United States v. Undetermined Quantities of Drugs

675 F. Supp. 1113, 1987 U.S. Dist. LEXIS 12065, 1987 WL 26617
CourtDistrict Court, N.D. Illinois
DecidedDecember 21, 1987
DocketNo. 87 C 4665
StatusPublished
Cited by2 cases

This text of 675 F. Supp. 1113 (United States v. Undetermined Quantities of Drugs) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Undetermined Quantities of Drugs, 675 F. Supp. 1113, 1987 U.S. Dist. LEXIS 12065, 1987 WL 26617 (N.D. Ill. 1987).

Opinion

MEMORANDUM OPINION

BRIAN BARNETT DUFF, District Judge.

This case involves the seizure and potential condemnation of approximately $680,-000 worth of drugs used and manufactured by Travenol Laboratories (“Travenol”) at its Regional Compounding Center (“TRC”) in Morton Grove, Illinois. The United States government, the plaintiff in this action, seized the drugs on May 22, 1987, pursuant to a Complaint for Forfeiture granted by a district court that same day. Travenol has moved for the release from seizure of approximately $500,000 worth of these drugs pursuant to the Federal Food, Drug and Cosmetic Act (“the Act”), 21 U.S.C. § 301 et séq. and this court’s equitable powers. This court has jurisdiction pursuant to 28 U.S.C. § 1345 and 21 U.S.C. § 334. For the reasons set forth below, the motion is granted.

BACKGROUND

For the purposes of this motion, the facts are not in dispute. The $500,000 of drugs at issue here are “sterile active ingredients” — principally freeze-dried powders or concentrated liquids — that have been subject to Food & Drug Administration (“FDA”) review and approval and are therefore perfectly lawful; provided they are packaged and sold in accordance with applicable regulations. According to the government, however, since the mid-1980s, Travenol has been engaged in a program (“the TRC program”) in which it alters these “sterile active ingredients” to produce different drugs — “finished product”— and the TRC program does violate the Act.

On May 22, 1987, the government sought and obtained an order for the seizure of [1114]*1114approximately $680,000 worth of drugs from the. TRC. Of these drugs, approximately $180,000 worth was “finished product”; the other approximately $500,000 worth were “sterile active ingredients.” The government admits that the “sterile active ingredients” were not misbranded nor mislabeled and would thus be perfectly lawful drugs, were it not for their intended use in producing the allegedly unlawful “finished product.”

On December 11, 1987, Travenol sought release of the “sterile active ingredients” on the condition that they would not be used in the TRC program but would instead be sold and/or distributed in a lawful manner.1 Travenol noted that the “sterile active ingredients” have a limited “shelf-life” and argued that the continued forced storage of these products was resulting in undue waste of beneficial drugs as well as unnecessary storage costs.

The government responded that, even conceding everything Travenol said, this court lacks the power to order the release of the sterile active ingredients at this time. According to the government, these drugs were properly seized as the intended ingredients of unlawful drugs; accordingly, they may only be released in accordance with 21 U.S.C. § 334(d), which provides that a court may, in its discretion, order the release of products seized under the Act after a condemnation proceeding has been held and any issues regarding the lawfulness of the products resolved. Such condemnation proceedings have not yet been held.

On December 16, 1987, this court heard oral arguments on Travenol’s motion.2 During the arguments, both sides agreed that there exists only one question for this court to resolve now: Does § 304 of the Act, 21 U.S.C. § 334, prohibit this court from ordering the pre-condemnation release of any products properly seized pursuant to the Act even where the government concedes that the goods, if released, would be in full conformity with the law?

DISCUSSION

21 U.S.C. § 334, sets out a coherent scheme for the seizure, condemnation and final disposition of products which allegedly violate the Act. When the FDA believes that a drug violates the Act, it may seek condemnation of the drugs “on libel of information.” 21 U.S.C. § 334(a). The drug may be seized pre-trial “by process pursuant to the libel.” 21 U.S.C. § 334(b). The procedures employed by the court in resolving the motion for libel and any other pre-trial matters “shall conform, as nearly as may be, to the procedures in admiralty.” 21 U.S.C. § 334(b).

Once a trial is held, and the drugs condemned, the district court may do any one of three things. It may order the drugs destroyed; it may order them sold; or it may order them “delivered to the owner thereof to be destroyed or brought into compliance with the provisions of this chapter under the supervision of an officer or employee duly designated by the Secretary.” 21 U.S.C. § 334(d).

Thus, the statute does not directly address the question of whether drugs may be released prior to the completion of condemnation procedures. The defendant claims that, because it does not, this court may invoke its equitable powers to order the pre-condemnation release of the “sterile active ingredients.”

In Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946), the Supreme Court stated that “unless a statute in so many words or by a necessary and inescapable inference, re[1115]*1115stricts the court’s jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied.” Id. at 398, 66 S.Ct. at 1089. In United States v. K-N Enterprises, Inc., 461 F.Supp. 988 (N.D.Ill.1978), the court relied on Porter in ordering the post-condemnation recall of drugs, despite the absence in the Act of a specific provision for recall, because “the statute by which we are given jurisdiction over the controversy does not preclude such relief.” Id. at 990.

The government insists that this case differs from K-N Enterprises because the statute’s comprehensive scheme for condemning allegedly unlawful drugs gives rise to the “unescapable and necessary inference” that pre-condemnation release is always improper. In so arguing, the government ignores entirely the Act’s instruction that admiralty procedures should inform the disposition of seizures pursuant to the Act. Admiralty Rule E(9) specifically provides for situations in which perishable goods have been seized:

(b) Interlocutory Sales.

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Bluebook (online)
675 F. Supp. 1113, 1987 U.S. Dist. LEXIS 12065, 1987 WL 26617, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-undetermined-quantities-of-drugs-ilnd-1987.