Carl Borchsenius Co. v. Gardner

• Decision Date: 15 March 1968
• Docket Number: Civ. A. No. 68-321.
• Citation: 282 F. Supp. 396
• Parties: CARL BORCHSENIUS CO., Inc., Plaintiff, v. John W. GARDNER, U. S. Secretary of Health, Education and Welfare, and C. C. Freeman, Acting Director, Food and Drug Administration, New Orleans, La., Defendants.
• Court: U.S. District Court — Eastern District of Louisiana

282 F. Supp. 396

CARL BORCHSENIUS CO., Inc., Plaintiff, v. John W. GARDNER, U. S. Secretary of Health, Education and Welfare, and C. C. Freeman, Acting Director, Food and Drug Administration, New Orleans, La., Defendants.

Civ. A. No. 68-321.

United States District Court E. D. Louisiana, New Orleans Division.

March 15, 1968.

Henry J. Read, John B. Gooch, Jr., New Orleans, La., for plaintiff.

Joan Elaine Chauvin, Asst. U. S. Atty., New Orleans, La., for defendants.

CASSIBRY, District Judge:

This is a proceeding in the nature of mandamus in which the plaintiff, Carl Borchsenius Co., Inc., a New York corporation, consignee of a shipment of coffee intended for import, is seeking to compel the defendants, John W. Gardner, Secretary of Health, Education and Welfare, and C. C. Freeman, Acting District Director, Food and Drug Administration, New Orleans, Louisiana, to release for export a portion of the shipment found to be so damaged that it could not be brought into compliance with the Food, Drug, and Cosmetic Act. The defendants are withholding the release for import of the sound coffee on the condition that the unsound coffee be destroyed.

The shipment of 5,000 bags of coffee, weighing 665,000 pounds with an estimated invoice value of $227,000, arrived at the Port of New Orleans from Paranagua, Brazil aboard the Mario D'Almeida on November 21, 1967. Admission for import of this shipment was sought by the filing of a "Consumption Entry" on November 24, 1967 with the Bureau of Customs in New Orleans offering the coffee for import as twenty-five hundred bags marked ALFER CBC 301/LX1 and twenty-five hundred bags marked ALFER CBC 301/LV1. The unloading of the vessel had commenced on November 21, but the 5,000 bags of coffee here involved were not unloaded until November 30 and December 1. Before their removal from the ship certain of the bags were damaged by contact with water, although it is not known exactly how the coffee got wet.

A wharf examination of the shipment by a United States Food and Drug Inspector on December 1 disclosed damp, moldy coffee in four of the six samples taken in the inspection. Approximately 1,500 bags were wet and some contained moldy coffee. The entire shipment of 5,000 bags was detained by the Food and Drug Administration in accordance with the import provisions of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 381, and notice was given of opportunity, among other things, to present evidence as to the manner in which the coffee could be brought into compliance with the Act.

On December 1, plaintiff filed an application for authorization pursuant to 21 U.S.C. § 381(b) to attempt to bring the 5,000 bags of coffee into compliance with the Act by the procedure of "skimming the coffee to remove molded beans" and "drying the coffee out to remove wet beans." This authorization was given on December 4. Reconditioning of the coffee had actually begun, however, before the approval was given because of the fact that, if not dried immediately, more coffee would mold. The coffee had been moved to and the reconditioning was done at the warehouse of Dupuy Storage and Forwarding Corporation on Decatur Street in New Orleans.

Of the 5,000 bags, examination showed 2,325 to be sound, and upon request of plaintiff's representative these bags were released under a partial release of the shipment on December 8. The reconditioning of the remainder of the shipment was finished by December 20, and the Import Inspector's examination showed on December 21 that, of the 2,789 bags received for reconditioning, 1,730 bags were made sound and thus brought into compliance with the law, 270 bags were poor skims, 231 bags were sweepings, and 1,053 bags were too poor to skim due to mold.

On December 26, the defendant C. C. Freeman, Acting Director of the Food and Drug Administration for this District, advised the plaintiff's representative by letter that a "Release Notice" on the 1,730 bags made sound would be issued upon receipt of proof of destruction of the remaining 270 bags of poor skims, 231 bags of sweepings and 1,053 bags of moldy coffee in original bags. The plaintiff had no objection to destruction of the 270 bags of poor skims and the 231 bags of sweepings, but its representative requested on January 2, 1968 that the 1730 bags of "made sound" coffee be released for import and that it be allowed to burnish, rebag and export the 1,053 bags which had not been reconditioned. The request to burnish, rebag and export was denied by Acting Director Freeman by letter of January 3 in which he advised:

"* * * Had your original intention been to export the entire lot, we would have issued a Refusal of Admission which would have permitted this. However you elected to bring these lots into compliance * * *. Now, under no circumstances can we allow that portion of the shipment in which the damage was concentrated to be exported. These bags are rejects from a reconditioning operation and must be destroyed under customs' supervision. "* * *

"As we advised you in our letter of December 26, 1967, we will issue release on the 1,730 bags of `made sound' coffee upon receipt of proof of destruction of the 1,053 bags of moldy coffee, the 270 bags of poor skims and the 231 bags of sweepings."

On February 6, plaintiff's representative requested permission to export the 1,053 bags of unreconditioned coffee in the original bags, without burnishing and rebagging, which was refused, and this action followed on February 15.

Proceeding by summary process on an allegation of necessity to avoid deterioration of the coffee, the plaintiff contended that the coffee was being illegally detained by the defendants (1) because the 1,730 bags of sound coffee met the standards for importation; (2) because the 1,053 bags which have not been reconditioned have substantial commercial value for exportation to the country of origin and/or to European markets and the law permits the export of these bags upon compliance with the provisions of 21 U.S.Code § 334(d) and 21 U.S.Code § 381(a), (b) and (d); (3) and because the demand for destruction of the 1,053 unreconditioned bags of coffee as a condition precedent for the release of the 1,730 bags of admittedly sound coffee is arbitrary, capricious, and contrary to the applicable statutes. The plaintiff prayed that this Court order the defendants:

(1) to release from custody for importation into the United States 1730 bags of reconditioned sound coffee, consisting of 760 bags marked ALFER CBC 301/LV-1 and 970 bags marked ALFER CBC 301/LX-1, which are presently being detained by the defendants in the warehouse of Dupuy Storage and Forwarding Corporation; and

(2) to release from custody for export 1053 bags (out of the original shipment of 5000 bags marked ALFER CBC 301/LV-1 and ALFER CBC 301/LX-1), which 1053 bags have not been reconditioned and remain in the original bags in which they were shipped, and which are detained by defendants in the warehouse of Dupuy Storage and Forwarding Corporation, upon compliance with the requirements of the applicable statutes.

The defendants were ordered to show cause on February 28 why the relief prayed for should not be granted.

On February 23, the defendants filed a motion to dismiss based on the grounds that (1) the Court lacks jurisdiction over the subject matter, and (2) the complaint seeking relief in the nature of mandamus fails to state a claim upon which relief can be granted; and filed a motion for summary judgment on the ground that there is no genuine issue as to any material fact and thus defendants are entitled to judgment as a matter of law. These motions were set for hearing on February 28 also.

At the hearing all parties were given the opportunity to present all evidence relevant to any issue in the case. There is essentially no dispute as to the facts of the case concerning the water damage to the coffee and the disposition of the shipment under the supervision of the Food and Drug Administration. A coffee surveyor, John P. McKee, familiar with this coffee shipment, testified for the plaintiff that in his opinion the 1,053 bags of unreconditioned coffee has a commercial net value for export of $20 to $25 per bag. According to him Belgium and Holland has a market for coffee in this condition, and after Hurricane Betsy in 1965 a quantity of coffee in worse condition than this was exported with his arrangements. The defendants' witness Paul J. Dugas, a Food and Drug Administration Import Inspector, testified as to the mold and decomposition of the coffee beans in samples taken and these were introduced into evidence, but he admitted that he had no intention to testify about their potential value for export.

Mr. Dugas explained that skimming was a process whereby the bag of coffee is laid flat on an even surface, the top of the bag is cut off and the moldy coffee skimmed off in a way to insure that no moldy coffee remains. "Sweepings" are the coffee spilled in the ship and on the wharf when bags break in the unloading of vessels. These "sweepings" are routinely exported according to him.

There is no serious dispute between the parties as to the law applicable to judicial authority in this case to review the administrative agency action. The plaintiff contends that the Court has jurisdiction to consider the case under 28 U.S.C. § 1361,¹ and authority to grant the relief sought under the provisions of the Administrative Procedure Act, 5 U.S.C. § 702,² because the Food and Drug Administration of the Department of Health, Education and Welfare has exceeded the statutory authority granted the administrative agency under 21 U.S.C. § 381(b).

All of the defendants arguments as to lack of jurisdiction and lack of authority to render relief in the nature of mandamus are based on the contention that the agency was acting within the scope of discretionary authority under the statute in the handling of this coffee shipment offered for import.

The...