US v. ARTICLES OF ANIMAL DRUG, ETC., Civ. No. 80-0-309.

• Decision Date: 04 November 1981
• Docket Number: Civ. No. 80-0-309.
• Citation: 528 F. Supp. 202
• Parties: UNITED STATES of America, Plaintiff, v. ARTICLES OF ANIMAL DRUG CONTAINING DIETHYLSTILBESTROL ..., Defendant.
• Court: U.S. District Court — District of Nebraska

528 F. Supp. 202

UNITED STATES of America, Plaintiff, v. ARTICLES OF ANIMAL DRUG CONTAINING DIETHYLSTILBESTROL ..., Defendant.

Civ. No. 80-0-309.

United States District Court, D. Nebraska.

November 4, 1981.

Thomas D. Thalken, U. S. Atty., Omaha, Neb., for plaintiff.

John F. Thomas, Omaha, Neb., for defendant.

MEMORANDUM OPINION

SCHATZ, District Judge.

This in rem civil action was commenced on May 7, 1980, by the United States of America (hereinafter United States or government) pursuant to the Federal Food, Drug, and Cosmetic Act (hereinafter the Act), 21 U.S.C.A. § 301 et seq. The government seeks a decree, pursuant to 21 U.S. C.A. § 334(a)(1), condemning as adulterated certain articles of animal drug containing diethylstilbestrol (hereinafter DES). More specifically, the complaint alleges that the articles proceeded against are adulterated while held for sale after shipment in interstate commerce within the meaning of the Act, 21 U.S.C.A. § 351(a)(5), in that each is a new animal drug 21 U.S.C.A. § 321(w) which is unsafe 21 U.S.C.A. § 360b(a)(1) (A) since no approval of an application filed pursuant to § 360b(b) is presently in effect with respect to its use or intended use, and no notice of a claimed investigational exemption under 21 U.S. C.A. § 360b(j) and regulation 21 C.F.R. § 511.1 (1980) is on file for the drug in question.

Pursuant to the warrant for arrest issued by this Court, the above-captioned articles of drug were seized on May 16, 1980, by the United States Marshal for this District. Foxley & Company (hereinafter claimant) thereafter intervened in the action by filing a claim to the seized articles and an answer to the complaint. Based upon a stipulation by and between the United States and claimant, this Court ordered that claimant be appointed custodian for the seized articles pending further court order.

On the basis of the pleadings, answers to interrogatories, admissions on file and supporting affidavits, the parties have now cross-moved for summary judgment pursuant to Fed.R.Civ.P. 56. It is settled that summary judgment motions are appropriate in libel actions brought pursuant to the Act. United States v. 14 Cases, Etc., "Naremco Medi-Matic, 374 F.Supp. 922, 926 (W.D.Mo. 1974); United States v. Article of Device ... Cameron Spitler, 261 F.Supp. 243, 244 (D.Neb.1966).

In the brief in support of its motion for summary judgment, the United States essentially argues that: (1) there is no genuine issue as to the fact that the seized articles are new animal drugs which are unsafe and, therefore, adulterated within the meaning of the Act; (2) the seized articles of drug are "held for sale" by claimant as a matter of law since they are being held for a purpose other than the personal consumption of the ultimate consumer; and (3) whether the seized articles were legally adulterated when purchased and received by claimant is immaterial to this proceeding in view of the Act's purpose to reach adulterated articles at all stages of commerce.

In the brief in support of its motion for summary judgment, the claimant essentially argues as follows: (1) claimant's purchase of the seized articles, which occurred prior to the effective date of the decision by the FDA Commissioner to withdraw approval of new animal drug applications for DES, was lawful; (2) the articles of drug containing DES purchased and received by claimant have not been "held for sale" after October 31, 1979; (3) claimant is not in violation of the FDA's ban on the use of DES animal drugs since claimant has not implanted any cattle since the effective date of said ban (November 1, 1979); and (4) claimant's mere possession of the article of drug in question is not presently illegal.

The chosen starting point for analysis of the above-described cross motions for summary judgment is 21 U.S.C.A. § 334(a)(1), which in pertinent part provides:

Any article of food, drug, or cosmetic that is adulterated or misbranded ... while held for sale (whether or not the first sale) after shipment 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 ....

To obtain a judgment of condemnation of a seized article of drug under 21 U.S.C.A. § 334(a)(1), therefore, the government must prove that the item seized is (1) a new animal drug (2) which is adulterated (3) while held for sale (4) after shipment in interstate commerce. The Court now turns to a brief discussion of each of these requisite elements as applied to the case at bar.

New Animal Drug

This Court finds, and claimant does not contest, that the articles of drug containing DES, which were seized on May 16, 1980, constitute a new animal drug within the meaning of 21 U.S.C.A. § 321(w). See "Diethylstilbestrol; Withdrawal of Approval of New Animal Drug Applications; Commissioner's Decision," 44 Fed.Reg. 54,852 (1979).

Adulteration

A new animal drug is deemed to be adulterated 21 U.S.C.A. § 351(a)(5) for purposes of the Act if it is unsafe 21 U.S. C.A. § 360b(a)(1)(A). And such a drug is deemed to be unsafe unless there is in effect an approval of a new animal drug application filed pursuant to 21 U.S.C.A. § 360b(b) with respect to the use or intended use of such drug, or a notice of claimed investigational exemption under 21 U.S. C.A. § 360b(j) is on file for the drug in question.

The claimant, Foxley & Company, has admitted that there is no approved new animal drug application in effect for the articles of drug seized in this action. Claimant's response to request 4 of plaintiff's first requests for admissions. Further, claimant has filed no notice of claimed investigational exemption under 21 U.S. C.A. § 360b(j) and Regulation 21 C.F.R. § 511.1 (1980) with respect to the articles of drug in question. Claimant's response to request 5 of plaintiff's first requests for admissions. As a result the Court finds that the new animal drug seized herein is unsafe, and thus adulterated, within the meaning of the Act.

Held for Sale

Title 21, U.S.C.A. § 334(a)(1) requires inter alia that adulterated articles sought to be condemned must have been "held for sale" after their shipment in interstate commerce. Claimant apparently contends the United States has failed to demonstrate as a matter of law that the DES animal drugs in claimant's possession were held for sale at the time of seizure. In support thereof, claimant has submitted the affidavit of Jerald E. Swanson, D.V.M., an employee of Foxley Cattle Company. Doctor Swanson's affidavit states in part: "The DES seized has not been held for resale by Foxley Cattle Company nor implanted in any cattle owned by Foxley Cattle Company after October 31, 1979 ..." Claimant has also represented that, at the time of seizure, the articles of drug containing DES were being held for return to their manufacturer in exchange for a refund of the purchase price. Claimant's response to request 6 of plaintiff's first requests for admissions; claimant's answer to plaintiff's interrogatory No. 5.

It is well established that the terms "while held for sale" as they appear in the Federal Food, Drug, and Cosmetic Act have been given by courts an expansive rather than a technical construction. United States v. 10 Cartons ... Hoxsey Tablets, 152 F.Supp. 360, 364-65 (W.D.Pa.1957). Indeed, whenever there is a problem of construction involving the federal food and drug law, the duty of courts is to liberally construe provisions of the Act, being mindful of its overriding purpose to protect the lives and health of the public. Meserey v. United States, 447 F.Supp. 548, 553 (D.Nev. 1977). In United States v. Sullivan, 332 U.S. 689, 696-97, 68 S.Ct. 331, 335-336, 92 L.Ed. 297 (1948), the Supreme Court explained that the words "while such article is held for sale after shipment in interstate commerce" apparently were intended by Congress "to extend the Act's coverage to every article that had gone through interstate commerce until it finally reached the ultimate consumer."

Courts have construed the "held for sale" clause to cover situations in which adulterated or misbranded articles are held by a retailer, United States v. Sullivan, supra; a wholesaler, DeFreese v. United States, 270 F.2d 730, 731 (5th Cir. 1959), cert. denied, 362 U.S. 944, 80 S.Ct. 810, 4 L.Ed.2d 772 (1960); and a bailee, United States v. Wiesenfeld Warehouse Co., 376 U.S. 86, 92, 84 S.Ct. 559, 563, 11 L.Ed.2d 536 (1964). Physicians holding drugs for use in their practice may hold drugs for sale within the meaning of 21 U.S.C.A. § 331(k). United States v. Evers, 643 F.2d 1043, 1050 (5th Cir. 1981). Devices, held by medical practitioners and used in the treatment of patients, are properly considered "held for sale." United States v. Diapulse Corp. of America, 514 F.2d 1097, 1098 (2d Cir.), cert. denied, 423 U.S. 838, 96 S.Ct. 66, 46 L.Ed.2d 57 (1975); United States v. Article of Device ... Cameron Spitler, supra, 261 F.Supp. at 246. Owners of a bakery have been convicted of violating the Act by holding adulterated flour for sale even though they planned to sell bread and rolls made from the flour rather than the flour itself. United States v. Cassaro, Inc., 443 F.2d 153, 155 (1st Cir. 1971).

This Court subscribes to the view that an article of drug or device is "held for sale" if it is used for any purpose other than personal consumption. United States v. Articles of Device Acuflex; Pro-Med, 426 F.Supp. 366, 368 n.3 (W.D.Pa.1977); see United States v. Article of Device ... Cameron Spitler, supra. The animal drugs containing DES at issue here clearly were not being held for personal consumption by an ultimate consumer, and were, therefore, "held for sale" under 21 U.S.C.A. § 334(a)(1...