National Ass'n of Pharmaceutical Mfrs. v. Food and Drug Administration, No. 204

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtBefore FRIENDLY and TIMBERS; FRIENDLY
Citation637 F.2d 877
PartiesNATIONAL ASSOCIATION OF PHARMACEUTICAL MANUFACTURERS and National Pharmaceutical Alliance, Plaintiffs-Appellants, v. FOOD AND DRUG ADMINISTRATION, Defendant-Appellee. ocket 80-6090.
Docket NumberNo. 204,D
Decision Date05 January 1981

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637 F.2d 877
NATIONAL ASSOCIATION OF PHARMACEUTICAL MANUFACTURERS and
National Pharmaceutical Alliance, Plaintiffs-Appellants,
v.
FOOD AND DRUG ADMINISTRATION, Defendant-Appellee.
No. 204, Docket 80-6090.
United States Court of Appeals,
Second Circuit.
Argued Oct. 20, 1980.
Decided Jan. 5, 1981.

Jacob Laufer, New York City (Bass, Ullman & Lustigman, Milton A. Bass, and Steven R. Trost, New York City, of counsel), for plaintiffs-appellants.

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Harvey J. Wolkoff, Asst. U. S. Atty., S. D. New York, New York City (John S. Martin, Jr., U. S. Atty., S. D. New York, Peter C. Salerno, Asst. U. S. Atty., New York City, Nancy L. Buc, Chief Counsel, Kathleen A. Blackburn, Asst. Chief Counsel, Food and Drug Administration, Rockville, Md., of counsel), for defendant-appellee.

Before FRIENDLY and TIMBERS, Circuit Judges. *

FRIENDLY, Circuit Judge:

In 1962 Congress enacted various amendments to the Federal Food, Drug, and Cosmetic Act of 1938 (the Act), 52 Stat. 1040, amended 76 Stat. 780, to "strengthen and broaden existing laws in the drug field so as to bring about better, safer medicine and to establish a more effective system of enforcement of the drug laws." S.Rep.No.1744, 87th Cong., 2d Sess. 8, (1962) U.S.Code Cong. & Adm.News, p. 2884. Among the amendments was a section by which a drug is deemed adulterated if its packaging, processing, holding or manufacturing fail to conform to "current good manufacturing practice ((CGMP)) to assure that such drug meets the requirements of this chapter as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess". § 501(a)(2)(B), 21 U.S.C. § 351(a) (2)(B). The Food and Drug Administration (FDA) issued its first regulations under this section in 1963, 28 F.R. 6385. In February, 1976, FDA announced a proposal to revise and update the then current CGMP regulations, 41 F.R. 6878. This proposal, which provided for the notice and comment procedures contemplated by 5 U.S.C. § 553, announced:

The Commissioner intends for CGMP regulations to become binding specific requirements that must be complied with; failure to do so shall render a drug product adulterated under section 501(a)(2)(B) of the (Act) .... Binding regulations will ... serve to inform courts of FDA's expert judgments regarding current good manufacturing practice for drugs in the United States; this will expedite and assist enforcement proceedings to assure compliance with section 501(a)(2)(B) of the act.

The FDA received numerous comments both upon the substance of its requirements and upon its proposal that the new CGMP regulations should have the force of law. 1 In an extensive preamble to the new regulations it set forth a legal analysis supporting its view that it had power to issue binding regulations, 43 F.R. at 45021-25, and the reasons why it believed binding rather than merely interpretive regulations would be in the public interest. 2 The regulations, now appearing at 21 C.F.R. Parts 210 and 211 (1980), were published on September 29, 1978, to be effective March 28, 1979, 43 F.R. 45014. They cover a broad spectrum of affairs, including requirements

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for personnel practices, record keeping, building design, and procedures for the control of drug production, packaging and labeling.

In this action in the District Court for the Southern District of New York, wherein jurisdiction was predicated on 28 U.S.C. §§ 1331(a) and 1337, the National Association of Pharmaceutical Manufacturers and the National Pharmaceutical Alliance, both trade associations, sought a declaration that FDA's attempt to give binding effect to the new CGMP Regulations was beyond its authority. The FDA moved to dismiss the complaint for failure to state a claim upon which relief can be granted, F.R.Civ.P. 12(b)(6). Chief Judge MacMahon granted the motion in a brief opinion, D.C. 487 F.Supp. 412 (1980), this appeal followed, and we now affirm. 3

Two different subsections of § 701 confer rulemaking authority upon the FDA. Section 701(a) provides:

The authority to promulgate regulations for the efficient enforcement of this chapter, except as otherwise provided in this section, is vested in the Secretary (of Health and Human Services).

The effect of § 4 of the Administrative Procedure Act of 1946 (APA), now 5 U.S.C. § 553, is to require that rulemaking under § 701(a), with certain exceptions, including "interpretative rules", follow an informal notice and comment procedure, which was done here. Section 701(e) provides that "(a)ny action for the issuance, amendment, or repeal of any regulation" under various sections of the Act of which § 501(a)(2)(B) is not one, shall follow a complex procedure which has been read to include a trial-type hearing; § 701(f) provides that review of any order resulting from such rulemaking lies in a court of appeals. See National Nutritional Foods Ass'n v. FDA, 504 F.2d 761, 771-74 (2 Cir. 1974), cert. denied, 420 U.S. 946, 95 S.Ct. 1326, 43 L.Ed.2d 424 (1975). Admittedly § 701(e) procedures were not followed here and the FDA's authority to give binding effect to the CGMP regulations at issue must rest on § 701(a).

Reading the language of that subsection, which comes from the Act of 1938, with the eyes of 1980, one would have little difficulty in concluding that the words suffice to empower the Commissioner of the FDA, to whom the Secretary has delegated his powers, 21 C.F.R. § 5.1(a)(1) (1980), to issue regulations, substantive as well as procedural, having the force of law. 4 The comprehensive

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opinion of Judge J. Skelly Wright in National Petroleum Refiners Ass'n v. FTC, 482 F.2d 672 (D.C.Cir.1973), cert. denied, 415 U.S. 951, 94 S.Ct. 1475, 39 L.Ed.2d 567 (1974), catalogued the many instances in which general statutory provisions not differing essentially from § 701(a) have been held to endow agencies with power to issue binding rules and regulations. In the interest of historical accuracy, it should be noted that at one time it was widely understood that generalized grants of rulemaking authority conferred power only to make rules of a procedural or an interpretative nature, and not binding substantive regulations, for which a specific delegation was thought necessary. See, e. g., Alvord, Treasury Regulations and the Wilshire Oil Case, 40 Colum.L.Rev. 252, 259-61 (1940); Lee, Legislative and Interpretive Regulations, 29 Geo.L.J. 1, 21 (1940); Final Report of the Attorney General's Committee on Administrative Procedure, supra, at 98 & nn.18, 19. The Supreme Court's decision in National Broadcasting Co. v. United States, 319 U.S. 190, 63 S.Ct. 997, 87 L.Ed. 1344 (1943), which in retrospect seems to have inaugurated the modern approach, was not universally so recognized at the time, since the Court there relied in part on more specific grants of rulemaking power and the regulations at issue in that case, although substantive in effect, were clothed in the garb of procedural rules.

In 1953, however, the Court decided American Trucking Ass'ns v. United States, 344 U.S. 298, 73 S.Ct. 307, 97 L.Ed. 337, in which the issue was whether the Interstate Commerce Commission, under the Motor Carrier Act of 1935, had the authority to promulgate rules restricting leasing and interchange practices in the trucking industry. In an outstanding opinion by Justice Reed, the Court expressly rejected the arguments that the Commission had exceeded its authority because the statute lacked an express delegation of power to regulate the practices in question, and because the general rulemaking power the statute did confer was intended only for rules governing agency procedure:

As a matter of principle, we might agree with appellants' contentions if we thought it a reasonable canon of interpretation that the draftsmen of acts delegating agency powers, as a practical and realistic matter, can or do include specific consideration of every evil to be corrected. But no great acquaintance with practical affairs is required to know that such prescience, either in fact or in the minds of Congress, does not exist....

We hold then that the promulgation of these rules for authorized carriers falls within the Commission's power, despite the absence of specific reference to leasing practices in the Act.... The grant of general rule-making power necessary for enforcement compels this result.

Id. at 309-10, 312, 73 S.Ct. at 314, 315. As documented by Judge Wright in National Petroleum Refiners, this generous construction of agency rulemaking authority has become firmly entrenched. 5

Beyond this there is formidable authority to the effect that § 701(a) itself is a grant of power to issue binding regulations. The first is the statement in Abbott Laboratories, supra, 387 U.S. at 151-52, 87 S.Ct. at 1516-1517, adverting to certain drug labeling regulations issued pursuant to § 701(a):

These regulations are not meant to advise the Attorney General, but purport to be directly authorized by the statute. Thus, if within the Commissioner's authority, they have the status of law and violations of them carry heavy criminal and civil sanctions.

The Court also spoke of the regulations as "self-operative" rules "that must be followed by an entire industry". Id. at 147, 87 S.Ct. at 1514. It can be argued that the Court could not really have meant to decide whether the regulations there at issue had

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the "status of law" since the Government had urged throughout the case that they were merely interpretive, the court of appeals had so held, 352 F.2d at 289-90, and the petitioner had not seriously challenged this, and also because in Toilet Goods Ass'n v. Gardner, 360 F.2d 677, 686, heard and decided in the Supreme Court, 387 U.S. 158, 167, 87 S.Ct. 1520, 1526, 18 L.Ed.2d 697, 704, together with Abbott Laboratories, we had said that we saw "little profit in debating the point, much discussed by the parties, whether the...

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12 practice notes
  • Riegel Textile Corp. v. Celanese Corp., No. 530
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • 6 Mayo 1981
    ...709 (1969); National Association of Pharmaceutical Manufacturers and National Pharmaceutical Alliance v. Food and Drug Administration, 637 F.2d 877, at 881 (2d Cir. 1981). This preference for rule-making results from a recognition of the value of agency expertise. Here, regulation of hazard......
  • US v. 789 CASES, Civ. No. 90-1777 (JP).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • 20 Agosto 1992
    ...21 U.S.C. § 371(a), are binding and have the force and effect of law. See, e.g., National Ass'n of Pharmaceutical Manufacturers v. FDA, 637 F.2d 877, 879-881, 889 (2d Cir.1981) ("Reading § 371(a) ... one would have little difficulty in concluding that the words suffice to empower the ... FD......
  • Administering the National Environmental Policy Act
    • United States
    • Environmental Law Reporter Nbr. 45-4, April 2015
    • 1 Abril 2015
    ...to issue licenses, or to take some other sort of binding action. See e.g. , National Ass’n of Pharm. Mfrs. v. Food & Drug Admin., 637 F.2d 877, 889 (2d Cir. 1981) (interpreting the legislative history of the governing statute to ind that a general grant of rulemaking authority to FDA was su......
  • NAT. ASS'N OF PHARMACEUTICAL MFRS. v. DEPT. OF HLTH., No. 80 Civ. 4205(MEL).
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 17 Mayo 1984
    ...the validity of the regulations was challenged. See National Association of Pharmaceutical Manufacturers v. Food & Drug Administration, 637 F.2d 877 (2d Cir.1981), aff'g, 487 F.Supp. 412 (S.D.N.Y.1980) ("NAPM I"). The Government also contends that, in the event the action is not res judicat......
  • Request a trial to view additional results
9 cases
  • Riegel Textile Corp. v. Celanese Corp., No. 530
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • 6 Mayo 1981
    ...709 (1969); National Association of Pharmaceutical Manufacturers and National Pharmaceutical Alliance v. Food and Drug Administration, 637 F.2d 877, at 881 (2d Cir. 1981). This preference for rule-making results from a recognition of the value of agency expertise. Here, regulation of hazard......
  • US v. 789 CASES, Civ. No. 90-1777 (JP).
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • 20 Agosto 1992
    ...21 U.S.C. § 371(a), are binding and have the force and effect of law. See, e.g., National Ass'n of Pharmaceutical Manufacturers v. FDA, 637 F.2d 877, 879-881, 889 (2d Cir.1981) ("Reading § 371(a) ... one would have little difficulty in concluding that the words suffice to empower the ... FD......
  • NAT. ASS'N OF PHARMACEUTICAL MFRS. v. DEPT. OF HLTH., No. 80 Civ. 4205(MEL).
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 17 Mayo 1984
    ...the validity of the regulations was challenged. See National Association of Pharmaceutical Manufacturers v. Food & Drug Administration, 637 F.2d 877 (2d Cir.1981), aff'g, 487 F.Supp. 412 (S.D.N.Y.1980) ("NAPM I"). The Government also contends that, in the event the action is not res judicat......
  • Church v. Block, No. 78-CV-849.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • 25 Septiembre 1981
    ...Mourning v. Family Publications Service, 411 U.S. 356, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973); Nat'l Assn. of Pharmaceutical Mfgrs. v. FDA, 637 F.2d 877 (2d Cir. 1981); Termini v. Califano, 611 F.2d 637 (2d Cir. 1979) (rational basis test for rule-making authority). The plaintiff has not made......
  • Request a trial to view additional results
1 books & journal articles
  • Administering the National Environmental Policy Act
    • United States
    • Environmental Law Reporter Nbr. 45-4, April 2015
    • 1 Abril 2015
    ...to issue licenses, or to take some other sort of binding action. See e.g. , National Ass’n of Pharm. Mfrs. v. Food & Drug Admin., 637 F.2d 877, 889 (2d Cir. 1981) (interpreting the legislative history of the governing statute to ind that a general grant of rulemaking authority to FDA was su......

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