Estee Lauder, Inc. v. US Food & Drug Admin.

• Decision Date: 16 June 1989
• Docket Number: Civ. A. No. 88-2741.
• Court: U.S. District Court — District of Columbia
• Parties: ESTEE LAUDER, INC., Plaintiff, v. UNITED STATES FOOD & DRUG ADMINISTRATION, et al., Defendants.

727 F. Supp. 1

ESTEE LAUDER, INC., Plaintiff, v. UNITED STATES FOOD & DRUG ADMINISTRATION, et al., Defendants.

Civ. A. No. 88-2741.

United States District Court, District of Columbia.

June 16, 1989.

William R. Pendergast, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D.C., for plaintiff.

Heidi A. Garland, Dept. of Justice, Office of Consumer Litigation, Washington, D.C., Mary K. Pendergast, Office of the General Counsel, Dept. of Health & Human Services, Food and Drug Div., Rockville, Md., for defendants.

MEMORANDUM OPINION

AUBREY E. ROBINSON, Jr., Chief Judge:

Plaintiff Estee Lauder Inc. ("Lauder"), a cosmetic manufacturer, filed a complaint on September 23, 1988, seeking a declaration that a Food and Drug Administration ("FDA" or "Administration") employee's position regarding proposed labeling is unlawful, unreasonable, arbitrary, and capricious. In a September 2, 1988, letter, the employee had advised Lauder that its proposed labeling of certain skin creams would render the products "drugs," which could only be sold if Lauder secured FDA approval for them or could show that the products were generally recognized as safe and effective by qualified experts. Plaintiff also seeks an injunction barring the FDA from taking legal action against any of its products based upon that employee's interpretation of the Federal Food, Drug, and Cosmetic Act ("FDCA" or "Act"), 21 U.S.C. § 321(g)(1)(C). Claiming there are no genuine issues of material fact, plaintiff filed a motion for summary judgment in November 1988.

Also in November 1988, the government moved to dismiss the complaint pursuant to Rule 12(b)(1) and (6) of the Federal Rules of Civil Procedure. The government argues that the case is not ripe for adjudication, that Lauder has failed to exhaust its administrative remedies, and that this Court does not otherwise have jurisdiction to enjoin the FDA from instituting enforcement actions.

This Court heard oral argument on these motions on April 19, 1989. The legal memoranda, supporting exhibits, final arguments, and post-hearing memoranda have all been fully considered. For the reasons set forth below, the Court grants the government's motion to dismiss and denies plaintiff's motion for summary judgment.

I. BACKGROUND

The Food and Drug Administration enforces the FDCA, which provides for different and more stringent regulation of drugs than of cosmetics. The FDA is authorized to take action against cosmetic manufacturers that make false and deceptive therapeutic claims about their products. The Administration and Lauder have engaged in lengthy discussions over certain Lauder cosmetics; they have disputed whether these products were being touted as having the effect of drugs and they have argued over the proper labeling of these goods. Given this context, it is appropriate to begin with a review of the statutory scheme of the laws regulating drugs and cosmetics.

A. "DRUG" AND "COSMETIC" STATUTES

Because drugs and cosmetics are subject to different regulations regarding testing, approval, labeling, and advertisement, the products are distinctly described in the Federal Food, Drug, and Cosmetic Act. The FDCA defines "drugs" as:

Articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease ... and articles ... intended to affect the structure or any function of the body....

21 U.S.C. § 321(g)(1). "Cosmetics," on the other hand, are defined as:

Articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance....

21 U.S.C. § 321(i)(1).

While both drugs and cosmetics are subject to the misbranding and adulteration provisions of the FDCA, 21 U.S.C. §§ 351, 361 (adulteration), 21 U.S.C. §§ 352, 362 (misbranding), drugs are subject to much stricter regulatory requirements. For example, it is well-established that drugs must comply with registration and labeling requirements. 21 U.S.C. §§ 360, 352(e), (f), (o), (p). Even more important, a drug cannot be sold until it is either specifically approved by the FDA or the manufacturer shows that the drug is generally recognized as safe and effective by qualified experts. 21 U.S.C. § 355; 21 U.S.C. § 321(p)(1). The FDA has no authority, however, to review cosmetics before they are marketed.

Some products, such as a skin cream, can be both a cosmetic and a drug under the FDCA. If a product is both, it must comply with the stricter requirements applicable to drugs. United States v. An Article ... "Sudden Change", 409 F.2d 734, 739 (2d Cir.1969) (citations omitted). Courts have held that the decision as to whether a product is a drug depends on its "intended use", which can be determined from objective evidence such as the product's current and past containers, instructions, and advertisements. Nutrilab v. Schweiker, 713 F.2d 335 (7th Cir.1983); National Nutritional Foods Ass'n v. Mathews, 557 F.2d 325, 334 (2d Cir.1977); United States v. An Article ... "Line Away" ..., 415 F.2d 369, 371-72 (3d Cir.1969); "Sudden Change", 409 F.2d at 738-39.

B. FACTUAL BACKGROUND

In early 1987, Daniel L. Michels, Director of the Office of Compliance for the Center for Drugs and Biologics at the FDA, wrote to more than 20 cosmetic manufacturers and distributors. The Administration objected to particular claims¹ made by these companies in the marketing of certain anti-aging or anti-wrinkle creams. On April 17, 1987, Michels wrote to Lauder, opposing some of the claims made for seven Lauder skin creams.² Pltf.'s Ex. A; Defts.' Ex. 1. This "regulatory letter" reviewed the then-current labeling for the products, pointing out the claims that Michels believed were drug claims. Because these labels presented Lauder's products as affecting the structure or function of the body, they were currently being considered as drugs by the FDA. Michels requested that the company take prompt action to correct the violations. In addition, he warned Lauder that the Administration was prepared to invoke sanctions such as seizures or injunctions pursuant to provisions in the FDCA. Finally, he asked that Lauder advise the FDA of the firm's actions.

In response to Michels's regulatory letters, twelve companies wrote and later met with the FDA in May and July 1987. As a result of these communications, in September 1987, the coalition sent John M. Taylor, FDA's Associate Commissioner for Regulatory Affairs, a proposal which attempted to devise a framework for distinguishing between cosmetic and drug categories. Pltf.'s Ex. D; Defts.' Ex. 2. On November 18, 1987, Taylor advised the firms that he did not agree with their proposed mechanism for distinguishing between cosmetics and drugs. He was particularly concerned over the continued marketing of skin creams with anti-aging claims. The firms were requested to respond within 30 days regarding measures they would take to correct the objectionable claims identified in the regulatory letter.

After numerous letters, telephone conversations, and meetings, Lauder submitted a proposal to the FDA for revising its products' claims. This letter of December 18, 1987, was Lauder's first individual response, or its "initial response" to Michels's regulatory letter. Pltf.'s Ex. F; Defts.' Ex. 4. In a letter dated March 24, 1988, Taylor responded to Lauder, reiterating his views that the company's labels violated the FDCA. Pltf.'s Ex. H; Defts.' Ex. 5. Four days later, counsel for Lauder met with a different FDA official, asking for guidelines for industry assistance. Lauder followed up this meeting with a letter dated May 4, 1988, indicating that the company was eliminating older promotional materials. Pltf.'s Ex. I; Defts.' Ex. 6. A month later, an FDA official from the Office of Compliance, Ms. Roma Jeanne Krause, wrote back to Lauder, notifying the company that its response to the regulatory letter did not bring its products in compliance with the laws. Pltf.'s Ex. K; Defts.' Ex. 7. Ms. Krause stated that Lauder's responses were inadequate because the company had not dropped its claims that its products repaired the aging process of the skin, that it had added an over-the-counter drug ingredient to several products, and that it had not submitted any examples of revised labeling to FDA.

On July 12, 1988, Lauder submitted proposed revised labeling for the seven skin creams and lotions referred to in Michels's April 17, 1987 regulatory letter. Pltf.'s Ex. M; Defts.' Ex. 8. See note 2 supra. In a letter dated September 2, 1988, Michels commented on the proposed labels, advising Lauder that some of the revised labeling continued to be objectionable because claims were still being made for skin repair. Pltf.'s Ex. N; Defts.' Ex. 9. He gave specific objections to the claims made in the labeling of five products and requested that these claims be removed. Finally, he asked that if Lauder was unwilling to make the changes identified, it so advise the FDA in 10 days. On September 13, 1988, Lauder stated that it would contact Michels "as soon as possible." Defts.' Ex. 10. Instead of contacting Michels, Lauder filed this lawsuit on September 23, 1988.

II. GOVERNMENT'S MOTION TO DISMISS

A. RIPENESS

The government seeks dismissal by asserting that the issues are not ripe for judicial review because Lauder's claims do not raise purely legal questions and because the FDA's challenged position does not constitute final agency action.

In deciding whether a controversy is ripe for review, a court must evaluate "both the fitness of the issue for judicial decision and the hardship to the parties of withholding court consideration." Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 1516, 18 L.Ed.2d 681 (1967). The "fitness" determination calls on the court to consider three factors: whether the issue raised is a purely legal one; whether immediate judicial review is...