Toilet Goods Association, Inc. v. Celebrezze

• Decision Date: 16 November 1964
• Citation: 235 F. Supp. 648
• Parties: The TOILET GOODS ASSOCIATION, INC., et al., Plaintiffs, v. Anthony J. CELEBREZZE, Secretary of Health, Education and Welfare, and George P. Larrick, Commissioner of Food and Drugs, Defendants.
• Court: U.S. District Court — Southern District of New York

235 F. Supp. 648

The TOILET GOODS ASSOCIATION, INC., et al., Plaintiffs, v. Anthony J. CELEBREZZE, Secretary of Health, Education and Welfare, and George P. Larrick, Commissioner of Food and Drugs, Defendants.

United States District Court S. D. New York.

November 16, 1964.

Breed, Abbott & Morgan, New York City, for plaintiffs, William L. Hanaway, Edward J. Ross, and Stephen R. Lang, New York City, of counsel.

Robert M. Morgenthau, U. S. Atty., for defendants, by Arthur S. Olick and Patricia A. Garfinkel, Asst. U. S. Attys., and William W. Goodrich, Asst. Gen. Counsel, for Food & Drugs, and William R. Pendergast, Atty., U. S. Dept. of Health, Education & Welfare.

TYLER, District Judge.

Forty individuals and companies manufacturing, distributing, and selling cosmetics in interstate commerce and an association of cosmetic manufacturers here seek a declaratory judgment 28 U.S.C. § 2201 as to the validity of certain provisions of regulations promulgated by the Commissioner 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. §§ 301-381.¹ More specifically, plaintiffs contend that the challenged regulations exceed the authority vested in the FDA by the statute, as amended, and pray that the court declare the regulations null and void and enjoin their enforcement.

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 defined as "a dye, pigment, or other substance" which, "when added or applied to a food, drug, or cosmetic, or to the 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 be deemed "unsafe" within the meaning of the Act unless they conform 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 issued the Color Additives Regulations, dated June 13, 1963.² 28 F.R. 6439, 21 C.F.R. §§ 8.1-8.6003. Those provisions of the regulations here challenged as in excess of the statutory authority 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, of 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, plaintiffs claim, may require the pretesting, listing and certification of all ingredients of cosmetics containing a color additive mixture;

(c) provisions of Section 8.1(f) 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 investigators to all processes and formulae involved in the manufacture of cosmetics.

Defendants have moved for an order dismissing the complaint, and, alternatively, for an order "striking certain portions of the complaint."³

I.

Defendants' principal contention on their motion to dismiss is that the complaint fails to state a case of actual controversy, as required by the Declaratory Judgment Act, 28 U.S.C. § 2201, particularly because of the absence of any threatened or attempted enforcement of the regulations.

Although the Declaratory Judgment Act was never intended or construed to grant the federal courts license to render advisory opinions, threatened enforcement of a statute or administrative regulation is not a sine qua non for its review under the Act. See Borchard, Declaratory Judgments (2d ed., pp. 365-6). In Columbia Broadcasting System, Inc. v. United States, 316 U.S. 407, 417-418, 62 S.Ct. 1194, 1200, 86 L.Ed. 1563 (1942), FCC regulations provided that radio stations would have their licenses revoked if they entered into contracts with networks containing certain prohibited clauses. The court held the regulations to be reviewable because of their serious impact upon the radio network's ability to conduct its business and stated that, "If an administrative order has that effect it is reviewable and it does not cease to be so merely because it is not certain whether the Commission will institute proceedings to enforce the penalty incurred under its regulations for non-compliance."

Recently, in Abbott Laboratories v. Celebrezze, 228 F.Supp. 855 (D.Del. 1964), where drug manufacturers challenged FDA labeling regulations, Chief Judge Wright held, at page 861:

"Plaintiffs may have judicial review of interpretive regulations upon their promulgation without 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 courts have taken jurisdiction and rendered a declaratory judgment on the validity of a challenged regulation or statute, the existence of such a threat merely serves as some evidence indicating the presence of an actual controversy and that 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 S.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 case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment."

More specifically, as to the reviewability of administrative rulings, Chief Justice Stone said in Columbia Broadcasting System, Inc. v. United States, supra, 316 U.S. 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 purport to control."

This being the test, I find it difficult and indeed inappropriate, at least under the circumstances here presented, to resolve the issue of reviewability upon the technical distinction, pressed by defendants, between legislative and interpretive regulations. Parenthetically, I should add that I read no federal authority to precisely support the defendants' argument that the regulations here involved 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 government's principal brief.)⁴

In any event, for reasons to be discussed hereinafter, I conclude that in a substantial and practical business sense plaintiffs are threatened with irreparable injury by the obviously intended consequences of the challenged regulations, and that to resort to later piecemeal resolution of the controversy in the context of individual enforcement proceedings would be costly and inefficient, not only for the 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 prohibitive for some of the plaintiffs, or ignoring them at the risk of incurring the statutory penalties should the regulations 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 is specifically suited for the determination of controversies where the plaintiffs must either comply with a contested regulation or continue their present course of conduct at their peril."

An affidavit submitted on behalf of one of the plaintiffs asserts that the cost of compliance to this plaintiff alone will be over $50,000,000. While this amount is immediately suspect,⁵ there can be little doubt but that the added recordskeeping 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 certainly to potentially greater expenses. That the latter are "hidden expenses" in the sense that they are presently incalculable does not diminish their significance. For example, 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 have an immediate adverse effect upon further research and development 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. 345 (1943), where the plaintiff sought a declaratory judgment on the validity 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...