Appendix — The Toilet Goods Association, Inc. v. John w.ga Rdner, Secretary of Health, Education, and Welfare

=

APPENDIX A.

Opinion of the United States Court of Appeals,

-. F or the Second Circuit.

(Filed April 13, 1966.)

~~ ‘ . +

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Tuer Tore Goons Association, Inc.; Anrta D’Focep, Inc.;

Avon Prokucts, Inc.; Beauty Counsetors, Inc.; Bonne

Bet1, Inc.;Baurgors, Inc’; CHarLES OF THE Rrrz, Inc.;

CHESEBROUGH-Poyp’s Inc.; CuHristtan Dior PrrruMeEs

. Corp.; Crarrot /IncorporaTep; CoLtontaL Dames Co.y

: \ _ Lrp.; Cory, Ivo’; Faserce Inc.; Frances Denny, Inc.;

= Tue Futter Brusn Co.; Tue Grorcze W. Lurr Co.,

- Inc.; Tae. Grverte Company; A. -M. Hansen, doing

business as House or HorA.xwoon ; ; Harper MeEruon,

Inc.; Hetena Rusrnstern, Inc.; Hetene Curtis Inpvus-

tries, Inc.; Henry/Haran/Hurtcaines, Inc.; Herpotp

LazsoraTory, Inc.; Jonn H. Brecx, Inc.; Kotmar Laso-

RATORIES, Inc.; LApy Lennox Company, Inc.; Lenn &

Fink Propucts Corporation; Arnotp L. Lewis, doing

business as Stupio Cosmetic Co.; Max Factor & Co.;7

MayBELLINE Co.; Mrerte Norman Cosmetics, Inc.; Jack

- B. NerHercutt, doing business af NErHERcUTT Lasora-

TorIES; Neurrocena Corp.; Nurrmire Propucts, Inc.;

Ovp 97 Company; Private Laset Cosmetigs Co., Inc.;

Puriran Cosmetics Co.; Revion, Inc.; Roux Lasora-,

Tories, Inc.; SHouron, Inc.; and. YarpLEy or Lonpon,

Inc.

. Piaintiffe-Appellees,

v.

“Joun W. Garpyzr, Secretary of Health, Education and

Welfare, and James L. Gopparp, Commissioner of Food

and Drugs,

Ditoinitante-kivocltiate.

- Before: .

Waterman, Moore and FRiEenb.y,

: | . Cireuit Judges.

_ 2a

Appendiz A.

Appéal by the Secretary of Health, Education and Wel-

fare and the Commissioner of Food and Drugs from an

order-of the District Court for the Southern District of

New York, Harold R. Tyler, Jr., Judge, denying their mo-

‘ tion to dismiss or grant summary judgnient in an action

for a declaratior of invalidity of four Food and- Drug Ad-

‘ministration regulations relating to color .additfes. . Af-

_ firmed as to Counts 1, 2 and 3; reversed as to Count 4.

Arrour §. Oxicx. (Robert M. Morgenthau,

United States Attorney for the Southern

District of New York; James G. Greils-

heimer, Assistant United States Attorney,

of Counsel), for Defendants-Appellants.

. Epwarp J. Ross (Breed, Abbott & Morgan, New

York, N. Y.; Stephen R. Lang, of Counsel),

for Plaintiff s- Appellees. .

Femucan, Circuit Judge: |

In July 1960, Congress added to the Federal Food, Drug,

and Cosmetic Act a number of new provisions known as the

Color Additive Amendmerits, 74 Stat. 397, 21 U. S. C. §§321-

sel . These were intended

‘to authorize the use of suitable color additives in

or on foods, drugs, and cosmetics in accordance with

- regulations to be issued by the Secretary of E. . ‘th,

Education, and Welfare, prescribing the conditions,

including maximum telerance; under which such addi-

tives may be safely used.’’ H. R. Rep. No. 1761, 86th

Cong., 2d Sess., 1960 U. S. Code Cong. & Ad. News

2887.

The Commissioner of Food and Drugs, to whom the Secre-

tary of Health, Education and Welfare has delegated the

Department’s functions under the Act, 22 F. R. 1051 (1957),

Appendia A. ;

25 F. R. 8625 (1960), held rule-making proceedings con-

forming to §4- of the Administrative Procedure Act, 5

U. S. C. §1003, and issued Color Additive Regulations, 21

C. F. R. Part 8, effective, with certain exceptions, on June

22,1968. poet

The following November the Toilet Goods Association,

‘ a trade organization of cosmetic manufacturers whose mem-

bers allegedly represent 90% of annual United States sales,

and forty manufacturers and distributors of cosmetics

brought this action against the Secretary and the Commis-

— in the District Court for the Southern District of .

ew York for a declaratory judgment that four provisions

of the Regulations exceeded the authority conferred by the

statute. Jurisdiction was propérly predieated on 28 U.S. C.

_§§1331 and 1337~—See_Smith v. Kansas City Title & Trust

Co., 255 U.S. 180 (1921).". The defendants moved to dis-

miss or to strike certain portions of the complaint on various

grounds, among others that the case was inappropriate for

declaratory relief and that the action was an unconsented

suit against: the sovereign; plaintiffs cross-moved for

summary judgment. a al 1964 Judge Tyler denied

both motions in an opinion, 235 F. Supp. 648, relying in

part on Abbott -Labs. v. Celebrezze, 228 F. Sup. 855 (D.

Del. 1964), where the court had granted a declaratory

judgment invalidating labeling regulations under the same

statute. A year later, when the case was nearly ready for

trial, the Secretary and the Commissioner renewed their

* We thus do not reach the question whether §10 of the Ad-

ministrative Procedure Act, 5 U. S. C. §1009,. constitutes an affirma-

tive grant of jurisdiction with respect to the review of federal

- administrative action, as the Suprente Court apparently assumed

in Rusk v. Cort, 369 U. S: 367, 371-72 (1962) and we recently did

in Cappadora v. Celebrezze, ——. F: 24 —— (2 Cir. 1966). But

see Ove Gustavsson Contracting Co. v. Floete, 278 F. 2a 912 (2

Cir.), cert. denied, 364 U. S. 894 (1960). Since 28 U. & C.

§§1336-40 do not require a jurisdictional amount, this question

arises only in cases such as social security, passport and citizenship

matters, where none of these sections is applicable and the juris-

dictional amount required by §1331 is not met.

.

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Diiiing 4 + EPA ne ree tie nk ame . awe

Appendix A.

- motion to dismiss on the two grounds stated, arguing that

- a different conclusion on ‘‘the issue of justiciability’’ was

' galled for by the Third Circuit’s reversal of the Abbott

Laboratories decision, 352 F. 2d: 286 (1965),? and the Dis-

- trict*of Columbia Circuit’s recent holding that declaratory

relief was not available to challenge certain regulations

adopted under the. Tobacco Inspection Act, 7 U.-S. C.

§714(b), Danville Tobacco Ass’n v; Freeman, 351 F. 2d 832

(D. C. Cir. 1965). Judge Tyler adhered io his determina-

tion but, at the defendants’ request, made the necessary

certification for an application to prosecute an interlocutory

appeal under 28 U. S. C. §1292(b); permission to appeal

_ was granted by a panel of this court.

I.

The first two counts of ‘the complaint charge that the

‘Regulations exceed the authority conferred by the statute

in treating finished cosmetic products and all diluents—un-

pigmented materials with which colors are mixed—as

‘‘color additives’’ subject to various requirements for test-

ing and administrative certification. _The basic section of

the Color Additive Amendments is {706 of the Act, 21

U..S. C. §376, which provides that a ‘‘color additive’’ shall

be deemed unsafe unless it meets two conditions :* The addi-

tive must be covered by a ‘‘regulation,”’ issued by the Sec-

- retary on a finding of suitability, which lists it for use

either generally or under prescribed conditions; and it

must either come from a batch certified for such use by

the Secretary under appropriate regulations or have been

- exempted from the certification requirement. , |

The term ‘‘color additive,’ on which the controversy

turns, is defined in $201(t)(1), as a material which

2.Subsequent to the argument of this appeal, certiorari: was

granted, 34 U.-S. Week 3294 (March 1, 1966) (No. 824).

® This is ject to an exception, not here important, for color

_ additives covered by an exemption for investigational use by

qualified experts, 21 U.S. C. §§376 (a) (2) and (f).

SE

5a

_ Appendia A. .

(A) is a dye, pigment, or other substance made

by a process of synthesis:. . . or otherwise derived .

from a vegetable, animal, mineral, or other source,

and

(B) when added or applied to a food, drug, or

cosmetic, or to the human body or any part thereof,

is capable (alone or through reaction with other

substance) of imparting color thereto.

21 U. 8. C. §321(t) (1)

The Regulations of the Food and —_— Administration

(FDA) interpret the-statutory definition of ‘color additive

as including ‘‘all diluents’’ and state further that

(

A substance that, when applied to the human body

results in coloring, is a ‘‘color additive,’’ unless the

function of coloring is purely incidental to its in-

tended use, such as in the case of deodorants. Lip-

stick, rouge, eye makeup colors, and related cosmetics

intended for coloring the human body are ‘‘color

additives.’? Reg. §8.1(f).

The term ‘‘diluent’’ is defined as: ao :

any component of a color additive mixture that is not

of itself a color additive and has been intentionally

. mixed therein fo facilitateAhe use of the mixture in

coloring foods, drugs, or cosmetics or in coloring the

human body. . The diluent may serve another func-

_ tional purpose in the foods, drugs, or cosmetics, as for

example sweetening, flavoring, emulsifying, or stabi-

lizing, or may be a functional component of an article

intended for coloring the human body.

Reg. §8.1(m) Jar >

The meamafesturers admit that the coloring ingredient

_ in a cosmetic is a ‘‘color additive’’ fully subject to both

es

Appendia A.

listing. and certification requirements of §706, and that a

‘*diluent,’’ in what they insist is the accepted definition of

an inert substance used to dilute dyes and pigments, is

subject to the Secretary’s power to certify additives ‘‘with

safe diluents or without diluents,’’ §706(c). They complain,

however, that the Regulations’ comprehensive definition of

‘‘eolor additive’’. goes beyond the reach of the statute in

imposing both listing and certification requirements on

finished products—like lipstick, nail polish, ete.—and non-

color ingredients that were never intended to be subject

to premarketing clearance, and on traditional diluents that

were meant to be subject only to certification as com- °

al .

~

ponents of dyes and pigments. . .

_ The third count of the complaint relates to provisions

in. the Regulations which attempt to subject - hair dye’.

products to premarketing clearance in what is alleged to

be violation of the exemption recognized in -the statute.

The Act as passed in 1938, in defining those cosmetics that

were deemed to be adulterated, contained in brs an

explicit exemption for hair dyes:

This provision shall not apply to coal-tar heir dye,

the label of which bears the following legend con-

spicuously displayed thereon: ‘‘Caution—This pro-

duct contains ingredients which may cause skin

irritation on certain individuals and a preliminary

test according to accompanying directions should

first be made. This product must not be used for —~_

dyeing the eyelashes or eyebrows ; to do so may cause

blindness.’’, and the labeling of which bears adequate

directions for such preliminary testing. .

&

' 52 Stat. 1054 * Fee ee

The exemption was carried forward in §601(e) which de-

clared that a cosmetic should be deemed adulterated ‘‘If

it is not a hair.dye and it bears or-contains a coal-tar color

other than one’’ from a certified batch. When’ Congress

revised the statute in the 1960 Amendments, it left §601(a)

as it was but modified §601(e) to read ‘‘If itis not a hair —

sd .

ies

ea

we,

va

Appendia A.

dye and it is, or it bears or contains, a color additive which

is unsafe’’ within the meaning of §706. 7

The Regulations recognized the statutory exemption

where proper labeling called for use of.the patch test but,

armed with an expansive definition of ‘‘color additive’’ in

- §8.1(f) which would on its face seem to include in a prep-

aration for use on the hair any coloring ingredient as well

as the finished product, proceeded to limit the a

as follows:

The “hair dye’’ exemption in section 601(a) of

_ the act applies to those articles intended for use in

altering the color of the hair and which are, or which

bear or contain, color additives with the sensitization

potential of causing skin irritation in certain individ-

uals and possible blindness when used for dyeing

the eyelashes or eyebrows. The exemption is per-~

mitted with the condition that the label of any such ~

article bear conspicuously the statutory caution and

adequate directions for preliminary patch- -testing.

If the poisonous er deleterious substance in the

‘‘hair dye’’ is one to which the caution is inapplicable -

and fori which patch-testing provides no safeguard,

the exemption does not apply; nor does the exemption

extend to poisonous or deleterious diluents that may

be introduced as wetting agents, hair conditioners,

emulsifiers, or other components in a color shampoo,

rinse, tint,or similar dual-purpose cosmetics that

alter the color of the hair. :

Reg. §8(u) .

. “The. manufacturers claim that the Regulations go beyond.

the statute in several ways: Whereas the 1938 Act literally

exempted from premarketing clearance any coal-tar. hair

dye complying with the statutory condition of notice and ;

the amendments did- not purport to effect any change, the

Regulations grant exemption only if the color additive in

the hair dye substance is one whose irritating qualities

would be detected by a _ test; and, contrary to the

Appendix A.

| longstanding interpretation—in effect by regulation when

the amendments were adopted‘—which applied the exemp-

4 ' tion in its full scope to dual-purpose hair products like

shampoos, rinses and tints with a coal-tar coloring com-

” ponent, the Regulations seem to limit the engtee to the ©

; coloring ingredient itself. © . ~“

ee Count 4 of the complaint attacks a section of the Regula-

tions, 48. 28(a) (4), which states that when it appears to the

Commissioner that a person has refused to permit duly

authorized employees of the FDA ‘‘free access to all manu-

. ‘facturing facilities, processes, and formulae involved in the

{ manufacture of color additives and intermediates from

+ “°— which such color additives are derived,’”’ he may suspend -

certification service to such person until adequate corrective -

aation is taken: The first sentence of §704(a) of the Act,

applicable to all goods, drugs, devices, or cgsmetics subject

thereto, authorizes the Secretary to inspect any ‘factory,

warehouse, establishment, or vehicle and all pertinent.

equipment, finished and unfinished materials; containers,

and labelling therein’’; the second sentence, dealing only

with places where prescription drugs are manufactured,

q a ~ processed or held, provides for inspection extending ‘‘to all

7 things therein (including records, files, papers, processes,

controls, and facilities).’’ The manufacturers say the chal-

lenged regulation illegally extends to cosmetics the broad-

ened inspection authorized only for prescription drugs, and

improperly subjects trade secrets to exposure. —

The expanded definition of ‘‘color additives,’’ the nar-

rowing of the hair dye exemption, and the allegedly com-.

pelled disclosure of secret formulae and processes impose,

the manufacttrers claim, burdens not contemplated by the

statute and threaten immediate and irreparable injury.

‘Even though coloring ingredients have been properly. pre-

ea ee ee

Ln oe ene m

* Reg. §1.200 apparently defined the term ‘‘coal-tar hair dye’’

‘in the §601(a) exemption to include ‘‘all articles containing any

coal-tar color.’? This definition of hair dyes was deleted by the

Commissioner as superseded by §8.1(u) of the Color Additive ©

‘Regulations, 28 F. R. 10638 (1963).

/) a

Appendia A. |

tested, listed and certified in compliance with the statutory

clearance scheme, the regulations require filing a separate

listing application for each finished product, traditional

diluent and non-color ingredient, including those formerly.

exempted under the hair dye provision; each application .

must be accompanied by, a $2600 filing fee, Reg. 48.50(c), »

_ and supported by extensive scientific tests establishing suit-

ability for intended use, Reg. §8.4(c). Even after listing,

every ingredient and finished product must come from a cer-

tified batch unless the Secretary has granted an exemption;

a minimum fee of $100 is charged foreach certification, Reg.

§8.51(a). An affidavit by one manufacturer claimed that

the listing of its finished products, alone for the issuance

of regulations would entail filing fees’ of $7,000,000 and

testing costs of nearly $42,000,000, and that eertification .

fees for a single year would amount to $750,000. Beyond

such out-of-pocket costs, increased by substantial additional

expenses for record-keeping, compliance with the challenged

_ regulations, by requiring significant changes in established

business practices and curtailing distribution of new prod-

ucts, allegedly would cause major and costly disruption of

the cosmetic industry. Moreover, the disclosure of formulae

and processes necessary to meet the new listing require-

ments and to avoid loss of certification for refusing inspec-

tion allegedly would result in misappropriation of ‘trade

secrets and discourage research and development of im-

proved cosmetic products. re

Failure to comply with the challenged regulations could

have serious. consequences if they are valid... Under 460!

of the Act, a cosmetic ther than a hair dye is deemed

adulterated if ‘‘itis, of it bears or contains, a color additive

_ which is unsafe’? within the meaning of §706(a): Projection —

of any adulterated article into the stream of interstate com-

° Very likely these figures are exaggerated since they take no

account either of the FDA’s power to require information on

diluents as a condition of. appreving coloring ingredients and

. granting certification or of the likelihood of exemption from

certification.

Appendix A.

merce and refusal to allow inspection’ required by §704 are

_ prohibited acts under the statute, and are subject to in-

junction and entail criminal liability; §§301-303; and any

adulterated article may be seized under $304. The manu-

~ facturers say that, apart from all else, the publicity incident

to criminal or civil proceedings against them for failure to

comply with the Regulations would be seriously detrimen-

tal in a highly competitive industry which spends millions

in cultivating public good will and is dependent on con-

sumer confidence in the integrity of its products.

The Secretary:and the Commissioner respond that the

fears as to the dilemma posed by\the Regulations are exag-

gerated. They insist that the Regulations merely expound

’ the manner in which they intend to construe the amend-

ments, that nothing has yet.been done to apply the pro-

visions of which plaintiffs complain, and that ample oppor-

tunity to test the Regulations i in concrete fact situations is

afforded by, the path-for review spelled out in the statute.

If the manufacturers will only comply with the listing and

certification requirements, the FDA’s application of the

. statute will, under §$706(d), be subject to the general ad-

ministrative provisions on’ hearings” and review in §701.

- Since the review authorized in §706(d) is directed at de-

cisions approving or disapproving listing and certification

and §§701(e) and (f) are limited to reyiew of other specifi-

-eally enumerated agency dete:minations, the contention is

not that the statutory provisions afford a direct path to

review of the general regulations on listing requirements;

it is nather that they furnish an indirect but nevertheless .

sufficient one which the manufacturers ought to have taken.

The proper course, defendants say, is for a manufacturer’ _

to petition for the listing of-diluents and finished cosmetic-

products as color additives, while protesting against the ~

need for doing so and conforming with the detailed require-

_ments for filing information only to the extent he believes

- proper under the statute; such a petition could be accom-

panied by a request for exemption from batch certification,

> F

lla

Appendia A.

again with appropriate protest and non-compliance with

the requirement of factual data to support the application.

Hither the FDA would retreat from applying its announced

interpretation of the statute and grant the petition and the:

request for exemption, or it would deny them in which event

tue road to a court of appeals would be open under §§701(e)

_ and (f). Are sewade :

Il.

“~ The serious questions® are whether direct: challenge of

the Regulations by suit ina district court is impliedly

- barred by the availability of review of listing and certifica-

tion denials in a court of appeals, and whether the contro-

.versy is appropriate for judicial determination prior to

application of the Regulations in a particular factual situ-

ation. :

We are not persuaded that by providing a procedure for

review of certaip-administrative decisions under the Food

and Drug Act in the courts: of_appeals, Congress meant to

foreclose relief with respect to other agency action under

the Administrative Procedure Act §10, 5 U. S. C. §1009,

or the Declaratory Judgment Act, 28 U. S. C. $2201, in

a case where this would otherwise be appropriate. The

agency determinations specifically reviewable under

§701(e) relate to such technical subjects as chemical prop-

erties of particular products and the formulation and ap-

plication of safety standards for protecting public health;

Congress naturally did not wish courts to consider such

* We need not discuss in the text the surprising contention that

an action for a declaration that federal regulatory officers have

acted in excess of their authority constitutes an unconsented suit

against the United States. The contrary is clearly established by

Philadelphia Co. v. Stimson, 223 U. §. 605, 619-20 (1912), see

Stark v. Wickard, 321 U. S. 288, 290 ( 1944), and indeed follows

inevitably from Ex parte Y. oung, 209 U. S. 123 (1908) ; law officers

of the Government ought not to take the time of busy judges or of

opposing parties by advancing an argument so plainly foreclosed

by Supreme Court decisions.

_T2a

: Appendix A.

matters without the benefit of the agency’s views after an

evidentiary hearing before it. Section 701, however, also

' gontemplated other less specialized administrative action

' by authorizing, in subsection (a), the making of regula-—

tions for the ‘efficient enforcement of the statute, and it

expressly declared in subsection (f) that the provision for

review of certain orders in the courts of appeals was ‘‘in

addition to and not in substitution for any other remedies

provided by law.’’ 21 U: S. C. §371(f)(6). The section as

a whole does not indicate to us any congyessional intent |

either to insulate administrative action not covered by sub- .

section (e) from challenge’as in excess of statutory author-

ity, see Stark v. Wickard, 321 U. S. 288, 308-11 (1944) ; 7

Cappadora v. Celebrezze, 356 F. 2d 1, 5 (2 Cir. 196

to postpone immediate challenge to such action me

awaiting ° the issuance of adjudicative orders subject to

statutory review would previde less effective relief.’ Inso-

far as Abbott Labs. v. Celebrezze, 352 F. 2d 286, 289

(3 Cir. 1965), cert. granted, intimates otherwise. we are

unwilling to follow it. vA \

The question whether a plaintiff may obtain judicial

relief in cases like this has been variously phrased as

; 7 The legislative history of the 1938 Act suggests that Congress

had no intention of limiting review of other action by adopting a

special procedure for the enumerated determinations. The House

Report, referring to the savings clause in §701(f) (6), stated:

There is also saved as a method to review a regulation

_ placed in 4ffect by the Secretary whatever rights exist to

_ initiate a historical proceeding in equity to enjoin the en-

forcement of the regulation, and whatever rights exist to

initiate a declaratory ju ent proceeding.

H. R. Rep. No. 2139, ‘75th Cong., 3d Sess., p. 11 (April

14, 1938).

The accompanying minority report, in endorsing the Secretary’s

challenge to the new review provisions as jéopardizing enforcement

of the statute, indicated that the special procedure was understood

to be an additional protection for ‘industry and not an exclusive

method of review of all actions forthe benefit of the —_ H. R.

Rep. 2139, Pt. 2 (April 21, 1938).

. 7

e & é : *

| | “13a |

; on

Appendix A.

whether he has ‘‘standing”’ to challenge the administrative

action as a person ‘ “suffering legal wrong’? or ‘aggrieved’?

within the meaning of §10 of the APA, whether the dispute °

is an ‘‘actual controversy’’ within the Declaratory Judg-

ment Act, or whether it is sufficiently ‘‘ripe’? for resolution.

by the courts. See Jaffe, Judicial Control of Administra-

tive ton 395-98 (1965). In fact, the critical issue is apt

to be if a matter of standing or of actdal controversy

than ofthe advisability of reviewing an administrative -

rule prior to its application in a specific factual situation.

The current healthy trend toward implementing . agency

~ policy by rule-making cuts both ys with respect to de-

claratory relief—increasing the need for this sort of as-

sistance on the art of those subjected to such rules, see

: L Columbia Broadcasting Sys., Inc. v. United States, 316

U. S. 407, 421 ( 1942), but also creating a danger that, un-

less the courts are circumspect, administration may be im-

properly halted, at least temporarily, before it has gotten

the slightest start. The problem is not to be solved, as the

parties suggest, by applying some readily procurable. lit-

mus paper which will determine. whether‘a controversy is

‘*justiciable’’; what is required, as in the case of challenge

, to the constitutionality of a statute, is a reasoned evalua-

tion of “both the appropriateness of the issues for decision

by. courts ‘and the hardship of denying judicial relief.’?

Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U. 8.

123,156 (1951), (Frankfurter, J/., concurring); see Jaffe,

| supra, at 396, 423.

The appropriateness of passing judgment on the validity

of an administrative regulation prior to its application to

* The danger of unwarranted ostponement of the effectiveness

of agency action is augmented by the fact that a suit for declaratory

relief must be brought in a district court, twice removed from the

supreme tribunal, whereas adjudicative orders are generally re-

viewable either in courts of appeals or in specially constituted dis-*

trict courts from which appeal lies directly to the Supreme Court.

Yet here too there is another side ; a district court may be in a better |

position than a court of appeals to carry out fact finding, as Con-

gress recognized in the Hobbs Act, 5 U. 8. C. §1037(b).

“ —

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BO hee Gilat Klean a i et Sy ORS RS Cis oe

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Appendia A.

particular facts depends on such factors as how far the .

rule represents the definitive position of the agency and

_ the extent to which the challenge raises a clearcut legal

issue susceptible of judicial solution without reference to

fact variables arising in its implementation. Cf. Northeast

Airlines, Inc. v. CAB, 345 F. 2d 662, 664 (1 Cir. 1965).

Review might be considered premature where an agency

rule had not received substantially as full consideration in

its formulation as it would have in subsequent application,

or where future experience would be likely to result in sig-

nificant modifications as to its precision or scope. Judicial .

determination might also be deemed inappropriate where

the controversy over the rule did not present a legal issue

that a court was qualified to resolve without reference to

factual determinations more effectively made by the

agency familiar with day to day administration. See Jaffe,

supra, at 406. In'this-case, however, the Regulations under

attack were issued’ after a full hearing with notice and by

their terms represent the definitive agency position on the

reach of the statutory requirements for listing and certifi-

cation of cosmetics, see Columbia Broadcasting Sys., Inc. _

v. United States, supra, 316 U. S. at 422; United States v. .

Storer Broadcasting Co., 351 U. S. 192, 198 (1956); to the

extent that they purport to apply premarketing require-

ments to broad categories like finished products and non-

coloring ingredients and define the hair-dye exerfiption,

they appear, prima facie, to be susceptible of. reasoned

comparison with. the statutory mandate without inquiry

into factual issues that ought to be first ventilated before

the agency. Indeed, it is manifest that if the manufac-

turérs adhere to their legal position, pro forma individual

applications to the FDA for listing and certification would

“. produce a record no more, and very likely less, illuminating —

than what the district court will develop at trial of this

action in which the great bulk of the industry is repre-

sented and will be bound. The mere fact that the procedure.

which the defendants suggest would bring the issue

wv

ee a Se

ba

Appendix A,

directly to a court of appéals without prior resort to a dis-

trict court, while entitled to some weight, is not controlling. .

As indicated earlier, the statutory procedure for review of

individual determinations in the courts of appeals was not

‘intended as a means for challenging FDA rule-making of

the usual sort; as shown by the authorities disenssed below,

the mere fact-that pursuit of that course could produce 2

decision on legal issues similar to that here sought does not

make its use mandatory. .

With respect to the other -relevant consideration, the

degree of hardship warranting declaratory relief, although

_ Some older precedents suggest broadly that an administra- °

_ tive ruling is not reviewable until and wnless it imposes an

obligation or subjects the plaintiff to some civil or criminal

liability, see, e.g., United States v. Los Angeles & Salt Lake

R.R., 273 U. S. 299, 309-10 ( 1927); Shannahan v. United

States, 303 U. S. 596, 599 ( 1938), there has been a growing

recognition that the timeliness of review depends on a

broader concept of ‘the substantiality of present or imme-

diate harm. See 3 Davis, Administrative Law Treatise

§2107 (1958). In Columbia Broadcasting Sys., Inc. v.

United States, 316-U. S. 407, 417-21 (1942), the Supreme

Court declared that though a particular rule does not of

itself deny a license or directly impose sanctions, it may

nevertheless be reviewable if it establishes a general stand-

ard of conduct which by its very promulgation demands

conformity and poses, for the plaintiff or others with whom

he must deal, the alternatives of compliance: or severe

penalties of forfeiture or disruption of business operations.

In Frozen Food Express v. United States, 351 U. S. 40,

43-44 (1956), the Court recognized that an agency order

generally announcing the scope of administrative regulation

was subject to immediate frontal attack, although oppor-

tunities for later challenge were sure to tome from a

cease and desist order’ by the ICC, see Eastern Texas

Motor Lines v. Frozen Food. Express, 351 U. §. 49 (1956),

sate SM a ae ‘

te esate oe Ate

16a

' Appendix A.

or suit for an injunction by the agency or competitors.°

And in United States v. Storer Broadcasting Co., 351 U. S.

192, 199-200 (1956), declaratory rules setting limits on the

number of licenses to be granted for broadcasting stations

under common ownership were held to be immediately

reviewable because they operated ‘‘to control the business

affairs’’ of the plaintiff and made it.impossible to ‘‘cogently

plan its present or future operations’’ so long. as their

validity remained undetermined; direct challenge to the

regulations was permitted even though review might have

been obtained by provoking an adverse administrative

order, see 351 U. S. at 208 (dissenting opinion). See

also Flemming v. Florida Citrus Exch., 358 U. S. 153, 168

(1958).

We see little profit in debating the point, much discussed

by the parties, whether the Regulations are ‘‘interpreta-

tive’’ or ‘legislative. *? Although that issue would have to,

be faced if the FDA had failed to‘comply with the. rule-

® Tf it be said that the carrier was subject to liability for criminal

penalties even before a cease and desist order or an. injunction, the

~ same is true here.

10Tn fact the FCC dismissed the plaintiff ’s application for an

additional station on the basis of the new rules the very day they

were adopted, 351 U. S. at 197, but review of the particular decision

was not sought.

We recognize that in: Steer review of the rule was in the Couft

: of Appeals for the District of Columbia, the same tribunal to which

Storer would have gone for review of the denial of an application;

but the dissenters thought the rationale of the majority would sup-

port a suit for declaratory relief in a district court after the 60-day

limitation for seeking review by the Court of Appeals had expired,

351 U. S. at 210 (dissenting opinion of Harlan, J.). A more impor-

tant differentiating consideration may be that awaiting denial of

a future application may not have afforded a broadcaster who had

reached the ceiling so full an opportunity for challenge as might

appear at first blush; if the application yas a competitive one for

a new license, the FCC might predicate denial on other grounds,

and to negotiate a transfer of an existing license in the teeth of the

multiple-ownership. rules would be of dubious business practica-

bility. However, this ground for distinguishing Stover would not

mad to a Food — ;

a eo oe

17a

Appendix A,

‘making procedures of §4 of the APA because of ‘ claim

on its part thatthe Regulations were merely ‘‘interpreta-

_ tive,’’ the interpretative character of a regulation does not

necessarily make it unripe for review; we perceive no

reason why a rule whereby an agency subjects to regulation

activities ‘contended to be immune should be exempt from

immediaté review because it purports to interpret a statute

although it would not be if made in the exercise, contended

to be illegal, of a substantive rule-making power. See

Frozen Food Express v. United States, supra; Jaffe, Ju-

dicial Control of Administrative Action 405-07 (1965) ; and

1 Davis, Administrative Law Treatise §5.03 (1965 Pocket

Part), criticizing on this ground American President Lines,

Ltd. v. FMC, 316 F. 2d 419 (D. ©. Cir. 1963), on which de-

fendants rely. Neither do we think anything is to be gained

by an attempt at comprehensive review of the decisions ;

the many cases in this area are not truly reconcilable and

the law has been moving in thé direction of greater free-

dom of review, see Jaffe, supra, at 412-17 (which, inter

alia, criticizes another decision relied on by defendant, .

Helco Prods. Co. v. McNutt, 137 F. 2d 681 (D. C. Cir.

1943)), and 3 Davis, Administrative Law Treatise §$§21.06-

21.08 (1958). We limit ourselves to the two recent Court

of Appeals decisions which defendants most strongly urge

upon us. |

Danville Tobacco Ass’n v. Freeman, 351 F. 2d 832 (D. C.

Cir. 1965), was a ‘rather weak case for declaratory. relief.

The plaintiffs there were neither threatened with penalties ©

nor, like those in Frozen Food and here, faced with the

need of applying for licenses to permit continuation of an

established business ; moreover, there was no showing that

the challenged regulation was in fact preventing expansion

_ of their operations, since they had filed no applications and

petitions by other applicants had been denied on grounds

other than those attacked: Agreeing with the defendants

that Abbott Labs. v. Celebrezze, 352 F. 2d 286 (3 Cir. 1965),

cert. granted, is not distinguishable on any satisfying basis,

‘18a: e

Appendix. A.

we must confess, with all respect, our inability to undér-~

stand why the plaintiffs there should be required to violate

the challenged FDA regulation in.order to raise the same

legal issue as to which “the district court had granted ‘de-

claratory relief. Insofar as the Abbott decision rested on a

negative implication from the limited review provisions of

the Food and —* Act, we have — ye our r inability

to agree. : | | ee Yy

: m3 |

“In applying the general consideretions thus developed

Tie the precise issues here presented, we must bear in mind

that this appeal is not from a declaratory judgment but

from the denial of a motion to dismiss a complaint seeking

one. The issue.on such an appeal is not whether the grant

of a declaratory judgment was in fact appropriate but

- whether it so clearly would not be out dismissal in limine

was required.

As regards the counts of the smalls challenging the ~

inclusion of finished products and color additives and the

‘alleged restrictions of the hair-dye exemption,.the appeal

must fail. These Regulations Legere have an immediate

impact on the industry, posing the ynacceptable alterna- ~

tives of complying or of incurring possible forfeitures and:

criminal liability, and cailing into question long standing

practices of premarketing testing and clearance. The

issues framed by the counts of the complaint addressed to

" «these Regulations appear sufficiently suitable for-immedi-

ate judicial resolution and the threatened harm sufficiently

great, that the districi court properly declined to dismiss

them. If the court should find that the issues are not sus- -

¢eptible .of resolution without detailed factua] evidence -

that ought to be first sifted by the agency, or that measures

being taken by the FDA for the listing and exemption from:

certification of approved diluents have so reduced the hard-»

ship on the plaintiffs as to make declaratory relief inap-

. . a

nee caret enna: Cel ra ecw

‘19a

. Appendix A.

: propriate, it need not proceed to judgment. But, so far as

, we can now see, the sooner the industry’s\claims as to the

coverage of the Act in these respects are determined, the

better for everybody. As said in Jaffe, Judicial Review of

» Administrative Action 404 ( 1965), ‘‘The public has an in-.

terest in early implementation of policy; the regulated per-

son has a legitimate interest whether to plan or not to plan

his operation.” Moreover, the party disappointed by court -

decision may wish to take the case to Congress.

The fourth count of the complaint, relating to agency

inspection of formulae and processes, stands differently.

Here the challenged regulation, §8.28(a) (4), does not* of

itself demand compliance at the expense of penalties. A

manufacturer who refuses access to his trade secrets is not

- threatened with criminal liability or seizure ; the regulation

* does not suggest that such refusal will be deemed a ‘* pro-

hibited act’? under the statute, as it would be in the case

of prescription drugs. It simply warns the industry that

the Commissioner may—not that he inevitably will—con-

‘sider a refusal to permit such inspection a sufficient cause

for suspending certification. Moreover, the next para-

' graph, §8.28(b), says that upon receipt of notice of suspen-

sion, the person so notified may request a hearing upon the

factual basis therefor. If after such hearing the Commis-

Sioner should adhere to his refusal to certify, review by a

court of appeals would seem available under §$$706(d) and

701(f); if not, an action could be brought in the district

court.

In this instance the possibility of unlawful injury to the

_ plaintiffs is, on its face, too remote for declaratory felief.

No one can now say whether the Commissioner will ever

make a demand for free access to color additive processes

or formulae, whether any manufacturer will. ever decline

this; what the Commissioner would do if so refused, and

what result a hearing would have. The fact that the Com-

_Missioner’s proclamation of the possible consequences of

refusal- may induce manufacturers to be more compliant

e

SIN a iN ik ca ln ce Ponda reyes

e

- ; ol " ‘

Se Ril ie had le ii Nt Set sad abril dh, Ora sot Mines clita bhadeichih

.

ew ie ‘ ss 9

Acid tsithite tebe ihre sos \seahsaiat 3

a ht

Appendia A.

than if he had kept silent until an episode calling for action

arose is not a sufficient basis for declaratory relief. More-

over, it is impossible to'see what declaration a court could

properly make. No one could Teasonably assert that cir-

cumstances warranting suspension of certification if a man-

ufacturer refused to give the FDA information concerning ~

processes or formulae could never arise; Congress’ failure

‘to empower the agency to compel an inspection of processes

or formulae is not a mandate to grant certificates when the

public cannot properly be protected otherwise. Review of

this Reenlation suvuid be on a case by case basis and with

a factual record to assist in determining whether access ‘to

secret processes and formulae is necessary and appropriate

to performance of the task of effective premarketing clear-

ance in a particular instance—at least in the absence of ex-

perience showing consistent abusive tactics.

The judgment with respect to Count 4 is reversed with |

instructions to grant the motion to dismiss; the judgment

with respect to Counts 1, 2 and 3 is affirmed, with further

proceedings to be promptly taken in the district court ‘in

accordance with this opinion. &

&

21a

APPENDIX B. ~

First Opinion of the United States District Court

For the Southern District of New York.

Civil Action 63 Civ. 3349

| | (Filed November 16, 1964)

THe Tomer Goons Association, Ino., et al.,

Plaintiffs,

, v. | .

AntHony J. CELEBREzze, Secretary of Health, Education

and Welfare, and George P. Larrick, Commissioner of

Food and Drugs, Defendants. Vai

f

Tyrer, District Judge. ; /

; /

‘. Forty individuals and companies manufacturing, dis-

tributing, and selling cosmetics in interstate commerce and

an association of cosmetic manufacturers here seek a declar-

atory judgment [28 U.S.C. §2201] as to the validity of

certain provisions of regulations promulgated by the Com-

missioner of the Food and Drug Administration (FDA).

These regulations were: issued pursuant to the 1960 Color

Additives Amendments, to the Food, Drug, and Cosmetic

Act, 21 U.S.C. §§301-381.2 More specifically, plaintiffs con-

tend that the challenged regulations exceed the authority

vested in the FDA by tle statute, as amended, and pray

that the court declare the regulations null and void and

enjoin their enforcement. ee

_ Essentially, the 1960 Amendments expand the Act’s

provisions for the pretesting of coal tar colors to require

the pretesting of all color additives, irrespective of their |

derivation. To this end, the term ‘‘color additive’? is

a The Amendments were enacted on July 12, 1960.

Ss

.

Petes etalhie woes: waa

f 22a

‘Append B

defined as ‘‘a dye, pigment, or other substance’’ which,

‘‘when added or applied to a food, drug, or cosmetic, or

‘to ihe human body or any part thereof, is capable * * * of

imparting color thereto.’? 21. U. S. C. §321(t)(1). The

- Amendments further state that color additives. shall bg

deemed ‘‘unsafe’’ within the meaning of the Act unless they ©

-eonform to regulations for the listing of additives ‘and for

‘the certification, with safe diluents or without diluents,

of batches of color additives.’’ 21 U. S. C. §376. ;

To implement these Amendments, the Commissioner of

the FDA issue? the Color Additives Regulations, dated |

June 13, 1963.7 2 Ff. R. 6439, 21 C. F. R. §§8.1-8.6003. Those

provisions of the regulations here challenged as in excess

of the statutory oe on which they purport to be

based are:

(a) provisions of Section 8.1(f) which, it is claimed, may

have the effect of defining a color additive as including

finished cosmetic products, and consequently, - requiring

the pretesting of finished products;

(b) provisions of Sections 8.1(f) and (m) which define

color additives as including all diluents and which, plain-

tiffs claim, may require the pretesting, listing and certifica-

tion of all ingredients of cosmetics containing a color addi-

tive mixture; :

(ce) provisions of ‘Sections 8. uf) and (u) which are

claimed to make nugatory the statutory exemption for hair.

dyes, 21 U. S.C. §361(a) and (e); and |

(d) provisions of Section 8.28(a) (4) ‘which plaintiffs

_ contend is an unwarranted grant of access by FDA investi-

gators to all processes and formulae involved in the manu-

facture of cosmetics. -

2 Actually, 21 U. S. C. §371(a) vests in the Secretary of the

Department -of Health; Education and Welfare the authority to

promulgate Food & Drug Act regulations. Defendants’ memoranda

explain that the responsibility for their actual promulgation was

delegated to the Commissioner. -

— . 2 — - 2 . > -

aac aE i A TGA ta th ci dls la ital thn mst tia

* - hn een aeae re

Spee Prien tee oe

8a

| Appendix B.

Defendants have moved for an erder dismissing the

complaint, and, alternatively, for an order “‘striking cer-

tain portions of the complaint.’* - iia

whe

' Defendants’ principal contention on their motion to dis-

miss is that the complaint fails: to state a case of actual

controversy, as required by the Declaratory J udgment Act,

28 U.S. C. §2201, particularly because of the absence of any 7

threatened or attempted enforcement of the regulations.

Although the Declaratory Judgment Act was never

S. Ct. 1194, 1200, 86 L. Ed- 1563 (4942), FCO regulations

provided that radio stations would have their . licenses

revoked if they entered into contracts with networks con- = -

taining certain prohibited clauses. The court held the ~ ee 7

Recently, in Abbott Laboratories v. Celebrezze, 228

F’. Supp. 855 (D. Del. 1964 » Wheré drug manufacturers chal-

lenged FDA labeling regulations, Chief J udge Wright held,

- at page 861: . |

“Plaintiffs may have judicial review of inter-

pretive regulations upon their promulgation without

8 Defendants, however, have not specified which portions they

wish stricken. Nr res. ;

24a

_ Appendix B.

awaiting some ultimate enforcement. Frozen “Food

Express v. United States, 351 U. S. 40, 76 S. Ct. 569,

100 L. Ed. 910 (1956) ; Federal Trade Commission »v.

Nash-Finch Company, 110 U. S. App. D. C. 5, 288 F.

2d 407. They need not await an action which would

- only make the threat of harm more pressing.”’

Thus, while the threat of enforcement is often present

in cases where the = taken jurisdiction and rend-

ered a declaratory judgment on the validity of a:challenged

regulation or statute, the existence of such a threat merely .

serves as some evidence indicating ier presence of an >

actual controversy and theat.the plaintiff stands to suffer

‘‘real, immediate and incalculable’? harm. See concurring

_ opinion of Mr. Justice Douglas, Joint Anti-Fascist Refugee

Committee v. McGrath, 341 U. S. 123, 175, 71 8. Ct. 624, 95

L. Ed. 817. (1951). |

In Maryland Casualty Co. v. “Pacific Coal & Oil Co., 312 ‘

U. S. 270, 273, 61 S. Ct. 510, 512, 85 L. Ed.. 826 (1940), the

Supreme Court said that, ‘‘Basically, the question in each

‘ease is whether the facts alleged, under all the grcum-

stances, show that there is a substantial as.

between parties having adverse legal interests, of sufficient

immediacy and reality to warrant the issuance of a declar-

atory judgment.’’

More specfically, as to the reviewability of administra

. tive rulings, Chief Justice Stone said in Columbia Broad-

casting System, Inc. v. United States, supra, 316 U. 8. at

_page 425, 62 S. Ct. at page 1204:

“The ultimate test of reviewability is not to be

found -in an overrefined, technique, but in the need

of the review to protect from the irreparable injury

- threatened in the exceptional case by administrative

rulings which attach legal consequences to action .

taken in advance of other hearings and adjudications

that may follow, the results of which the regulations

— to control. i

25a

Appendix BR,

are ‘‘interpretive’”’ as opposed to “‘legislative’’ and thus

do not ‘‘approach a degree of finality such as would warrant

access to the Courts’ (See page 59 et seq. of the govern-

ment’s principal brief.)*

plaintiffs but as well for the public as represented by the

. defendants.

The regulations force manufacturers to choose between

complying with them, at a cost that may prove to be pro-

hibitive for’some of the plaintiffs, or ignoring them at the

_ Tisk of incurring the statutory penalties should the regula-

tions later be held valid. And, as Chief Judge Wright

- recently observed in the Abbott Laboratories case, supra,

228 -F'. Supp. at 862: “The declaratory judgment procedure .

their peril.’’«

*In fairness to defendants, however, it must be said that some

commentators and courts have discussed this distinction in theoreti-

cal terms. See Davis, Administrative Rules—Interpretative, Legis-

lative and Retroactive, and cases therein cited. 57 Yale L. J” 919,

928-29 (1948). - |

a

ee ee

Appendia B.

An affidavit submitted on behalf of one of the plaintiffs

asserts that the cost of compliance to word o- ctmend

will be over $50,000,000. While this amou mediately

suspect,® there can be little doubt but that the added records-

keeping and laboratory testing costs in themselves will be

extremely burdensome for all of the plaintiffs.

Aside from such measurable out-of-pocket costs of

compliance, it is not difficult to perceive that the impact of _

the regulations on plaintiffs’ present methods of doing -

business will be ‘substantial .and will give rise almost cer-

tainly to potentially greater expenses. That the latter are

‘hidden expenses’’.in the sense that they are presently

incalculable does not diminish their significance. For exam-.

ple, in the area of research alone, plaintiffs’ affidavits show

‘that the provisions of the regulations dealing with listing

.and with access to all formulae and processes will haye an

immediate adverse effect upon further research and devel-

opment of new products.. The situation here, incidentally,

contrasts sharply with the facts of Helco Products Co. v.

McNutt, 78 U. S. App. D. C. 71, 137 F. 2d 681, 149 A. L. R.

_ 845 (1943), where the plaintiff sought a declaratory judg-. .

ment on the validif\of a simple advisory opinion of the

FDA elicited in response to the plaintiff’s inquiry whether |

or not its proposed business venture would violate the Food

‘and Drug Act. Rather, we are dealing with a case that more

‘closely parallels Wallace v. Currin, 95 F. 2d 856 (4th Cir.

1938), aff’d., 306 U. 8. 1, 59 S. Ct. 379, 83 L. Ed. 441 (1939)..

The court in that case held that the plaintiffs, tobacco ware-

housemen, could challenge the 1955 Tobacco Inspection Act

in a declaratory judgment suit because of the Act’s sub-

stantial interference with their businesses, notwithstanding

. the fact that the cost of compliance for each warehouseman

would only be $25 per marneting season.

* The affiant Speers confused §8.50(c) of the regulations,

| which requires a deposit of $2,600 for each listing application, with

§8.50(j), which establishes ‘a fee of $250 ‘‘for services in listing a

diluent’’ for use in color additive mixtures.

.

awe 4 Oe

oe ers

it ne e en agney

: 27a

Appendix B.

+ Having established that a justiciable controversy exists, ©

th e at least two compelling reasons for assuming jur-

isdiction and determining in this action the validity of the —

challenged regulations.

_ First, since a concern for consumer safety is ostensibly

the principal motive underlying promulgation of the Color

Additives Regulations, there is a strong public interest in

an early determination of their validity. Four years have

already elapsed since Congress enacted the statutory pro-

visions which the regulations seek to implement. Any fur-

ther delay in determining whether or not the cosmetic

industry need comply with the regulations will only serve

to further frustrate Congress’ purpose of providing the

corisuming publie with protection against potentially harm-

ful color additives. |

@ Sccond, this action provides an opportunity to examine |

all four challenged regulatory provisions together within

the context of a single plenary proceeding. Since these four

provisions are interrelated as elements of a common plan

of governmental regulation, there is a distinct advantage

in reviewing them together. Moreover, since the regula-

tions raise complicated and technical issues which will

require expert testimony to resolve—undoubtedly from

many of the same witnesses—there is a practical advantage

for the litigants as well as for the court in having this

testimony brought forth in a single action rather than in

four or more aepanete suits or enforcement proceedings.

II. | |

Since I conclude that there is a justiciable controversy

presented and further that it~would be improvident to

‘decline jurisdiction on discretionary grounds, this would

dispose of the dismissal motion were it not for the fact that

defendants raise two further arguments for dismissal of the

entire action and two other arguments for dismissal as to

certain of the plaintiffs. All four issues so raised must be

resolved against defendants, at least at this stage of the

- proceedings :

28a

Appendix B.

(1) This is not an unconsented suit against the United .

States. Keeping in mind.the distinction drawn in Larson

v. Domestic € Foreign Commerce Corp., 337 U. S. 682, 69

S. Ct. 1457, 93 L. Ed. 1628 (1949), the thrust of the claim

here is not that the Commissioner wrongly exercised his

delegated powers—which would be a claim against the

sovereign—but that he acted in excess of his statutory

authority and therefore outside the scope of his delegated

powers: And, as the Supreme Court said in‘ Larson, at

689, 69 S. Ct. at 1461, ‘‘where the officer’s-powers are limited

by statute, his actions beyond those limitations are con-

sidered individual and not sovereign actions.’’ See Abbott

Laboratories v. Celebrezze, supra; Philadelphia Company

v. Stimson, 223 U. 8. 605, 32 S. Ct. 340, 56 L. Ed. 570 (1912) ;

Federal Trade Commission v. Nash-Finch Company, 110

U.S. App. D. C. 5, 288 F. 2d 407 (1961).

(2) The Attorney General is not an indispensable party

to this action. This was the conclusion in the Abbott

Laboratories case where the court said 228 F. Supp. at

page 862: ‘‘The decree sought here does not operate

against the Attorney General except in a secondary fashion. _

He will not be forced to do anything no matter how the

court decides.’’ |

(3) The Toilet Goods Association does have standing to -

sue. The members of the Association account for more

than 90% of the annual sales of cosmetics in the United

States: They are individually harmed and the Association,

as a proper representative of the interests of its members,

can challenge the regulations in that capacity. Natio#al

Motor Freight Traffic Association v. United States, 372

U. S. 246, 83 S. Ct. 688, 9 L. Ed. 2d 709 (1963); Abbott

Laboratories v. Celebrezze, supra.

(4) Venue, predicated upon 28 U. S. C. §1391(e), is

proper as’ to each of the individually named plaintiffs.

Although not all the Circuits agree, this Circuit has con-

sistently held that 28 U. S. C. §1391(c) applies to plaintiff

OD mate ele iil tien stp dt piace Ras

__ 29a.

: Appendia B.

and defendant corporations alike. Freiday v. Cowdin, 83

F. Supp. 516 48. D. N. Y. 1949) ; Southern Paperboard Cor-

poration v. United States, 127 F. Supp. 649 (S. D. N. Y.

1955) ; Wear-Ever Aluminum Inc. v. Stpos, 184 F. Supp. 364

(S.D. N.Y. 1960)... | .

Accordingly, defendants’ motion to dismiss is denied in

all respects. ‘

Il.

Since the papers already submitted by the parties raise -

“eneghatantive issues outside this court’s ordinary sphere of

competence, it would be unwise to make a determination on

‘the merits at this stage without the aid of ‘‘live’’, expert

testimony. : ;

To be sure, the essential questions presented in this

action are ones of statutory interpretation; whatever com-

petence the court and counsel may have in this area

- generally, however, can only. be enhanced by a particular

understanding, to be obtained with expert assistance, of

the technical problems involved. dditionally, since pro-

fesstonally qualified representatives of both plaintiffs and

defendants were present during the hearings and debates.

which preceded the passage of the 1960 Color Additives

Amendments, it would be helpful to hear their testimony

relative to legislative intent, which, presumably, they had

an important role in shaping and assisting. :

Plaintiffs’ motion for Summary judgment, therefore is

denied. — no a j

eo * ‘ | 1 ao

Tnasmuch-as defendants have not specified what they

wish to have stricken from the complaint, their motion to

strike is denied. j °

Settle order accordingly.

Ptah Salad anche SNe A WED aC Ellin Se iinet dion nls latin Neha f

é

ee -

BEE Ge Seer eign Sed

30a

| APPENDIX C.

Second Opinion of the United States District Court

for the Southern District of New York.

> : Civil Action 63 Civ. $349

veka December 13, 1963)

a

The Tomer Goops Association, Inc., e¢ al.,

Plaintiffs,

~ %. :

AntHony J. CeLesrezze, Sécretary of Health, Education —

and Welfare, and Grorce P. Larrick, Commissioner of

Food and Drugs, Defendants.

Tyrer, D. J.

Defendants . (hereinafter collectively referred to as”

‘“‘F'DA’’), with the permission of this court, have made a .

( renewed motion to dismiss the complaint and for summary

judgment pursuant to F. R. C. P. 56 and 28 U. S. C.. 2201

on the grounds’ that the complaint fails to set forth a jus-

ticiable controversy and that this is an unconsented suit

against the United States. In the alternative, defendants

have moved -for an order pursuant to the provisions of 28

U.S. C. 1292(b) certifying the aforesaid issues for an inter-

locutory appeal.

_. By way-of background, the principal impetus for this

renewed motion stems from recent opinions filed by the

United States Courts of Appeals for the Third Circuit in

_ Abbé Laboratories v. Celebrezze, et al., 352’°F. 2d 286,

decided November 1, 1965, and for the District of Columbia

in The Danville Tobacco Association et al. v. Freeman,.351

F. 2d 832, decided September 30, 1965. Both decisions, in

general terms, were rulings that the district courts should

3la °

‘ | .

7 Appendix C. |

have dismissed complaints for failure to state: justiciable

controversies where complainants were ostensibly chal-

lenging the meaning and validity of agency regulations.

Thus, FDA here asserts that the facts of the present case °

are substantially analogous to those in Abbott and Danville’

Tobacco, and that, therefore, the decision of this court filed

on November 17, 1964 and determining, among other things,

that the present case presents a justiciable controversy in

a context not involving an unconsented suit against the

United States; should be reconsidered and overturned. —

The parties arnply briefed the issues upon. this renewed

motion, and oral argument were heard on December 6, 1965.

On December 8, 1965, this court filed an order denying the

renewed motion of FDA for dismissal but certifying the

questions ‘ presented for an interlocutery appeal. This

memorandum. is designed to, sketch the principal reasons

for this court’s refusal to disturb its ‘original determination

filed approximately one year ago. poet oar

No useful purpose can be served here in replowing the

Same ground covered in the opinion of this court reported

at 235 F. Supp: 648. Essentially, I do not agree with

FDA’s arguments that Abbott and Danville Tobacco pre-

sent facts and gircumstances apposite to the case at bar!

As already indiAted in the earlier opinion of this court,

FDA in the last anafysis has consistently bottomed all of its

‘arguments upon the technical proposition that the regula-

tions here under attack are ‘‘interpretive”’ as Opposed to

legislative’? This ornérstone contention of FDA, it

Seems to me, has sever{l deficiencies, . Preliminarily, it

smacks of hypertechnicality; in the words of Chief Justice .

Stone, ‘‘the ultimate test of reviewability is not to be found

* Indeed, Danville Tobacco seems to me So obvioust inapposite

as to warrant no detailed discussion whatsoever. I § pect that .

FDA ‘in part would agree because its papers and oral argument

were principally keyed to Abbott, with little or no detailed discus-

sion of Danville Tobacco. ais 7 é.

* See discussion in 57 Yale L. J. 919, 928-9 (1948).

Pe ee eee Ons

pili Ee

( Appendia C.

in an over-refined technique...’’. Colwmbia Broadcasting

System, Inc. v. United States, 316 U. S. 407, 425 (1942).

More significant, this court has ready found upon the

allegations of the complaint in this case that FDA has

promulgated final regulations pursuant to the Color Addi- _

tives Amendments of 1960 enacted by Congress as part of

the Food, Drug and Cosimetics Act (74 Stat. 397, Public Law

86-618, 86th Cong., 2d Session, 21 U. 8. C. 321 (+) and 376)

(hereinafter the ‘‘ Act’’) ; thatihefe is raised by the parties

a substantial issue as to whgther or not four of these final

regulations significantly exceed the legislative mandate of

the 1960 Amendments; and that irreparable harm would

attach to plaintiffs unless these issues are resolved in this

declaratory judgment action prior to piecémeal administra-

* tive litigation upon individual license’ applications. It is in

the light of these findings that I reach my opinion that

Abbott, and, of ‘course, Danville Tobacco, are distinguish-

able from this case.

Granting” arguendo that Abbott Laboratories is gen-

erally more similar tothe present controversy, it must be

emphasized that there the applicable statutory provision®

merely required that with respect to prescription drugs, the —

.established or generi¢-drug name.be printed ‘‘prominently”’

on the label in type half as large as any brand or proprie-

tary name. Presumably, this ‘‘prominently’* requirement

could be satisfied in a number of ways such as by meang of a .

special label in large type-face, or by printing the ggneric

» name in bold red letters and the like. In its pertineht reg-

ulations, FDA in effect provided that the generic‘name |

must be shown ‘‘prominently’’ not only on labels but ‘‘each

timfe’’ the trade name is used for any purpose, whether it be

advertising, labelling or whatever. Perhaps understand-

ably under these circumstances, the Court of Appeals ruled

that the issue presented was. one of interpretation of the

regulations in question and, as such, not: ‘cognizable by the

district court.

8 Section 503(e) (1) (B) of the Act.

©

ee ae

OS ee cee RE a 5S

33a ‘ ‘

- Appendiza C. -

But the situation in this case is Significantly different; ©

Here the plaintiff contends that: (1) the 1960 Color Addi-

tive Amendments require merely pretesting, listing and

allege that FDA has ote regulations; purportedly under .

the authority of the

case presents a different issue of “‘reviewability’’? or

“‘Justiciability’? than that before the court in Abbott

Laboratories,5 Upon the complaint allegations, this is not

necessarily a case where, as FDA is prone ‘to argue, the

parties are simply bickering as to how the regulations are

to be interprefed and applied. Rather, on the face of the:

pleadings, this is a case involving allegations of serious

and significant excesses by an executive agency, through

the device of final regulations, beyond the powers conferred

by Congress upon the agency in the 1960 Amendments, |

_ Whether or not these claims are true presents, in my view,

a justiciable controversy which is ripe for determination

by a distriet court under the Declaratory Judgment Act.

* For other possible distinguishing factors, see discussion of this

court at 235 F. Supp. at Pages 651-2.

* Moreover, even if it’be said that this ease is not distinguishable

from Abbott, then I would ye ig with the reasoning and ultimate

result to date of the latter 0)

mye <a OVRtied dt as Sine

in

ith A Sef, hb eeu

J i.

1 I fired te neal Ge -daby. RS »

tntsashiens

we

ae cae siemens a ee ee a. a

34a

7 / Appendia C.

ee : : og

In reaching the latter conclusion, I am not unaware of

‘another argument of FDA which, though not novel, takes

on special focus by virtue of certain discussion of the

’ Court of Appeals in Abbott Laboratories. FDA urges as

a ‘principal argument against reviewability here that Con-

- gres8 has provided another and more efficacious remedy

fer-dggrieved industry members. In substance, this is the

remedy of judicial réview by .a Court of Appeals from

individual orders of the FDA upon applications for licenses

for cosmetics, all as set forth in subsection (f)(1-5) of

Section 701 of the Act. -Apparently, FDA obtains comfort ~

from certain statements concerning this: statutory method

of review by the Court of Appeals at pages 8 and 9of its

slip opinion in Abbott Laboratories. But, as I see it, such

is cold comfort indeed in view of the fact that the Court

of Appeals in Abbott ‘Laboratories at the threshold had

determined that they were concerned with an interpretative

as opposed to ‘‘legislative’’ regulations such as are alleged

in the case at bar. Moreover, subsection (f)(6) of Section

701 of the Act underscores the Congressional intention that

_the special review of license proceedings by the Courts of

Appeals ‘‘shall'be in addition to and not in substitution

forany other remedies provided by law’’. Finally, it is

scarcely tosbe thought that judicial review limited to the

traditional’and narrow scope ofswhether.or not,the Com-

missioner’s findings are supported | by adequate evidence

ean supplant the other and broader form of remedy or

review available’under the Declaratory Judgment Act.

A brief, final paragraph: ‘may be in order respecting that

part of this court’s December 8, 1965 order certifying the

‘questions pursuant té 28 U. S. C. 1292(b). Aside and apart .

from the circumstance that plaintiffs have agreed: to. the’

FDA’s request for certification, it is clear from a review of

the general case law in this field that, notwithstanding my

firmly held views on the issues here of justiciability and

-- whether or not this is an unconsented suit against the

sovereign, there is ample room for difference of opinion.

os

. Appendiz C.

o ‘ : .

Further to bespeak the obvious, a- different view than mine

would quickly terminate this litigation, which, though only

commenced last year due to doubtless necessary delays in

the regulation making process, involves subject matters

passed upon by the Congress five years ago. Even if the

reviewing court were to agree that this court has properly

taken jurisdiction, it must be borne in mind that this case

‘ Was: ready to proceed to trial on December 6, 1965, the day

when this renewed! motion was argued—i.e. in-the event

of an unsuccessful interlocutory appeal, this case presum-

ably can be resolved on the nférits without undue additional

delay. , eis ;

December 10, 1965. .

i : ; /8/ H.R. Tyrer, Je, .

U.S. D. J.

7 .

Cr

tv

* ee

es Cem

36a

APPENDIX D

Judgment of the Court of Appeals

_ UNITED STATES COURT OF APPEALS

For THe Seconp Crrcvlt.

At a Stated Term of the United States Court of Appeals,

ip, and for the Second Circuit, held at the United States

Courthouse in the City of New York, on the thirteenth day

of April one thousand nine hundred and sixty-six.

. Present: . f i a

Hon. Srerry R. WATERMAN,

Hon. Baer 3 P. Moors,

Hon. vRY J. FRIENDLY,

Circuit Judges.

© Tur Tomer Goons Association, INc., et al.,

¢ | Plaintiffs-A ppellees,

é

v. : a, we C

AntTHony J. CELEBREZZE, Secretary ‘of Health, Education

and Welfare, and Grorcrz P. Larrick, Commissioner: of

Food and Drugs,

\ Defendants-Appellants. 4

)

‘f Appeal from the United States District Court for the

Southern District of New York.

2 This cause came on to be heard on the jtranscript of

record from the United States District Court for the South-

ern District of New York,and was argued by counsel.

,

37a

. Appendia D.

On Consmeration Wuereor, it is now hereby ordered,

adjudged, and decreed that the order of said District Court

be and it hereby is affirméd as to the First, Second and

Third Counts of.the complaint, | |

It is further ordered that the order of said District Court

be and it hereby is reversed as to the Fourth Count of the

complaint with instructions to grant the motion to dismiss

~~. in accordance with the opinion of thié court.

A. Danret Fvusaro

Clerk |

38a

APPENDIX E a

Federal Food, Drug, and Cosmetic Act, as Amended

Section’ 201(t), 52 Stat. 1040 (1938), as emented by Sec- |

tion 101(c) of the Color Additive Amendments of 1960,

74 Stat. 397 (1960), 21 U.S.C. §321(t): —

‘“‘CHAPTER II—DEFINITIONS |

**Sec. 201. For the purposes of this Act—

e : e : : - * . ; *

. (t) (1) The term ‘color additive’ means. a

(A) is a dye, pigment, or other substance made

by a process of synthesis or similar artifice, or

extracted, isolated, or otherwise derived, with or

without intermediate or final change of identity,

and

(B) when: added or applied to a food, drug, or

cosmetic, or to the human body or any part thereof,-

is capable (alone or through reaction with other. .

substance), of imparting color thereto;

except ° that such term does not include any ie

. Yial which the Secretary, by regulation, determines

is used (or igtended to be used) solely for a purpose

or pyrpeees other than coloring.

¢6(2)°'The term ‘color’ includes black, white, and.

intermediate grays.

. **(3) Nothing in subparagraph (1) of this para-

graph shall be construed to apply to any jesticide -

chemical, soil or plant nutrient, or othe icultural

chemical solely because of its effect in ai - rétard-

ing, or otherwise affecting, directly or indirectly, the

growth or other natural physiological processes of

&

from a vegetable, « ‘imal, mineral, or other source, °

" wv. :

wee ee ee

ww peatle

©° Appendix E.

produce of the soil and thereby affevting its color,

whether béfore or after harvest.’? ‘A

Section 704(a), 52 Stat. 1057 (1938), as amended by

‘Section 201 of the Drug Amendments of 1962, 76 Stat. 792

_ (1962), 21 U.S.C. $374(a): ——

PRPs, PRutue

‘‘Factory Inspection

“Sec. 704 [374]. (a) For purposes. of enforce-

ment of this Act, officers or employees duly desig-

nated by the Secretary, upon presenting appropriate

credentials and a written notice to the owner, op-

erator, or agent in charge, are authorized (1)- to

\ _ @nter,; 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 (2) to in-

spect, at reasonable times and within reasonable

limits and in a reasonable manner, such factory, —

warehouse, establishment, or vehicle and all. perti- -

nent equipment, finished and unfinished materials,

containers, and labeling therein. In the case of any

_ factory, warehouse, establishment, or ‘consulting

- laboratory in which -prescription drugs are manb-,

factured, processed, packed, or held, inspection shall .

extend to all things therein (including records, files,

papers,. processes, controls, and facilities) bearing

. on whether prescription drugs which are adulterated

_ or misbranded within the meaning of this Act, or

‘which may not be manufactured, introduced into

interstate commerce, or sold, or offered for sale by

reason of any provision of this Act, have been or are

being manufactured, processed, packed, transported, ~ .

or held in any such’ place, or otherwise bearing °

‘

¥

40a oo ae ine

Appendix E. ‘?

on violation of this ‘Act. No i author-

ized for prescription drugs by the preceding sentence .

_ Shall extend to (A) financial data, (B) .sales data

_ other than shipment data, (C) pricing data, (D)- per-

~ sonnel data (other than data as to-qualifications of

technical and professional personnel performing

functions subject to this Act), and (E) research data . - ¢

( other than data, relating to new drugs and antibiotic

drugs, subject to reporting and inspection under

- regulations lawfully issued pursuant to section 505 —

(i) or (j) or section 507 (d) or (g) of this Act,. ahd -

data, relating to other drugs, which in the case ofa _

* new drug would be subject to reporting or inspection as

under lawful regulations issued pursuant to section

505(j) of this Act). A separate notice shall be given

for each such inspection, but a notice shall not be ©

required for each entry made during the .period

nee by the inspection. Each such inspection shal].

pe commenced and hioeauead with reasonable

promptness.

»

. . a ate bd a" 6 ‘

. th Soh hi a ie re Nib Ee eee

« oe 7 a ala

__ APPENDIX F

Regulations of the Food and Drug Administration, _ :

a ce . 21 CFR Part 8 _

‘Subpart A-—Definitions and Procedural and Interpreta-

"tive Regulations . ee

4g 8.1. ‘Definitions and interpretations:

~*(f) A ‘color .additive’ is any material, not exempted

under section 201(t) of the act, that is a dye, pigment, or

other substance made by a process of synthesis or similar

artifice, or extracted, isolated, or otherwise derived, with

or without intermediate or final change of identity, from a

vegetable, animal, mineral, or othersgource and that, when

added or applied to a food, drug, or cosmetic or to the

human body or any part thereof, is capable (alone or

through reaction with other substance) of imparting a color

thereto. This includes all diluents. Substances capable of

imparting a cblor to a container for ‘foods, drugs, or cos-

metics nat color additives unless the customary or rea-

snably {feseeale handling or use of the container may

reasonably be expected to result’ in the.color being trans-

_ mitted to the contents of the package or ally thereof.

. Food ingredients such as cherries, green or ppers,

cholocate, and orange juice which contribute thei own

natural color when mixed with other foods are not regarded

as ‘color additives’; but where a food substance such as

beet juice is deliberatély used as a color, as in pink lemonade,

it is a ‘color additive.’ Food ingredients as authorized by

a definition and ection § of identity: prescribed by regula-

_ tions pursuant tyéection 401 of the act are ‘color additives,’

_ where thé ingTedients specifically designated’ in the

‘definitions and standards $f identity as permitted for use |

for coloring purposes. An ingredient of an animal feed

whose intended function is to impart, through the biological

: y 7 .

.*

SNe rwresceye ems; dea ad : ~ ° i ° at - Se ee POR aathe renerey - :

ba .

. e e . .

. . . .

‘en

Appendia F.

processes of: the animal, a color to the meat, milk, or eggs of ©

the animal is a color additive and is not exempt. from the _

requirements of the statute. This definition shall apply

whether or not such.ingredient has nutritive or other func-

tions in addition to the property of imparting color. A sub-.

stance that, wlien applied to the human body results in

coloring, is a ‘color additive,’ unless the function of color-

ing is purely incidental to its intended use, such as in the

case of deodorants. Lipstick, rouge, eye makeup colors, and

related cosmetics intended ‘for coloring the human: body ~

are ‘color additives.’ An. ingested drug the intended

gern of whichis to impart color to the human body is-

a ‘color additive. * For. the purposes of this part, ~—_

iis ‘color’ includes black, white, and intermediate grays,

_ but substances including migrants from packaging matée-_—

’ vials which do not contribute any colér — to the

naked eye are not ‘color additives.’ ’* .

§ 8.28 Authority to refuse certifiation service.

‘*(a) When it appears to the nite enema that'a ae

has:

‘ (1) Obtained, or attempted to’ ede. a certifi-

cate through fraud or > a eee of a — |

rial fact.

(2) Faltified the records negenes to be kept by ~

— or

(3) Failed to keep such en or to make them

available, or to accord. full opportunity to make

inventory of stocks on hand or otherwise to check

, oe correctness of. such records, as required y

or...

Administration free access

P: (4) Refuse ‘to rmit duly atheastant employees .

- of the Food and Deer

to all manufacturing facilities, processes, and formu-

* Tae involved im the manufacture of color additives

and intermediates from which such color additives

are derived; ;

.

¥

a

PEE Im ete x a

~ 2 ao - mnillnns tthe

: sad : :

4 . a 5 ‘ : = :

I;

a he may immediately suspend certieatign m service to such :

} . Person and may continue such suspension - until adequate

0 . . Corrective action has been taken. - —e

‘ “6 (b) Upon receipt of the notice of suspension of service,

“ a the person so. notified may, request a hearing upon the

factual basis for the sus uspension. The procedure at the

hearing shall conform as near early as possible to the procedure

describéd in §§130. 16-100, 26 of this chapter.”? _

| ; Me (5776)

Ps

é

| : ° e 2G j

¥ . .

. . a

: ‘ ° .

. . "a . . . = .

Bed : ° ; . s | die dine tate eee

= POLED Fee Cone gyms wmy 7 . es -

. A . 2 ’ .

. ? * . .

.

APPENDIX G,

The svepeets F eclery Inspection evden of

, H. R. 11581 -

| “TLR. 11581, 87th Cong, 2d sess.)

“A BILE To protect the public health by amending the

e.- Federal Food, Drug, and Cosmetic Act to assure the

' gafety, efficacy,.and reliability of drugs, authorize stand- °

-ardization of drug names, establish special controls ‘for

barbiturate and stimulant drugs, and clarify and strengthen

existing inspection authority with respect to any articles

subject to the Act; and to amend related laws

“* Be ét enacted by the Senate and House. of Bawsiete

‘ tives of the United States of America in Congress

‘ assembled, That this Act, divided into titles and sections -

‘according. ‘to the following table of contents, may be cited

; as the ‘Drugs and: Factory — Amendment of

‘ ; / : &. . 1962’. ‘

*

“TITLE II—CLARIFICATION AND STRENGTHEN-

ING OF FACTORY INSPECTION AUTHORITY

“F acTory INSPECTION

‘Sec. (a) The first sentence of subsection (a) of;

section-704 of the Federal Food, Drug, and Cosmetic Act is *

-— = -as follows: ‘For.purposes of enforcement ie

f thi rs or employees duly designated by the

Secretary, ‘upon presenting appropriate credentials and a

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

- are authorjzed (1) to enter, at reasonable times, any fac-

_ tory, warehouse, or establishment in which food, drugs, _ .

- devices; or cosmetics are manufactured, processed, packed,

~ 4° or held, for introduction into interstate commerce or. after

such introduction, or to enter. any consulting laboratory,

or te enter any vehicfe being used to transport or hold =

—9? ~w “ c ‘

PE LY ser maracas Yrs mens eceparegeepage Sess. yt LN eR REE RIE TTS ing fo, Rin Bele 6 a 8 o erquerness conweam ceca anes

= gerne ear SE en eres eens igen nesasineey Ben ate : ae

. o

re

© ee ee me ees = wet ~ eet

4

fa: ly

. Appendia.G.

such food, drugs, devices, or cosmetics in interstate com-

merce; andl (2):to inspect, at reasonable times and ‘within

reasonable limits and in a reasonable manner, such factory,

warehouse, establishment, consulting laboratory, or vehicle

and all pertinent equipment, finished and unfinished mate-

rials, containers, and labeling therein, and all things

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

trols, and facili aring on whether articles which

are adulterated or‘ misbrandéed within the meaning of

-this Act, or which may not be ‘manufactured, introduced

into interstate commerce, or sold or offered for sale by

reason of any provisién, of this Act, have -been, or are

being. manufactured, processed, packed, transported; or . .

held in any such place, or otherwise bearing on violations

or potential violations of this Act’.’?

”

a’, . ‘ . ;

r . | _

“ ‘

ax ‘

_

% 46a

a

APPENDIX H

“The Proposed F: actory Inspection. ‘Provisions -

+H. R. 6788 :

“88th Congress ist Sesmon

| H. R. 6788

. - A BILL To protect the public health by amending the

_ Federal! Food, Drug and Cosmetic Act to extend and clarify

existing inspection and investigative powers, require a pre-

marketing showing of the .afety of cosmetics, assure the -

safety, efficacy, and. reliability of therapeutic, diagnostic,

_ and prosthetic devices, inprove the statutory coofdinatién

. between taat Act and the biological-drug provisions of the

Public Health Service Act, provide for cautionary labeling ©

of articles where needed to ‘ei accidental injury, and

for other purposes.

‘Be it enacted by the Senate and House of Representa-

_ tives of the United States of. America in Congress

assembled, That this Act, divided into titles and sections

according to the following table of contents, may be cited’

as the ‘Food, Drug, and Cosmetic Act Amendments of 1963.’

° a * . . * 7 ee cs

“TITLE -I—INSPECTION AND PRODUCTION

. OF EVIDENCE .

“ Exrension or Prescription Dave INSPECTION AurTHoriry

‘ to Orxer Drvues, Foop, Cosmetics, .aND * Devices

“Spo, 101. (a) Section 704{a) of the Federal Food, ©

Drug, and Cosmetic Act (21 U. S. C. — is amended

_

bad a5 e e * ; e *®

— (6) striking out in the second sentence all -be-

| ginning with the words ‘In ” case ees any factory’

| 47a -

Se | Appendia HA.

down through and including the words ‘shall extend

to’, @ad thus combining such sentence with the first

Sentence; |

. *(7) striking out ‘in the same sentence the sub- )

-Sequent words ‘prescription drugs’ and inserting

in lieu thereof the word ‘articlés’ ;”” |

ae

ne ene

_ 48a

‘APPENDIX I.

Secretary’s Letter to the Speaker Transmitting

H.R. 6788.

Department of

HEALTH, tied ARD WELFARE

‘the 29, 1963

.. Dear Mr. Speaker :

There is enclosed - herewith 8 draft bill with the shant

title, **Food, Drug, and Cosmetic Act Amendments of 1963”’ .

which is designed to strengthen consumer protection.

This bill would carry out certain recommendations made

by President Kennedy in his Consumer Protection Message

of March 15, 1962, his Health Message of February 7, 1963,

and his Message on Elderly Citizens of February 21, 1963, -

and make certain aes a in. food and drug. .

laws.

1. Extension and clarification of inspection aad

under the Federal Food, Drug, and Cosmetic Act to deter-

mine whether food, nonprescription drugs, cosmetics, and

therapeutic devices, are being oe ” marketed

ém accordance with the law.-

On October 10, 1962, the Drug Aimendments of 1962 were

enacted as P. L. 87-781. Section 201 of this law provided. ~

for strengthened inspection authority with respect to pre-

scription drugs. With certain exceptions, the amendment

permits inspection.of prescription drug establishments (and —

makes clear our authority to make inspection of independent.

consulting laboratories for such establishments) to encom-

pass access to all things (including records, files, papers,

processes, controls, and facilities) which have a bearing ong

wee of the law with respect to such —_

49a

Similar authority is needed with respect to other prod-

ucts covered by the Food, Drug, and Cosmetic Aet. Manu-

facturers of ‘such products can, and a substantial number

do; refuse to allow the Food and Drug ion to

make sufficient inspection of their manuf: operations

and related records to permit a sound jodgmet as to the

legality of their operations. In the 15-month period ending

March 31, 1963, 436 food firms refused to permit Food and

rug Administration inspectors to make one .or more:

hases of inspection needed for a true evaluation of the

° _ ypurity and safety of the firm’s output. For example, the

4

>

. . i %

Yate »

Food and Drug Administration is hampered in determining

whether poisonous ingredients are present in food and

cosmetics when it is denied access to formulas. Three hun- -

dred and twenty-two of the food firms referred to above

refused, for example, to furnish qualitative or quantitative

formulas. And with respect to proprietary drugs, the

quality control requirements for drug manufacture enacted

last year would be difficult, if not impossible, to enforce

unless we have inspection eumantty of the same scope as for.

prescription drugs.

Authority is also needed to make complete inspections

of-retail pharmacies. At present retail pharmacies are

exémpt from the recently broadened inspection- provisions

(with respect to records, ete.) relating to other establish-

ments handling prescription drugs. Thus, te Food and

Drug Administration cannot make needed ‘investigations of

the receipt and dispensing of dangerously adulterated or. .

misbranded drugs, such as decomposed, over-age life-saving

drugs, or certain other critical inspections in the retail drug

store. The Food and Drug Administration should be able

to review prescription files when stocks of dangerous pre-

scription drugs are being removed from the market and

when investigations are being made-of druggists suspected

of selling potent. prescription-only drugs without prescrip-

tions. It should also be able to inspect all other kinds of

relevant: pharmacy records, other than prescription files. -

?

50a

The enclosed bill would, therefore, extend the inspection

authority presently applicable o 2 aioe

to all other products covered bythe Food, Drug, and Cos-

metic Act, permit the review of drugstore prescription files

when the.inspector has. m to believe that the pharmacy

has dispensed prescription: intended for human use

in violation of the -Act’s provisions governing the dispens-

ing of such drugs, or when the inspector is tracing the dis-

tribution of dangerously adulterated drugs or devices; or of

a new drug’or device in violation of the new-drug section’s

requirements, and permit the inspection of ——

records ¢ of ieee a

ir a ‘es. o -s .

Sincerely,

4

‘Asenony J. CELEBREZZE,

Secretary.

See “gene

.

o-g unr 10 Pett ibn NOOR ie aeary

AY

. . .