Federal Security Adm v. Quaker Oats Co

• Decision Date: 01 March 1943
• Docket Number: No. 424,424
• Citation: 63 S.Ct. 589,87 L.Ed. 724,158 A.L.R. 832,318 U.S. 218
• Parties: FEDERAL SECURITY ADM'R v. QUAKER OATS CO
• Court: U.S. Supreme Court

318 U.S. 218

63 S.Ct. 589

87 L.Ed. 724

FEDERAL SECURITY ADM'R

v QUAKER OATS CO.

No. 424.

Argued Feb. 4, 5, 1943.

Decided March 1, 1943.

[Syllabus from pages 218-220 intentionally omitted] Mr. Valentine Brookes, of San Francisco, Cal., for petitioner.

Mr. George I. Haight, of Chicago, Ill., for respondent.

Mr. Chief Justice STONE delivered the opinion of the Court.

The Federal Security Administrator, acting under §§ 401 and 701(e), of the Federal Food, Drug and Cosmetic Act, 52 Stat. 1040, 1046, 1055, 21 U.S.C. §§ 341, 371, 21 U.S.C.A. §§ 341, 371, promulgated regulations establishing 'standards of identity' for various milled wheat products, excluding vitamin D from the defined standard of 'farina' and permitting it only in 'enriched farina', which was required to contain vitamin B1, riboflavin, nicotinic acid and iron. The question is whether the regulations are valid as applied to respondent. The answer turns upon (a) whether there is substantial evidence in support of the Administrator's finding that indiscriminate enrichment of farina with vitamin and mineral contents would tend to confuse and mislead consumers; (b) if so, whether, upon such a finding, the Administrator has statutory authority to adopt a standard of identity, which excludes a disclosed nondeleterious ingredient, in order to promote honesty and fair dealing in the interest of consumers; and (c) whether the Administrator's treatment, by the challenged regulations, of the use of vitamin D as an ingredient of a product sold as 'farina' is within his statutory authority to prescribe 'a reasonable definition and standard of identity.'

Section 401 of the Act provides that 'Whenever in the judgment of the Administrator such action will promote honesty and fair dealing in the interest of consumers, he shall promulgate regulations fixing and establishing for any food, under its common or usual name so far as practicable, a reasonable definition and standard of identity. * * * In prescribing a definition and standard of identity for any food or class of food in which optional ingredients are permitted, the Administrator shall, for the purpose of promoting honesty and fair dealing in the interest of consumers, designate the optional ingredients which shall be named on the label.' By § 701(e) the Administrator, on his own initiative or upon application of any interested industry or a substantial part of it, is required to 'hold a public hearing upon a proposal to issue, amend, or repeal any regulation contemplated by' § 401. At the hearing 'any interested person may be heard'. The Administrator is required to promulgate by order any regulation he may issue, to 'base his order only on substantial evidence of record at the hearing', and to 'set forth as part of the order detailed findings of fact on which the order is based.' ¹

Any food which 'purports to be or is represented as a food for which a definition and standard of identity has been prescribed' pursuant to § 401 is declared by § 403(g) to be misbranded 'unless (1) it conforms to such definition and standard, and (2) its label bears the name of the food specified in the definition and standard, and, insofar as may be required by such regulations, the common names of optional ingredients * * * present in such food'. The shipment in interstate commerce of 'misbranded' food is made a penal offense by §§ 301 and 303. 'In a case of actual controversy as to the validity' of an order issuing regulations under §§ 401 and person 'adversely affected' by it may secure its review on appeal to the Circuit Court of Appeals for the circuit of his residence or principal place of business. On such review the findings of the Administrator 'as to the facts, if supported by substantial evidence, shall be conclusive.' § 701(f)(1), (f)(3).

After due notice² and a hearing in which respondent participated, the Administrator by order promulgated regulations establishing definitions and standards of identity for sixteen milled wheat products, including 'farina' and 'enriched farina'. Regulation 15.130 defined 'farina' as a food prepared by grinding and bolting cleaned wheat, other than certain specified kinds, to a prescribed fineness with the bran coat and germ of the wheat berry removed to a prescribed extent. The regulation made no provision for the addition of any ingredients to 'farina'. Regulation 15.140 defined 'enriched farina' as conforming to the regulation defining 'farina', but with added prescribed minimum quantities of vitamin B1, riboflavin,³ nicotinic acid (or nicotinic acid amide) and iron. The regulation also provided that minimum quantities of vitamin D, calcium, wheat germ or disodium phosphate might be added as optional ingredients of 'enriched farina', and required that ingredients so added be specified on the label. In support of the regulations the Administrator found that 'unless a sandard' for milled wheat products 'is promulgated which limits the kinds and amounts of enrichment, the manufacturers' selection of the various nutritive elements and combinations of elements on the basis of economic and merchandising considerations is likely to lead to a great increase in the diversity, both qualitative and quantitative, in enriched flours offered to the public. Such diversity would tend to confuse and mislead consumers as to the relative value of the need for the several nutritional elements, and would impede rather than promote honesty and fair dealing in the interest of consumers.'

On respondent's appeal from this order the Court of Appeals for the Seventh Circuit set it aside, 129 F.2d 76, 82, holding that the regulations did not conform to the statutory standards of reasoanbleness, that the Administrator's findings as to probable consumer confusion in the absence of the prescribed standards of identity were without support in the evidence and were 'entirely speculative and conjectural', and that in any case such a finding would not justify the conclusion that the regulations would 'promote honesty and fair dealing in the interest of consumers.' We granted certiorari, 317 U.S. 616, 63 S.Ct. 158, 87 L.Ed. —-, because of the importance of the questions involved to the administration of the Food, Drug and Cosmetic Act.

Respondent, The Quaker Oats Company, has for the past ten years manufactured and marketed a wheat product commonly used as a cereal food, consisting of farina as defined by the Administrator's regulation, but with vitamin D added. Respondent distributes this product in packages labeled 'Quaker Farina Wheat Cereal Enriched with Vitamin D', or 'Quaker Farina Enriched by the Sunshine Vitamin'. The packages also bear the label 'Contents 400 U.S.P. units of Vitamin D per ounce, supplied by approximately the addition of 1/5 of 1 percent irradiated dry yeast'.

Respondent asserts, and the Government agrees, that the Act as supplemented by the Administrator's standards will prevent the marketing of its product as 'farina' since, by reason of the presence of vitamin D as an ingredient, it does not conform to the standard of identity prescribed for 'farina', and that respondent cannot market its product as 'enriched farina' unless it adds the prescribed minimum quantities of vitamin B1, riboflavin, nicotinic acid and iron. Respondent challenges the validity of the regulations on the grounds sustained below and others so closely related to them as not to require separate consideration.

As appears from the evidence and the findings, the products of milled wheat are among the principal items of the American diet, particularly among low income groups.⁴ Farina, which is a highly refined wheat product resembling flour but with larger particles is used in macaroni, as a breakfast food, and extensively as a cereal food for children. It is in many cases the only cereal consumed by them during a period of their growth. Both farina and flour are manufactured by grinding the whole wheat and discarding its bran coat and germ. This process removes from the milled product that part of the wheat which is richest in vitamins and minerals, particularly vitamin B1, riboflavin, nicotinic acid and iron valuable food elements which are often lacking in the diet of low income groups. In their diet, especially in the case of children, there is also frequently a deficiency of calcium and vitamin D, which are elements not present in wheat in significant quantities. Vitamin D, whose chief dietary value is as an aid to the metabolism of calcium, is developed in the body by exposure to sunlight. It is derived principally from cod liver and other fish oils. Milk is the most satisfactory source of calcium in digestible form, and milk enriched by vitamin D is now on the market.

In recent years millers of wheat have placed on the market flours and farinas which have been enriched by the addition of various vitamins and minerals. The composition of these enriched products varies widely.⁵ There was testimony of weight before the Administrator, prin- cipally by expert nutritionists, that such products, because of the variety and combination of added ingredients, are widely variable in nutritional value; and that consumers generally lack knowledge of the relative value of such ingredients and combinations of them.

These witnesses also testified, as did representatives of consumer organizations which had made special studies of the problems of food standardization, that the number, variety and varying combinations of the added ingredients tend to confuse the large number of consumers who desire to purchase vitamin-enriched wheat food products but who lack the knowledge essential to discriminating purchase of them; that because of this lack of knowledge and discrimination they are subject to exploitation by the sale of foods described as 'enriched', but of whose inferior or unsuitable quality they are not informed. Accordingly a large number of witnesses recommended the adoption of definitions and standards for '...