Glass Packaging Institute v. Regan
| Decision Date | 06 July 1984 |
| Docket Number | No. 83-1390,83-1390 |
| Citation | 737 F.2d 1083 |
| Parties | , 237 U.S.App.D.C. 378 GLASS PACKAGING INSTITUTE, et al., Appellants v. Donald T. REGAN, Secretary of the Treasury, et al. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Michael S. Kelley, Washington, D.C., with whom Miles W. Kirkpatrick, Caswell O. Hobbs, III, Janine Sweeney Frias and Scott Stempel, Washington, D.C., were on the brief for appellants. Howard T. Weir, Washington, D.C., also entered an appearance.
Joseph W. LoBue, Asst. U.S. Atty., with whom Stanley S. Harris, U.S. Atty., Royce C. Lamberth, R. Craig Lawrence and Michael J. Ryan, Asst. U.S. Attys., and Robert M. Tobias, Atty., Bureau of Alcohol, Tobacco and Firearms, Washington, D.C., were on the brief, for appellees Regan, Secretary of Treasury, et al. Lee S. Strickland, Asst. U.S. Atty., Washington, D.C., also entered an appearance.
Jerome H. Heckman, Washington, D.C., with whom John B. Dubeck, Peter L. de la Cruz and Ilene R. Heller, Washington, D.C., were on the brief for appellee Society of Plastics Industry, Inc.
Before WILKEY and GINSBURG, Circuit Judges, and MacKINNON, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge WILKEY.
The Glass Packaging Institute, a trade association of glass bottle manufacturers, and its president, William W. Sadd, brought this suit to block a decision by the Bureau of Alcohol, Tobacco and Firearms permitting liquor to be packaged and sold in plastic polyethylene terephthalate bottles. The plaintiffs argue that this administrative ruling is unlawful because it was promulgated without notice and comment. They also assert that the risk of criminal tampering with polyethylene terephthalate bottles should have been considered in the environmental assessment prepared by the agency. The district court rejected both these claims. We affirm the district court's decision, concluding that plaintiffs lack standing to challenge alleged procedural deficiencies in the administrative process, and that the agency's environmental assessment was not defective.
The types of materials that may be used to package alcoholic beverages are regulated by two federal agencies, the Food and Drug Administration ("FDA") and the Bureau of Alcohol, Tobacco and Firearms ("Bureau"). Although these agencies serve diverse statutory goals, their respective regulatory domains partially overlap. Consequently, bottlers of alcoholic beverages must comply with the dual sets of regulations promulgated by these agencies.
The FDA is charged with the primary responsibility of safeguarding the lives and health of consumers of food and drugs. The Federal Food, Drug, and Cosmetic Act prohibits the use of a "food additive" unless that use conforms to FDA regulations. 1 Alcoholic beverages are foods, 2 and liquor bottles are considered additives 3 under the definitional sections of this Act. Consequently, distillers wishing to bottle alcoholic beverages using a packaging material not currently on the market must seek FDA approval before using the new substance.
This process is usually commenced by filing a food additive petition with the FDA, which then publishes a notice in the Federal Register. After evaluating the potential impact on the public health and safety of the use of the proposed substance, as well as considering the accompanying environmental effects, the petition is either granted or denied. Approval of the petition is usually effectuated by an amendment to the FDA's food additive regulations permitting anyone to use the newly approved packaging material subject to any limitations or guidelines contained in the amended regulations. 4
The second series of regulations governing the packaging of alcoholic beverages exists to regulate tax revenues. The United States levies a tax on each gallon of distilled spirits produced in or imported into the United States, based on the volume of alcohol contained in the beverage. 5 The Secretary of the Treasury is charged with the responsibility of collecting these revenues. Because the integrity of the packaging materials can have a direct effect on the volume of alcohol and, consequently, the amount of tax to be collected, the use and refilling of liquor bottles are strictly regulated. 6 Under authority delegated by the Secretary of the Treasury, 7 "whenever in [its] judgment such action is necessary to protect the revenue," the Bureau is authorized (1) "to regulate the kind, size, branding, marking, sale, resale, possession, use, and reuse of containers ... designed or intended for use for the sale of distilled spirits," and (2) to require persons manufacturing these containers to submit to inspections, to keep records, and to file reports as prescribed by the Bureau regulations. 8 Regulations promulgated by the Bureau pursuant to this authorization require that containers used for liquor bottles be made from materials which it has approved as adequately protecting tax revenues.
In 1973, after notice and comment rulemaking proceedings, the FDA approved the use of polyethylene terephthalate plastic in containers used for alcoholic beverages not exceeding fifty percent alcohol by volume. These beverages include beer, wine, and many liquors falling within the Bureau definition of distilled spirits. 9 Anticipating that several distillers might eventually request clearance to use this type of plastic in packaging distilled spirits, in 1976 the Bureau issued an industry circular notifying proprietors of distilled spirits plants of the procedures to be followed to obtain authorization to use new plastic compounds in liquor bottles. These steps included submitting sample bottles for use in Bureau testing, and providing verification that the plastic packaging compound meets all applicable FDA requirements for packaging alcoholic beverages. 10 The Bureau also noted in this circular that the National Environmental Policy Act would require the Bureau to prepare a study of possible environmental effects caused by use of the proposed plastic packaging material.
Apparently no formal distillers' applications to use polyethylene terephthalate plastics were filed until 27 October 1980 and 26 October 1981. On these dates two distillers requested Bureau clearance touse polyethylene terephthalate ("PET") in packaging their distilled spirits. On 8 June 1981, the Glass Packaging Institute ("GPI") requested that the Bureau conduct an informal rulemaking on the issue of whether the Bureau's regulations should be amended to embrace PET liquor bottles.
No rulemaking proceeding was initiated in response to GPI's request. However, on 11 January 1982 the Bureau notified the public of its intent to prepare an environmental assessment on the use of PET in liquor bottles. GPI filed comments, urging that the manufacturing of PET containers would consume too much energy, that the use of PET in packaging could be carcinogenic, that incineration of discarded PET bottles would release harmful gases, and that disposal of solid wastes would present additional environmental hazards. These and other environmental objections were taken under advisement by the FDA. Well after the close of the period for filing written comments, and only approximately two weeks before the initial environmental evaluation was due to be released, GPI also sought to notify the Bureau about the environmental threat posed by the alleged tamperability of PET bottles. This concern was prompted by nationally publicized news stories about unrelated incidents of tampering with nonprescription pain medicines. GPI's attempts to schedule a meeting with the Bureau on the issue of PET tamperability were unsuccessful.
On 5 October 1982, without specifically mentioning the two pending requests for PET clearance, the Bureau issued a final rule effective 5 November 1982 amending its definition of a permissible liquor bottle. The previous definition permitted distillers to use liquor bottles made of "glass, or earthenware, or other suitable material approved by the Director [of the Bureau]." 11 The new regulation authorized liquor bottles "made of glass or earthenware, or of other suitable material approved by the Food and Drug Administration ... and which has been determined by the Director [of the Bureau] to adequately protect the revenue." 12 The rule codified the Bureau's longstanding practice of deferring to FDA expertise on the health and safety issues associated with approval of new packaging materials. 13
Because the FDA had previously approved PET for use in liquor bottles, the final rule arguably permitted distillers to begin manufacturing PET liquor bottles subject to FDA regulations. However, at this point, the Bureau had not ruled on whether PET would adequately protect tax revenues. Neither had a final environmental assessment been issued.
One day before the final rule was to become effective GPI filed suit in the United States District Court seeking to enjoin the Bureau from approving PET liquor bottles. GPI initially sought to overturn the approval of PET on three grounds. First, it contended that the Bureau's failure to conduct an informal rulemaking proceeding before approving PET liquor bottles violated the Administrative Procedure Act. Second, it charged that the Bureau's failure to prepare an environmental impact statement was inconsistent with the National Environmental Policy Act. Finally, GPI asserted that the Bureau had violated its own regulations by failing to determine whether PET would adequately protect revenue. The plaintiffs' motion for a temporary restraining order based on these grounds was denied on 4 November 1982.
On 4 November 1982 the Bureau released a final environmental assessment which concluded that use of PET liquor bottles would not have a significant environmental effect. That assessment did...
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