United States v. Research Laboratories

• Decision Date: 02 April 1942
• Docket Number: No. 9898.,9898.
• Citation: 126 F.2d 42
• Parties: UNITED STATES v. RESEARCH LABORATORIES, Inc.
• Court: U.S. Court of Appeals — Ninth Circuit

126 F.2d 42 (1942)

UNITED STATES v. RESEARCH LABORATORIES, Inc.

No. 9898.

Circuit Court of Appeals, Ninth Circuit.

February 24, 1942.

Rehearing Denied April 2, 1942.

J. Charles Dennis, U. S. Atty., of Seattle, Wash., and Frank Hale, Asst. U. S. Atty., of Tacoma, Wash., and Wm. W. Barron, Atty., Department of justice, of Washington, D. C., for appellant.

Howard P. Arnest and William S. Nash, both of Portland, Or., and Stephen F. Chadwick, Orville H. Mills, and Chadwick, Chadwick & Mills, all of Seattle, Wash., for appellee.

Before DENMAN, MATHEWS, and STEPHENS, Circuit Judges.

MATHEWS, Circuit Judge.

In the District Court of the United States for the Western District of Missouri, 143 packages of a drug called Nue-Ovo were proceeded against by appellant, the United States, on a libel for condemnation under § 304(a) of the Federal Food, Drug and Cosmetic Act,¹ 21 U.S.C.A. § 334(a). On application of appellee, Research Laboratories, Incorporated, claimant of the 143 packages of Nue-Ovo, the proceeding was removed to the District Court of the United States for the Western District of Washington. In that court appellant was ordered to, and did, amend its libel. To the amended libel (hereafter called the libel) appellee filed exceptions, one of which was that the libel "fails to state facts sufficient to constitute a cause of action." This exception was sustained and the proceeding was dismissed. From the order of dismissal this appeal is prosecuted.

The libel is crudely and inexpertly drawn. It does not state directly and positively, as a competently drawn libel would have stated, that the 143 packages of Nue-Ovo were misbranded when introduced into or while in interstate commerce. It does, however, state:

"That the said article Nue-Ovo² is misbranded in violation of the Federal Food, Drug and Cosmetic Act * * * in that the statements appearing in the labeling thereof, viz., in the circulars entitled `What is Arthritis,' accompanying the said article are false and misleading in this, that all and singular of the statement therein and the whole thereof create the impression in the mind of the reader thereof that the said article is a competent treatment for arthritis and excite a feeling of hope and expectation in the mind of a sufferer from arthritis that the use and consumption of said article will be beneficial in treatment of said disease, whereas the said article is not a competent and beneficial treatment for arthritis. * * *

"That on or about the 15th day of March, 1940, the said 143 packages, more or less, each containing 3 bottles of an article labeled in part `Nue-Ovo' were shipped * * * in interstate commerce from Chicago, Illinois, by Nue-Ovo, Inc., Chicago, Illinois, * * * to Crown Drug Company, Kansas City, Missouri, and said article now remains unsold in the possession of the Crown Drug Company at Kansas City, Missouri.

"That the said circular accompanied said article while in interstate commerce, and thereafter, in the following manner, to-wit:

"That a shipment of circulars from Nue-Ovo, Inc., Chicago, Illinois, designated by title as `What is Arthritis' (Exhibit A)<sup>3</sup> and containing the same printed words, letters and form, were received in interstate commerce by the Crown Drug Company of Kansas City, Missouri, at its warehouse * * * in said city simultaneously with the said article; that the said circulars and the said shipment of `Nue-Ovo' were placed, then and there, in the same room of the said warehouse for distribution to retail stores of the said Crown Drug Company at Kansas City, Missouri * * *."

Thus, in substance, the libel states that 143 packages of Nue-Ovo and printed circulars containing false and misleading statements concerning Nue-Ovo were shipped in interstate commerce from Chicago, Illinois, to Kansas City, Missouri, and that all the packages and all the circulars were so shipped by a single shipper (Nue-Ovo, Inc.) to a single consignee (Crown Drug Company) and were by said consignee simultaneously received in interstate commerce.

These statements must, for present purposes, be taken as true. Taking them as true, we hold that the circulars accompanied the packages and constituted their labeling within the meaning of the Act;⁴ that, since the circulars were false and misleading, the packages were misbranded within the meaning of the Act;⁵ that, since the circulars accompanied the packages in interstate commerce, the packages were misbranded while in interstate commerce within the meaning of the Act; and that, therefore, the packages — and, of course, their contents — are subject to condemnation.

The libel does not state, nor is it material, whether the packages and the circulars did or did not travel in the same crate, carton or other container or on the same train, truck or other vehicle during their interstate journey. The packages and the circulars had a common origin and a common destination and arrived at their destination simultaneously. Clearly, therefore, they accompanied each other, regardless of...