 333, 335

(May, 1953).

Again, in 1957, the former chief of the Philadelphia

district of FDA stated the “long-standing interpretation”

of the FDA as follows:

“Under the Act according to the Food & Drug Ad-

ministration’s interpretation, the owners of animals

have the right to attempt to make their own diagnosis

and to attempt treatment of their own animals.

(Emphasis added). Stanfill, Chief of Philadelphia Dis-

trict of FDA, Facts About The Food & Drug Adminis-

tration, Pennsylvania Veterinary Medical Association,

Lancaster, Pennsylvania, October, 1957.

Even prior to 1951, the FDA admitted that it was

questionable that they had any authority to differentiate

between “prescription drugs” and “over-the-counter drugs”

or to forbid the sale of prescription drugs without a pre-

scription. It was for this very reason that the FDA

12

sought clear and unequivocal congressional authority to

prohibit the sale of prescription drugs without a prescrip-

tion. However, Congress gave that authority to the FDA

only in the case of human drugs. Durham-Humphrey

Amendments, 65 Stat. 648 (1951). This new amendment

to the FDCA specifically allowed the FDA to require

prescription sales only when the drug is:

A drug intended for use by man which—* * *

(b) because of its toxicity or other potentiality

for harmful effect, or the method of its use, or the

collateral measures necessary to its use, is not safe

for use except under the supervision of a practitioner

licensed by law to administer such drug; * * * [21

U.S.C. §353(b) (1).] (Emphasis added).

Alan Kushen commented on the amendments in this

way:

“The Durham-Humphrey Amendment has been in ef-

fect since 1952 and, as we all know, requires that cer-

tain drugs be dispensed only on written prescription

of a licensed practitioner. We are all equally familiar

with the statutory legend ‘Caution: Federal law pro-

hibits dispensing without prescription.’ One might

not always remember, however, that all of Section

503(b) reads on drugs ‘intended for use by man’ (Em-

phasis supplied). The legislative history of the Dur-

ham-Humphrey Amendment amply supports the posi-

tion that it was clearly not meant to apply to veterinary

drugs.” Kushen, FDA: A Case Study In Adminis-

trative “Legislation”, 24 THe Business LAwyer 261

(1968) (Emphasis added).

This same article addressed the FDA’s “promulgation”

of regulation §201.105 [then codified as §1.106(c)] which

is the regulation purportedly issued under authority of the

13

proviso to §502(f)(1). The author observed that the

promulgation of this regulation constituted but another

“classic example of [the FDA] pulling one’s self up by

one’s own bootstrap”. The manner in which the FDA

accomplished this was as follows:

„. .. FDA inserted into §1.106(c) [now §201.105]

as one of the conditions of the exemption for ‘veter-

inary drug,’ that the label bear the legend ‘Caution:

Federal Law restricts this drug to sale by or on order

of a licensed veterinarian.’ What federal law so re-

tricts?

“It [the FDA] overlooks completely the fact that

§1.106(c) [now §§201.105] was issued pursuant to

§502(f), which deals only with labeling. No simple

change in regulatory language can properly define

‘prescription drug’ to include ‘veterinary drug’ since

the sole statutory basis for the definition clearly limits

it to drugs for use by man.” Id. at 264. (Emphasis

added).

The FDA’s interpretation is further reflected by its

introduction, in 1980, before the 96th Congress, of H.R.

7035 to amend the FDCA. This 1980 Bill, which was not

passed out of committee, stated in the amendment which

would if adopted authorize a regulation similar in part

to §201.105:

“Section 104 of the Bill would provide exclusively for

the category of animal drugs which may be dispensed

only under a veterinarian prescription.”

Thus, this 1980 Bill would have amended §503 to provide

the statutory authority the FDA now lacks to regulate

animal prescription drugs in the same manner as the

Durham-Humphrey Amendments in 1951 authorized reg-

14

ulation of human prescription drugs (§503(b) (1), 21 U.S.C.

§353 (b)(1)). The Court of Appeals decision totally

ignored all the legislative and agency acknowledgments

of the difference between human and animal drugs. Each

of the drug cases relied upon by the Court of Appeals

dealt solely with human drugs and not animal drugs.“

Every known article or text published on the subject

has recognized this distinction, in statutory regulation,

between animal drugs [veterinary drugs] and human drugs

[drugs intended for use by man], a controlling distinction

which the decision of the Court of Appeals failed com-

pletely to recognize.

“There is a different philosophy for drugs designated for

veterinary use, The owners of animals have the right

to diagnose the ailments of their pets or livestock and

to treat them by injection, internal medication or other-

wise, and directions for use must be adequate for lay

use except in a comparatively few examples of highly

potent drugs. If an owner miscalculates, human life

is not endangered. Injury or death of an animal is

an economic loss which is different from injury or

death of a human being.” (Emphasis supplied) 3

TouLmin, LAW or Foop & Druc Cosmetics, Chapter

47, p. 1069.

This distinction between human and animal drugs

has continually been espoused by Congress. (Cong. Rec.

No. 6, 1967, Animal Drug Amendments H.R. 3639, Page

31292.) It had been the “long standing interpretation”

of the FDA until the instant case.

10. United States v. El-O-Pathic Pharmacy, 192 F.2d 62

(9th Cir. 1951), United States v. Articles of Drug . . . Mykocert,

625 F.2d 665 (5th Cir. 1980). El-O-Pathic, supra, erroneously

ö that 502 (f) required a prescription legend for human

gs.

15

REASONS FOR GRANTING THE WRIT

1. The decision of the Court of Appeals for the

Sixth Circuit conflicts in principle with the decision of

this Court in United States v. Sullivan, 332 U.S. 689 (1948),

where Justice Rutledge, in his concurring opinion, con-

cluded that the plain meaning of the four-line proviso of

8502 (f) conformed to that of the district court rather than

that of the Court of Appeals.“ The important question

of federal law as to animal drugs decided by the Court of

Appeals in this case, has not been previously addressed or

settled by this Court.

2. The Court of Appeals erred in concluding that an

animal drug bearing veterinarian caution legend could

not also bear “adequate directions for use” under §502(f)

so as not to be misbranded.

3. The decision of the Court of Appeals conflicts with

decisions of this Court and other Courts of Appeals on the

Final Judgment Rule since the vacating of a stipulated

order and advancing a request for injunctive relief to a

hearing on the merits was not the equivalent of dissolving

or refusing an injunction on the merits.

4. The decision of the Court of Appeals in effect

granted FDA’s motion for preliminary and permanent

injunctive relief without affording petitioners a hearing on

the merits.

11. The Court of Appeals has granted the FDA authority to

regulate animal drugs, as distinguished from human drugs, by

prescription legend where Congress expressly refused to do so,

where there is no clear legislative history supporting such ex-

tention, where the Agency’s prior interpretations did not authorize

such extension, and where such an extension is not necessary to

effectuate the purpose of the Food, Drug & Cosmetic Act.

16

1. The Decision of the Court of Appeals for the Sixth

Circuit Conflicts in Principle With the Decision of

This Court in United States v. Sullivan, 332 U.S.

689 (1948), Where Judge Rutledge, in His Concurring

Opinion, Concluded That the Plain Meaning of the

Four-Line Proviso of §502(f) Conformed to That of

the District Court and Not the Court of Appeals.

United States v. Sullivan, supra, concerned a retail

druggist who received a number of bottles of a human

drug called sulfathiazole. The bottles had a prescription

label. On two separate occasions twelve tablets were re-

moved from the labeled bottles, put in unlabeled pill boxes,

and sold to customers.

The issue in Sullivan was whether the Act’s require-

ment that it be applied only to persons who performed

acts resulting in drug misbranding while the drug was

“held for sale after shipment in interstate commerce” ex-

empted the locai retailer. This Court held it did not.

The question of the authority for requiring prescrip-

tion sale could have been raised by the facts of Sullivan,

but was neither briefed nor dealt with in the Court’s opin-

ion. The question was, thus, never brought before this

Court.“

However, the Court did have occasion to consider the

general nature of the FDCA. Justice Rutledge, in his con-

curring opinion, noted that:

The Act is long and complicated. Its numerous pro-

visions treat the very different subjects of drugs, food

12. The decision of the Court of Appeals erred in allowing

the FDA to include animal drugs in prescription legend require-

ments by regulation when Congress specifically omitted animal

drugs from prescription legend requirements on the basis that

a man’s animals are his private property and he may diagnose

and treat their ailments as he sees fit.” (See text, supra, pre-

ceding footnote 10.)

17

and cosmetics alike in some respects, differently in

others. The differences are as important as the sim-

ilarities, and cannot be ignored.” United States v. Sul-

livan, supra (emphasis added), at p. 699.

Of course, Sullivan was decided before the 1951 Durham-

Humphrey Amendments; it was, in fact, one of the primary

reasons for the adoption of the Amendments as to human

drugs. Justice Rutledge was therefore speaking of both

human and animal drugs when he interpreted the “proviso”

language of §502(f)(1) now relied upon by FDA as au-

thority for promulgating §201.105. Justice Rutledge’s in-

terpretation of the plain meaning of those words is impor-

tant:

“The intent to protect the public health is further

emphasized by the limited scope of the proviso, which

directs the Administrator to make exemptions only

when clause (1) ‘is not necessary for the protection

of the public health.“ (at p. 702.)

Justice Rutledge’s views were echoed by the majority at

pages 694-695 and by the Trial court in the instant case in

applying this same plain meaning to the same words. The

Court of Appeals ignored the Sullivan decision in its

opinion.

The FDCA covers a broad range of items—food, cos-

metics, human drugs, animal drugs, medicinal devices, and

the like. Sullivan emphasized that the statutory differences

in the way these diverse items are handled must be given

close scrutiny and full effect for the proper and fair ad-

ministration of the statute. The Court of Appeals’ inter-

pretation of Section 502(f) and regulation §201.105 is in

direct contradiction to the Court’s guidelines set out in

Sullivan. The decision in Sullivan did not allow the un-

restricted over-the-counter sale of all human drugs or

18

devices nor would it as to veterinary drugs. FDA has

sufficient authority without §201.105 to protect the public

from so-called potent or dangerous animal drugs. Further,

FDA can and has in the past sought congressional authority

to designate animal drugs as “prescription drugs”, but

such authority has not been given,”

The legislative history of §502(f) establishes that no

implicit exemption for animal drugs bearing a prescription

legend “is necessary to attain congressional objectives or

to avert an unreasonable reading” of the proviso to §502(f)

(1), “not necessary for the protection of the public health”.

Id. at p. 2475.“ .

The District Court’s Order of October 9, 1979, empha-

sized that any possible presumption as to the validity of

administrative regulations is ‘annulled and found unen-

forceable when in excess of statutory authority as de-

termined by the natural and plain meaning of the con-

gressional enactment”. The District Court correctly con-

cluded that “the proviso to §352(f) (1) [§502(f) (1)] speaks

plainly and unequivocally”.

13. See H.R. 7035, 96th Cong. 20 Session April 2, 1980 (Sec-

tion 104), which would provide for a —— 4 of Mid eren

—— as, which does not presently exist. ill was not

adopted.

14. In the Congressional hearings on the 1938 Federal Food,

and Cosmetic Act the committee analyzed the misbrandin

provision of the act on drugs and devices, tion 502(f) whigh

was amended to its present form. The report clearly states that

Section 502(f) is a "labeling statute and permits the Secretary

by regulation to prescribe “warnings”. It was not intended to

restrict availability of drugs for self-medication, Other pro-

visions of Section 502 are designed to uire the labeling of

drugs and devices with information essential to the consumer,

The bill is not intended to restrict in any way the availability of

drugs for self-medication. On the contrary, it is intended to

make self-medication safer and more effective. For this purpose

prove rovisions are included in this section requiring the appropriate

of habit-forming drugs, requiring that labels bear ade-

—5 rections for use and warnings against probable misuse,

and setting up appropriate provisions for deteriorating drugs.

19

As the Second Circuit stated in rejecting the govern-

ment’s construction of another provision of the Act in

Toilet Goods Association v. Finch, 419 F.2d 21 (2d Cir.

1969):

„ .. the language is too clear for us to read it as mean-

ing something different from what it so plainly says,

at least in the absence of persuasive legislative history.

The case fits perfectly Mr. Justice Brandeis’ famous

stricture, ‘what the Government asks is not a con-

struction of the statute, but, in effect, an enlargement

of it by the court, so that what was omitted, presum-

ably by inadvertence, may be included within its

scope.“ (Emphasis supplied). 419 F. 2d at 29.

In the Toilet Goods case, in construing FDA regulatory

power, the Distriet Court reasoned:

„. . . if Congress had intended to confer upon

the FDA the regulatory powers which that agency

has assumed in the Regulations , it could

have easily done so in simple and unambiguous lan-

guage. Congress did not do so, and the obvious im-

plications from the negative are fortified by the legisla-

tive history of the 1960 Amendments.

* * * the point of this case is that Congress,

and not the FDA or the Federal Courts, has the power

to establish * * * consumer protection.” (Emphasis

added). Toilet Goods Association v. Gardner, 278 F.

Supp. 786, 793-4 (S.D.N.Y. 1968) aff d in part in Toilet

Goods Association v. Finch, 419 F.2d 21 (2d Cir. 1969).

This Court has further held that agency interpretations

which rest on an erroneous legal foundation, or which

are inconsistent with a statutory mandate, must be struck

down. NLRB v. Brown, 380 U.S. 278, 85 S. Ct. 980 (1965);

Federal Maritime Commission v. Seatrain Lines, Inc., 411

U.S. 726, 93 S. Ct. 1773 (1973), and that an administrative

construction of an act which is clearly erroneous is not

persuasive in judicial proceedings, Florida Citrus Ex-

change v. Folsom, 246 F.2d 850 (5th Cir. 1957), rev’d on

other grounds, 385 U.S. 153, 79 S. Ct. 160 (1958), reh. den,

79 S. Ct. 349.

The principle that an agency’s construction of its own

regulations is entitled to great weight normally applies

only where the relevant statutory language is unclear or

is susceptible of differing interpretations. Shea v. Vial-

pando, 416 U.S. 251, 94 S. Ct. 1746 (1974). In construing

what Congress has written in the proviso to 502 (f) (1),

neither the FDA nor this Court can add, subtract, delete

or distort the words used therein. 62 Cases etc. v. United

States, 340 U.S. 593 (1951); See also, United States v.

Goldenberg, 168 U.S. 95, 103 (1897), cited by the District

Court in its opinion and order.

The District Court in this case concluded, as did this

Court in United States v. Sullivan, supra, 332 U.S. 702-

703, that the statutory proviso to §502(f) (1) is not ambigu-

ous and calls for a common sense and literal reading.

The requisite congressional intent for the FDA to have

promulgated §201.105 on the authority of the proviso

to §502(f)(1) is clearly not present. Simply stated, the

Court of Appeals failed to give effect to the plain meaning

of the statutory proviso of 5502 (f) (1) despite this Court's

admonition in Sullivan to the contrary.

2. The Court of Appeals Erred in Concluding That an

Animal Drug Bearing a Veterinarian Caution Leg-

end Could Not Also Bear Adequate Directions for

Use“ Under §502(f) So As Not to Be Misbranded.

After deciding that the District Court’s action, which

granted a motion to vacate the stipulated order, was appeal-

21

able and that the District Court’s order was in error,

the Circuit Court went on to decide an issue which the

District Court has not yet reached. That issue is whether

by the mere affixation to a label of an animal drug of

a warning “Caution: Federal Law restricts this drug to

use by or on the order of a licensed veterinarian” it is

per se impossible for “adequate directions for use” to be

written as required by §502(f).

In order to satisfy the basic statutory mandate of

9502 (f) (1), all drugs, whether human or animal, had to

bear information for all conditions for which the drug

was intended to be prescribed, recommended, or suggested

in its labeling and all had to bear information on dosage,

frequency of use, duration of use, time of use, root of

use and preparation for use. This is the very type of

information, translated to veterinarian use, these nine

drugs contain, in addition to other information, in their

labeling. There has been no testimony or evidence to the

effect that said labels do not contain “adequate directions

for use”.

The so-called “lay use” requirement for adequate di-

rections was not utilized until 1952 after the enactment

of the Durham-Humphrey Act. See 17 Fed. Reg. 6818

(1952) codified at 21 C.F.R. §201.105. Therefore, Congress

did not, through the Durham-Humphrey Amendment, ap-

prove a regulatory “lay use” definition as applied to animal

drugs since the Durham-Humphrey Amendment was

adopted before the definition was adopted and the Durham-

Humphrey Amendment related only to human drugs.

If Congress had concluded that certain essential animal

drugs might be characterized as so unsafe that proper

labeling with the adequate directions for use could not

be devised for them, as concerned the Court of Appeals,

it would have said so, in “simple and unambiguous lan-

guage.” Toilet Goods, supra.

3502 (f) says absolutely nothing about there being

some drugs for which no adequate directions can be written

for lay use. It simply says that adequate directions for

use shall be written for all drugs.

The Court of Appeals has in effect pre-empted the

right of the petitioner to (1) challenge the need or the

reason for any of the animal drugs to bear a “prescription

legend” and (2) to establish in the Trial Court, that the

labels on said drugs bear “adequate directions for use”

under 8502 (f) so as not to be misbranded.

3. The Decision in This Case Conflicts With Decisions

of This Court and Other Courts of Appeals on the

Final Judgment Rule.

An order modifying or dissolving a stipulated order

between the parties, which provides that it was to remain

in effect only “until further order of this Court“ is inter-

locutory in nature and therefore is not immediately appeal-

able.“ There has been no hearing yet on the FDA’s

request for injunction.

This settled rule reflects a fundamental policy decision

that has been made by Congress, and endorsed repeatedly

by this Court,“ that in all but the most exceptional of

15. 28 U.S.C. §1292(a) (1).

16. Congress has, of course, carved out a limited exception

to the final judgment rule in §1292(a)(1) which provides a

right of appeal from an interlocutory on which grants, de-

nies or dissolves injunctions.

17. Gardner v. Westinghouse Broadcasting, 437 U.S. 478

481 (1978) nt. 7. The Court of Appeals obviously misconstrued

the record when it found that an “injunction was dissolved or

refused on the merits”. There was and has been no hearing or

ruling on the merits of any injunction request of the FDA. Ac-

tually, it was advanced for hearing on the merits by the very

order which the FDA appealed. The FDA moved to stay such

a hearing.

23

circumstances the benefits that may be realized in per-

mitting piecemeal review are far outweighed by the costs,

delay in concluding litigation on its merits, and the in-

evitable drain on scarce judicial resources.

One of the major dangers of the present decision is the

blind acceptance of the FDA’s erroneous characterization

of the record to the effect that there was a denial of its

motion for injunctive relief when in fact no hearing on the

merits of the requested injunctive relief has even yet oc-

curred and the FDA has filed a motion to stay such hear-

ing.

The Court of Appeals concluded that the order vacating

the stipulated order amounted to the dissolution or re-

fusal of an injunction within the meaning of §1292(a) (1).

The major vice of the decision was the length to which the

Court went to distort the District Court’s order by con-

struing the stipulated order as an “injunction” that “was

dissolved or refused on the merits” by the Court’s order.

The District Court’s opinion clearly indicated otherwise.

4. The Decision of the Court of Appeals in Effect

Granted the FDA’s Motion for Preliminary and

Permanent Injunctive Relief Without Affording Pe-

titioners a Hearing on the Merits.

Without affording the petitioners with an opportunity

to be heard on the merits of the requested preliminary or

permanent injunctive relief, the Court of Appeals’ de-

cision has preempted the District Court’s opportunity to

proceed with such a hearing by foreclosing evidence that

said drugs are not dangerous or that the prescription

legends are not necessary or that adequate directions for

use can be demonstrated despite the presence of said

cautionary legend. What the Court of Appeals has done

is to automatically grant the FDA an injunction based on

24

a stipulated order agreed to by the parties that was spe-

cifically subject to being dissolved by “further order” of

the District Court. Such an approach conflicts with due

process, the burden of proof for injunctive relief, and con-

travenes the basic philosophy of determining the justifica-

tion for the issuance of the extraordinary injunctive relief.

The mere presence of a cautionary legend on drugs, with-

out more, should not automatically justify the issuance

of the equivalent of a permanent injunction.

CONCLUSION

For these reasons, a Writ of Certiorari should issue

to review the judgment and opinion of the Court of Ap-

peals for the Sixth Circuit.

Respectfully submitted,

STANLEY M. FISHER

Counsel of Record

THOMAS H. SHUNK

650 Terminal Tower

Cleveland, Ohio 44113

(216) 696-8550

Counsel for Petitioners

May 29, 1981

Al

APPENDIX

MEMORANDUM OPINION AND ORDER OF THE

UNITED STATES DISTRICT COURT

(Filed October 9, 1979)

No. C 78-1470 A

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff

V.

JERRY J. COLAHAN, et al.,

Defendants

MEMORANDUM OPINION AND ORDER

Lamsnros, District Judge

This action was brought by the United States under the

Food, Drug and Cosmetic Act, 21 U.S.C. §301, et seq. (“the

Act”), to enjoin defendants (individual distributors of

veterinary drugs) from selling certain prescription veteri-

nary drugs directly to dairymen and other customers. A

Temporary Restraining Order and a stipulated order were

issued, based on the presumed validity of a federal regula-

tion, 21 C.F.R. §201.105. That regulation was promulgated

by the Secretary of the then Department of Health, Educa-

tion and Welfare under the cited statutory authority of 21

U.S.C. §352(f). The question now before the Court is

whether §201.105 is a valid and enforceable regulation. It

A2

is agreed that the Act prohibits the introduction or de-

livery of adulterated or misbranded foods, drugs, devices

or cosmetics into interstate commerce, and the

“adulteration, mutilation, destruction, obliteration or

removal of the whole or any part of the labeling of, or

the doing of any other act with respect to, a food,

drug, device, or cosmetic, if such act is done while such

article is held for sale (whether or not the first sale)

after shipment in interstate commerce and results in

such article being adulterated or misbranded.”

21 US.C. §§331(a), (k). The federal regulation, 21 C.F.R.

§201.105, was issued by the Secretary under the authority

of 21 U.S.C. 5352 (f), which provides the following:

A drug or device shall be deemed to be misbranded—

(f) Unless its labeling bears (1) adequate directions

for use; and (2) such adequate warnings against use

in the pathological conditions or by children where its

use may be dangerous to health, or against unsafe dos-

age or methods or duration of administration or ap-

plication, in such manner and form, as are necessary

for the protection of users: PROVIDED, That where

any requirement of clause (1) of this subsection, as

applied to any drug or device, is not necessary for the

protection of the public health, the Secretary shall

promulgate regulations exempting such drug or device

from such requirement. (emphasis supplied).

Finally, the controversial regulation, §201.105, reads in part

as follows:

A drug intended for veterinary use which, because of

toxicity or other harmful potentiality for harmful ef-

fect, or the method of its use, is not safe for animal

A3

use except under the supervision of a licensed veteri-

narian, and hence, for which adequate directions for

use” cannot be prepared, shall be exempt from [21

U.S.C. 6352 (f) (1)] if all the following conditions are

met: (a) The drug is... sold only to or on the pre-

scription or other order of a licensed veterinarian for

use in the course of his professional practice. .

(b) The label of the drug bears: (1) the statement:

“Caution: Federal law restricts this drug to use by

or on the order of a licensed veterinarian”; and (2) The

recommended or usual dosage; and (3) The route of

administration, if it is not for oral use; and (4) The

quantity or proportion of each active ingredient... .

(c) (1) Labeling on or within the package from which

the drug is to be dispensed bears adequate information

for its use, including indications, effects, dosages,

routes, methods, and frequency and duration of ad-

ministration, and any relevant hazards, contra-indica-

tions and precautions under which veterinarians. . .

can use the drug safely and for the purposes for which

it is intended, including all purposes for which it is

advertised or represented

The above-emphasized statutory proviso allows the

Secretary to act only when the condition stated in 3352 (f)

exists: adequate directions for use as part of the label and

packaging contents are unnecessary for protection of the

public health. The Secretary may not act when that

condition is not evident. If adequate directions for use are

necessary for the protection of the public health, 5352 (f)

does not provide the Secretary with authority to draft and

adopt regulations. Additionally, even when that condition

is met, the Secretary is only empowered to make exemp-

tions from regulation, not enact more stringent restrictions

such as §201.105. However, it is clearly the Secretary’s

position that adequate directions for use are necessary

A4

here to protect the public health, as evidenced by the

requirement of a prescription and the cautionary legend.

The statute just does not provide regulatory authority for

situations such as this where it is claimed that “adequate

directions for use” can never be written for the protection

of the general public because the drug and its side-effects

are so complex that it can be dispensed properly only

on the advice of a veterinarian. Thus the Secretary has

over the years adopted the position that §352(f) gives him

the inherent authority to fill the hiatus in that statute—

i.e., the area where certain drugs are necessary for the

public health but will always be technically misbranded

because “adequate directions for use“ are impossible to

devise—by enacting regulations such as §201.105. But such

administrative action, albeit logical, does not justify judicial

addition to the language of the statute because this Court

should not be required “to supply an omission in the statute

or to hold that Congress must have intended to do that

which it has failed to do.” United States v. Goldenberg,

168 U.S. 95, 103 (1897).

In United States v. Sullivan, 332 U.S. 689 (1948), a

retail druggist took several pills from a container properly

labeled for human drugs and placed them in another con-

tainer which was not properly labeled. The druggist then

sold the pills in the new container. The Supreme Court,

in a decision delivered by Justice Black, held that the acts

of the druggist violated the requirements of “adequate

directions for use.” In so holding, the Supreme Court gave

a literal construction to the Act. The pharmacist argued

in opposition that such a strict ruling would apply to similar

sales of foods, drugs and cosmetics. The majority noted

that that conclusion would not necessarily follow, and that

statement was further explained in the concurring opinion

of Justice Rutledge. In his analysis, Justice Rutledge dis-

A5

cussed the proviso to §352(f), which of course concerns

the Court today:

.. . The intent to protect the public health is further

emphasized with the limited scope of the proviso, which

directs the [Secretary] to make exemptions only when

compliance with clause (1) “is not necessary for the

protection of the public health.” ... Under [§352(f),

the Secretary] is given no power to exempt on the

ground that compliance is impracticable. He cannot

weigh business convenience against protecting the

public health. Only where he finds that labeling is

not necessary to that protection is he authorized to

create an exemption for drugs and devices. Health

security is not only the first, it is the exclusive, cri-

terion.

332 U.S. at 702-703. It is thus clear to this Court that a

common sense, literal reading of §352(f) is called for, al-

though the Court is aware that such a position may come

as a shock to the FDA at this late date, especially since

other courts have long since allowed the Secretary the

wide latitude and discretion claimed here. See, e.g., United

States v. El-O-Pathic Pharmacy, 192 F.2d 62 (9th Cir.

1951).

Although administrative regulations are entitled to a

presumption of validity, they can be annulled and found

unenforceable when in excess of statutory authority as

determined by the natural and plain meaning of the Con-

gressional enactment. See, e.g. Osaka Shosen Kaiska Line

v. United States, 300 U.S. 98, 101 (1937); Western Union

Tel. Co. v. F.C.C., 541 F.2d 346 (3rd Cir.), t. denied, 429

U.S. 1092 (1976); Diamond Roofing Co. v. O.S.H.R.C., 528

F.2d 645 (5th Cir. 1976). Despite the equities of this case

and the Secretary’s admirable concern for the health of all

citizens, the Court feels it is bound by that principle to

A6

reach the result found here. Finally, the Court does not

view this case as one where the agency’s historical inter-

pretation of one of its enabling statutes is to be afforded

considerable deference. See, e.g., Young v. Tennesseee

Valley Authority, —— , No. 77-1243 (6th Cir.,

Sept. 24, 1979). At least at this juncture, it is not clear

that Congress has explicitly ratified the agency’s inter-

pretation as in Young. But most importantly, the statute

in question in Young was arguably ambiguous on its face,

whereas here the proviso to §352(f) speaks plainly and

unequivocally. See discussion infra.

From the beginning of this action, the Government

has relied upon §352(f) as the statutory authorization for

§201.105. However, the Government has since modified its

position to assert additional statutory authority under 21

U.S.C. §260b(d) (1), the New Animal Drug Amendment, as

well as 21 U.S.C. §371(a). To begin with, §360b was not

enacted until 1968, whereas the key language of §201.105

was promulgated years earlier. Therefore, §360b cannot

have been the statutory basis for §201.105. Whether the

Secretary could in the future require a prescription and

cautionary legend under §360b in an entirely different issue

than the one presently before the Court; application of

§360b to the facts here is still an undetermined question,

and further consideration may well result in an alternative

basis for liability. The primary question at this time is

still whether the §201.105 stood upon firm statutory foot-

ing when promulgated.

Section, §371(a) provides as follows:

This authority to promulgate regulations for the ef-

ficient enforcement of this chapter, except as otherwise

provided in this section, is vested in the Secretary.

The authority of the Secretary to make binding regulations

under §371(a) is not challenged. Surely, such a challenge

A/

would be fruitless, as demonstrated by the Second Circuit

in National Nutritional Foods Association v. Weinberger,

512 F.2d 688, 696-697 (2nd Cir.), cert. denied, 423 U.S. 323

(1975):

Whatever doubts might have been entertained regard-

ing the FDA’s power under [§371(a)] to promulgate

binding regulations were dispelled by the Supreme

Court’s recent decision in Weinberger v. Hyson, West-

cott & Dunning, nc., 412 U.S. 609, 93 S. Ct. 2469, 37

L.Ed. 2d 207 (1973), and its campanion cases, Ciba

Corp. v. Weinberger, 412 U.S. 640, 93 S. Ct. 2495, 37

L.Ed. 2d 230 (1973); Weinberger v. Bentex Pharma-

ceuticals, Inc., 412 U.S, 645, 93 S.Ct. 2488, 37 L.Ed. 2d

235 (1973); U.S.V. Pharmaceutical Corp. v. Weinber-

ger, 412 U.S. 655, 93 S.Ct. 2498, 37 L.Ed. 2d 244 (1973).

Those decisions interpreted [§371(a)] as giving FDA

the power to promulgate substantive regulations hav-

ing the binding force of law rather than mere “inter-

pretative” standards enforceable only on a case-by-

case basis through plenary suits against those refusing

to comply.

However, what is challenged here is whether §201.105 was

properly promulgated in the first place, and hence entitled

to the binding effect afforded by §371(a). The Govern-

ment asserts that FDA interpretations of §371(a) and the

regulation cloaks §201.105 with an authoritive blanket.

However, the rule that agency construction of its own

regulations is entitled to great weight only applies where

the relevant statutory language is unclear or susceptible

to differing interpretations. See Young v. Tennessee Val-

ley Authority, supra; Air Transport authority Association

of America v. Brownell, 124 F.Supp. 909 (D. D. C. 1954).

Thus, where the language of a statute is clear on its face, a

court cannont avoid its duty of so construing the statute by

A8

deferring to a prior, contrary agency interpretation. Avia-

tion Consumer Action Project v. C.A.B., 412 F.Supp. 1028

(D.C. 1976), motion granted in part, denied in part, 418

F.Supp. 634 (1976). Furthermore, agency decisions which

rest on an erroneous legal foundation, or which are in-

consistent with a statutory mandate, should be struck down,

N. L. R. B. v. Brown, 380 U.S. 278, 291-292 (1965), and are

not persuasive in judicial proceedings. Florida Citus Ex-

change v. Folsom, 246 F.2d 850 (5th Cir. 1957), reversed

on other grounds, 358 U.S. 153, reh. denied, 358 U.S. 948

(1958).

The Government asserts that the Secretary relied on

§371(a) in enacting §1.106, now §201.105, as evidenced by

Exhibit A attached to its Third Memorandum, Section

371 (a) is a general grant of authority to enact regulations

for the limited purpose of efficient enforcement of the Act.

Accordingly, a regulation exempting veterinary drugs

from providing adequate directions for use must neces-

sarily be consistent with the Congressional mandate of

§352(f) that exemptions from such regulation be limited

to the circumstances stated therein. Thus the regulation,

being in excess of the narrow authority granted by §352(f),

could not properly be found valid under the general grant

of authority in §371(a). The regulation could not have

been promulgated for the “efficient enforcement” of the

Act when the Act specifically limits such regulation in

§352(f). As with the direct analysis under §352(f), the

Secretary has also gone beyond the broader, but still limited

grant of authority of §371(a). It is not the function of

the courts to vindicate the wisdom of the law, Merchants’

Insurance Company v. Ritchie, 5 Wall 541, 18 L.Ed. 540,

544, 545 (1867), but rather it is the duty of the Court to

interpret a statute as it finds it, without reference to

whether its provisions are wise or unwise. United States

A9

v. South-Eastern Underwriters Association, 322 U.S. 533,

561 (1943); Olsen v. Nebraska, 313 U.S. 236, 247 (1940).

Finally, the Secretary has amended the complaint to allege

(1) adulteration of drugs and (2) improper application for

permission to sell new animal drugs under 21 U.S.C, §360b.

While the government legitimately may be able to proceed

against the defendants for the relief it seeks under those

amendments, the Temporary Restraining Order and the

stipulated order were not entered on the basis of either of

those legal theories. Hence the Court chooses not to ad-

dress them.

In light of the above discussion the Court finds that

there is considerable doubt at this stage whether plaintiff

would prevail on the merits, and thus the Temporary Re-

straining Order and the accompanying stipulated order must

be vacated. Rule 65 (b), Fed. R. Civ.P. That is not to say,

however, that further proceedings will not vindicate the

Secretary's position and ultimately entitle plaintiff to the

relief sought. Accordingly, the Court cautions against in-

correct interpretation of this order. The Court does not

hold that the Secretary cannot protect the public health.

The Court does not hold that defendants did not violate the

Act and that defendants cannot at some point be prevented

from selling dangerous drugs which humans may indirectly

consume. Those issues have yet to be decided. Rather, the

Court holds only that these defendants canont be enjoined

at this time from the conduct complained of under the

authority of §201.105.

A pretrial conference with the Court is scheduled for

November 15, 1979 at 1:30 p.m.

ITIS SO ORDERED.

/s/ Tuomas D. LAMnROS

United States District Judge

Al0

ORDER OF THE UNITED STATES

DISTRICT COURT

(Filed February 12, 1980)

No, C 78-1470 A

UNITED STATES DISTRICT COURT

NorTHERN DISTRICT OF OHIO

EASTERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff

V.

JERRY J. COLOHAN [sic], et al.,

Defendants

ORDER

Launnos, District Judge

In November, 1978, the United States brought this

action under the Food, Drug and Cosmetic Act, 21 U.S.C.

§301 et seq., to enjoin defendants (several distributors

of veterinary drugs) from selling nine prescription veter-

inary drugs directly to dairymen and other customers

(“Cleveland case”). The Cleveland defendants are: Jerry

J. Colohan [sic], an individual doing business as IBA of

Ohio, and Norman F. Bauer, Robert L. Berkshire, John D.

Burrows, Russell C. Humphrey, Jr., Simon E. Miller and

Ralph A. Scharver. A temporary restraining order and a

stipulated order were issued, based on the presumed validity

of a federal regulation, 21 C.F.R. §201.105. In October

of 1979, this Court questioned the validity of §201.105

and whether it was clothed with a statutory authoritative

All

blanket. The Court ordered the temporary restraining

order and the stipulated order be vacated because there

was considerable doubt at that time whether plaintiff

would prevail on the merits, Rule 65(b), Fed. R. Civ.

P., in light of the clear meaning of 21 U.S.C. §352(f)

and the analysis of Justice Rutledge in a concurring opinion

in United States v. Sullivan, 332 U.S. 689 (1948). The

Court continued to caution against incorrect interpretation

of the October order:

The Court does not hold that the Secretary cannot

protect the public health. The Court does not hold

that defendants did not violate the Act and that de-

fendants cannot at some point be prevented from sell-

ing dangerous drugs which humans may indirectly

consume. Those issues have yet to be decided.

Rather, the Court holds only that these defendants

cannot be enjoined at this time from the conduct com-

plained of under the authority of §201.105.

Almost a year after the filing of the Cleveland case

but before the October, 1979 order, the United States filed

an action in the United States District Court in the District

of Massachusetts, Case No. CA 79-1643-F, (“Massachusetts

case“), against IBA, Inc., a Massachusetts corporation, and

Daniel J. Belsito, the president of the corporation. IBA,

Inc. is the franchisor of the defendant franchisees in the

Cleveland case. The Massachusetts case also was brought

on the presumed validity of the same federal regulation,

§201.105, in the Cleveland case.

The holding in the Cleveland case that the temporary

restraining order is vacated allows the defendant fran-

chisees to continue to sell the drugs at this time. Conceiv-

ably, the court in the Massachusetts case could grant the

government’s motion for a preliminary injunction by ruling

that §201.105 appears to be a validly promulgated regula-

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tion. The effect of such a ruling would prevent IBA,

Inc. from distributing the drugs to the Cleveland defen-

dants; the ruling could cut off the source of the Cleveland

defendants’ products. Such a situation would create a

dilemma by the duplicative litigation. Additionally, both

cases involve similar questions of law and fact.

Rule 19(a), Fed. R. Civ. P. provides:

A person who is subject to service of process and

whose joinder will not deprive the court of jurisdiction

over the subject matter of the action shall be joined

as a party in the action if (1) in his absence complete

relief cannot be accorded among those already parties,

or (2) the claims an interest relating to the subject

of the action is so situated that the disposition of

the action in his absence may (i) as a practical matter

impair or impede his ability to protect that interest

or (ii) leave any of the persons already parties subject

to a substantial risk of incurring doubles, multiple,

or otherwise inconsistent obligations by reason of his

claimed interest. If he has not been so joined, the

court shall order that he be mace a party.... If

the joined party objects to venue and his joinder would

render the venue of the action improper, he shall

be dismissed from the action.

It is obvious from the circumstances caused by the

United States in filing the two actions and the relationship

between the Massachusetts defendants and the Cleveland

defendants that complete relief cannot be accorded to the

Cleveland defendants; the Massachusetts defendants have

an interest in the Cleveland case to the extent that any

determination in the Cleveland case would impair their

ability to protect that interest as well as subject the Cleve-

land defendants to substantial risk of incurring inconsistent

obligations. Additionally, venue is proper in Cleveland

Al3

as evidenced by admissions of IBA, Inc. doing business

within the jurisdiction of this Court as well as the fran-

chisor-franchisee relationship between the defendants in

both cases. Accordingly, IBA, Inc. and Daniel J. Belsito

are hereby joined as party defendants in the Cleveland

case.

Plaintiff has moved for a reconsideration of the Octo-

ber, 1979 order. The Court finds no meritorious basis

to reconsider the order and position of this Court. A

substantial question remains as to whether the regulation,

§201.105, exceeds the statutory grant of authority of §352

(f), notwithstanding the agency’s good intentions. Accord-

ingly, plaintiff's motion for reconsideration of the October,

1979 order is denied.

Plaintiff has moved for certification of an interlocutory

appeal, 28 U.S.C. §1292(b). Upon consideration, the Court

finds that the time for such an appeal is not ripe because

the Court has not issued a final order on the issue of

the validity of §201.105. Thus, plaintiff's motion is denied.

Plaintiff's motion for a stay pending appeal, therefore,

is moot. This case shall proceed tc trial on the merits.

IT IS SO ORDERED.

/s/ Tuomas D. LAMBROS

United States District Judge

Al4

OPINION OF THE UNITED STATES COURT OF

APPEALS FOR THE SIXTH CIRCUIT

(Filed December 11, 1980)

No. 79-3767

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

v.

JERRY J. COLAHAN, et al.,

Defendants-Appellees.

Aal, from the United States District Court for the

Northern District of Ohio, Eastern Division.

Before Merritt and Brown, Circuit Judges; Guy, Dis-

trict Judge.*

BAY Brown, J. The government brought this action

against Colahan and others (herein collectively referred

to as Colahan), alleging that Colahan sold veterinary drugs

directly to dairy farmers without a prescription in viola-

tion of an applicable regulation promulgated by the Food

and Drug Administration (FDA). The district court issued

a temporary restraining order. This was replaced six

days later by a stipulated order in which Colahan agreed

not to distribute nine veterinary drugs until further order

of the court. Colahan moved the court after about two

*Honorable Ralph B. Guy, Jr., United States District Judge

for the Eastern District of Michigan, sitting by designation.

Al5

months to vacate the stipulated order on the ground that

FDA did not have authority to require a prescription in

connection with the sale of these drugs. Almost a year

later, the district court, recognizing that the question before

it was whether the FDA had authority to promulgate the

regulation upon which it relied and concluding that FDA

did not have such authority, granted the motion to vacate.

The district court denied the government’s motion to re-

consider, denied a certification under 28 U.S.C. § 1292b,

and denied a stay pending appeal. The government now

appeals.

The government’s appeal raises two issues. First,

whether the court’s action in granting the motion to vacate

the stipulated order prohibiting the dispensing of the drugs

except by veterinarian’s prescription is appealable. Sec-

ond, if the order is appealable, whether the court’s ruling

was in error and requires reversal by this court.

The government contends that the district court’s rul-

ing is appealable under 28 U.S.C. § 1292(a)(1).' This sec-

tion provides a right of appeal from interlocutory de-

cisions which grant, deny, or dissolve injunctions. The

record here shows that the order from which the govern-

ment appeals dissolved, over the government’s objection,

the stipulated order which prohibited distribution of drugs

except by prescription.

1. § 1292. Interlocutory decisions

(a) The courts of appeals shall have jurisdiction of

appeals from:

(1) Interlocutory orders of the district courts of the

United States, the United States District Court for the Dis-

trict of the Canal Zone, the District Court of Guam and the

District Court of the Virgin Islands, or of the judges thereof,

granting, continuing, modifying, re or dissolving in-

junctions, or refusing to dissolve or m injunctions, ex-

cept where a direct review may be had in the Supreme

Al6

We conclude that the order vacating the stipulated

order amounted to the dissolution or refusal of an injunc-

tion within the meaning of § 1292(a)(1). The basis for

the district court’s vacating of the order was its opinion

that the FDA had no authority, as a proposition of law,

to require that the drugs be distributed only pursuant to

a prescription. Thus the injunction was dissolved or re-

fused on the merits. Gardner v. Westinghouse Broadcasting

Co., 437 U.S. 478, 481, n. 7 (1978).

As we find the order is appealable, we must consider

whether it was an error to vacate the order enjoining

Colahan from distributing the nine veterinary drugs. While

a district court’s refusing or dissolving of a temporary in-

junction can be reversed on appeal only if it is determined

that the district court abused its discretion, if the district

court erred as a matter of law, as the government here

contends, such would be an abuse of discretion. United

States v. Beaty, 288 F.2d 653 (6th Cir. 1961).

FDA contends that, in selling the involved drugs to

dairy farmers, the drugs thereby become “misbranded”

within the meaning of 21 U.S.C. § 352(f) which provides:

A drug or device shall be deemed to be misbranded—

(f) Unless its labeling bears (1) adequate direc-

tions for use. . Provided, That where any require-

ment of clause (1) of this subsection, as applied to any

drug or device, is not necessary for the protection

of the public health, the Secretary shall promulgate

regulations exempting such drug or device from such

requirement.

In this connection, FDA relies on 21 C.F.R. § 201.5 which

provides in part:

Al7

“Adequate directions for use” means directions under

which the layman can use a drug safely and for the

purposes for which it is intended.

The FDA further relies on 21 C.F.R. § 201.105 which pro-

vides in part:

A drug intended for veterinary use which, because

of toxicity or other potentiality for harmful effect, or

the method of its use, is not safe for animal use except

under the supervision of a licensed veterinarian, and

hence for which “adequate directions for use” cannot

be prepared, shall be exempt from section §502(f) (1)

of the Act if all the following conditions are met:

(a) Thedrugis:

(1) In the possession of a person (or his agents

or employees) regularly and lawfully engaged in the

manufacture, transportation, storage, or wholesale or

retail distribution of veterinary drugs and is to be

sold only to or on the prescription or other order

of a licensed veterinarian for use in the course of

his professional practice; or

(2) In the possession of a licensed veterinarian

for use in the course of his professional practice.

(b) The label of the drug bears:

(1) The statement “Caution: Federal law re-

stricts this drug to use by or on the order of a licensed

veterinarian” ....

(c)(1) Labeling on or within the package from

which the drug is to be dispensed bears adequate

information for its use, including indications, effects,

dosages, routes, methods, and frequency and duration

of administration, and any relevant hazards, contrain-

Al8

dications, side effects, and precautions under which

veterinarians licensed by law to administer the drug

can use the drug safely and for the purposes for which

it is intended, including all purposes for which it is

advertised or represented

FDA contends that directions cannot be written which

would permit a layperson to use these drugs safely. There-

fore, under 21 U.S.C. § 352(f), “adequate directions for

use” cannot be written. Thus, contends FDA, under the

proviso contained in § 352(f), it may require by regulation,

as it has, that such drugs are exempt and thus approved

for distribution only if the requirements of 21 C.F.R.

§ 201.105 are met since professional direction, in the words

of the statute, “is necessary for the protection of the public

health.”

Colahan contends, and the district court ruled, that

FDA had no authority to issue the regulation 21 C.F.R.

§ 201.105. As stated in the district court’s opinion vacating

the stipulated order:

The above-emphasized statutory proviso allows

the Secretary to act only when the condition stated

in § 352(f) exists: adequate directions for use as

part of the label and packaging contents are unneces-

sary for protection of the public health. The Secretary

may not act when that condition is not evident. If

adequate directions for use are necessary for the pro-

tection of the public health, § 352 (f) does not provide

the Secretary with authority to draft and adopt regula-

tions. Additionally, even when that condition is met,

the Secretary is only empowered to make exemptions

from regulation, not enact more stringent restrictions

such as § 201.105. However, it is clearly the Secre-

tary’s position that adequate directions for use are

necessary here to protect the public health, as evi-

Al9

denced by the requirement of a prescription and the

cautionary legend. The statute just does not provide

regulatory authority for situations such as this where

it is claimed that “adequate directions for use” can

never be written for the protection of the general

public because the drug and its side-effects are so

complex that it can be dispensed properly only on

the advice of a veterinarian.

We conclude that, while the language of 21 U.S.C.

§ 352(f) and particularly the proviso therein would sug-

gest that the FDA could exempt a drug only when direc-

tions for use are not needed, the proviso is also subject

to the interpretation argued by the government. We fur-

ther conclude that the government’s interpretation is the

correct one. We therefore reverse the decision of the

district court. The reasons for our conclusion are as fol-

lows:

First, Colahan’s interpretation of the statute reaches

a totally unreasonable result. His interpretation would

require that the FDA either allow unrestricted over-the-

counter sale of all veterinary drugs or withdraw useful

drugs from the market that the FDA considers to be dan-

gerous unless sold by prescription.

We are also persuaded by the FDA’s longstanding

exercise of authority to issue and enforce this regulation.

FDA first promulgated the challenged regulation in 1938.

This administrative interpretation over many years is en-

titled to great weight. Commissioner v. First Security

Bank, 405 U.S. 394, 403, n. 16 (1972). Implementation

of the Act’s complex statutory scheme is a job entrusted

in the first instance to the FDA. Therefore, since there

is more than one reasonable interpretation of this statute,

the court should follow the interpretation urged by the

A20

FDA. Udall v. Tallman, 380 U.S. 1 (1965); United States

v. Articles of Drug. 3 (5th Cir, 1980).

Further supporting FDA’s position is the clear indica-

tion that Congress has been aware since 1938 of the FDA’s

interpretation of its statutory authority while it was legis-

lating in this area, and yet Congress has not restricted

such FDA authority. Congress passed the Durham-Hum-

phrey Amendments in 1951. 65 Stat. 648 (1951). This

amended parts of the Act’s regulatory scheme. The House

report noted awareness of the authority asserted by the

FDA. In discussing “adequate directions for use,” the

report stated:

Drugs suitable for use only by or under the direction

of a licensed practitioner have been exempted from

the adequate directions requirement on condition that

they be labeled . . . [with the prescription legend].

H.R. Rep. No. 700, 82d Cong., Ist Sess. 4 (1951).

Despite Congressional awareness of the FDA’s interpreta-

tion of its authority under the Act, and despite revisions

of the Act in 1951 and 1962,? Congress has not eliminated

or modified FDA’s asserted authority. “[A]n agency’s

longstanding construction of its statutory mandate is en-

titled to great respect, ‘especially when Congress has re-

fused to alter the administrative construction.’” Board

of Governors v. First Lincolnwood Corp., 439 U.S. 234,

248 (1978). Once an agency’s interpretation of a statute

has been brought to the attention of Congress, and Con-

gress has not sought to alter that interpretation although

it has amended the statute in other respects, then presum-

See Drug Amendments of 1962, Pub.L.No. 87-781, 76 Stat.

780 7 1962); ye Shee Food, Drug, and Cosmetic Act Amendments

1361. Humphrey amendments) Pub. L. No. 82-215, 65 Stat. 648

1951).

A21

ably the legislative intent has been correctly discerned.

United States v. Rutherford, 442 U.S, 544, 554, n. 10 (1979).

Lastly, this assertion of FDA authority has been recog-

nized and approved by the courts. United States v. El-

O-Pathic Pharmacy, 192 F.2d 62 (9th Cir. 1951); United

States v. Articles of Drug, F.2d (5th Cir. 1980).

Therefore, we conclude that the district court erred

as a matter of law in dissolving the stipulated order pre-

venting Colahan from dispensing certain veterinary drugs

without prescription on the ground that FDA had no au-

thority to require prescriptions as a prerequisite to dispens-

ing of the drugs. We remand with instructions to the

district court to reinstate the stipulated order and for

further proceedings not inconsistent with this opinion.

A22

ORDER OF THE UNITED STATES COURT OF AP.

PEALS FOR THE SIXTH CIRCUIT DENYING

MOTION FOR REHEARING

(Filed March 5, 1981)

No. 79-3767

UNITED STATES COURT OF APPEALS

For Tue Srxtu Circuit

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JERRY J. COLAHAN,

Defendant-Appellant.

ORDER

Before: Merritt and Brown, Circuit Judges; Guy, District

Judge.*

On receipt and consideration of a petition for rehearing

and suggestion for rehearing en banc in the above styled

case; and

No judge in active service in this court having moved

for rehearing en banc and the motion therefore having

been referred to the panel which heard the case; and

»The Honorable Ralph B. Guy, J

by many —— 3

for the Eastern District of Michigan, citing by

A23

The panel having noted nothing of substance in said

motion for rehearing which had not been carefully con-

sidered before issuance of the court’s opinion;

Now, therefore, it is Ordered that the motion for re-

hearing be and the same is hereby denied.

ENTERED BY ORDER OF THE COURT

/s/ JoHN P. HEHMAN

Clerk