Grand Laboratories, Inc. v. Harris

• Decision Date: 21 February 1980
• Docket Number: No. Civ 79-4126.,Civ 79-4126.
• Parties: GRAND LABORATORIES, INC., Plaintiff, v. Patricia HARRIS, Secretary of Health, Education and Welfare, Defendant.
• Court: U.S. District Court — District of South Dakota

488 F. Supp. 618

GRAND LABORATORIES, INC., Plaintiff, v. Patricia HARRIS, Secretary of Health, Education and Welfare, Defendant.

No. Civ 79-4126.

United States District Court, D. South Dakota, S. D.

February 21, 1980.

Qualley, Larson & Jones, Sioux Falls, S. D., for plaintiff.

John J. Ulrich, Asst. U. S. Atty., Sioux Falls, S. D., and Frederick H. Degnan, Asst. Chief Counsel, Food and Drug Administration, Dept. of Health, Education and Welfare, Rockville, Md., for defendant.

MEMORANDUM DECISION

NICHOL, Chief Judge.

This case, involving the interplay between the Virus, Serum, and Toxin Act of 1913 (VSTA), 21 U.S.C. section 153 et seq., and the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. section 301 et seq., is one of first impression. Plaintiff is a South Dakota corporation engaged in the production and marketing of animal biologics. Defendant is joined in her capacity as supervisor of the Food and Drug Administration (FDA). Defendant obtained a search warrant from the United States Magistrate directed against the plaintiff's facility. Plaintiff brought this action seeking declaratory and injunctive relief against the FDA on the grounds that the FDA has not been empowered by Congress to regulate the manufacture and sale of animal biologics. A temporary restraining order was issued and a hearing on a motion for preliminary injunction set. The FDA elected to move for dismissal rather than file an answer.

The parties basically agree on the facts relevant to the issue of jurisdiction. The plaintiff apparently manufactures and sells animal biologics wholly within the state of South Dakota. Animal biologics are products prepared from animal tissues or fluids or growth of microorganisms used for the prevention or treatment of disease in animals. The particular product around which this dispute has centered is known as "Porcine Mastitis-Metritis-Arthritis-Infertility Bacterin" (Bacterin). The antigen (the biological component intended to produce an immune response) in the Bacterin is an organism known as Streptococcus equisimilus. The Bacterin also contains an adjuvant, a substance that is intended to enhance the immune response to the antigen. The particular adjuvant used in the Bacterin is aluminum hydroxide. The FDA introduced evidence tending to show that aluminum hydroxide is not produced in South Dakota and, further, that plaintiff had purchased aluminum hydroxide from a chemical firm in New Jersey.

The gravamen of the plaintiff's contention is that the VSTA granted sole federal regulatory power over the manufacture and sale of animal biologicals to the United States Department of Agriculture (USDA). The grant of jurisdiction to the USDA only reaches animal biologicals delivered or offered for delivery in interstate commerce; regulation of animal biologics produced and marketed on an intrastate basis, even where a component has passed through interstate commerce, being left to the various states.¹ In support of its contention that the federal regulation of animal biologics rests solely with the USDA the plaintiff points to the following language in the FDCA:

Nothing contained in this Act shall be construed as in any way affecting, modifying, repealing, or superseding . . . the virus, serum, toxin, and analogous products provisions, applicable to domestic animals, of the Act of Congress approved March 4, 1913 . . ..

21 U.S.C. section 392(b) (1970). The obvious implication of the plaintiff's position is that no federal agency has congressional authority to regulate plaintiff's activities.

The FDA contends that the Bacterin is a drug within the meaning of the FDCA and that jurisdiction exists because a component, the adjuvant aluminum hydroxide, has passed through interstate commerce. The FDA views the language of 21 U.S.C. 392(b) as precluding it from asserting jurisdiction only over animal biologicals subject to regulation by the USDA. As the VSTA does not grant the USDA jurisdiction over animal biologicals produced and distributed within the boundaries of a single state, the FDA contends that it has jurisdiction over such "intrastate" biologicals when one of the components has passed through interstate commerce.

Both parties have pointed to legislative history, prior enactments, and the past practices of various agencies in support of their interpretation of 21 U.S.C. section 392(b). Our inquiry must, of course, start with the language of the provision. "Though we may not end with the words in construing a disputed statute, one certainly begins there." F. Frankfurter, Some Reflections on the Reading of Statutes, 16 (1943); quoted with approval in Andrus v. Allard, 444 U.S. 51, 56, 100 S.Ct. 318, 322, 62 L.Ed.2d 210 (1979). By the combination of words used in section 392(b), Congress seems to have said that what the VSTA hath wrought let not the FDCA lay assunder. The histories of the various acts dealing with the purity and effectiveness of food and drugs, and biologicals for animals and humans indicate that the VSTA was intended as the sole federal effort in the regulation of animal biologics.

Adulterated or unwholesome drugs, along with food and liquor, were first subjected to federal regulation in 1890. See, Ch. 839 section 2, 26 Stat. 415. This first effort only applied to articles imported into the United States or its territories. In 1902 an Act was passed regulating the interstate commerce of human biologics. Act of July 1, 1902, ch. 1378, 32 Stat. 728. The 1902 Act was administered by the Public Health Service, at that time a division of the Treasury Department.

The Food and Drug Act of 1906 provided for the regulation of food, drugs and liquor placed in interstate commerce. Act of June 30, 1096, ch. 3915, 34 Stat. 768. The Act applied to articles received or delivered in "original unbroken packages" having passed through interstate commerce. Id., section 2, 34 stat. at 768. The term "drug" was defined as including "all medicines and preparations recognized in the United States Pharmacopeia or National Formulary for internal or external use, and any substance or mixture of substances intended to be used for the cure, mitigation, or prevention of disease of either man or other animals." Id., section 6, 34 Stat. at 769. Although this definition has received some subsequent embellishment, it remains substantially the same. Primary responsibility for enforcement of the Act was assigned to the Bureau of Chemistry in the Department of Agriculture. See, Appropriations Act for Dept. of Agriculture, March 4, 1917, ch. 179, 39 Stat. 1151.

In the first part of the next decade farmers were suffering considerable losses as a result of the somewhat motley manufacture and distribution of anti-hog cholera serum. The Department of Agriculture apparently felt that the authorization to regulate animal drugs contained in the Food and Drug Act of 1906 did not provide adequate authority to regulate anti-hog cholera serum; the Department procured the passage of the VSTA in response to the anti-hog cholera serum problem. See, Hall v. State, 100 Neb. 84, 158 N.W. 362 (1916). The VSTA, then as now, provided for the regulation of animal biologicals shipped in interstate commerce, with no jurisdiction over biologics merely having a component that had passed through interstate commerce. Responsibility for its administration was placed with the Bureau of Animal Industry, a subdivision of the Department of Agriculture. Appropriations Act of March 4, 1917, Ch. 179, 39 Stat. 1138.

The Food and Drug Act was extensively revised in 1938. Among other changes the jurisdiction over drugs extended to articles intended for use as components in drugs. Act of June 25, 1938, ch. 675, section 201, 52 Stat. 1041, (current version at 21 U.S.C. section 321(g) (1970)). It was explicitly stated in the Senate debate on the 1938 Act that no new authority was provided for FDA supervision² of human biologics.

Mr. Vandenberg. Will the Senator also make a statement for the record as to the effect of this proposed legislation upon biological products, and the possible interference with the existing serum act of 1902, and the existing administration of biological supervision?

Mr. Copeland. If the Senator will turn to the last page of the bill, page 56, and read line 6, 7, and 8, he will see that it is provided that the provision of this bill shall not be held to modify or repeal any of the existing laws of the United States, except as provided by paragraph (A) of Section 717. That particular law mentioned by the Senator is not dealt with at all by this bill, and there is no thought of transfering that very well done function of the Public Health Service to the Food and Drug Administration.

Mr. Vandenberg. And no new authority over biological products is contained within the bill?

Mr. Copeland. Not the slightest.

79 Cong.Rec. 5018 (1935). It is befitting to note that this colloquy occurred at a time when the PHS was in the Department of Treasury and the FDA in USDA. The situation had changed by 1944 when the provisions regulating human biologics were amended.

In 1939 the PHS was transferred from Treasury to the newly created Federal Security Agency. Reorg. Plan No. 1 of 1939, reprinted in 53...