174 F.2d 676 (9th Cir. 1949), 11936, Willapoint Oysters v. Ewing

Docket Nº11936.
Citation174 F.2d 676
Party NameWILLAPOINT OYSTERS, Inc. v. EWING, Administrator, Federal Security Agency, et al.
Case DateApril 29, 1949
CourtUnited States Courts of Appeals, Court of Appeals for the Ninth Circuit

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174 F.2d 676 (9th Cir. 1949)

WILLAPOINT OYSTERS, Inc.

v.

EWING, Administrator, Federal Security Agency, et al.

No. 11936.

United States Court of Appeals, Ninth Circuit.

April 29, 1949

Rehearing Denied June 3, 1949.

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Albert E. Stephan, of Seattle, Wash., (Grosscup, Ambler & Stephan, of Seattle, Wash., of counsel), for petitioner.

Alexander M. Campbell, Asst. Atty. Gen., Frank J. Hennessy, U.S. Atty., of San Francisco, Cal. (John T. Grigsby, Atty., Dept. of Justice, and William Goodrich, Atty., Federal Security Administration, both of Washington, D.C., of counsel), for respondents.

Before STEPHENS, BONE, and ORR, Circuit Judges.

BONE, Circuit Judge.

This matter is before us on a petition for judicial review of two so-called 'Final Orders' of the Federal Security Agency, hereafter referred to as Agency, prescribing and establishing standards of identity and a standard of fill of containers for canned oysters. The First Final Order was issued March 10, 1948, by Respondent Ewing, Federal Security Administrator, hereafter referred to as Administrator, and published in Federal Register March 13, 1948 (13 F.R. 1337-1339). The Second Final Order was issued August 3, 1948 by Respondent Kingsley, Acting Federal Security

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Administrator, and published in Federal Register August 12, 1948 (13 F.R. 4663-4664). These orders, which purport to establish regulations of general applicability, will be referred to as the First and Second Orders.

Petitioner, a Pacific Coast packer of canned oysters, filed with this court its petition for judicial review of the First Order and in this petition sought injunctive relief against enforcement of the order of March 10th and an order remanding the proceedings to the Administrator to take further evidence respecting its method of 'blanching' oysters which it uses in its commercial canning operations. It was represented to this court that this 'blanching' method of treating canned oysters had been 'commercially developed' subsequent to the close of the record upon which the Administrator based his First Order of March 10th.

Being persuaded, on the record before us, that the showing by petitioner presented reasonable and just ground for granting the petition for remand, this court on June 8, 1948, ordered that the proceeding be remanded to the Administrator with directions to take such additional evidence (and evidence in rebuttal thereof) as petitioner should offer relative to the new process it employed to pack 'blanched' oysters, the hearing to be held within 30 days of the date of the order, on reasonable notice to petitioner. We further ordered that after considering such additional evidence, the Administrator might modify his findings as to the facts or make new findings by reason of the additional evidence taken, and file with this court such new or modified findings, together with his recommendations, if any, for the modification or setting aside of his original (First) order along with the return of such 'additional evidence.' 21 U.S.C.A. § 371(f).

The Administrator conformed to this mandate and pursuant thereto a further hearing was timely held on July 7 to 12, 1948 before a presiding officer designated by respondent Ewing. Thereafter and on August 3, 1948, respondent Kingsley, as Acting Administrator, signed the so-called 'Second Order' by which relief was again denied to petitioner. New (supplementary) findings on the new evidence adduced at the hearing ordered by this court were reported back to this court, the supplementary findings being made by Kingsley during the absence from duty of the Administrator. Thereafter petitioner caused the entire record upon which both orders had been made to be presented to this court for consideration, review and determination of the validity of both orders and the findings and conclusions upon which they rest.

Both Final Orders were promulgated under the provisions of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C.A. § 341, and they establish and promulgate new 'definitions and standards of identity, ' and new 'standards of fill, ' for canned oysters. As to the matter of 'fill, ' the orders require that all oyster packers shall conform to a standard under which the 'drained weight' of all species of oysters packed in all sizes of cans shall be not less than 59% of the water capacity of the can. As respects standards of identity, the orders require that petitioner's product shall be labeled 'Pacific Oysters.' (The requirement of a 59% 'fill' means that the can (see footnote 3) shall contain approximately 6 1/2 ounces of oyster meat at the time it reaches the consumer. See calculations on weight of oysters and water capacity, infra.)

The foregoing requirements are challenged on this review as 'unlawful' under each of five enumerated legal standards set by the Administrative Procedure Act 5 U.S.C.A. § 1009(e). The specific contentions are set forth at a later point. 1

The real substance of petitioner's challenge appears to be epitomized in its contention that compliance with the two orders would (a) compel the Western type of oyster to be henceforth only identified as 'Pacific Oysters' while the Southern type of oyster would enjoy the name 'Oysters';

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(b) destroy a long-continued use on its labels of the generic term 'Oysters' and thereby transfer to Southern oyster canners the exclusive use and good will of that term and (c) destroy petitioner's 'quality pack' by requiring an excessive quantity of its (larger) Western oysters to be crammed into a can with resultant discoloration, disfiguration, distortion and breakage.

In order that the numerous contentions of petitioner be brought into proper perspective we are obliged to refer to previous and formal steps taken by the Administrator to establish regulations covering certain practices in the oyster canning industry. Specifically, these activities of the Administrator relate to formal regulatory proceedings before him in 1944. The order and regulations resulting from the 1944 proceedings are discussed more fully infra.

The record on this review also contains data and arguments offered by petitioner relating to certain official declarations and actions antedating the 1944 regulatory proceedings before the Administrator, and these are thought by petitioner to support its position here.

A fair consideration of these pre-1944 matters and the argument based on them persuades us (so far as a fill of container standard is concerned) that the subsequent proceedings had before the Administrator in 1944, and the regulations formally and lawfully adopted and promulgated as a result thereof (9 F.R. 14008; 21 C.R.R. 1944 Supp.Sec. 36.6) rob these earlier proceedings of the legal significance petitioner attaches to them. At the 1944 hearing the issue squarely presented (and made the subject of important regulations) dealt directly and specifically with a formal proposal to establish a fill of container standard for canned oysters. Such a standard was duly and lawfully established by the regulations promulgated as a result of this hearing, and it may be noted that a change in such a standard is also one of the basic issues before us on this review. 2 (See later references to the 1944 hearing.)

In reliance upon these so-called 'antecedent proceedings' petitioner contends that in using a 5 ounce fill in the No. 1 EO can 3 oyster canners were 'following' a so-called 'advisory announcement' issued by the Bureau of Chemistry in the Department of Agriculture in February, 1914. This 'announcement' recited that 'pending further investigation' the weights agreed on by a meeting of canners held in Washington in 1912 would be regarded by the Board as satisfactorily fulfilling the requirements of Food Inspection Decision No. 144. 4

It appears to be petitioner's position that these early pronouncements (applicable to departmental policy of the period when they were promulgated) in some manner conferred upon oyster canners a valuable and continuing 'right' to use a 5 ounce fill in the No. 1 can, and that this right was destroyed by the order of 1948 here reviewed.

If this is petitioner's position we are unable to agree with it. To follow this reasoning would require us to ignore the compelling legal effect of the subsequent 1944 regulatory order, which we think was lawfully adopted. Whatever the force and effect of these former pronouncements of departmental policy it is certain that the field of regulation they purported to occupy was, under statutory authority, completely pre-empted and occupied by the above mentioned regulations adopted in the 1944 proceedings. The most that can be said of these older 'announcements' is that they possess (so far as this hearing is concerned)

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only historical interest. Subsequent and sweeping statutory changes of vital and compelling significance, and later adoption of new administrative regulations under these statutory changes completely devitalized these old pronouncements of policy. We cannot view them as having an effect that even remotely touches the issues posed on this review.

The record shows that petitioner was not canning oysters in 1944 (for reasons later stated) as a consequence of which its business operations were not affected by the 1944 regulations which established a standard of fill. Due to this situation it contented itself with entering a formal appearance at the 1944 hearing apparently for the sole purpose of filing (as it did) a challenge to the sufficiency of the evidence there adduced.

The so-called 'Southern (oyster canning) Industry' did not appear at the 1944 hearing, and petitioner represents to us that 'Western packers could not challenge' the 1944 regulatory order (although they alone had protested) because they were not...

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