U.S. v. Western Serum Co., Inc.

Decision Date04 January 1982
Docket NumberNo. 80-5835,80-5835
Citation666 F.2d 335
PartiesUNITED STATES of America, Plaintiff-Appellee, v. WESTERN SERUM COMPANY, INC., Chemalytics, Inc., Iatric Corporation, corporations, and Wallace F. Schmidt, Edward J. Prochaska, William T. Northey, and Rickie M. Adams, individuals, Defendants-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

Steven A. Cohen, Phoenix, Ariz., argued, for defendants-appellants; Levenbaum, Cohen & Reed, Phoenix, Ariz., on brief.

John J. Powers, III, Dept. of Justice, Washington, D. C., argued, for plaintiff-appellee; Frederic Freilicher, Dept. of Justice, Washington, D. C., on brief.

Appeal from the United States District Court for the District of Arizona.

Before KENNEDY and ALARCON, Circuit Judges, and BELLONI, * District Judge.

KENNEDY, Circuit Judge:

Appellant Western Serum is a manufacturer of veterinary drugs. The United States instituted an enforcement action under the Federal Food, Drug and Cosmetic Act of 1938, 21 U.S.C. §§ 301-392 (1976) (herein "the Act"), seeking to enjoin Western Serum from distributing eleven of its drug products.

On the Government's motion for summary judgment, the requested injunction was granted. 1 Western Serum and its agents were "permanently restrained and enjoined from directly or indirectly introducing" any of the eleven drugs into interstate commerce, until a new drug application for each drug had been cleared by the FDA. The relevant statutes are set out in the margin. 2

Western Serum contends that the injunction granted against it was improper for three reasons. First, it is argued that as a matter of primary jurisdiction the FDA was required to conduct full hearings and conclude that the drugs involved are not "generally recognized as safe and effective" as a precondition to any determination that the products are "new drugs" under the statute and before seeking an injunction under § 332. Second, Western Serum contends that the 1968 grandfather clause, section 108(b)(3) of Pub.L. 90-399, 82 Stat. 342 (1968), found at 21 U.S.C.A. § 360b note (1972), excuses appellant from compliance with the requirements of section 360b. Western Serum makes a third argument, that since the Government did not raise the grandfather clause issue in its summary judgment motion, it was improper for the court to decide it. This third contention can be given short shrift. The district court did not err in giving summary judgment if it ruled correctly on the legal issues presented. To that question we now turn.


On the primary jurisdiction issue, the plain meaning of the statute, 21 U.S.C. § 332, gives federal district courts jurisdiction to enjoin any and all listed violations of the Act. The Supreme Court in Ciba Corp. v. Weinberger, 412 U.S. 640, 644, 93 S.Ct. 2495, 2498, 37 L.Ed.2d 230 (1973), however, stated, in considered dictum:

Cases may arise where there has been no formal administrative determination of the "new drug" issue, it being first tendered to a district court. Even then, however, the district court might well stay its hand, awaiting an appropriate administrative determination of the threshold question.

See also Weinberger v. Bentex Pharmaceuticals, Inc., 412 U.S. 645, 652-54, 93 S.Ct. 2488, 2493-94, 37 L.Ed.2d 235 (1973). Seizing upon this language, Western Serum claims that because administrative expertise is needed to resolve highly technical questions, and because the issue here is complex factually, the district court should have deferred proceedings on the injunction until the FDA had followed its own procedures to determine that the products in question were "new drugs."

The Government responds that the Supreme Court's language in Bentex and Ciba concerned a matter not briefed in those cases, and not properly at issue, and as ill-advised dicta should not be controlling here. The FDA appears to argue that district courts have no discretion to refuse to act pending FDA hearings, even in a particularly complicated and difficult case.

We are much aided in our consideration of the primary jurisdiction issue by the First Circuit's recent discussion of the same problem in United States v. Alcon Laboratories, 636 F.2d 876 (1st Cir. 1981). The court there stated (D)eference to an agency's primary jurisdiction makes little sense in the context of an enforcement proceeding initiated by the agency.... The agency's view of the question is clear and will have to be substantiated for the agency to prevail in court.... The government asserts, and we have found nothing to the contrary, that of the hundreds of enforcement actions brought by the FDA under section 505 (21 U.S.C. § 355 (1976)) since 1938, none save the present (that reversed by the First Circuit) has been remanded to the agency. Returning issues in an enforcement action to the FDA imposes an administrative burden for which the Act makes no provision, and insofar as the procedure delays adjudication of the regulatory status of the drug, may work to the disadvantage not only of the agency and public, but also of the manufacturer. In such circumstances, the power to remand must be used sparingly. Id. at 888-89.

In the case before us, Western Serum's products do not present a particularly difficult problem, aside from the legal issue of interpreting the 1968 grandfather clause. 21 U.S.C. § 321(w) defines a "new animal drug," in relevant part, as any drug "the composition of which is such that such drug is not generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of animal drugs, as safe and effective for use under the conditions described, recommended, or suggested in the labeling thereof." It is also settled that a drug is a new drug unless there is a consensus of informed opinion, founded on well-controlled clinical tests, that the drug is both safe and effective. Weinberger v. Hynson, Westcott & Dunning, 412 U.S. 609, 629-32, 93 S.Ct. 2469, 2483-2484, 37 L.Ed.2d 207 (1973); United States v. An Article of Drug ... Entrol-C Medicated, 513 F.2d 1127, 1128-29 (9th Cir. 1975). In his affidavit as an expert witness for the Government, Dr. Tennant denied that there is any scientific literature relevant to the safety and effectiveness of the drugs in question, much less the required consensus of qualified experts that the drugs are safe and effective. Nothing to the contrary was put forward by Western Serum. Its products are therefore new drugs under the statute unless Western Serum can find shelter under the 1968 grandfather clause. Existence of the purely legal question of interpretation of the grandfather clause did not oust the district court of jurisdiction. We hold the district court did not err in hearing the case.

The court below, 498 F.Supp. 863 (D.Ariz.1980), held, under the authority of United States v. X-Otag Plus Tablets, 441 F.Supp. 105 (D.Colo.1977), aff'd, 602 F.2d 1387 (10th Cir. 1979), that the question for its decision was whether the FDA had "probable cause to believe that the drug in question was a new drug." 498 F.Supp. at 865-66. Only if "probable cause" exists, under this theory, should a district court take jurisdiction to consider enjoining the marketing of a drug when there has been no previous formal FDA finding that the drug is a "new drug." We do not approve or disapprove this standard. Consideration of the existence or scope of any "discretion" to defer to the FDA in enforcement actions under a primary jurisdiction theory can await a more appropriate case. The scientific or other specialized expertise which breathes life into the doctrine of primary jurisdiction, see Nader v. Allegheny Airlines, 426 U.S. 290, 303-07, 96 S.Ct. 1978, 1986-88, 48 L.Ed.2d 643 (1976), was simply not needed for resolution of this case by the district court.


Western Serum's main contention at oral argument was that the district court erred in not permitting it to prove that the drugs in question met the prerequisites of the 1968 grandfather clause. This grandfather clause, section 108(b)(3) of Pub.L. 90-399, 82 Stat. 342 (1968), states:

In the case of any drug (other than a drug subject to section 512(n) of the basic Act as amended by this Act) intended for use in animals other than man which, on October 9, 1962, (A) was commercially used or sold in the United States, (B) was not a new drug as defined by section 201(p) of the basic Act as then in force, and (C) was not covered by an effective application under section 505 of that Act, the words "effectiveness" and "effective" contained in section 201(w) as added by this Act to the basic Act shall not apply to such drug when intended solely for use under conditions prescribed, recommended, or suggested in labeling with respect to such drug on that day. (Emphasis added).

Western Serum interprets the statute to state that if a drug was generally recognized as safe in 1962, then it is forever exempt from the premarketing approval otherwise required by the Act as to both safety and effectiveness. We reject this contention, which is inconsistent both with the language of the grandfather clause and the purpose of the Food, Drug and Cosmetic Act to protect the public health. See United States v. An Article of Drug ... Bacto-Unidisk, 394 U.S. 784, 798, 89 S.Ct. 1410, 1418, 22 L.Ed.2d 726 (1969).

Western Serum's assertion that 1962 is the only year in which recognition of safety need be proven relies on cases which discuss another grandfather clause of the Act, section 107(c)(4) of Pub.L. 87-781, 76 Stat. 780 (1962), reprinted at 21 U.S.C.A. § 321 note (1976). 3 Western Serum does not argue that this clause applies to its products but says that the 1968 grandfather clause at issue here should be interpreted in the same way as section 107(c)(4) of the 1962 grandfather clause. We accept the analogy, but not Western Serum's conclusion. None of the cases cited by Western Serum 4 focus on the issue of whether...

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