Nutraceutical Corp. v. Von Eschenbach

• Decision Date: 17 August 2006
• Docket Number: No. 05-4151.,05-4151.
• Citation: 459 F.3d 1033
• Parties: NUTRACEUTICAL CORPORATION; Solaray, Inc., Plaintiffs-Appellees, v. Andrew VON ESCHENBACH, Acting Commissioner, U.S. Food and Drug Administration; United States Food and Drug Administration; Michael O. Leavitt, Secretary of the Department of Health and Human Services; Department of Health And Human Services; United States of America, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

459 F.3d 1033

NUTRACEUTICAL CORPORATION; Solaray, Inc., Plaintiffs-Appellees, v. Andrew VON ESCHENBACH, Acting Commissioner, U.S. Food and Drug Administration; United States Food and Drug Administration; Michael O. Leavitt, Secretary of the Department of Health and Human Services; Department of Health And Human Services; United States of America, Defendants-Appellants.

No. 05-4151.

United States Court of Appeals, Tenth Circuit.

August 17, 2006.

Christine N. Kohl, Attorney (Peter D. Keisler, Assistant Attorney General, Paul M. Warner, United States Attorney, Jeffrey Bucholtz, Deputy Assistant Attorney General, and Douglas N. Letter, Attorney, Department of Justice, Washington, D.C., and Paula M. Stannard, Acting General Counsel, Sheldon T. Bradshaw, Associate General Counsel, Eric M. Blumberg, Deputy Chief Counsel, and Claudia J. Zuckerman, Associate Chief Counsel, Office of General Counsel, U.S. Department of Health & Human Services, Food and Drug Division, Rockville, MD, with her on the briefs), for Defendants-Appellants.

Jonathan W. Emord (Andrea G. Ferrenz with him on the brief), Emord & Associates, P.C., Reston, VA, for Plaintiffs-Appellees.

Before KELLY, TYMKOVICH, Circuit Judges and EAGAN,^* District Judge.

EAGAN, District Judge.

Defendants-appellants, Andrew von Eschenbach, M.D., Acting Commissioner of the U.S. Food and Drug Administration, the United States Food and Drug Administration ("FDA" or "the agency"), Michael O. Leavitt, Secretary of the Department of Health and Human Services, the Department of Health and Human Services, and the United States, appeal from a judgment of the district court denying their motion for summary judgment and granting the cross-motion of plaintiffs-appellees for summary judgment. Nutraceutical Corp. v. Crawford, 364 F.Supp.2d 1310 (D.Utah 2005). Plaintiffs-appellees, Nutraceutical Corporation and its wholly-owned subsidiary, Solaray Corporation (collectively, "Nutraceutical"), manufacture and sell Ephedra, a product containing ephedrine-alkaloid dietary supplements ("EDS"). In 2004, the FDA issued a regulation which banned all EDS sales in the United States market. Nutraceutical brought this action challenging the regulation as unlawful. The district court agreed with Nutraceutical. Id. at 1321. Our jurisdiction arises under 28 U.S.C. § 1291, and we reverse.

Background

In its published decision, the district court determined that the risk-benefit analysis employed by the FDA to support an EDS ban was contrary to the intent of Congress and that the FDA had failed to prove by a preponderance of the evidence that EDS pose an unreasonable risk of illness or injury at 10 milligrams ("mg") or less a day. Nutraceutical, 364 F.Supp.2d 1310. It accordingly entered summary judgment in favor of Nutraceutical, enjoined the FDA from enforcing its proscription against Nutraceutical for the sale of products with a recommended daily dosage of 10 mg or less of EDS,¹ and remanded to the FDA for new rule-making.

The issues raised by this appeal are: (1) whether the FDA correctly interpreted the relevant statute to require a risk-benefit analysis in determining if a dietary supplement presents an "unreasonable risk of illness or injury"; and (2) whether the FDA satisfied its burden of proving that dietary supplements containing EDS present an unreasonable risk of illness or injury when doses of 10 mg or less per day are suggested or recommended in labeling.

Nutraceutical alleges that the FDA lacked statutory authority to promulgate and enforce a ban of all EDS. The FDA argues that it acted pursuant to the broad authority delegated to it by the Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 301, et seq., to regulate dietary supplements for safety. The FDCA provides the FDA with broad authority to regulate food, drug, and dietary supplement products in order to ensure public health and safety. Id. In 1994, Congress amended the FDCA with the Dietary Supplement Health and Education Act ("DSHEA"), Pub.L. No. 103-417, 108 Stat. 4325 (1994). Under DSHEA, the FDA regulates vitamins, minerals, herbs, amino acids, and other dietary substances. Dietary supplements are generally regulated in a manner similar to food and the FDA is authorized to prevent adulterated products from entering the market. See 21 U.S.C. § 331(a), (b), (c), (k) (adulteration and distribution of adulterated food are prohibited acts). Congress declared that a dietary supplement is "adulterated":

If it is a dietary supplement or contains a dietary ingredient that —

(A) presents a significant or unreasonable risk of illness or injury under —

(i) conditions of use recommended or suggested in labeling, or

(ii) if no conditions of use are suggested or recommended in the labeling, under ordinary conditions of use; . . .

21 U.S.C. § 342(f)(1). The FDA argues that EDS are adulterated and points to the "unreasonable risk of illness or injury" provision of DSHEA as the primary source of statutory authority for its EDS ban. 21 U.S.C. § 342(f)(1)(A).

Ephedrine alkaloids are a class of structurally-related chemical stimulants that occur naturally in some botanicals. In the 1980s and 1990s, manufacturers promoted the sale of EDS for weight loss and athletic performance enhancement. In the 1990s, the FDA received numerous Adverse Event Reports ("AERs") which documented harmful side effects, including heart attacks, strokes, seizures, and death, associated with EDS intake.² Based on the circumstantial evidence of the AERs, the FDA began to investigate the effects of EDS. The investigation included a literature review of scientific studies and a Food Advisory Committee on Dietary Supplements Containing Ephedrine Alkaloids Meeting held on August 26-27, 1996 ("1996 Food Advisory Committee"). In 1997, the agency proposed a regulation which would have required specific warnings and established a dosage regimen. 62 Fed.Reg. 30,-678 (June 4, 1997).

The FDA's 1997 proposed regulation of EDS faced substantial opposition, including from the General Accounting Office ("GAO"). The GAO determined that the FDA had not been thorough in its investigation and requested further research. See GAO, Dietary Supplements: Uncertainties in Analyses Underlying FDA's Proposed Rule on Ephedrine Alkaloids 11 (1999). Responding to the GAO's concerns, the FDA withdrew the 1997 proposed regulation. 65 Fed.Reg. 17,474 (Apr. 3, 2000).

The FDA continued to receive AERs and compile scientific literature regarding EDS. Given the fact that dietary supplement manufacturers are not required to submit scientific data on their products, the body of scientific literature on EDS was limited. Among the studies on which the FDA relied was a report commissioned by the National Institutes of Health. To further supplement the record, the agency hired Mario A. Inchiosa, Jr., Ph.D.,³ to conduct further research on the health effects of EDS in 1999. During the public notice and comment period, Nutraceutical submitted to the FDA several requests for an exemption of low-dosage EDS, to no avail. The administrative record grew to over 130,000 pages, approximately 19,000 AERs were collected,⁴ and extensive public notice and comment resulted in over 48,-000 comments.

After seven years of investigating EDS, the FDA adopted a regulation which banned EDS at all dosage levels from the national market. Final Rule Declaring Dietary Supplements Containing Ephedrine Alkaloids Adulterated Because They Present an Unreasonable Risk, 69 Fed.Reg. 6788 (Feb. 11, 2004) ("Final Rule"). In the Final Rule, the FDA concluded that "[t]he best clinical evidence for a benefit . . . supports only a modest short-term weight loss, insufficient to positively affect cardiovascular risk factors or health conditions associated with being overweight or obese." Id. at 6789. Based on this risk-benefit analysis, the FDA determined that all EDS present an "unreasonable risk of illness or injury" under all ordinary or recommended conditions of use. Id. at 6788. As such, the Final Rule classified EDS adulterated within the meaning of DSHEA.

The district court held that "the FDA's requirement that EDS demonstrate a benefit is contrary to the clear intent of Congress" and found the agency's definition of "unreasonable" as entailing a risk-benefit analysis to be improper. 364 F.Supp.2d 1310, 1319. The district court also found that the FDA failed "to prove by a preponderance of the evidence that a dosage of 10 mg or less of ephedrine alkaloids presents a significant or unreasonable risk of illness or injury." Id. at 1321. Based on these findings, the district court granted summary judgment for plaintiffs and denied summary judgment for defendants.

Discussion

Standard of Review

The district court's conclusions as to whether the FDA had acted pursuant to congressionally delegated authority in promulgating a rule is reviewed de novo. However, the parties dispute the appropriate standard of review of the administrative decision. DSHEA provides that: "The court shall decide any issue under this paragraph on a de novo basis." 21 U.S.C. § 342(f). The district court did "not reach the question of whether the FDA's statutory construction should be reviewed de novo." 364 F.Supp.2d at 1317. In the interest of clarity and consistency, we now reach this question.

Courts are to review agency actions under DSHEA using the "traditional tools of statutory construction." Pharmanex v. Shalala, 221 F.3d 1151, 1154 (10th Cir. 2000). The de novo standard, under section 342(f), applies to enforcement actions by the United States against manufacturers of dietary supplements. Such enforcement actions may result in imprisonment or monetary fines. 21 U.S.C. § 333; see United States v. Park, 421 U.S. 658, 95 S.Ct. 1903, 44 L.Ed.2d 489 (1975). Reading the statute as a whole, it is clear that the de novo standard applies when courts "decide" matters rather than when they "review" administrative decisions. As such, it is appropriate...