Petition for Writ of Certiorari — Argent Chemical Laboratories, Inc. v. United States

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In The

Supreme Court of the United States

October Term, 1996

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ARGENT CHEMICAL LABORATORIES, INC., various

articles of drug identified in Attachment A, which are

located at Argent Chemical Laboratories, Inc., 8515 and

8702 152nd Avenue N.E. Redmond, Washington,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

* a

Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

+

PETITION FOR WRIT OF CERTIORARI

a

Jon R. ZuLAuF

Attorney for Petitioner

1809 Seventh Avenue

Tower Building - 13th Floor

Seattle, WA 98101

(206) 682-1114

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

1. Did the Ninth Circuit err when it held that the use of

a non-judicial arrest warrant was necessary to further the

regulatory scheme of the Food, Drug and Cosmetic Act?

2. Is the use of a non-judicial arrest warrant improper

when the seizure is not conducted contemporaneously

with an administrative search and there is no showing of

an immediate threat to the public or other exigent circum-

stances?

ii

TABLE OF CONTENTS

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STATUTES INVOLVED IN THIS CASE............. 2

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TABLE OF AUTHORITIES

Page

CASES

Camara v. Municipal Court, 387 U.S. 523 (1967)........ 5

Colonnade Catering Corp. v. United States, 397 US.

ee 2&9, 231, 13

Coolidge v. New Hampshire, 403 U.S. 443 (1971)........ 9

Donovan v. Dewey, 452 U.S. 594 (1981)................ 6

Horton v. California, 496 U.S. 128 (1990) .............. 5

Marshall v. Barlow’s, Inc., 436 U.S. 307 (1978) ......... 5

New York v. Burger, 482 U.S. 691 (1987)............. 6, 7

S & S Pawn Shop, Inc. v. City of Del City, 947 F.2d

I oc wa cuceceees 11, 12

United States v. Articles of Drug Neptone, 569

Se Bae GUE COl, 1983)... ccc cee. 10

United States v. Biswell, 406 U.S. 311

EE eee 4,5, 6, 9, 11, 13

United States ». Device Labeled “Theramatic”, 641

oe 8 a S| 8, 9, 10

Winters v. Board of County Commissioners, 4 F.3d

Nee en caeebewe 11, 12

STATUTES AND RULES

Supplemental Rules for Certain Admiralty and

Maritime Claims, Rule C(3).................2, 3, 4, 9

ne 2

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ee 3

TABLE OF AUTHORITIES - Continued

Page

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26 USA. & SABE) 60 ce vseccaseedeecsecpevesences tues 1

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OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Ninth Circuit that gives rise to this Petition is

reported at 93 F.3d 572 (9th Cir. 1996). It is reprinted in

Appendix A hereto (“App. A”) at Page A-1.

The Order of the District Court for the Western Dis-

trict of Washington which granted petitioner’s motion to

quash is unpublished and may be cited as No. C94-1120C

(W.D. Wash. Oct. 15, 1994) (Order granting Motion to

Quash Warrant and Return Property). It is reprinted in

Appendix B hereto (“App. B”) at page B-1.

4

JURISDICTION

Petitioner seeks review of the United States Court of

Appeals for the Ninth Circuit’s decision filed on August

16, 1996. In that decision, the Ninth Circuit reversed the

order of the United States District Court for the Western

District of Washington quashing a Warrant for Arrest In

Rem which permitted the seizure from petitioner of var-

ious veterinary drug products. Pursuant to Supreme

Court Rule 13.1, this petition has been filed within 90

days of the entry of judgment.

The jurisdiction of the Court is invoked pursuant to

28 U.S.C. § 1254(1).

STATUTES AND CONSTITUTIONAL PROVISIONS

INVOLVED IN THIS CASE

21 U.S.C. § 334. The text of § 334 is reprinted in Appendix

C hereto (“App. C”) at page C-1.

Supplemental Rules for Certain Admiralty and Maritime

Claims, Rule C. The text of Rule C is reprinted in Appen-

dix D hereto (“App. D”) at page D-1.

The Fourth Amendment to the United States Constitution

provides:

The right of the people to be secure in their

persons, houses, papers, and effects, against

unreasonable searches and seizures, shall not be

violated, and no Warrants shall issue, but upon

probable cause, supported by Oath or affirma-

tion, and particularly describing the place to be

searched, and the persons or things to be seized.

I. STATEMENT OF THE CAsE

Petitioner, Argent Chemical Laboratory (“Argent”),

manufactures veterinary drug products. Agents of the

Food and Drug Administration (“FDA”) inspected Argent

Chemical Laboratory facilities on May 9, 1994. The FDA

cited Argent for certain violations of the Food, Drug and

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

asked that corrections be made. The FDA did not take

any enforcement action at the time of the May 9, 1994

inspection and made no attempt to seize drugs at that

time. The FDA did not order Argent to stop manufactur-

ing drugs, nor did it order Argent to cease selling the

drugs that it had already manufactured.

Argent continued to manufacture and sell its prod-

ucts and made the corrections which the FDA had

requested. Each of the FDA’s concerns were addressed by

the management of Argent and either corrections were

made or explanations were given to the FDA. Throughout

the summer of 1994, the FDA gave Argent no indication

that its efforts failed to bring it in compliance with the

Act.

On July 29, 1994, almost three months after its most

recent inspection, the FDA filed a complaint in the West-

ern District of Washington for the forfeiture of several

categories of veterinary drugs and their constituent mate-

rials in Argent’s possession. The FDA then obtained a

warrant for arrest in rem in order to seize those drugs.

The warrant was not issued by a magistrate, but by

Nealann Shari, a deputy clerk of the District Court.

Argent was not given notice of the complaint, nor of the

warrant for arrest. Then on August 11, 1994, 13 days after

the warrant was issued and 94 days after the FDA’s last

inspection, federal agents entered Argent’s place of busi-

ness and seized over $100,000 worth of chemicals.

The warrant for arrest in rem was issued pursuant to

the Act, 21 U.S.C. § 334(b), which permits the seizure of

articles under the procedure in admiralty provided in

Rule C of the Supplemental Rules for Certain Admiralty

and Maritime Claims (Rule C). Rule C does not require a

showing of probable cause, nor review by a magistrate,

but instead allows a court clerk to issue a warrant of

arrest upon the filing of a complaint.

The district court granted Argent’s motion to quash

the warrant finding that the warrant violated the Fourth

Amendment. The district court noted that although the

Court has carved out an exception to the Fourth Amend-

ment which allows inspections of “closely regulated”

industries, the exception applies only to administrative

inspections. App. B. The district court held that the

exception did not allow the government to “conduct a

particularized search and seizure without first obtaining

an ordinary warrant.” App. B.

SO ETN eon

The government appealed and the Ninth Circuit

reversed. The Circuit Court held that the Colonnade-

Biswell exception which allows warrantless administra-

tive inspections of “closely regulated businesses” also

allows the government to conduct particularized war-

rantless searches for the purpose of seizing evidence.

Il. ARGUMENT

A. The Ninth Circuit Erred When it Found that the

Seizure of Argent’s Property Pursuant to a

Non-Judicial Warrant Was Necessary to Further

the Regulatory Scheme of the Food, Drug &

Cosmetic Act.

DNAS Se

This forfeiture action arose under 21 U.S.C. § 334,

which authorizes the seizure and forfeiture of, among

other things, adulterated drugs. The statute provides that |

“the procedure in cases under this section shall conform,

as nearly as may be, to the procedure in admiralty.” |

§ 334(b).

Rule C of the Supplemental Rules for Certain Admi- '

ralty and Maritime Claims provides that:

a a O

[I]n actions by the United States for forfeitures

for federal statutory violations, the clerk, upon

filing of the complaint, shall forthwith issue a

summons and warrant for the arrest of the ves-

sel or other property without requiring a certi-

fication of exigent circumstances.

It is a fundamental proposition of Fourth Amend-

ment law that “except in certain carefully defined classes

of cases, a search of private property without proper

consent is ‘unreasonable’ unless it has been authorized by

a valid search warrant.” Camara v. Municipal Court, 387

U.S. 523, 529 (1967). A valid search warrant requires a

showing of probable cause and review by a neutral and

impartial magistrate. Horton v. California, 496 U.S. 128, 143

(1990) (Brennan, J., dissenting). Rule C violates funda-

mental Fourth Amendment law because it does not

require a showing of probable cause, nor scrutiny by an

impartial magistrate, and it does not fit within any of the

narrow exceptions to the warrant requirement.

This Court has carved out exceptions to the warrant

requirement for “pervasively regulated businesses” and

for “closely regulated industries long subject to close

supervision and inspection.” Marshall v. Barlow’s, Inc., 436

U.S. 307, 313 (1978). In Colonnade Catering Corp. v. United

States, the Court acknowledged Congress’ “broad author-

ity to fashion standards of reasonableness for searches

and seizures” in the liquor industry “long subject to close

supervision and inspection.” 397 U.S. 72, 77 (1970). Then,

in United States v. Biswell, 406 U.S. 311, 317 (1972), the

Court held that warrantless inspections of a firearms

dealership, conducted pursuant to a statutory inspection

scheme, did not offend the Fourth Amendment.

More recently, the Court has upheld warrantless

inspection schemes involving coal mines, Donovan v.

Dewey, 452 U.S. 594 (1981), and automobile junkyards,

New York v. Burger, 482 U.S. 691 (1987).

In Burger, the Court clarified that warrantless inspec-

tions of pervasively regulated businesses are reasonable

only if three criteria are met. First, there must be a sub-

stantial governmer:t interest that informs the regulatory

scheme. Id. at 702. Second, the warrantless inspections

must be necessary to further the regulatory scheme. Id. at

702-03. And third, the inspection program, in terms of the

certainty and regularity of its application, must provide a

constitutionally adequate substitute for a warrant. Id. at

703.

In the present case, the Ninth Circuit held that the

Colonnade-Biswell exception to the warrant requirement

applied to the Argent seizure. Specifically, the Ninth Cir-

cuit held that the drug-manufacturing industry is so

closely regulated that owners of drug factories have a

lesser expectation of privacy which must give way to the

government’s substantial interest in protecting the public

from adulterated drugs. Therefore, the Ninth Circuit rea-

soned, the in rem arrest procedure of Supplemental Rule

C does not violate any Fourth Amendment protection

afforded the owners of a veterinary drug manufacturing

company.

The Ninth Circuit’s analysis, however, failed to ade-

quately consider the criteria set forth in Burger, 482 U.S.

at 702-03, and failed to properly limit the administrative

inspection exception.

ee

The court in Burger, recognized that there must be

limits on administrative inspections. A procedure that

circumvents the Fourth Amendment warrant requirement

should be permitted only when it is “necessary” to fur-

ther a regulatory scheme. Here, there was no showing

that a non-judicial arrest warrant procedure wa* neces-

sary to further the regulatory scheme. There was no

showing that the government's interest would have been

impaired by obtaining a warrant from a judge or magis-

trate. There was no showing of an imminent danger to

the public that would justify using a non-judicial warrant

of arrest.

The provisions of § 334 which permit warrants of

arrest issued by court clerks instead of judicially scruti-

nized seizure warrants based on probable cause are

unnecessary to the regulatory scheme. Under the criteria

of the Burger decision, the seizure provisions of Rule C

violate the Fourth Amendment because they are unneces-

sary.

The Ninth Circuit’s analysis failed to distinguish

between regulatory inspections and later, particularized

seizures of property at the same location. While the regu-

latory inspections may have been necessary to further the

regulatory scheme, the non-judicial warrant procedure

used in the later particularized seizure of property was

not necessary. There was no showing that the Rule C non-

judicial warrant provisions were important or necessary

to the regulatory scheme.

In the present case, the FDA waited 94 days after the

last regulatory inspection before taking any action to

seize Argent’s property. There was no showing that the

FDA would have been hindered in its seizure of Argent’s

property by forcing the agency to obtain a traditional

seizure warrant. The FDA should have obtained a war-

rant from a neutral magistrate upon a showing of proba-

ble cause before seizing Argent’s property on August 11,

1994.

B. The Ninth Circuit’s Decision in the Argent

Case Directly Conflicts With an Earlier Ninth

Circuit Decision, a Prior District Court Opin-

ion, and the Tenth Circuit’s Holding in S & S

Pawn Shop, Inc. v. City of Del City.

An earlier Ninth Circuit decision addressed the issue

of whether a court clerk may, consistent with the Fourth

Amendment, issue a warrant for an arrest in rem under

§ 334. In United States v. Device, Labeled “Theramatic”, 641

F.2d 1289 (9th Cir. 1981), federal agents entered a doctor’s

office and seized a diathermy machine alleged to be

misbranded. The agents acted on the authority of an

arrest warrant issued by the clerk of the court. The Ninth

Circuit concluded:

We hold that absent exigent circumstances,

entrance into homes and offices to seize items

alleged to violate the Food, Drug, and Cosmetic

Act must comply with the basic requirements of

the Fourth Amendment: the verified complaint

on which the warrant authorizing seizure is

based must provide probable cause to believe

that the article to be seized violates the act, and

the complaint must be scrutinized by a

detached, independent official, empowered to

decide whether probable cause does exist,

before the warrant is issued.

Id. at 1295. In so holding, the court explained that because

“the government has a specific target in mind,” the cases

involving random inspections to enforce statutory stan-

dards did not apply. Id. at 1294. Theramatic did not

address the question of whether the general inspection

scheme of the Act violated the Fourth Amendment, the

constitutionality of which would be subject to analysis

under Colonnade-Biswell. Instead, Theramatic addressed

whether in rem arrest warrants may constitutionally be

issued pursuant to § 334 and Supplemental Rule C.

Although a well-defined scheme for inspecting per-

vasively regulated businesses may survive Fourth

Amendment scrutiny, the protection against unreasonable

searches and seizures may nevertheless prevent govern-

ment agents from returning to conduct a particularized

search and seizure without first obtaining an ordinary

warrant. See Coolidge v. New Hampshire, 403 U.S. 443,

471-72 (1971) (holding “plain view” exception did not

apply to seizure of car when police knew of car’s loca-

tion, intended to seize the car, and had ample oppor-

tunity to obtain warrant).

The agents in this case had previously conducted

administrative inspections pursuant to § 374(a) of the

Act. The constitutionality of these inspections is not an

issue here. Based on their conclusion that Argent was in

violation of the Act, the agents obtained the in rem arrest

warrant to search a particular business to seize particular,

identified chemicals and drugs. The arrest warrant was

issued, pursuant to § 334 and Supplemental Rule C, by a

deputy clerk who did not review the government's alle-

gations to determine if there was cause to seize the items.

10

This is precisely what the Ninth Circuit forbade in Thera-

matic.

Other courts have made the distinction between rou-

tine administrative inspections and seizures of particular,

identified items. In United Stxtes v. Articles of Drug .. .

Neptone, 569 F. Supp. 1182 (N.D. Cal. 1983) the court

found that an FDA seizure violated the Fourth Amend-

ment when it seized drugs without a warrant:

Whether Aquaculture reasonably expected the

Hirschberg facilities to be subject to regular gov-

ernment inspection is irrelevant here, as the act

in question was a premeditated seizure of speci-

fied items . . . it is well settled that where it is

practicable to obtain a warrant, the government

must do so. Indeed, where the government

knows in advance the location and description

of evidence and intends to seize it, as was the

case here, the requirement of a warrant imposes

no constitutionally recognizable inconvenience

.. . » Here there is no evidence of any excep-

tional situation that would justify a warrantless

seizure. The government does not contend that

it was responding to an emergency or that it was

in hot pursuit. There is no evidence that the

goods were being destroyed or were about to be

removed from the premises. The government

offers no evidence that it was impracticable to

obtain a warrant. (citations omitted)

The court in Neptone recognized that portions of an

administrative inspection scheme may be unconstitu-

tional if they are unnecessary to further the regulatory

scheme. Warrantless searches to seize particularized

pieces of evidence, absent a showing of exigent circum-

stances, are unnecessary.

we ~

11

The Ninth Circuit’s decision in Argent also conflicts

with the Tenth Circuit holding in S & S Pawn Shop, Inc. v.

City of Del City, 947 F.2d 432 (10th Cir. 1991). In that case,

the court found that the pawn shop business was closely

regulated justifying warrantless administrative inspec-

tions. The court found, however, that some searches and

seizures of S & S Pawn may have been conducted pur-

suant to “direct criminal suspicion,” thus necessitating a

warrant:

As evidenced in the depositions, appellant pre-

sents material facts demonstrating that the

inspections of appellant’s business premises

were conducted not as part of a pre-planned and _

dispassionate administrative procedure but

instead pursuant to direct criminal suspicion.

Such a search gives cause for grave constitu-

tional concern. A proper administrative search

is conducted on neutral criteria to restrain the

discretion of the officer in charge of the search.

The Tenth Circuit does not permit warrantless

searches of highly regulated businesses when the search

is being conducted for a particular item as evidence of a

crime. In Winters v. Board of County Commissioners, 4 F.3d

848 (9th Cir. 1993), the police had entered a pawnshop

solely for the purpose of seizing evidence of a crime that

the police knew was in possession of the pawnshop. The

Tenth Circuit found that pawnshops are “closely regu-

lated” industries under Oklahoma law for the purposes

of the Colonnade-Biswell exception. Id. at 852 (citing S.S.

Pawn, 947 F.2d at 436-39). However, the court did not

allow the government to bootstrap the police’s entrance

into the pawnshop to seize particular property onto the

12

government’s ability to administratively inspect the

pawnshop:

If we were to allow an officer under the guise of

the administrative statute to seize evidence of

criminal activity without a warrant when the

officer has a particularized suspicion regarding

that evidence, we would eradicate the Fourth

Amendment protections enjoyed by the pawn-

shop.

Although we upheld the constitutionality of

the Oklahoma statutes in S & S Pawn, we cau-

tioned that the execution of an administrative

search pursuant to direct criminal suspicion

raises grave constitutional concerns. S & S Pawn

947 F.2d at 441. We noted that the exigent cir-

cumstances allowing a warrantless administra-

tive search evaporate when the police intend to

seize particular criminal evidence. “Once it is

discovered that a pawnshop possesses stolen

property, ‘spot’ searches are no longer neces-

sary. Moreover, after the pawn tickets are turned

over to the enforcing officer, ‘surprise’ no longer

appears to justify the necessity of a warrantless

search.” Id. at 441 n.7. Simply put, when a law

enforcement officer intends to seize a particular

piece of criminal evidence from the premises of

a pawnshop, the seizure may not be substanti-

ated by relying on the pretense of an adminis-

trative search coupled with the plain view

doctrine. In such a situation, the officer must

obtain a warrant. Thus we reverse the district

court and find there was a seizure in violation of

Ms. Winter’s Fourth Amendment rights.

Id. at 854-55.

The reasoning of the Tenth Circuit in S & S Pawn

and Winters is in direct conflict with the Ninth Circuit’s

OCT see errs ene -

13

decision in Argent when applying the Colonnade-Biswell

exception. The conflict is irreconcilable and certiorari is

appropriate.

Ill. CONCLUSION

The Court should accept review of the Ninth Circuit

decision both because the lower court misapplied the

Colonnade-Biswell exception to the warrant requirement

and because the decision conflicts with decisions within

the Ninth Circuit and also with the Tenth Circuit’s appli-

cation of the Colonnade-Biswell exception when the gov-

ernment enters a “closely regulated” business not to

inspect, but for the sole purpose of seizing property.

Respectfully submitted this 13th day of November,

1996.

FiNEGOLD & ZULAUF

Jon R. ZuLaurF

Attorney for Argent Chemical

Laboratories, Inc.

In The

Supreme Court of the United States

October Term, 1996

ARGENT CHEMICAL LABORATORIES, INC., various

articles of drug identified in Attachment A, which are

located at Argent Chemical Laboratories, Inc., 8515

and 8702 152nd Avenue N.E. Redmond, Washington,

Petitioner,

V.

UNITED STATES OF AMERICA,

Respondent.

Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

APPENDIX

A-l

APPENDIX A

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Unrrep States OF AMERICA,

Plaintiff-Appellant,

7 No. 95-35167

ARGENT CHEMICAL LasoraTories, INC. D.C. No.

various articles of drug identified

in Attachment A, which are

located at Argent Chemical

Laboratories, Inc., 8515 and 8702

152nd Avenue NE, Redmond,

Washington,

Defendant-Appellee.

CV-94-01120-JCC

OPINION

Ne ee eee ee ee ee ee eee ee ee ee”

Appeal from the United States District Court

for the Western District of Washington

John C. Coughenour, District Judge, Presiding

Argued and Submitted

January 9, 1996 — Seattle, Washington

Filed August 16, 1996

Before: James R. Browning, Eugene A. Wright and

William C. Canby, Jr., Circuit Judges

Opinion by Judge Canby

A-2

COUNSEL

Jacob M. Lewis, United States Department of Justice,

Washington, D.C., for the plaintiff-appellant.

John R. Zulauf, Finegold, Zulauf & Engelhard, Seat-

tle, Washington, for the defendant-appellee.

OPINION

CANBY, Circuit Judge:

Under procedures authorized by Congress, the Food

and Drug Administration (“FDA”) seized allegedly adul-

terated products from the premises of a regulated veter-

inary drug manufacturer, without obtaining a warrant

from a judicial officer issued upon a finding of probable

cause. The question before us is whether that seizure

violated the Fourth Amendment. We concluded that it

did not, and we reverse the judgment of the distric: court.

I. The Factual Background

Argent Chemical Laboratories manufactures and

repackages veterinary drugs. FDA agents inspected

Argent several times between the summer of 1993 and

May 1994 to ensure compliance with the Food, Drug, and

Cosmetic Act, 21 U.S.C. § 301 et seq. (“Act”). The FDA

cited Argent for certain deficiencies. Several months after

the last inspection, the FDA agents secured from the

A-3

Deputy Clerk of the District Court, without the interven-

tion of a judicial officer or a showing of probable cause,

an in rem arrest warrant for various veterinary drugs

alleged to violate the Act. FDA agents and United States

Marshals then seized over $100,000 worth of veterinary

drugs from Argent’s premises.

This condemnation action followed. Argent appeared

as claimant and contested the constitutionality of the

seizure. The district court held that the seizure violated

the Fourth Amendment; it accordingly granted Argent’s

motion to quash the in rem arrest warrant and ordered the

government to return the property. The government

appealed, and the district court stayed its order pending

the appeal.

II. The Statutory Scheme of Seizure

The warrant in this case was issued in accordance

with the Act. Under the Act, an article “proceeded

against shall be liable to seizure by process pursuant to

the libel, and the procedures in cases under this section

shall conform, as nearly as may be, to the procedure in

admiralty. ...” 21 U.S.C. § 334(b). Under the Supplemen-

tal Rules for Certain Admiralty and Maritime Claims

(“Supplemental Rules”), an in rem action begins with a

complaint that must “be verified on oath or solemn affir-

mation” and that must “describe with reasonable partic-

ularity the property that is the subject of the action.”

Supplemental Rule C(2). Upon filing of the complaint, the

clerk issues a warrant:

A-4

Except in actions by the United States for forfei-

tures for federal statutory violations, the veri-

fied complaint and any supporting papers shall

be reviewed by the court and, if the conditions

for an action in rem appear to exist, an order so

stating and authorizing a warrant for the arrest

of the vessel or other property that is the subject

of the action shall issue and be delivered to the

clerk who shall prepare the warrant.

In actions by the United States for forfeitures for

federal statutory violations, the clerk, upon filing of

the complaint, shall forthwith issue a summons and

warrant for the arrest of the vessel or other property.

Supplemental Rule C(3) (emphasis added). Thus, because

this was an action by the United States for a forfeiture for

federal statutory violations, FDA agents were able to

obtain a warrant without review by a judicial officer or a

finding of probable cause.

Ill. The Fourth Amendment and the Colonnade-

Biswell Exception

Argent argues that, although the drugs were seized

pursuant to a warrant issued in accordance with the Act,

the seizure violated the Fourth Amendment’s prohibition

of unreasonable searches and seizures and its require-

ment that warrants issue upon probable cause. We con-

clude, however, that Argent’s argument is defeated by

the nature of its business and the regulation to which it is

subject.

A-5

The Fourth Amendment applies to commercial prem-

ises as well as to private homes, See v. City of Seattle, 387

U.S. 541, 546 (1967), but under the so-called Colonnade-

Biswell exception, warrantless searches and seizures on

commercial property used in “closely regulated” indus-

tries are constitutionally permissible. Colonnade Catering

Corp. v. United States, 397 U.S. 72 (1970); United States v.

Biswell, 406 U.S. 311 (1972). Persons engaging in per-

vasively regulated industries have a diminished expecta-

tion of privacy. New York v. Burger, 482 U.S. 691, 702

(1987); Biswell, 406 U.S. at 316. With regard to such indus-

tries, “Congress has broad authority to fashion standards

of reasonableness for searches and seizures.” Colonnade,

397 U.S. at 77. Thus in Colonnade and Biswell, the Court

held that there was no constitutional violation when the

businesses of dispensing liquor and selling firearms,

respectively, were subjected to inspections and seizures

without a warrant issued by a judicial officer upon proba-

ble cause.

Argent asserts that it is not subject to the Colonnade-

Biswell exception for two reasons: first, its veterinary

drug business is not the kind of industry that is subject to

the Colonnade-Biswell exception; and second, the Colon-

nade-Biswell exception does not extend to a separate and

particularized seizure of misbranded or adulterated

goods. We reject both contentions.

IV. Manufacture of Veterinary Drugs as a Closely Reg-

ulated Industry

In New York v. Burger, 482 U.S. at 702-03, the Supreme

Court set forth the standards for determining when the

A-6

Colonnade-Biswell exception applies.! A warrantless

inspection will be deemed reasonable only if the business

is closely regulated and if three criteria are met:

First, there must be a “substantial” govern-

ment interest that informs the regulatory

scheme pursuant to which the inspection is

made. .

Second, the warrantless inspections must be

“necessary to further [the] regulatory

scheme.” .. .

Finally, “the statute’s inspection program, in

terms of the certainty and regularity of its appli-

cation, [must] provid[e] a constitutionally ade-

quate substitute for a warrant.”

Burger, 482 U.S. at 702-03 (quoting Donovan v. Dewey, 452

U.S. 594, 600, 602-03 (1981)). We conclude that all of these

standards are met in this case.

As a threshold matter, the veterinary drug industry is

“closely regulated.” See generally 21 U.S.C. §§ 301 - 392; 21

C.F.R. Pts. 200-599. The Food, Drug, and Cosmetic Act

prohibits the adulteration or misbranding of any drug, 21

U.S.C. § 331(b), whether that drug is intended for use by

either humans or animals, 21 U.S.C. § 321(g)(1)(B).

“[V]irtually every phase of the drug industry is heavily

regulated, from packaging, labeling, and certification of

expiration dates, to prior FDA approval before new drugs

1 Although Burger pertained only to a search, the Colonnade-

Biswell exception applies to searches and seizures. See Colonnade, 397

U.S. at 77 (warrantless search and seizure of liquor held

constitutiona!); Biswell, 406 U.S. at 317 (warrantless search and

seizure of firearms held constitutional); see also infra part III.

A-7

can be marketed.” United States v. Jamieson-McKames Phar-

maceuticals, Inc., 651 F.2d 532, 537 (8th Cir. 1981) (foot-

notes omitted), cert. denied, 455 U.S. 1016 (1982); see e.g.,

21 U.S.C. § 351(a) (regulating manufacture), § 351(b) (reg-

ulating strength, quality, and purity), § 352(a), (b), (f). (g),

(h), (p), regulating packaging and labeling); § 355 (new

drug approvals), § 360b (regulating new animal drug

approvals). Regulations implementing the act are quite

extensive. See generally 21 C.F.R. Pts. 200-599. For exam-

ple, good manufacturing practices for the preparation of

human and animal drugs are set forth in detail. See 21

C.F.R. Pts. 210, 211.2 The veterinary drug industry is

certainly regulated as extensively as the vehicle disman-

tling industry, which the Supreme Court has held to be

“closely regulated.” See Burger, 482 U.S. 703-04.

Although duration of a particular regulatory scheme

has “some relevancy” in determining whether an indus-

try is closely regulated, Burger, 482 U.S. at 705, “it is the

pervasiveness and regularity of the federal regulation

that ultimately determines whether a warrant is neces-

sary.” Donovan, 452 U.S. at 606. The pervasiveness and

regularity of the current regulatory scheme is sufficient to

2 These regulations include personnel qualifications and

responsibilities, 21 C.F.R. §§ 211.25, 211.28; buildings and

facilities specifications, 21 C.F.R. §§ 211.42-211.58; equipment

specifications, 21 C.F.R. §§ 211.63-211.72; production and

process controls, 21 C.F.R. §§ 211.100-211.115; packaging and

labeling controls, 21 C.F.R. §§ 211.122-211.137; holding and

distribution procedures, 21 C.F.R. §§ 211.142, 211.150;

laboratory controls, 21 C.F.R. §§ 211.160-211.176; and

requirements for recording and reporting, 21 C.F.R.

§§ 211.180-211.198, to name but a few.

A-8

make it “closely regulated” under Burger wholly apart

from any consideration of duration.

FDA regulation of Argent’s industry also meets the

three enumerated criteria of Burger. First, there is “a

‘substantial’ government interest that informs the regula-

tory scheme pursuant to which the inspection is made.”

Burger, 482 U.S. at 702. Argent argues that in some

respects animal drug provisions are less stringent than

human drug provisions, compare 21 U.S.C. § 355 (new

drugs) with 21 U.S.C. § 360b (new animal drugs), and that

regulation of animal drugs is primarily motivated by

economic considerations rather than human safety, see 1

James T. O’Reilly, Food and Drug Administration § 16.01, at

16-3 & n.9 (2d ed. 1995). Neither argument suggests that

the government lacks a substantial interest in ensuring

the safety and effectiveness of animal drugs. Congress

has seen fit, either for human safety or for economic

reasons, to regulate animal drugs to ensure their safety

and effectiveness. Whether the interest is human health,

economic health, or both, we conclude that it is substan-

tial.

Second, “the warrantless inspections [are] ‘necessary

to further [the] regulatory scheme.’ ” Burger, 482 U.S. at

702 (quoting Donovan, 452 U.S. at 600). Unannounced

inspections have a deterrent effect; forcing inspectors to

obtain a warrant before inspection might frustrate the

purpose of the Act by alerting owners to inspections. See

id. at 702-03; Biswell, 406 U.S. at 316. Moreover, this court

3 We note, however, that the original 1906 Food and Drugs

Act provided for regulation of animal drugs. Act of June 30,

1906, ch. 3915, § 6, 34 Stat. 769.

A-9

has recognized the “need for swift governmental action

to remove misbranded products from the stream of com-

merce.” United States v. An Article of Device “Theramatic”,

715 F.2d 1339, 1343 (9th Cir. 1983) (“Theramatic II’), cert.

denied sub nom. Cloward v. United States, 465 U.S. 1025

(1984). Thus, warrantless searches and seizures are neces-

sary to further the regulatory scheme that ensures the

integrity of veterinary drugs.

Finally, the regulatory scheme, ” ‘in terms of the cer-

tainty and regularity of its application, [provides] a con-

stitutionally adequate substitute for a warrant,’ ” thereby

satisfying the third Burger requirement. Burger, 482 U.S. at

703 (quoting Donovan, 452 U.S. at 603). “[T]he regulatory

statute must perform the two basic functions of a war-

rant: it must advise the owner of the commercial premises

that the search is being made pursuant to the law and has

a properly defined scope, and it must limit the discretion

of the inspecting officers.” Id. Taken as a whole, the Act,

the accompanying regulations, and the Supplemental

Rules for Certain Admiralty and Maritime Claims pro-

vide a constitutionally adequate substitute for a warrant.

Inspections are conducted with notice furnished at the

time, and their scope is limite’ by statute. 21 U.S.C.

§ 374(a)(1). Seizures are limited to drugs that are adulter-

ated or misbranded, 21 U.S.C. § 334(a)(1), the articles to

be seized must be described “with reasonable partic-

ularity,” Supplemental Rules C(2), and the government's

complaint must be “verified on oath or solemn affirma-

tion,” id. Moreover, in most cases, the seizure is subject to

the approval of one of the Food and Drug Administra-

tion’s district offices, the appropriate office (or “center”)

in the Food and Drug Administration headquarters, the

A-10

Food and Drug Administration’s Office of Enforcement,

the Office of the Chief Counsel, and the Department of

Justice. See FDA Regulatory Procedures Manual, ch. 6, at

173-85 (Aug. 1995).4

We conclude, therefore, that Argent’s operation, as

regulated by the FDA, falls within the Colonnade-Biswell

exception to the Fourth Amendment’s warrant require-

ment.

V. The Particularized Seizure and the Warrant

Requirement of the Theramatic Case

Argent next contends that, even if it is a “closely

regulated” industry for purposes of the Colonnade-Biswell

exception, that exception does not apply to the seizure in

this case.

To the extent that Argent’s argument suggests that

the Colonnade-Biswell exception applies only to inspec-

tions and not to seizures, the argument is untenable. It is

true that Burger discussed its criteria for “closely regu-

lated” industries in terms of “inspections,” but it also

approved the use of evidence seized in the course of the

inspection. 482 U.S. at 716. Moreover, both Colonnade and

Biswell involved seizures of contraband discovered dur-

ing the unwarranted inspections. Biswell held that,

because the unwarranted inspection was constitutionally

permissible. “[t]he seizure of respondent’s sawed-off

4 On occasion, in the case of so-called “direct reference

seizures,” headquarters review is skipped. See FDA Regulatory

Procedures Manual, ch. 6, at 176.

Eo

A-11

rifles was not unreasonable under the Fourth Amend-

ment.” 406 U.S. at 317. Thus, Colonnade-Biswell extends to

seizure without warrant of what may be inspected with-

out warrant, when Congress so authorizes.

The argument that Argent most vigorously asserts,

and the one that was accepted by the district court, is

based on our decision in United States v. Device Labeled

“Theramatic”, 641 F.2d 1289 (9th Cir. 1981) (“Theramatic

I”), In Theramatic I, we held that the Fourth Amendment

was violated by the FDA’s seizure from a physician’s

office of an allegedly misbranded medical device pur-

suant to a warrant issued under the Supplemental Rules.

Id. at 1295. We emphasized that the physician was enti-

tled to the protection of the Fourth Amendment in his

office just as he was in his home. Id. at 1292. We recog-

nized that some administrative searches could be con-

ducted on the strength of a warrant issued on less than

probable cause, but the government in Theramatic I was

not conducting random inspections to enforce adminis-

trative standards; it was “searching a particular physi-

cian’s office to seize a particular, identified device.” Id. at

1294. Finally, we said that the Colonnade-Biswell exception

to the warrant requirement did not apply because the

“search at issue here was not part of any statutory pro-

gram to inspect physicians’ offices.” Id. at 1295.

We do not draw from Theramatic I the same lessons

that Argent and the district court did. The problem with

the seizure in Theramatic I was that it was effectuated by

an impermissible invasion of the physician’s right of pri-

vacy. That is why we were careful in Theramatic I to point

out that the case involved not only a seizure, “but a

paradigmatic search - a physical intrusion by the U.S.

A-12

Marshal into [the physician's] office.” Id. at 1291. We also

stated:

It is one thing to seize without a warrant prop-

erty resting in an open area or seizable by levy

without an intrusion into privacy, and it is quite

another thing to effect a warrantless seizure of

property, even that owned by a corporation,

situated on private premises to which access is not

otherwise available for the seizing officer.

Id. at 1292 (quoting G.M. Leasing Corp. v. United States, 429

U.S. 338, 354 (1977)) (emphasis added). The Colonnade-

Biswell exception did not apply because it is based largely

on the diminished expectation of privacy in a closely- |

regulated industry, see Burger, 482 U.S. at 700, and the |

physician in Theramatic I was not closely regulated by the |

FDA.

The district court, however, accepted Argent’s inter-

pretation of Theramatic I, concluding that “[aJlthough a

well-defined scheme for inspecting pervasively regulated

businesses may survive Fourth Amendment scrutiny, the

protection against unreasonable searches and seizures

may nevertheless prevent government agents from

returning to conduct a particularized search and seizure

without first obtaining an ordinary warrant.” The District |

Court held that Theramatic I forbade agents from search- |

ing “a particular business to seize particular, identified |

chemicals and drugs.”

Theramatic I’s reference to a particularized search,

however, was made to point out that the search con-

ducted there was not an administrative search similar to

those designed to insure sanitary housing conditions, see

A-13

Camara v. Municipal Court, 387 U.S. 523 (1967), or work-

place safety, see Marshall v. Barlow’s, Inc., 436 U.S. 307

(1978); that was not what the FDA was doing. But a

wholly separate point (which we thought was even

clearer) was that the physician was not “closely regu-

lated” by the FDA and therefore was not subject to the

Colonnade-Biswell exception. Theramatic I, 641 F.2d at 1295.

Thus it is the invasion of privacy, not the partic-

ularity of the seizure, that is the relevant difference

between Argent’s case and Theramatic I for purposes of

the Colonnade-Biswell exception. Argent, being closely

regulated by the FDA, has a diminished expectation of

privacy that was not violated by the seizure. We attach no

significance to the fact that the FDA “returned” to exe-

cute its in rem warrant some time after its last inspection.

If a random, unannounced inspection does not violate

Argent’s Fourth Amendment right of privacy, we see no

reason why the unannounced execution of a warrant

under the Supplemental Rules would do so. The seizure

is from the premises of a closely regulated manufacturer

and is conducted within the regulatory scheme in the

manner Congress has authorized. There is no need to

brigade the seizure with an inspection in order to legiti-

mize it; Argent’s expectation of privacy has not been

violated.

VI. Conclusion

Under the Colonnade-Biswell exception to the Fourth

Amendment, Argent had a “reduced expectation of pri-

vacy.” Burger, 482 U.S. at 702. As a consequence, the

seizure of Argent’s drugs from its premises pursuant to a

A-14

warrant issued in accordance with 21 U.S.C. § 334 and

Supplemental Rule C did not violate the Fourth Amend-

ment.

REVERSED.

B-1

APPENDIX B

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

UNITED STATES, ) CASE NO. C€94-1120C

Plaintiff, ORDER ON MOTION

i ) TO QUASH WARRANT

) AND RETURN PROPERTY

oa tees wie: i

: )

Defendant. )

)

This matter comes before the Court on the motion of

claimant Argent Chemicals Laboratories, Inc., for an

order quashing the in rem arrest warrant and directing

the government to return the seized articles.

I. BACKGROUND

Agents of the Food and Drug Administration

inspected Argent’s facilities several times in the summer

and fall of 1993, and in May of 1994. The final FDA

inspection occurred on May 9, 1994. The FDA cited

Argent for certain deficiencies and requested that correc-

tions be made. Argent states that it then made the correc-

tions as requested.

On August 11, 1994, FDA agents and U.S. Marshals

seized various drugs and chemicals from Argent, acting

on the authority of an arrest warrant signed by Nealann

Shari, Deputy Clerk of the District Court. There are no

B-2

probable cause determination or judicial review of any

kind prior to the issuance of the warrant.

Il. ANALYSIS

This forfeiture action arises under 21 U.S.C. § 334,

which authorizes the seizure and forfeiture of, among

others things, adulterated drugs. The statute provides

that “the procedure in cases under this section shall con-

form, as nearly as may be, to the procedure in admiralty.”

Id.

Rule C of the Supplemental Rules for Certain Admi-

ralty and Maritime Claims provides that

[iJn actions by the United States for forfeitures

for federal statutory violations, the clerk, upon

filing of the complaint, shall forthwith issue a

summons and warrant for the arrest of the ves-

sel or other property without requiring a certi-

fication of exigent circumstances.

Argent argues that the search and seizure of its prop-

erty pursuant to Rule C violated the Fourth Amendment,

because the warrant was not subject to a probable-cause

determination by a district judge. |

A

The Fourth Amendment prohibits “unreasonable

searches and seizures.” Warrantless searches of private

property, “except in certain carefully defined classes of

cases,” are unreasonable. Camara v. Municipal Court, 387

ee eT TT |

B-3

U.S. 523, 87 S. Ct. 1727, 1731(1967). Because “[t]he busi-

nessman, like the occupant of a residence, has a constitu-

tional right to go about his business free from

unreasonable official entries upon his private commercial

property,” See v. City of Seattle, 387 U.S. 541, 87 S. Ct. 1737,

1739 (1967), the warrant clause “protects commercial

buildings as well as private homes,” Marshall v. Barlow's

Inc., 436 U.S. 307, 98 S. Ct. 1816, 1819 (1978).

The Supreme Court has carved out exceptions to the

warrant requirement for “pervasively regulated busi-

nesses” and for “closely regulated industries long subject

to close supervision and inspection.” Barlow's, 98 S. Ct. at

1820-21 (citations and internal quotations omitted). In

Colonnade Catering Corp. v. United States, 397 U.S. 72, 90 S.

Ct. 774, 777 (1970), the Court acknowledged Congress’

“broad authority to fashion standards of reasonableness

for searches and seizures” in the liquor industry, “long

subject to close supervision and inspection.” Then, in

United States v. Biswell, 406 U.S. 311, 92 S. Ct. 1593 (1972),

the Court held that warrantless inspections of a firearms

dealership, conducted pursuant to a statutory inspection

scheme, did not offend the Fourth Amendment. But the

Court has maintained that these cases are exceptions to

the general rule,

represent[ing] responses to relatively unique cir-

cumstances. Certain industries have such a his-

tory of government oversight that no reasonable

expectation of privacy could exist for a propri-

etor over the stock of such an enterprise. Liquor

(Colonnade) and firearms (Biswell) are industries

of this type; when an entrepreneur embarks

upon such a business, he has voluntarily chosen

B-4

to subject himself to a full arsenal of govern-

mental regulation.

Barlow's, 98 S. Ct. at 1821 (citations omitted). The Court

went on to say that “[t]he element that distinguishes

these enterprises from ordinary businesses is a long tradi-

tion of close government supervision, of which any per-

son who chooses to enter such a business must already be

aware.” Id.

More recently, the Court has upheld warrantless

inspection schemes involving coal mines, Donovan uv.

Dewey, 452 U.S. 594, 101 S. Ct. 2534 (1981), and auto-

mobile junkyards, New York v. Burger, 482 U.S. 691, 107 S.

Ct. 2636 (1987). In Burger, the Court clarified that war-

rantless inspections of pervasively regulated businesses

are reasonable only if three criteria are met. First, there

must be a substantial government interest that informs

the regulatory scheme. Burger, 107 S. Ct. at 2644. Second,

the warrantless inspections must be necessary to further

the regulatory scheme. Id. And third, the inspection pro-

gram, in terms of the certainty and regularity of its appli-

cation, must provide a constitutionally adequate

substitute for a warrant. Id.

The government argues that the Colonnade-Biswell

exception to the warrant requirement applies here. Speci-

fically, the government urges that the drug-manufactur-

ing industry is so closely regulated that owners of drug

factories have a lesser expectation of privacy which must

give way to the government's substantial interest in pro-

tecting the public from adulterated drugs. Therefore, the

B-5

government reasons, the in rem arrest procedure of Sup-

plemertal Rule C does not violate any Fourth Amend-

ment protection afforded the owners of a drug factory.

The government relies heavily on the Eighth Circuit's

decision in United States v. Jamieson-McKames Pharmaceuti-

cals, Inc., 651 F.2d 532 (8th Cir. 1981), cert. denied, 445 US.

1016 (1982). In Jamieson-McKames the court held that the

warrantless inspection procedure of the Food, Drug, and

Cosmetic Act, set out at 21 U.S.C. § 374, does not vioiate

the Fourth Amendment because it fails within the Colon-

nade-Biswell exception. The government also cites Found-

ing Church of Scientology v. United States, 409 F.2d 1146

(D.C. Cir.), cert. denied, 396 U.S. 963 (1969), which held

that the procedure in admiralty, employed to seize

E-meters from the Church of Scientology, did not violate

the Fourth Amendment.!

Contrary to the government's assertion, neither of

these cases is directly on point. Jamieson-McKames stands

for the proposition that § 374, the inspection provision of

the FD&C Act, does not offend the Fourth Amendment.

Jamieson-McKames, 651 F.2d at 538 (holding that “inspec-

tions authorized by § 374 are ‘reasonable’ and therefore

not inconsistent with the Fourth Amendment”). The case

does not address § 334, the provision related to arrests in

rem, except in the context of the applicable probable-

cause standard. Id. at 651 F.2d at 540-41 & n.17. Although

1 The government also cites United States v. Articles of

Hazardous Substance, 588 F.2d 39 (4th Cir. 1978). That case is

inapposite because it involved commercial premises open to the

public, and therefore presented no invasion of privacy. Id. at 43

n.1.

B-6

the agents in Jamieson-McKames obtained the in rem arrest

warrants pursuant to Rule C, see id. at 540 & n.17, it

appears that defendants challenged the seizures only on

the basis that “the application for the warrant for inspec-

tion did not comply with traditional probable-cause stan-

dards.” Id.

Similarly, in Founding Church of Scientology, the court

did not specifically reach the question of whether an in

rem arrest warrant issued by a court clerk would meet

Fourth Amendment standards, because there, “[t]he libel

was subject to scrutiny by a United States District Judge,

and it was only after his review and by court order that

the warrant issued.” Founding Church of Scientology, 409

F.2d at 1150. The court’s other statements to the effect

that the Fourth Amendment did not necessarily require a

“showing of probable cause before a magistrate” in the

contest of civil attachments under the rules of admiralty

is dicta. Id.

Cc

The Ninth Circuit, on the other hand, has specifically

addressed the issue of whether a court clerk may, consis-

tent with the Fourth Amendment, issue a warrant for an

arrest in rem under § 334. In United States v. Device, Labeled

“Theramatic”, 641 F.2d 1289 (9th Cir. 1981), federal agents

entered a doctor’s office and seized a diathermy machine

alleged to be misbranded. The agents acted on the

authority of an arrest warrant issued by the clerk of the

court. The Ninth Circuit concluded:

We hold that absent exigent circumstances,

entrance into homes and offices to seize items

B-7

alleged to violate the Food, Drug, and Cosmetic

Act must comply with the basic requirements of

the Fourth Amendment: the verified complaint

on which the warrant authorizing seizure is

based must provide probable cause to believe

that the article to be seized violates the act, and

the complaint must be scrutinized by a

detached, independent official, empowered to

decide whether probable cause does exist,

before the warrant is issued.

Id. at 1295. In so holding, the court explained that because

“the government had a specific target in mind,” the cases

involving random inspections to enforce statutory stan-

dards did not apply. Id. at 1294 (citing Barlow’s 98 S. Ct.

1816, and Camera, 87 S. Ct. 1727). The court also rejected

the argument that the search fell within the Colonnade-

Biswell exception because “the search at issue here was

not part of any statutory program to inspect physicians’

offices —- the same seizure procedure could have been

used against misbranded devices no matter where they

were found.” Id. at 1295.

Thus, there is an important distinction between Ther-

amatic and the Colonnade-Biswell line of cases. Theramatic

does not address the question of whether the general

inspection scheme of § 374 violates the Fourth Amend-

meit, the constitutionality of which would obviously be

subject to analysis under Colonnade-Biswell. See Jamieson-

McKames. Theramatic does, however, directly address

whether in rem arrest warrants may constitutionally be

issued pursuant to § 334 and Supplemental Rule C.

Although a well-defined scheme for inspecting per-

vasively regulated businesses may survive Fourth

Amendment scrutiny, the protection against unreasonable

B-8

searches and seizures may nevertheless prevent govern-

ment agents from returning to conduct a particularized

search and seizure without first obtaining an ordinary

warrant. Cf. United States v. Articles of Drug Consisting of

Following: Undetermined Quantity of 100-Capsule .Bottles,

etc., 568 F. Supp. 1182 (N.D. Cal. 1983).

Theramatic is binding authority directly on point. The

agents in this case had previously conducted administra-

tive inspections pursuant to § 374. The constitutionality

of these inspections is not at issue here. Based on their

conclusion that Argent was in violation of the Act, the

agents obtained the in rem arrest warrant to search a

particular business to seize particular, identified chemi-

cals and diugs. The arrest warrant was issued, pursuant

to § 334 and Supplemental Rule C, by a deputy clerk who

did not, indeed could not, review the government's alle-

gations to determine if there was cause to seize the items.

This is precisely what the Ninth Circuit forbade in Thera-

matic.

The government argues that Theramatic is distin-

guishable on the ground that the search there involved a

doctor’s office, not a drug factory. The Court is unper-

suaded by this distinction. First, the Supreme Court deci-

sions interpreting the Fourth Amendment’s reach into the

commercial realm do not make a distinction between a

2 It is worth noting in this context that during a warrantless

inspection under § 374, the agents may take samples. They may

proceed to seize and forfeit items only under § 334. There is

nothing unusual about the suggestion that the seizure under

§ 334 requires greater safeguards than the inspection under

§ 374.

B-9

business or professional office and a factory. Rather, the

Court has simply stated that the Fourth Amendment pro-

tects “private commercial property,” See, 87 S. Ct. at 1739,

and “commercial buildings.” Barlow’s, 98 S. Ct. at 1819.

Second, the government’s approach would tend to create

a confusing body of case law giving law enforcement

officers unreliable standards for determining whether

and when to obtain judicially-authorized warrants.

Finally, the government cites a number of district

court decisions authorizing the in rem arrest procedure in

the context of violations of the FD&C Act. E.g., United

States v. Articles of Drug . . . WANS, 526 F. Supp. 703, 706

(D.P.R. 1981); United States v. Undetermined quantities

of . . . blue-green algae, 1983 WL 1076 (D. Or. 1983). The

Court is not free to follow the reasoning of other district

courts in the face of countervailing Ninth Circuit author-

ity.

Ill. CONCLUSION

The Ninth Circuit has held unambiguously that

agents seeking to enter a business office to seize items

alleged to violate the Food, Drug, and Cosmetic Act must

comply with the Fourth Amendment BY obtaining a war-

rant based upon probable cause and authorized by a

detached judicial officer. Argent Chemical’s motion to

quash is therefore GRANTED. The government is hereby

ORDERED to return the seized property to Argent Chem-

icals.

B-10

SO ORDERED this 15th day of Dec., 1994.

/s/ JOHN C. COUGHENOUR

The Honorable John C. Coughenour

United States District Judge

C-1

APPENDIX C

Pertinent Provisions of the Food, Drug and Cosmetic Act

21 U.S.C. 334(a):

§ 334 Seizure

(a) Grounds and jurisdiction

(1) Any article of food, drug, or cosmetic that is

adulterated or misbranded when introduced into or while

in interstate commerce or while held for sale (whether or

not the first sale) after shipment in interstate commerce,

or which may not, under the provisions of section 344 or

355 of this title, be introduced into interstate commercz,

shall be liable to be proceeded against while in interstate

commerce, or at any time thereafter, on libel of informa-

tion and condemned in any district court of the United

States or United States court of a Territory within the

jurisdiction of which the article is found. No libel for

condemnation shall be instituted under this chapter, for

any alleged misbranding if there is pending in any court

a libel for condemnation proceeding under this chapter

based upon the same alleged misbranding, and not more

than one such proceeding shall be instituted if no such

proceeding is so pending, except that such limitations

shall not apply (A) when such misbranding has been the

basis of a prior judgment in favor of the United States, in

a criminal, injunction, or libel for condemnation proceed-

ing under this chapter, or (B) when the Secretary has

probable cause to believe from facts found, without hear-

ing, by him or any officer or employee of the Department

that the misbranded article is dangerous to health, or that

the labeling of the misbranded article is fraudulent, or

C-2

would be in a material respect misleading to the injury or

demage of the purchaser or consumer. In any case where

the number of libel for condemnation proceedings is lim-

ited as above provided the proceeding pending or insti-

tuted shall, on application of the claimant, seasonably

made, be removed for trial to any district agreed upon by

stipulation between the parties, or, in case of failure to so

stipulate within a reasonable time, the claimant may

apply to the court of the district in which the-seizure has

been made, and such court (after giving the United States

attorney for such district reasonable notice and oppor-

tunity to be heard) shall by order, unless good cause to

the contrary is shown, specify a district of reasonable

proximity to the claimant's principal place of business, to

which the case shall be removed for trial.

(b) Procedure; multiplicity of pending proceedings

The article, equipment, or other thing proceeded

against shall be liable to seizure by process pursuant to

the libel, and the procedure in cases under this section

shall conform, as nearly as may be, to the procedure in

admiralty; except that on demand of either party any

issue of fact joined in any such case shall be tried by jury.

When libel for condemnation proceedings under this sec-

tion, involving the same claimant and the same issues of

adulteration or misbranding, are pending in two or more

jurisdictions, such pending proceedings, upon applica-

tion of the claimant seasonably made to the court of one

such jurisdiction, shall be consolidated for trial by order

of such court, and tried in (1) any district selected by the

claimant where one of such proceedings is pending; or (2)

a district agreed upon by stipulation between the parties.

C-3

If no order for consolidation is so made within a reason-

able time, the claimant may apply to the court of one such

jurisdiction and such court (after giving the United States

attorney for such district reasonable notice and oppor-

tunity to be heard) shall by order, unless good cause to

the contrary is shown, specify a district of reasonable

proximity to the claimant's principal place of business, in

which all such pending proceedings shall be consolidated

for trial and tried. Such order of consolidation shall not

apply so as to require the removal of any case the date for

trial of which has been fixed. The court granting such

order shall give prompt notification thereof to the other

courts having jurisdiction of the cases covered thereby.

D-1

APPENDIX D

Supplemental Rules for Certain Admiralty and Maritime

Claims Rule C. Actions in Rem: Special Provisions

(1) When Avarcasie. An action in rem may be brought:

(a) To enforce any maritime lien;

(b) Whenever a statute of the United

States provides for a maritime action in rem or a

proceeding analogous thereto.

Except as otherwise provided by law a party who

may proceed in rem may also, or in the alternative, pro-

ceed in personam against any person who may be liable.

Statutory provisions exempting vessels or other

property owned or possessed by or operated by or for the

United States from arrest or seizure are not affected by

this rule. When a statute so provides, an action against

the United States or an instrumentality thereof may pro-

ceed on in rem principles.

(2) Complaint. In actions in rem the complaint shall

be verified on oath or solemn affirmation. It shall

describe with reasonable particularity the property that is

the subject of the action and state that it is within the

district or will be during the pendency of the action. In

actions for the enforcement of forfeitures for violation of

any statute of the United States the complaint shall state

the place of seizure and whether it was on land or on

navigable waters, and shall contain such allegations as

may be required by the statute pursuant to which the

action is brought.

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APPENDIX E

§ 374 Inspection

(a) Right ot agents to enter; scope of inspection; notice;

promptness; exclusions. (1) For purposes of enforcement

of this Act, officers or employees duly designated by the

Secretary, upon presenting appropriate credentials and a

written notice to the owner, operator, or agent in charge,

are authorized (A) to enter, at reasonable times, any

factory, warehouse, or establishment in which food,

drugs, devices, or cosmetics are manufactured, processed,

packed, or held, for introduction into interstate commerce

or after such introduction, or to enter any vehicle being

used to transport or hold such food, drugs, devices, or

cosmetics in interstate commerce; and (B) to inspect, at

reasonable times and within reasonable limits and in a

reasonable manner, such factory, warehouse, establish-

ment, or vehicle and all pertinent equipment, finished

and unfinished materials, containers, and labeling

therein. In the case of any factory, warehouse, establish-

ment, or consulting laboratory in which prescription

drugs or restricted devices are manufactured, processed,

packed, or held, the inspection shall extend to all things

therein (including records, files, papers, processes, con-

trols, and facilities) bearing on whether prescription

drugs or restricted devices which are adulterated or mis-

branded within the meaning of this Act, or which may

not be manufactured, introduced into interstate com-

merce, or sold, or offered for sale by reason of any

provision of this Act, have been or are being manufac-

tured, processed, packed, transported, or held in any

such place, or otherwise bearing on violation of this Act.

No inspection authorized by the preceding sentence or by

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paragraph (3) shall extend to financial data, sales data

other than shipment data, pricing data, personnel data

(other than data as to qualifications of technical and

professional personnel performing functions subject to

this Act), and research data (other than data relating to

new drugs, antibiotic drugs, and devices and subject to

reporting and inspection under regulations lawfully

issued pursuant to section 505(i) or (k), section 507(d) or

(g), section 519, or 520(g) [21 USCS § 355(i) or (k), § 357(d)

or (g), § 360i, or § 360j(g)], and data relating to other

drugs or devices which in the case of a new drug would

be subject to reporting or inspection under lawful regula-

tions issued pursuant to section 505(j) [21 USCS §

355(j)]). A separate notice shall be given for each such

inspection, but a notice shall not be required for each

entry made during the period covered by the inspection.

Each such inspection shall be commenced and completed

with reasonable promptness.