US v. An Article of Drug Neo-Terramycin

• Citation: 540 F. Supp. 363
• Decision Date: 06 May 1982
• Docket Number: Civ. A. No. CA3-79-615-D.
• Parties: UNITED STATES of America, Plaintiff, v. AN ARTICLE OF DRUG ... NEO-TERRAMYCIN SOLUBLE POWDER CONCENTRATE, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

540 F. Supp. 363

UNITED STATES of America, Plaintiff, v. AN ARTICLE OF DRUG ... NEO-TERRAMYCIN SOLUBLE POWDER CONCENTRATE, et al., Defendants.

Civ. A. No. CA3-79-615-D.

United States District Court, N. D. Texas, Dallas Division.

May 6, 1982.

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Richard E. Geyer, Assoc. Chief Counsel for Veterinary Medicine, Rockville, Md., Paula Mastropieri-Billingsley, Asst. U. S. Atty., Dallas, Tex., for plaintiff.

Robert Becker, Kleinfeld, Kaplan & Becker, Washington, D. C., Lee Simpson, Akin, Gump, Strauss, Hauer & Feld, Dallas, Tex., for Pfizer, Inc.

ORDER

ROBERT M. HILL, District Judge.

Came on for consideration before the Court the motion for disposition under 21 CFR § 558.15 filed by Pfizer, Inc. (Pfizer), claimant, and the motion for summary judgment filed by the United States, plaintiff. Having considered the motions, briefs and oral argument of the parties, as well as the evidence submitted in support of the motions, the Court is of the opinion that the motion for disposition under 21 CFR § 558.15 should be denied and that the motion for summary judgment should be granted.

The procedural posture of this action is set out in the Court's Order of December 14, 1981, 529 F.Supp. 230, denying Pfizer's motion to dismiss. To summarize, the United States initiated this action in rem under the Federal Food, Drug and Cosmetic Act (the Act), 21 U.S.C. § 334 (1972), seeking seizure and condemnation of a specified quantity of the animal drug Neo-Terramycin Soluable Powder Concentrate (Neo-Terramycin). Neo-Terramycin is a combination drug composed of the antibiotics neomycin and oxytetracycline. Following a trial to a jury, the jury found that Neo-Terramycin "is generally recognized" as safe and effective, contrary to the allegations of the United States. Subsequently, the United States filed a motion for a new trial, which the Court granted on May 8, 1981.

I. Motion For Disposition Under 21 CFR § 558.15

Pfizer contends that the marketing of Neo-Terramycin is subject to the jurisdiction of the Food and Drug Administration (FDA) under 21 CFR § 558.15 and that its status is governed by the interim marketing provision of that regulation. The government opposes this motion on the ground that Neo-Terramycin is not currently covered under § 558.15. The government also urges that this action can most expeditiously be disposed of on the merits and that returning the action to the FDA would simply result in the indefinite delay of the ultimate disposition of the action.

Section 558.15 was designed to encompass low-level (subtherapeutic), continuous (or long term) use of antibiotics and other anti-bacterials in feed for food-producing animals. The regulation resulted from an accumulation of evidence that long-term, low-level use of antibiotics in animal feed might result in the development of antibiotic-resistant bacteria, increasing the risk of bacterial disease in animals or humans. Upon the recommendation of an Antibiotic Task Force, the FDA, after notice and opportunity for comment, published a final regulation, 21 CFR § 135.109, the precursor of § 558.15, in the Federal Register of April 20, 1973. 38 Fed.Reg. 9811.¹ At the time 21 CFR § 135.109 was proposed and issued, the FDA considered water soluble products to be included within the definition of "animal feed" and thus within the scope of the regulation. Neo-Terramycin is a water soluble drug and therefore was initially covered by the regulation.

The FDA originally interpreted "animal feed" in its regulation to include drinking water. "Animal feed" is defined in the Act as

... an article which is intended for use for food for animals other than man and which is intended for use as a substantial source of nutrients in the diet of the animal, and is not limited to a mixture intended to be the sole ration of the animal.

21 U.S.C. § 321(x) (1972). Under this definition, the FDA was not required to include drinking water and non-nutrient additives within the definition of animal feed, because neither water nor antibacterial additives provide a substantial source of nutrients in the diet of the animal.

Section 135.109 required the submission of new animal drug applications (NADA's) for drugs not previously covered by NADA's, and certain data, by specified dates. Those drugs for which NADA's were submitted in response to the regulation were accorded "interim marketing" privileges, i.e., the drugs were allowed to remain on the market even though data was unavailable conclusively establishing their safety and effectiveness. The interim marketing privilege was provided to allow the continued marketing of drugs which had been marketed prior to the adoption of the regulation while testing was done that would conclusively demonstrate whether a real danger of the development of an antibiotic resistant bacteria existed as a result of long-term, subtherapeutic use of the drug in animal feed. It is undisputed that Pfizer submitted a NADA for Neo-Terramycin on July 16, 1973, in compliance with § 135.109.

On August 6, 1974, the FDA published in the Federal Register a list of all of the drugs that were to be covered by § 135.109. 39 Fed.Reg. 28382. No water soluble products were included in the list. See 39 Fed. Reg. 28394 et seq. On March 27, 1975, the FDA redesignated § 135.109 as § 558.15 as part of a general series of recodifications of FDA regulations. 40 Fed.Reg. 13802. The preamble to this recodification provided that the changes being made were nonsubstantive and therefore notice and public procedure was not required. Id. at 13803. A final order was issued by the FDA on February 25, 1976, listing the drugs covered by § 558.15. 41 Fed.Reg. 8282. Again, water soluble products were excluded from the list of drugs covered by the regulation.

When wetted down, the issues presented by Pfizer's motion are whether the FDA changed its interpretation of § 558.15 to exclude water soluble products and, if so, did it do so in a proper manner. The Court is of the opinion that the FDA properly did change its interpretation so that Neo-Terramycin is not covered by the interim marketing provision.

Neither party specifically addressed the proper scope of review to be conducted by the Court. In all cases, agency action must be set aside if the action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 414, 91 S.Ct. 814, 822, 28 L.Ed.2d 136 (1971); 5 U.S.C. § 706(2)(A) (1976). In certain narrow, limited circumstances, agency action is to be set aside if not supported by "substantial evidence." 5 U.S.C. § 706(2)(E) (1976). Review under the substantial evidence test is authorized only when the agency action is taken pursuant to the Administrative Procedure Act (APA), 5 U.S.C. § 553 (1976), or when the agency action is based on a public adjudicatory hearing. Overton Park, 401 U.S. at 414, 91 S.Ct. at 822. In other equally narrow circumstances, the reviewing court is to engage in a de novo review of the action and set it aside if it was "unwarranted by the facts." 5 U.S.C. § 706(2)(F) (1976). De novo review is authorized when the agency action is adjudicatory in nature and the agency fact-finding procedures are inadequate, or when issues that were not before the agency are raised in a proceeding to enforce a nonadjudicatory agency action. Overton Park, 401 U.S. at 415, 91 S.Ct. at 823.

De novo review is clearly inapplicable in this action. The Court does not decide whether the proper scope of review is the "arbitrary and capricious" standard or the "substantial evidence" standard, because the FDA's action in denying interim marketing approval to water soluble products meets the more stringent substantial-evidence test.²

A court should accord substantial deference to the interpretation of a regulation given by the agency charged with its administration. United States v. Rutherford, 442 U.S. 544, 553-54, 99 S.Ct. 2470, 2475-76, 61 L.Ed.2d 68 (1979); Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). Such deference is especially prudent in areas involving scientific and medical controversies. Public Citizen v. Foreman, 631 F.2d 969, 975 (D.C.Cir. 1980). The ultimate standard of review is a narrow one; the court is not empowered to substitute its judgment for that of the agency. Overton Park, 401 U.S. at 416, 91 S.Ct. at 823. Even if the action involves a new interpretation of a regulation, the traditional standard of deference applies. Montana Power Co. v. Environmental Protection Agency, 608 F.2d 334, 347 (9th Cir. 1979).

An agency, when faced with new facts, or in light of reconsideration of the relevant facts, may alter past interpretations or overturn past administrative rulings and practice. American Trucking Assoc. v. Atchison, Topeka & Santa Fe Ry., 387 U.S. 397, 416, 87 S.Ct. 1608, 1618, 18 L.Ed.2d 847 (1967); Spartan Radio Broadcasting Co. v. FCC, 619 F.2d 314, 322 (4th Cir. 1980). This principle, applied where a regulation was being amended in American Trucking and Spartan Radio, should be equally applicable in a situation where an agency is making a change not subject to the informal rule-making procedures of the APA. New interpretations may contradict the result obtained under the previous interpretations. Montana Power, 608 F.2d at 347. Generally, an agency's interpretation of the regulation should stand if it is one of several reasonable alternatives, even though it may not appear as reasonable as some other alternative. Expedient Service v. Weaver, 614 F.2d 56, 57 n.1 (5th Cir. 1980); Floyd S. Pike Electrical Contractor, Inc. v. OSHA, 576 F.2d 72, 75 (5th Cir. 1978).

Although the ultimate standard of review is a narrow one, a reviewing court must engage in a searching and careful review of the facts. Overton Park, 401 U.S. at 415-16, 91 S.Ct. at 823. This...