U.S. v. Gel Spice Co., Inc.

• Citation: 773 F.2d 427
• Decision Date: 13 September 1985
• Docket Number: No. 1455,D,1455
• Parties: UNITED STATES of America, Appellee, v. GEL SPICE COMPANY, INC. and Barry Engel, Defendants-Appellants. ocket 85-1037.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 427

773 F.2d 427

UNITED STATES of America, Appellee, v. GEL SPICE COMPANY, INC. and Barry Engel, Defendants-Appellants.

No. 1455, Docket 85-1037.

United States Court of Appeals, Second Circuit.

Argued July 15, 1985.

Decided Sept. 13, 1985.

Raymond W. Phillips, Office of Consumer Litigation, Civ. Div., Dept. of Justice, Washington, D.C. (Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Raymond J. Dearie, U.S. Atty., Thomas Roche, Asst. U.S. Atty., E.D.N.Y., Brooklyn, N.Y., J. Patrick Glynn, Beverly Sherman Nash, Office of Consumer Litigation, Civ. Div., Dept. of Justice, Washington, D.C., David G. Adams, Jeffrey Freedman, Associate Chief Counsel, Food and Drug Admin., Washington, D.C., of counsel), for appellee.

J. Daniel Mahoney, New York City (Craig P. Murphy, Clifford G. Skibinsky, Windels, Marx, Davies & Ives, New York City, of counsel), for defendants-appellants.

Before PIERCE and PRATT, Circuit Judges, and STEWART, District Judge. ^*

PIERCE, Circuit Judge:

Gel Spice Company, Inc. (Gel Spice) and Barry Engel, President of Gel Spice, appeal from a judgment of the United States District Court for the Eastern District of New York (McLaughlin, Judge ), dated December 21, 1984, which found appellants guilty, after a bench trial, on all ten counts of an information charging them with violating the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Sec. 342(a)(4).

The district court found that the government did not act in bad faith in conducting inspections of Gel Spice's facilities and that Gel Spice had not made a sufficient preliminary showing to warrant an evidentiary hearing on this issue or to warrant access to certain government documents sought by appellants. The district court also held that appellant Engel did not establish the defense of impossibility. We affirm the decision of the district court.

BACKGROUND

At all relevant times, Gel Spice, a New York corporation, imported, processed, and packaged spices. The processing involved grinding, blowing, sifting, and repackaging the spices into consumer and industrial size containers. Barry Engel has been the President of Gel Spice since 1963 and has been responsible for the purchasing of spices and their storing, processing, and packaging at the company's office and warehouse at 593 McDonald Avenue, Brooklyn, New York. He, his brother Andre S. Engel, Gel Spice's Vice-President, and their mother owned equal shares of Gel Spice and signed checks and documents on behalf of the company.

The Federal Food, Drug, and Cosmetic Act (the Act), 21 U.S.C. Sec. 301 et seq., is enforced by the Food and Drug Administration (FDA). The purpose of the Act is the protection of the public from foods that FDA's primary statutory tool to ensure compliance with the Act is the statutory inspection authority granted in 21 U.S.C. Sec. 374. FDA officials and employees are authorized by this provision "to enter, at reasonable times, [after presenting appropriate credentials and a written notice to the owner] any ... establishment in which food [and other regulated products] are manufactured, processed, packed, or held ... and ... to inspect, at reasonable times and within reasonable limits and in a reasonable manner, such ... establishment, [including the facility's] equipment, finished and unfinished materials[,] containers, and labeling." 21 U.S.C. Sec. 374(a)(1). Nothing in 21 U.S.C. Sec. 374 requires FDA to obtain a warrant from a judicial officer.

are exposed to unsanitary conditions. The statute requires that foods be produced and held in sanitary facilities. 21 U.S.C. Sec. 342(a)(4). It prohibits distribution of "adulterated" food, which is defined, in part, as food which may have become contaminated with filth, regardless of whether filth is actually found in the food itself. Id.

The Act provides FDA with three principal enforcement mechanisms when it determines that the Act has been violated. The agency can request the United States Department of Justice (DOJ) to initiate a civil seizure action against any food that is adulterated, 21 U.S.C. Sec. 334, seek an injunction to restrain violations of any prohibited act, 21 U.S.C. Secs. 331 and 332, or seek to initiate criminal proceedings against any person who commits a prohibited act, 21 U.S.C. Secs. 331 and 333.

According to the government, the customary manner in which a legal action is initiated by FDA is as follows:

1. An inspection is conducted by an FDA investigator and a report is prepared.

2. Where inspection reveals violative conditions, the inspection report is referred to the Compliance Branch of the field office for review.

3. The field office may then recommend appropriate regulatory action (including legal action), if any, to the pertinent FDA Bureau, in this case the Bureau of Foods.

4. Where the possible legal action is criminal prosecution, the field office provides the potential defendants with an Opportunity to Present Views, pursuant to 21 U.S.C. Sec. 335, and 21 CFR 7.84 et seq. (a Section 305 hearing). The record from the hearing is then reviewed by the field office in determining appropriate legal action, if any.

5. The field [office's] recommended course of action is reviewed by the Bureau. If the Bureau concurs in the recommendation, the matter is then referred for approval to [the] Enforcement Policy Staff.

6. Recommendations for regulatory action, if approved by [that] office, are referred to the Office of General Counsel of FDA for review and approval.

7. If approved by FDA's Chief Counsel, then, and only then, is a matter formally referred to Justice (through the appropriate U.S. Attorney) for the institution of legal proceedings.

Appellee's Brief at 7-8.

In June 1972, FDA inspected Gel Spice and found a widespread rodent infestation at the firm. When reinspected in August 1972, there was evidence of a continuing rodent infestation. According to the government, following the June and August 1972 inspections, FDA considered a criminal prosecution against Gel Spice. However, before deciding whether to refer the case to the DOJ, FDA's Chief Counsel requested another inspection to determine current conditions. As a consequence, there was a July 1973 reinspection at which no evidence of rodent infestation was found, and therefore no referral for criminal prosecution was made to the DOJ.

Three years later in July 1976, the FDA inspected Gel Spice and found active rodent infestation. A civil seizure court action was instituted pursuant to 21 U.S.C. Sec. 334 Another inspection of Gel Spice's premises occurred on March 30, 1977. According to the government, this inspection was conducted pursuant to the FDA New York District Office's March 1977 work plans which, based upon several factors, including the prior regulatory history of the firm and the particular commodity manufactured or processed and the risk it presents, identify for each investigator the establishments he is assigned to inspect. This inspection again showed the presence of adulterated food; the FDA initiated another civil seizure action and the District Office again recommended to the Bureau of Foods that Gel Spice be issued a Section 305 hearing notice of possible criminal prosecution arising out of the March 1977 inspection.

against Gel Spice's foods that were adulterated. In October 1976, FDA held a Section 305 hearing to determine if Gel Spice should be criminally prosecuted based upon the results of the July 1976 inspection. Section 305 hearings afford a person against whom the FDA is contemplating a criminal prosecution "appropriate notice and an opportunity to present his views, either orally or in writing, with regard to such contemplated proceeding" before the matter is referred to the United States Attorney for prosecution. 21 U.S.C. Sec. 335. Following the section 305 hearing during which Gel Spice presented its views, FDA's New York District Office, in February 1977, recommended to the Bureau of Foods that it consider the criminal prosecution of Gel Spice for the July 1976 inspection.

Prior to a decision on this request for a hearing, Gel Spice was inspected again on July 6, 1977, allegedly as a result of a report received by FDA's Philadelphia District Office from the United States Defense Personnel Supply Agency. The Supply Agency had received and rejected a shipment of ground cinnamon manufactured by Gel Spice. The cinnamon had been rejected because of animal infestation. This July 1977 inspection revealed still more adulterated foods in Gel Spice's premises. Again, FDA initiated a civil seizure action as to the violative food products.

Thereafter, the District Office held a Section 305 hearing concerning both 1977 inspections. On February 28, 1978, FDA's New York Office submitted its prosecution recommendation based on the two 1977 inspections. The District Office's previous recommendation concerning the July 1976 inspection was still pending at the Bureau of Foods, so that after review of the charges arising out of the three inspections (July 1976, March 1977, and July 1977), on March 22, 1978 the Bureau approved and forwarded a prosecution recommendation to FDA's Enforcement Policy Staff headed by Joseph Hile. Hile approved and forwarded the recommendation to FDA's Chief Counsel. After final review, on September 18, 1978, the Chief Counsel referred the matter to the United States Attorney for the Eastern District of New York for prosecution. The referral covered violations disclosed during the July 1976 and March and July 1977 inspections. Subsequently, in January 1979, again consistent with its regular work plans, another inspection was made of Gel Spice which again revealed active rodent infestation. Following a civil seizure, a Sec. 305 hearing, in which Gel Spice participated, and all the necessary reviews, on November 21, 1979, the FDA's Chief Counsel made a further recommendation to the United States Attorney for prosecution arising out of the January 1979 inspection....