United States v. 7 Jugs, etc., of Dr. Salsbury's Rakos

• Citation: 53 F. Supp. 746
• Decision Date: 31 January 1944
• Docket Number: Civil Actions No. 125-127.
• Parties: UNITED STATES v. 7 JUGS, ETC., OF DR. SALSBURY'S RAKOS. SAME v. 16 CANS, ETC., OF DR. SALSBURY'S PHEN-O-SAL TABLETS. SAME v. 67 BOTTLES, ETC., OF DR. SALSBURY'S CAN-PHO-SAL.
• Court: U.S. District Court — District of Minnesota

53 F. Supp. 746

UNITED STATES v. 7 JUGS, ETC., OF DR. SALSBURY'S RAKOS.

SAME v. 16 CANS, ETC., OF DR. SALSBURY'S PHEN-O-SAL TABLETS.

SAME v. 67 BOTTLES, ETC., OF DR. SALSBURY'S CAN-PHO-SAL.

Civil Actions Nos. 125-127.

District Court, D. Minnesota, Second Division.

January 31, 1944.

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Blair, Curtis & Hayward and Marshall M. Holcombe, all of New York City, A. R. Eggert, of Charles City, Iowa, and Joseph N. Moonan and Ray G. Moonan, both of Waseca, Minn., for claimant, in behalf of the motion.

Victor E. Anderson, U. S. Atty., and Stanley V. Jacobson, Asst. U. S. Atty., both of St. Paul, Minn., for libelant, in opposition.

JOYCE, District Judge.

These proceedings arose as a result of libels of information filed by the United States on June 1, 1942, against certain quantities of three articles of drug labeled in part "Dr. Salsbury's Rakos", "Dr. Salsbury's Phen-O-Sal", and "Dr. Salsbury's Can-Pho-Sal", charging that these articles were misbranded in violation of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C.A § 301 et seq. and subject to seizure and condemnation. A monition was issued and the United States Marshal pursuant thereto attached the articles in the possession of Boote's Hatcheries and Packing Company, Worthington, Minnesota, hereinafter called "the Hatcheries", where they had been shipped on various dates after January 1, 1942, by Dr. Salsbury's Laboratories, Charles City, Iowa, hereinafter called "the Laboratories". Thereafter the Laboratories intervened as claimant. As a result of preliminary proceedings, amended libels were filed by the United States. Each of the amended libels charged that the three articles were misbranded in violation of Section 502 (a) as a result of the association between the articles and five printed booklets. (Government's Exhibits 1-5). These booklets, which are alleged to contain false and misleading representations concerning the effectiveness of the three articles in the treatment of specified diseases of poultry, were delivered to the Hatcheries by a sales representative of the Laboratories, and are alleged to have accompanied the articles in interstate commerce so as to constitute "labeling" as defined in Section 201 (m) (2) of the Act. Each of the libels has attached as exhibits such portions of these booklets as the government alleged were false and misleading. Answers filed by the claimant denied that the booklets constituted "labeling", denied that they contained false and misleading representations as to their effectiveness, and alleged that the three articles were not subject to seizure and condemnation under Section 304 (a) of the Act.

In order that the court might pass upon the questions of whether the booklets are "labeling" and whether the drugs are subject to seizure and condemnation, the parties stipulated the relevant facts. Claimant then moved to dismiss the libels upon the ground that the stipulation established that the articles of drug were not misbranded "when introduced into or while in interstate commerce" as required by Section 304 (a), and, therefore, this court had no jurisdiction over the subject matter of these proceedings. On September 13, 1943, an order was made denying this motion.

The three cases were consolidated for trial before a jury, and verdicts in favor of the United States were returned. The jury specially found that the three articles were misbranded. Appropriate decrees of condemnation and orders for destruction were submitted and approved. Claimant has now moved for new trials in each of the three cases and has assigned forty-five grounds of error.

It is proper that consideration first be given to those specifications of error which attack the propriety of the order denying the motion to dismiss the proceedings for want of jurisdiction over the subject matter. Although the stipulation specifically applies to Civil 125, involving the product Rakos, the parties have agreed that it is also typical of and applicable to Civil 126 and 127, involving the products Phen-O-Sal and Can-Pho-Sal.

From the stipulation it appears that the Laboratories is an Iowa corporation which distributes throughout the United States a line of poultry remedies designed for the prevention and treatment of diseases of poultry. Main offices are located at Charles City, Iowa, with branches at Columbus, Ohio, Fort Worth, Texas, and Kansas City, Missouri. Employing over 300 persons, the firm had sales in 1941 exceeding one million dollars. Distribution of its remedies is through hatcheries, drug stores, and feed and poultry houses, serviced by salesmen making regular calls.

One such salesman is Mr. A. F. Achilles, a resident of St. Paul, whose sales territory includes Worthington, Minnesota, where the Hatcheries are located. Since his employment on January 1, 1937, Achilles has made monthly calls on dealers in his territory in the solicitation of orders and rendering poultry services. Several times yearly, printed matter is shipped to Mr. Achilles by the Laboratories for distribution to his customers. In calling upon dealers, Achilles furnished them, "according to their needs and requirements and out of a supply carried in his car", with the type of booklets here involved. "Generally, Mr. Achilles, as part of his duties, on each of his regular calls on dealers, would determine whether sufficient quantities of the said booklets were on hand, and where the supply was low, it would be replenished out of supplies carried by him. Occasionally, a dealer, in order to maintain an adequate supply, would inform Mr. Achilles of his need for the said booklets without waiting for Mr. Achilles to check the quantity on hand." Where dealers desired replenishment of their stock of booklets prior to Achilles' monthly visit, request would be made upon the Laboratories, "sometimes in connection with an order for merchandise", and a supply would either be delivered by Achilles or sent in small quantities from Charles City, Iowa. "During the spring and fall of each year as desired, a dealer would be provided by Mr. Achilles with window, counter, wall and floor display cards and posters."

It further appears from the stipulation that the quantities of the product Rakos here involved were shipped in interstate commerce from Charles City, Iowa, via railroad, on January 16 and April 11, 1942, and via truck express, on May 4, 1942, to the Hatcheries at Worthington, Minnesota. Prior to these times, the booklets here involved had been shipped and caused to be shipped in interstate commerce by the Laboratories to Achilles at St. Paul, Minnesota. These were delivered by Achilles to the Hatcheries on January 14, 1942, and April 29, 1942, "where they were prominently displayed together with, in immediate proximity to and in association with various articles of drugs manufactured and sold by Dr. Salsbury's Laboratories including specifically the articles of drug labeled in part `Dr. Salsbury's Rakos' (including that quantity seized herein), `Dr. Salsbury's Phen-O-Sal', and `Dr. Salsbury's Can-Pho-Sal', and were available for reading and accessible for distribution with the sale, actual of potential, of these articles of drugs. The posters and display cards of the type herewith submitted as Exhibits A through E, which had been delivered by Mr. Achilles prior to the dates specified herein, were similarly displayed."

It is also stated that in addition to being displayed and available with the drugs, the booklets "are distributed by dealers * * * in over the counter transactions with purchases of one or more of the articles of drugs manufactured and sold by Dr. Salsbury's Laboratories including the articles of drug labeled in part, `Dr. Salsbury's Rakos', `Dr. Salsbury's Phen-O-Sal', and `Dr. Salsbury's Can-Pho-Sal'. Also, a store patron may freely avail himself of one or more of the said booklets even though making no purchase". It is also agreed that the principal distribution of Government's Exhibit 5, several million annually, is by direct mailing to farmers throughout the United States at the request of dealers. These are mailed from Mount Morris, Illinois, where they are printed.

The following provisions of the Act are pertinent to claimant's contention. Section 502(a) defines misbranding as follows: "A drug or device shall be deemed to be misbranded—(a) If its labeling is false or misleading in any particular." "Labeling" is defined by section 201(m) (2) to mean "all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article." So far as applicable, Section 304(a) provides that "Any article of * * * drug * * * that is * * * misbranded when introduced into or while in interstate commerce * * * shall be liable to be proceeded against while in interstate commerce, or at any time thereafter, on libel of information and condemned in any district court of the United States within the jurisdiction of which the article is found * * *."

The specific contention made by claimant is that the stipulation establishes that while the quantities of Rakos here involved were shipped on January 16, April 11, and May 4, 1942, the booklets had been shipped to Achilles prior thereto, and were delivered to the Hatcheries on January 14, and April 29, 1942. Therefore, there is said to be a complete lack of identity as to times of shipment, times of arrival and routes travelled between the drugs and the booklets. Accordingly, it is argued, the drugs were not misbranded "when introduced into or while in interstate commerce" as required by Section 304(a).

In passing upon this contention, of paramount importance is the fact that the Federal Food, Drug & Cosmetic Act is an enactment under the Commerce Clause. Accordingly, in construing its provisions, consideration should be given to the purposes of the Act, its history, the specific...