Grand Laboratories, Inc. v. Patricia Harris, Secretary of Health, Education, and Welfare

660 F.2d 1288, 1981 U.S. App. LEXIS 17183

• Court: Court of Appeals for the Eighth Circuit
• Decided: October 2, 1981
• Docket: 80-1331
• Status: Published

Opinions

ARNOLD, Circuit Judge.

This is a suit by Grand Laboratories, Inc., to enjoin the Food and Drug Administration from inspecting its facilities in South Dakota. Grand manufactures animal biologies, which are products prepared from animal tissues or fluids, or from microorganisms, and used for the prevention or treatment of disease in animals. Plaintiff distributes its product wholly within the state of South Dakota, but some ingredients are shipped interstate to Grand’s laboratory. The FDA argued that it had the right to inspect Grand’s facilities because animal biologies are “drugs” within the meaning of the Food, Drug, and Cosmetic Act, 21 U.S.C. § 321(g)(1)(B), which defines “drug” to include “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals ... . ” The District Court relying on later Acts of Congress which will be detailed below, disagreed with FDA and held that animal biologies are not “drugs” for present purposes. It therefore issued the injunction prayed for. Grand Labs., Inc. v. Harris, 488 F.Supp. 618 (D.S.D.1980). A panel of this Court affirmed, one judge dissenting. Grand Labs., Inc. v. Harris, 644 F.2d 729 (8th Cir. 1981). We then granted the FDA’s petition for rehearing en banc, and now, after hearing argument, we reverse the District Court.

I.

An understanding of the issue presented in this case requires a brief summary of statutory lav/ in the field of drugs and biologies. A number of relevant propositions are undisputed. Laboratories making animal biologies for sale interstate are subject to regulation by the Department of Agriculture, and have been since the enactment of the Virus, Serum, and Toxin Act of 1913 (VSTA), 21 U.S.C. §§ 151-58. That Act provides in part:

It shall be unlawful for any person, firm, or corporation to prepare, sell, barter, or exchange in any place under the jurisdiction of the United States, or to ship or deliver for shipment from one State or Territory or the District of Columbia, any worthless, contaminated, dangerous, or harmful virus, serum, toxin, or analogous product intended for use in the treatment of domestic animals, and no person, firm, or corporation shall prepare, sell, barter, exchange, or ship as aforesaid any virus, serum, toxin, or analogous product manufactured within the United States and intended for use in the treatment of domestic animals, unless and until the said virus,'serum, toxin, or analogous product shall have been prepared, under and in compliance with regulations prescribed by the Secretary of Agriculture, at an establishment holding an unsuspended and unrevoked license issued by the Secretary of Agriculture as hereinafter authorized.

21 U.S.C. § 151.

It is agreed, on the other hand, that the VSTA does not authorize the Agriculture Department to regulate animal biologies manufactured and distributed wholly within one state, as Grand’s products are, even if a component used in the biologic has passed through interstate commerce. See Animal Health Inst. v. USDA, 487 F.Supp. 376 (D.Colo.1980).

It is also clear that all animal biologies, whether interstate or intrastate, are within the literal definition of “drug” in FDA’s governing statute, the Food, Drug, and Cosmetic Act of 1938. That definition, in full, is as follows:

(g)(1) The term “drug” means (A) articles recognized in the official United States Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United States, or official National Formulary, or any supplement to any of them; and (B) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; and (C) articles (other than food) intended to affect the structure or any function of the body of man or other animals; and (D) articles intended for use as a component of any article specified in clauses (A), (B), or (C) of this paragraph; but does not include devices or their components, parts, or accessories.

21 U.S.C. § 321(g)(1). The portion of this definition that is relevant for present purposes originated in the Food and Drug Act of 1906, 34 Stat. 768, 769, which defined “drug” to include “any substance or mixture of substances intended to be used for the cure, mitigation, or prevention of disease of either man or other animals.”

In an attempt to harmonize these provisions, both sides point to Section 902(c) of the Food, Drug, and Cosmetic Act (FDCA), as amended in 1968, 21 U.S.C. § 392(b). This statute provides:

(b) Nothing contained in this chapter shall be construed as in any way affecting, modifying, repealing, or superseding the provisions of section 262 of Title 42 (relating to viruses, serums, toxins, and analogous products applicable to man); the virus, serum, toxin, and analogous products provisions, applicable to domestic animals, of the Act of Congress approved March 4, 1913; the Filled Cheese Act of June 6, 1896, the Filled Milk Act of March 4, 1923; or the Import Milk Act of February 15, 1927.

Thus, we know that the FDCA does not modify or affect the power of the Department of Agriculture under the VSTA of 1913 over interstate animal biologies. Grand contends, and the District Court held, that Section 902(c) also bars FDA from regulating intrastate animal biologies. (It is agreed that the FDCA, read without reference to the harmonizing clause contained in Section 902(c), would validly give FDA power to regulate animal biologies sold intrastate, if an ingredient of the products had previously been transported interstate.) Under Grand’s view, it is subject to no federal regulation. FDA, on the other hand, would read Section 902(c) more literally. If a product is not subject to the VSTA (as intrastate animal biologies are not), it must, according to FDA, remain subject to its jurisdiction under the FDCA, assuming the product is within the words of the FDCA’s definition of “drug” (as intrastate animal biologies concededly are). FDA’s view, if accepted, would subject both interstate and intrastate animal biologies to federal regulation, although, perhaps anomalously, the regulation would be by different agencies.

II.

This case concerns products admittedly used for the prevention or treatment of disease in animals. The particular product around which the dispute here centers is known as “porcine mastitis-metritis-arthritis-infertility bacterin.” This bacterin contains, among other ingredients, aluminum hydroxide (itself a “drug”), which, according to evidence introduced in the court below, was purchased by the plaintiff Grand Laboratories, Inc., from a chemical firm in New Jersey and then shipped to South Dakota for use in the manufacturing process.

There is thus no doubt that the product involved here is within the literal definition of “drug” that Congress has adopted. Grand urges us not to apply the words of the statute as written for two main reasons: (1) the interpretation thus produced is unreasonable; and (2) Congress, by its actions in later years, primarily in 1913 and 1968, has shown that it really did not mean what it said in 1906.

We start with the proposition, recently repeated by the Supreme Court, that

When we find the terms of the statute unambiguous, judicial inquiry is complete, except “in ‘rare and exceptional circumstances.’ ” TV A v. Hill, 437 U.S. 153,187, n. 33 [98 S.Ct. 2279, 2298, n.33, 57 L.Ed.2d 117] (1978) (quoting Crooks v. Harrelson, 282 U.S. 55, 60, [51 S.Ct. 49, 50, 75 L.Ed. 156] (1930)).

Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981).¹ That Court has affirmed this principle with special force in respect of the very definition at issue in this case. In United States v. An Article of Drug . .. Bacto-Unidisk . . ., 394 U.S. 784, 89 S.Ct. 1410, 22 L.Ed.2d 726 (1969), the question was whether a laboratory aid known as an antibiotic sensitivity disc, used in a screening test for help in determining the proper antibiotic drug to administer to patients, was a “drug” within the meaning of 21 U.S.C. § 321(g)(1)(B), notwithstanding the fact that it was used exclusively in laboratory work and never came in contact with any part of the patient’s body. The Supreme Court reversed holdings by two courts below that the antibiotic discs were not drugs. The Court said:

. . . Congress fully intended that the Act’s coverage be as broad as its literal language indicates ....

394 U.S. at 798, 89 S.Ct. at 1418. The Court also referred, ibid., to “the well-accepted principle that remedial legislation such as the Food, Drug, and Cosmetic Act is to be given a liberal construction consistent with the Act’s overriding purpose to protect the public health . . . .”

The significance of this holding for present purposes is enhanced when it is recalled that the effect of a contrary holding in Bacto-Unidisk would probably not have been to exempt the discs from regulation altogether, since, if they had not been held to be “drugs,” they would almost certainly have been considered “devices,” and thus subject to regulation, though to a lesser extent, under another provision of the statute. Here, by contrast, a holding that animal biologies are not “drugs” would leave those substances, in cases where they are not actually shipped in their finished form across state lines, entirely free of all federal regulation.

The District Court ably argued that the result advocated by the Food and Drug Administration here would be illogical, in that certain kinds of animal biologies, those shipped across state lines, would be regulated by the Department of Agriculture, whereas certain other kinds, those not shipped across state lines but composed in part of ingredients that had been so shipped, would be regulated by the Food and Drug Administration. The resulting regulatory scheme, to be sure, is not so symmetrical as it could be, and if one were casting a vote in Congress, the arguments for placing the regulation of all animal biologies in the Department of Agriculture, as opposed to the Food and Drug Administration, would be strong indeed. It seems to us, however, that judges should usually resist the temptation to superimpose their own ideas of reason and logic on the clear words of a congressional enactment. We do not believe that a literal construction of this statute yields “results so manifestly unreasonable that they could not be attributed to congressional design .. .. ” United States v. Rutherford, 442 U.S. 544, 555, 99 S.Ct. 2470, 2477, 61 L.Ed.2d 68 (1979). It is no more reasonable, in our view, to conclude that Congress, despite the concededly unambiguous words of the 1906 statute, did not intend in that enactment to regulate animal biologies at all.

It is true that this construction of the statute leaves some questions unanswered about the subsequent conduct of the Congress. If, for example, animal biologies had already been regulated by the Act of 1906, why did Congress, in the Virus, Serum, Toxin Act of 1913 subject those products, when shipped interstate, to regulation by the Department of Agriculture? The question is a fair one, and we do not know the answer for certain. We do suggest, however, that when Congress enacts two provisions with respect to a given subject that appear to be inconsistent or conflicting, it is our duty to harmonize the provisions and to give effect to both of them to the extent possible. Here, the 1913 Act can be given full effect as written, without superseding the jurisdiction previously conferred over products of the kind at issue in this case by the 1906 Act. Grand rightly directs our attention to the Animal Drug Amendments of 1968, § 107 of which, 82 Stat. 342, is now codified at 21 U.S.C. § 392(b). This provision makes clear that the Food, Drug, and Cosmetic Act does not affect, modify, repeal, or supersede the Virus, Serum, Toxin Act of 1913. Plaintiff reads these words as indicating a general intention on the part of Congress not to regulate animal biologies at all except as expressly provided in the 1913 Act. The words need not be so read. Their literal meaning is simply to leave the regulation of animal biologies shipped across state lines in the Department of Agriculture, where it had been since 1913. No reference is made to the Act of 1906, and no such reference should be implied, in view of the universally received doctrine that repeals by implication are not favored.

It is perfectly true that Congress can act to cure the anomaly of FDA regulation of intrastate animal biologies, if it is an anomaly. It is equally true that Congress could overrule a holding by the courts that the Food and Drug Administration has the power to regulate animal biologies sold intrastate. The real question is, who shall bear the risk that, for reasons of inertia or otherwise, Congress may not act at all? We think it better that the risk be borne by the private parties seeking to avoid all federal regulation, rather than by the public agency seeking to defend the public health. No doubt there are cases when the literal meaning of a statute is absurd, and we are not, in those instances, obliged to abandon our common sense. In most cases, however, the safer course is to apply the law as written, secure in the knowledge that if we do so we cannot justly be accused of usurpation, and that a power exists that can correct us. In short, this is a case in which we should apply the aphorism of Mr. Justice Holmes that “[w]e do not inquire what the legislature meant; we ask only what the statute means.” Holmes, The Theory of Legal Interpretation, 12 Harv.L.Rev. 417, 419 (1899).

III.

The judgment of the District Court is reversed, and this cause is remanded to it with instructions to dismiss Grand’s complaint.

1 . See also United States Railroad Retirement Bd. v. Fritz, 449 U.S. 166, 179, 101 S.Ct. 453, 461, 66 L.Ed.2d 368 (1980): “the language of the statute is clear, and we have historically assumed that Congress intended what it enacted.”