Nor-Am Agricultural Products, Inc. v. Hardin

• Decision Date: 15 July 1970
• Docket Number: No. 18478.,18478.
• Citation: 435 F.2d 1133
• Parties: NOR-AM AGRICULTURAL PRODUCTS, INC., and Morton International, Inc., Plaintiffs-Appellees, v. Clifford M. HARDIN, Secretary of Agriculture, G. W. Irving, Jr., Administrator Agricultural Research Service and Harry W. Hays, Director Pesticides Regulation Division, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

435 F.2d 1133 (1970)

NOR-AM AGRICULTURAL PRODUCTS, INC., and Morton International, Inc., Plaintiffs-Appellees, v. Clifford M. HARDIN, Secretary of Agriculture, G. W. Irving, Jr., Administrator Agricultural Research Service and Harry W. Hays, Director Pesticides Regulation Division, Defendants-Appellants.

No. 18478.

United States Court of Appeals, Seventh Circuit.

July 15, 1970.

Thomas A. Foran, U. S. Atty., Chicago, Ill., Howard S. Epstein, Atty., U. S. Dept. of Justice, Washington, D. C., for defendants-appellants; Harold M. Carter, Director, Regulatory Division, Raymond W. Fullerton, Atty., Regulatory Division, Dept. of Agriculture, Washington, D. C., of counsel.

Holland C. Capper, Chicago, Ill., for plaintiffs-appellees; Robert B. Gerrie, James H. Ryan, Geoffrey G. Gilbert, McBride, Baker, Wienke & Schlosser, Chicago, Ill., of counsel.

Before SWYGERT, Chief Judge, and CUMMINGS and PELL, Circuit Judges.

PELL, Circuit Judge.

This is an appeal from an order of the District Court granting plaintiffs' motion for a preliminary injunction enjoining the appellants (the Secretary and other personnel of the United States Department of Agriculture) along with each person acting under the authority or direction of the appellants, and any employee or agent of the Department from taking action, the purpose of which would be in effect to interfere with the sale, distribution, or manufacture of certain agricultural seed treatment products containing mercury compounds and generically referred to as Panogen products. The plaintiffs, Nor-Am and Morton, are the seller and manufacturer respectively of the products involved.

If this were the ordinary situation involving an appeal from an interlocutory order granting a preliminary injunction, the sole issue before this court would be whether the District Court abused its discretion in allowing a preliminary injunction. Further, it is clear that reversal would not be authorized nor would the decree be subject to modification unless abuse of discretion was clearly shown. Mytinger & Casselberry, Inc. v. Numanna Laboratories Corp., 215 F.2d 382, 384 (7th Cir. 1954).

Professor Wright has stated the matter well as follows:

"The trial court has considerable discretion in determining whether the situation requires the preservation of existing conditions through a preliminary injunction and the more deliberate conclusion of the appellate court that the ultimate decision may be against the party that obtained preliminary injunction does not warrant reversal of the interlocutory order. Reversal on such an appeal can be only for abuse of discretion." 3 Barron & Holtzoff, Federal Practice and Procedure § 1440 at 510 (1958).

Indeed, there is some authority to the effect that the only requirement is that a prima facie case be made. See: 43 C.J.S. Injunction § 192 p. 898 (1945). We would have little difficulty in affirming the District Court's order on the basis of the pleadings and evidence before the court if this were the ordinary type of case, but it is not. We are confronted at the outset by the strongly urged contention of the Department that this is an attempt to secure a judicial review of administrative proceedings and that the District Court lacks jurisdiction so to do.

It is not contended by the Department that the administrative action taken by the Secretary pursuant to 7 U.S.C. § 135 et seq., is immune from judicial scrutiny. The Department concedes otherwise but contends that judicial intervention into the administrative process created by Congress in the particular statute is not appropriate at this time because a court should not grant injunctive relief unless and until the appropriate administrative procedure is exhausted.

Conversely, the plaintiffs contended in the District Court and now contend that the particular order of the Secretary was arbitrary and capricious and by its nature had achieved a finality permitting judicial review under 5 U.S.C. § 701 et seq. as well as pursuant to the inherent equity powers of the court.

To resolve the conflicting contentions, it is necessary to turn in some detail to the facts as adduced at the hearing before the District Judge.

It is to be noted that there was some complaint by the Department that it was hampered timewise in its preparation for the hearing below; however, the District Court did offer the Government a chance to bring in additional evidence and did grant additional time to permit the preparation of a motion to dismiss, which motion was denied at the time of the granting of the preliminary injunction. At the conclusion of the testimony, including that by the defendant Hays, the District Judge inquired of counsel for the Department as to whether the Department intended to present evidence, presumably referring to further testimony or other evidence. Counsel indicated he was going to confer with other counsel and the matter having been continued for several days no further testimony was offered. Since the Department contends that its personnel did not act arbitrarily or capriciously but on a basis of fact, presumably the matters on which the order in controversy was based were available for presentation. In any event, the Department on this appeal does not appear to be resting its claim for reversal on a claim of not having had a fair opportunity of presenting evidence available to it.

In considering the evidence before the District Court we are not, as we have heretofore indicated, considering this as the ordinary case in which the only inquiry is that of whether discretion was abused. Nevertheless, we are not unmindful that another "ordinary" rule of procedure is applicable. We are referring to the principle that on an appeal from the granting of an interlocutory order of preliminary injunction the evidence will be considered in the light most favorable to the appellee.

This court has so held in analogous situations without feeling the necessity for the citation of authority. Seifert v. Solem, 387 F.2d 925, 929 (7th Cir. 1967).

As a matter of fact, the proposition that the court on appeal will presume that the trier of facts resolved the conflict in favor of the party for whom its verdict was rendered, unless it is opposed to the physical facts or inherently incredible, will assume the truth of such party's evidence which will be viewed in the light most favorable to the verdict and will give the benefit of all inferences that may reasonably and legitimately be drawn therefrom is of such universality that 5 C.J.S. Appeal & Error § 1562(4) beginning at p. 1225 has some twenty full pages of citations supportive thereof.

Panogen products are mercury compounds which have been continuously marketed by plaintiffs and their predecessors for approximately twenty years. The product is used in the agricultural community as a fungicide seed treatment to protect young seedlings such as oats, tomatoes, wheat, barley and sorghum, from soil borne fungi disease and systemic or seed borne diseases that carry from one generation to the next. By estimate, United States farmers had been benefited from 1949 through 1968 in an increased yield of crops raised from treated seed in an aggregate value in excess of eight billion dollars. A small amount of the product apparently goes a long way and the cost to farmers has been an average of approximately seven cents per planted acre per season. Testimony indicated there was no available satisfactory substitute for liquid methyl-mercury seed treatment products (including Panogen) which is as economical and efficacious for the treatment of seeds.

Sale of Panogen products amounts to about $4000 per day. Panogen products are economic poisons within the meaning of 7 U.S.C. § 135, et seq., being the Federal Insecticide, Fungicide and Rodenticide Act, of which the Secretary is chargeable with the administration. The statute requires the registration of economic poisons and the Panogen products in question were duly and properly registered under the statute. Plaintiffs and their predecessors for some years prior to being required to do so by the United States Food and Drug Administration have included a distinctive red dye in their formulations to give warning and for the purpose of preventing either deliberate or accidental misuse of treated seed or by-products as human food or animal feed. All of the Panogen products were labeled, the labels showing in red letters "poison treated" and containing a skull and cross-bones. In addition, the labels contained warnings that the seed treated with the Panogen products was not to be used for feed, oil or food purposes and might be fatal if swallowed and might produce delayed chemical burns. Warnings further admonished against breathing dust or getting near eyes or skin. Antidotes were specified on the warning labels. Labels were not only prepared for direct use on the product but for use on containers containing treated seed.

For the purpose of the hearing below only, the following facts were assumed to be true. On or about August 1969, a hog raiser in Alamogordo, New Mexico, obtained waste grain products which had been contaminated with a fungicide or fungicides containing mercury. The waste grain products were fed to approximately seventeen hogs as a supplement to their diet which also included cooked garbage. After approximately one month of feeding all of the hogs with the contaminated material, one hog (after it showed signs of illness) was butchered for family food and the meat was eaten by seven of the nine family members from September through December. In October 1969, fourteen of the remaining hogs owned by the family became ill, with blindness and a gait disturbance. Twelve of these hogs died and two became blind In December 1969, three of the family members who had eaten the hog became permanently injured from mercury poisoning.

On the evening of February 17, 1970 there was a national television broadcast on the Huntley-Brinkley...