Southeastern Minerals, Inc. v. Harris

• Decision Date: 30 July 1980
• Docket Number: No. 78-2270,78-2270
• Parties: SOUTHEASTERN MINERALS, INC. and Marshall Minerals, Inc., Plaintiffs-Appellees, v. Patricia Roberts HARRIS, as Secretary of Health and Human Services, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 758

622 F.2d 758

SOUTHEASTERN MINERALS, INC. and Marshall Minerals, Inc., Plaintiffs-Appellees, v. Patricia Roberts HARRIS, as Secretary of Health and Human

Services, et al., Defendants-Appellants.

No. 78-2270.

United States Court of Appeals, Fifth Circuit.

July 30, 1980.

Gregory J. Leonard, Asst. U. S. Atty., Macon, Ga., Frederick H. Degnan, Assoc. Chief Counsel, F.D.A., Rockville, Md., Susan J. Atkinson, Robert B. Nicholson, Dept. of Justice, Washington, D. C., Richard M. Cooper, Chief Counsel, Arthur N. Levine, Deputy Chief Counsel, F. D. A., Rockville, Md., for defendants-appellants.

Ben Kirbo, Bainbridge, Ga., for plaintiffs-appellees.

Appeal from the United States District Court for the Middle District of Georgia.

Before GOLDBERG, CHARLES CLARK and THOMAS A. CLARK, Circuit Judges.

CHARLES CLARK, Circuit Judge:

In this appeal we review that portion of a district court judgment conditionally enjoining various federal officials ¹ charged with the enforcement of the Food, Drug, and Cosmetic Act (the Act), 21 U.S.C. §§ 301-392, from (1) interfering in any way with the manufacturing and marketing of the appellees' gentian violet premix product and (2) inspecting or visiting the appellees' offices and plants. We affirm in part and vacate in part the judgment appealed from.

In March 1976, Marshall Minerals, Inc., (Marshall) began to manufacture and Marshall and Southeastern Minerals, Inc., (Southeastern) began to distribute a poultry feed premix product containing gentian violet. ² Marshall and Southeastern asserted in 1976 and continue to contend today that gentian violet as a component of premix products designed to be added to animal feed is "generally recognized, among experts qualified by scientific training and experience to evaluate its safety, . . . to be safe under the conditions of its intended use" (GRAS) and thus is exempt from regulation as a food additive under the Act. ³ Accordingly, Marshall and Southeastern chose to market the premix product without first securing the approval of a food additive regulation by the Food and Drug Administration (FDA). ⁴

The appellees continued to manufacture and market the premix product through mid-1977 without interference from any governmental entity or official. However, after the Eighth Circuit's decision in United States v. Naremco, Inc., 553 F.2d 1138 (8th Cir. 1977), Herbert Friedlander, the Acting Director of the Bureau of Veterinary Medicine, on June 21, 1977, wrote to all manufacturers of gentian violet products, including Marshall, stating FDA's opinion that "(g) entian violet as a component of animal feed constitutes a 'food additive' and may not be shipped for that purpose since there is no regulation for its safe use." The letter continued to advise "that the marketing of gentian violet products intended for use in animal food . . . is in violation of the Act . . . (and) makes the products, the firms and the officials within those firms responsible for the violation, subject to regulatory action."

A series of meetings and conferences followed Marshall's receipt of the June 21, 1977, letter during which representatives from Marshall, Southeastern, and the FDA attempted to resolve the GRAS status of the premix product. No resolution was forthcoming, however, as both sides adhered to their original positions. Marshall and Southeastern asserted that the gentian violet premix product was GRAS and thus exempt from FDA regulation as a food additive. The FDA contended that the product was not GRAS and therefore was subject to regulation under the Act.

On August 18, 1977, Marshall, although still asserting that its product was exempt from FDA regulation, forwarded to the FDA a petition proposing a food additive regulation that would permit the marketing of the gentian violet premix. The FDA received the petition on August 22, 1977, and acknowledged its receipt by letter to Marshall on August 25, 1977. On October 17, 1977, the FDA again wrote Marshall, commenting that the petition was then under review.

Subsequently, on October 20, 1977, FDA inspectors visited Marshall's offices in a Bainbridge, Georgia, tri-office complex seeking to inspect Marshall's manufacturing facilities. After learning that those facilities were located in Marshall, Texas, rather than Bainbridge, Georgia, the FDA inspectors departed only to return to the complex later in the day to inspect the offices of Southeastern and Flint River Mills. On October 26, 1977, agents of the State of Texas, apparently acting at the request of the FDA, inspected Marshall's manufacturing facilities and forwarded a report of their findings to the FDA.

The next day officials of the State of Arkansas, at the instance of the FDA, issued a "stop use" order on 17,300 pounds of Marshall's gentian violet premix product then in the hands of Johnson Feed Mills in Mena, Arkansas. The state officials based their order on the product's alleged status as an unapproved food additive despite the fact that the product was properly registered with the Arkansas State Plant and Feed Board.

A conference was held on October 31, 1977, between various FDA officials, the president of Marshall and Southeastern, and Mr. Ben Kirbo, legal counsel for Marshall and Southeastern. The district court found that the meeting had been requested by Marshall and Southeastern in a good faith, cooperative attempt to resolve amicably the disagreement over the GRAS status of the gentian violet premix product. No resolution of that dispute occurred despite Marshall's announcement that it voluntarily had ceased the production of the premix product on October 22, 1977. Near the end of the meeting, Acting Director Friedlander threatened Marshall and Southeastern with endless litigation should they continue to press their position by stating to their counsel: "Mr. Kirbo, your client cannot afford to litigate with us. We are the United States of America. Our resources are endless and we will use them all against you." ⁵

The State of Connecticut on November 3, 1977, again at the instance of the FDA, issued an embargo against 36,000 pounds of Marshall's gentian violet premix product then in the hands of Central Connecticut Farmers Coop. Like the Arkansas "stop use" order, the Connecticut embargo was based on the product's alleged status as an unapproved food additive.

On November 7 and 8, 1977, a FDA inspector made six separate visits to and inspections of Marshall's manufacturing facilities. The district court characterized these visits and inspections as harassing and threatening and noted that the FDA official on several occasions threatened Marshall with the use of criminal warrants if the inspector's various demands for the production of records and documents were not complied with. After these visits and inspections, Marshall unsuccessfully attempted to obtain the FDA's consent to the release of the 53,300 pounds of premix product being held by state officials in Arkansas and Connecticut.

On December 13, 1977, Marshall and Southeastern instituted this action pursuant to 42 U.S.C. § 1361, seeking a writ of mandamus and other equitable relief. On December 14, 1977, the FDA instituted a formal libel proceeding pursuant to 21 U.S.C. § 334 against the premix product being held by state officials in Arkansas. A similar § 334 proceeding was instituted in Connecticut on December 30, 1977. ⁶ While this action was pending before the district court, Marshall on January 30, 1978, received a letter from the FDA stating that the August 18, 1977, petition proposing a food additive regulation covering the gentian violet premix product would not be considered as having been filed because of certain deficiencies. This letter notice is inconsistent with procedures for prompt notice established by the agency's regulations. ⁷

The district court held an evidentiary hearing in this action and, in a March 3, 1978, opinion and order, granted equitable relief to Marshall and Southeastern. In part, the district court's order enjoined various federal officials charged with the enforcement of the Act from interfering in any way with the manufacturing and marketing of the appellees' gentian violet premix product and from inspecting or visiting the appellees' offices and plants. It also enjoined those same officials from failing to inform Marshall with specificity of the deficiencies in its August 18, 1977, petition, from failing to allow Marshall a reasonable time in which to correct such deficiencies, and from delaying final action on the petition. ⁸ The federal officials appeal only from that portion of the district court's judgment enjoining them from interfering with the manufacturing and marketing of the premix product and from inspecting or visiting the appellees' offices and plants.

I.

The district court acted in excess of its jurisdiction by enjoining the federal officials from interfering with the manufacturing and marketing of the appellees' premix product insofar as the injunction prohibited those officials either from making additional seizures of the product or from subsequently initiating additional enforcement proceedings under § 334. ⁹ Although a district court is not totally without jurisdiction to conduct pre-enforcement review of FDA actions, see Abbott Laboratories v. Gardner, 387 U.S. 136, 139-48, 87 S.Ct. 1507, 1510-15, 18 L.Ed.2d 681, 686-91 (1967), such jurisdiction is limited. In the instant case, the district court exceeded that jurisdiction.

In Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088 (1950), the Supreme Court upheld the multiple seizure provision of § 334 and, in so doing, concluded that district courts are without jurisdiction to review the FDA's determination of probable cause necessary for the initiation of enforcement actions. Id. at 600-602, 70 S.Ct. 873-74, 94 L.Ed. at 1094-1095. See also Pharmadyne Laboratories, Inc. v. Kennedy, 596 F.2d 568, 570-73 (3d Cir. 1979); ...