Cutler v. Hayes

• Decision Date: 03 November 1982
• Docket Number: Civ. A. No. 81-2092.
• Citation: 549 F. Supp. 1341
• Parties: Mimi CUTLER, Stephen D. Annand, National Council of Senior Citizens, Plaintiffs, v. Dr. Arthur Hull HAYES, Jr., Commissioner, Food and Drug Administration, Richard S. Schweiker, Secretary, Department of Health and Human Services, Defendants, The Proprietary Association, Inc., Intervenor-Defendant.
• Court: U.S. District Court — District of Columbia

549 F. Supp. 1341

Mimi CUTLER, Stephen D. Annand, National Council of Senior Citizens, Plaintiffs, v. Dr. Arthur Hull HAYES, Jr., Commissioner, Food and Drug Administration, Richard S. Schweiker, Secretary, Department of Health and Human Services, Defendants The Proprietary Association, Inc., Intervenor-Defendant.

Civ. A. No. 81-2092.

United States District Court, District of Columbia.

November 3, 1982.

William B. Schultz, Katherine A. Meyer, Public Citizen Litigation Group, Washington, D.C., for plaintiffs.

Jeffrey N. Gibbs, Asst. U.S. Atty., U.S. Dist. Court, Washington, D.C., for defendants.

Robert A. Altman, Washington, D.C., for intervenor-defendant.

MEMORANDUM AND ORDER

JACKSON, District Judge.

This case represents another engagement in the war being waged by several public interest groups against the Food and Drug Administration ("FDA") over the adequacy of its regulation of the over-the-counter ("OTC") drug market. Plaintiffs are Mimi Cutler and Stephen Annand, individuals who claim that they are consumers of OTC drugs, and the National Council of Senior Citizens ("NCSC"), on behalf of its members who use OTC drugs. The defendants are Arthur Hayes, Commissioner of the Food and Drug Administration; Richard Schweiker, Secretary of the Department of Health and Human Services (collectively, "FDA"); and The Proprietary Association, Inc. ("PA"),¹ a trade association whose members manufacture OTC drugs. The complaint alleges that certain FDA regulations concerning the "OTC review" referred to infra violate the Federal Food, Drug, and Cosmetic Act, as amended ("FDC Act"), 21 U.S.C. § 301 et seq. (1976) and this Court's prior decision in Cutler v. Kennedy, 475 F.Supp. 838 (D.D.C.1979) which began as Health Research Group v. Kennedy, Civil Action No. 77-0734, and survived dismissal on standing grounds, 82 F.R.D. 21 (D.D.C. 1979), by adding the same individual plaintiffs. Plaintiffs also allege that the FDA has abdicated its statutory duty to enforce the FDC Act against manufacturers who sell OTC drugs which fail to meet the Act's standards and that the FDA's failure to complete its OTC review constitutes an "unreasonable delay" in violation of the Administrative Procedure Act, 5 U.S.C. §§ 555(e), 706(1). The original parties have filed cross-motions for summary judgment, and the intervenor-defendant has filed a motion for judgment on the pleadings. The intervenor has also moved to dismiss on grounds that the plaintiffs lack standing and have failed to exhaust administrative remedies.

Standing and Exhaustion of Remedies

The PA claims that the plaintiffs are sham participants in this action, solicited by Public Citizen and the Health Research Group to permit them to maintain a suit otherwise barred by the decision in Health Research Group v. Kennedy, 82 F.R.D. 21 (D.D.C.1979). The Court finds it unnecessary to become embroiled in the continuing controversy between these parties over the standing of consumer groups, because it concludes that the issue was decided in Cutler v. Kennedy, and the PA is collaterally estopped to challenge the standing of plaintiffs Cutler and Annand.

The doctrine of collateral estoppel provides that "once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation." Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979). It precludes parties from contesting matters already fully litigated, protects their adversaries from the burdens attending multiple lawsuits, conserves judicial resources, and minimizes the risk of inconsistent decisions, Id., at 153-54, 99 S.Ct. at 973-74, and these purposes are equally served when the doctrine is applied to jurisdictional questions as to the merits. American Surety Co. v. Baldwin, 287 U.S. 156, 53 S.Ct. 98, 77 L.Ed. 231 (1932); Miller v. Saxbe, 396 F.Supp. 1260 (D.D.C.1975); Zoriano Sanchez v. Caribbean Carriers, Ltd., 552 F.2d 70 (2d Cir.1977). Cutler, Annand, and the PA were all parties to the prior proceeding.² The only remaining inquiry is whether the issue presented in the two proceedings is substantially the same. Schneider v. Lockheed Aircraft Corp., 658 F.2d 835, 852 (D.C.Cir.1981).

In Cutler v. Kennedy plaintiffs challenged the continued marketing of certain OTC drugs which had not been affirmatively shown to meet the FDC Act's standards. Their standing derived from their increased risk of exposure to drugs which were substandard. 475 F.Supp. at 848. In this case the plaintiffs allege that the regulations as revised following the decision in Cutler have not alleviated that exposure risk. The parties and the threatened injury being the same in both cases, the standing issue is identical and was conclusively determined in the prior proceeding.³

Intervenor-defendant PA also argues that plaintiffs have failed to exhaust their administrative remedies. This action, however, is ancillary to Cutler v. Kennedy and is, in essence, a suit to vindicate plaintiffs' limited victory there to which, they assert, the FDA has been less than amenable beyond revising the disputed regulation. The FDA did not raise the exhaustion issue in Cutler and has not raised it here. Assuming without deciding that it is an issue which can be raised by PA when waived by the agency itself, it is patently clear that the FDA does not concede plaintiffs are entitled to relief they seek now whether at the FDA or in this Court. In these circumstances resort to the agency would be not only futile but wasteful as well. See Mathews v. Diaz, 426 U.S. 67, 76, 96 S.Ct. 1883, 1889, 48 L.Ed.2d 478 (1976); Natural Resources Defense Council v. Train, 510 F.2d 692, 703 (D.C.Cir.1975).

The FDA Regulations

The statutory scheme under which the FDA regulates the nation's drug markets was set out in detail by the court in Cutler v. Kennedy, and a synopsis will suffice here.

The Federal Food, Drug, and Cosmetic Act of 1938, established a premarketing license system only for "new drugs," defined in the original act as those not generally recognized by qualified experts as safe for their intended use. Prior to marketing a new drug, the manufacturer is required to submit a "new drug application" ("NDA") for approval by the FDA. 21 U.S.C. § 355(a). The Drug Amendments Act of 1962 expanded the scope of this premarketing clearance by redefining a "new drug" as one not generally recognized being as both safe and effective for its intended use. 21 U.S.C. § 321(p). By definition, therefore, any drug which is generally recognized as safe and effective ("GRAS/E") is not a new drug and is exempt from the NDA requirement. Cutler v. Kennedy, 475 F.Supp. at 841.

Although the FDC Act provides for the imposition of substantial penalties upon a producer who sells a "new drug" without an NDA, the Act does not require any administrative determination of a drug's status prior to its introduction into the marketplace. A manufacturer who concludes that his drug meets the GRAS/E requirements⁴ customarily distributes the product without first seeking FDA approval — whether he does so lawfully depends, of course, upon whether it is, in fact, GRAS/E. The vast majority of OTC drugs are marketed in this manner.

The 1962 amendments also contained transitional provisions for drugs placed on the market since 1938 and mandated an FDA review of all drugs covered by NDAs,⁵ although no corresponding review of GRAS/E products was required. In 1972, however, the FDA announced that it would, on its own initiative, begin a comprehensive review of OTC drugs to establish "conditions" under which they could be lawfully marketed. 37 Fed.Reg. 85 (Jan. 5, 1972). In lieu of reviewing the estimated 100,000-500,000 OTC products individually for safety and effectiveness, the agency decided it would focus on the seven hundred or so active ingredients used in all OTC drugs and, through rule-making, promulgate "monographs" stating the conditions under which the particular ingredients can be recognized as GRAS/E. 37 Fed.Reg. 9464 (May 11, 1972).

The OTC review proceeds in four steps. In the first, now completed, advisory panels of experts analyzed test data and submitted their recommendations to the FDA in the form of a monograph establishing permissible use and labeling standards for each drug, 21 C.F.R. § 330.10(a)(5), the process having taken each panel anywhere from four to seven years to complete. Next, the FDA reviews each monograph and publishes it in the Federal Register for public comment and the submission of additional information concerning a product's safety and effectiveness. 21 C.F.R. § 330.10(a)(6). In the third stage, after reviewing the comments submitted, the FDA publishes a tentative final monograph ("TFM") and provides the public with opportunity to file objections to the TFM or to request an oral hearing. 21 C.F.R. §§ 330.10(a)(7), 330.10(a)(8). No additional data or information concerning a drug's effectiveness may be submitted to the agency at this point, however, unless the FDA grants a petition to reopen the record. 21 C.F.R. § 330.10(a)(10)(ii). Finally, the FDA reviews the entire administrative record and issues a final monograph ("FM"), the agency's conclusive and legally binding determination regarding the conditions under which a drug is GRAS/E.

While the review was underway the FDA devised a system of administrative triage to assign a drug to one of three categories. Category I drugs were those which met conditions under which they would be GRAS/E. In Category II were those which did not. Category III drugs were those for which the available data was insufficient to make a determination either way. See 21 C.F.R. §§ 330.10(a)(5) (1978). When the FDA adopted a regulation which purported to authorize the continued marketing of Category III drugs after the issuance of a final monograph, 21 C.F.R. § 330.10(a)(13)...