United States v. Food, 2,998 Cases ( 1995 )

United States Court of Appeals,
Fifth Circuit.
No. 94-30389.
UNITED STATES of America, Plaintiff-Appellant,
v.
FOOD, 2,998 CASES, etc., Defendant.
First Phoenix Group, Ltd., Claimant-Appellee.
Sept. 26, 1995.
Appeal from the United States District Court for the Eastern
District of Louisiana.
Before WOOD, Jr.,* JOLLY and DeMOSS, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
This appeal presents complex, difficult, and close questions.
It is, however, a case that is unlikely to arouse widespread
passion.
The case begins with an import alert for mushrooms canned in
China and falsely bearing the labels of certain Taiwanese
manufacturers. Based on the alert, the Food and Drug
Administration (the "FDA") detained two shipments of mushrooms
owned by appellee First Phoenix Group Limited, Inc. ("First
Phoenix"). The question that drives this appeal is what is to be
done with these mushrooms now that they have been detained by the
Customs Service at the port of entry; First Phoenix argues that it
*
Circuit Judge of the Seventh Circuit, sitting by
designation.
1
is entitled to "reexport"1 them, and the FDA argues that it has the
authority to destroy them. The FDA filed a complaint in the United
States District Court for the Eastern District of Louisiana,
asserting authority to destroy the mushrooms under 21 U.S.C. § 334
of the Federal Food, Drug, and Cosmetic Act (the "FDCA"). First
Phoenix argued that when imported goods are detained at the port of
entry, the FDA could invoke only the administrative procedures
under 21 U.S.C. § 381 of the FDCA to refuse entry of the goods into
the United States and then allow First Phoenix ninety days to
"reexport" the mushrooms before the FDA could destroy them. The
district court agreed and dismissed the FDA's complaint. The
resolution of whether the district court erred in dismissing the
complaint depends upon whether the mushrooms were ever "introduced
into interstate commerce" within the expansive definition contained
in the FDCA; and, second, upon whether, in the statutory scheme,
Congress intended that § 334 judicial proceedings could be invoked
only after the goods had been released from the Customs Service.
We conclude, given the broad statutory definition of
interstate commerce, that the mushrooms were in interstate commerce
and that neither the plain words of the statute nor congressional
intent behind the statute bars FDA's proceeding under § 334 in this
case.
I
1
This inside term is somewhat misleading. When imported
goods have been refused admission into the United States,
"reexport" is a convenient term describing the opportunity given
to the importer to send these goods out of the United States.
2
In October 1989, the Food and Drug Administration (the "FDA")
issued an "import alert"2 for all canned mushrooms processed in
China in response to a food-borne illness caused by staphylococcal
enterotoxin found in canned mushrooms produced in nine China
factories. Appellee First Phoenix Group Limited, Inc. ("First
Phoenix"), an importer of food products, purchased several orders
of canned mushrooms supposedly packaged at Hwa Chen Industrial
Corporation ("Hwa Chen") in Taiwan. In late spring 1992, First
Phoenix attempted to enter two shipments of mushrooms—3,000 cases
and 6,000 cases—into the United States. The 3,000-case shipment
was unloaded at Savannah, Georgia, transported under a United
States Customs Service transit bond to a bonded warehouse in Tampa,
Florida, and offered for entry on May 26, 1992. The United States
Customs Service (the "Customs Service") conditionally released
these mushrooms under bond pending review by the FDA. The
mushrooms then were shipped to a bonded warehouse in New Orleans,
Louisiana, the destination city for each shipment, and have
remained in this warehouse since this time. The 6,000-case
shipment was unloaded at Long Beach, California, in early July
1992, transported under a Customs Service transit bond to a bonded
warehouse in New Orleans, and offered for entry on behalf of First
Phoenix by Transoceanic Shipping.
On July 10, 1992, the FDA issued a second import alert
2
An import alert advises FDA field offices of ongoing
problems with a specific product offered for import and suggests
appropriate action, such as detention for inspection and
sampling.
3
advising its field offices to detain shipments of canned mushrooms
from specified Taiwanese manufactures, including Hwa Chen. The FDA
issued this import alert because mushrooms labelled as packaged and
produced from these specified manufacturers actually were processed
and packaged in an unknown factory in China. Because of this
import alert, the FDA issued Notices of Detention and Hearing for
the 3,000-case shipment on July 29, and for the 6,000-case shipment
on December 14.3 In these notices, the FDA indicated that it was
acting under its power in § 381(a) of the Federal Food, Drug, and
Cosmetic Act (the "FDCA"), 21 U.S.C. §§ 301 et seq. Based on an
examination of cans from both shipments4 and additional information
provided by Hwa Chen, the FDA determined that the mushrooms were
not processed or packaged in Taiwan. The FDA thus concluded that
an unknown factory in China used Hwa Chen's can codes in a
deliberate attempt to circumvent the broad import alert on canned
mushrooms originating in China. The FDA then advised First Phoenix
that it would likely refuse admission of the mushrooms and allow
reexport only under very strict conditions. The FDA, however,
issued no formal notice of refusal of admission. The FDA then
conducted additional testing of a separate lot of mushrooms
ostensibly packaged at Hwa Chen and shipped into the United States
by First Phoenix, but not at issue in this appeal. Based on
staphyloccal enterotoxin found in these mushrooms, the FDA informed
3
Between July 29 and December 14, First Phoenix located a
purchaser in Russia for the mushrooms.
4
The FDA sampled the mushrooms from the 3,000-can shipment,
but found no adulteration of the mushrooms.
4
First Phoenix of its decision to destroy the mushrooms, rather than
allow reexport. Thus, the FDA decided to proceed under the
authority provided in 21 U.S.C. § 334, instead of proceeding under
21 U.S.C. § 381.
Accordingly, on November 3, 1993, the government filed a
complaint in the United States District Court for the Eastern
District of Louisiana seeking seizure and condemnation of both
shipments of mushrooms as adulterated and misbranded goods in
interstate commerce under its authority in 21 U.S.C. § 334(a) of
the FDCA. Under the district court's warrant for the arrest of
both shipments, the United States Marshals Service seized and
attached the shipments at the New Orleans warehouse where they were
stored upon entry into New Orleans and continue to be held at the
present time. On April 19, 1994, the district court granted
summary judgment in favor of First Phoenix and dismissed the
government's case. The district court held that the mushrooms had
never entered interstate commerce as required for an action under
§ 334(a) because they had continually remained under Customs
Service transit bonds. The district court thus determined that the
Customs Service remained in control of the mushrooms since their
import into the United States. Finally, the court concluded that
§ 381(a) was the government's exclusive authority with respect to
the mushrooms and gave First Phoenix the opportunity to reexport
the two shipments before being destroyed by the FDA. Thereafter,
the district court denied the government's motion for
reconsideration and granted its motion for a stay of the judgment
5
pending appeal.
On appeal, the government argues that because the mushroom
shipments fall within the statutory definition of "interstate
commerce," it had the authority to bring a § 334 seizure and
condemnation action in the district court. The government further
contends that its authority to act under this statute is unaffected
by the fact that the administrative remedy in § 381 is also
available to it in this case. The government thus concludes that
the district court erred in granting summary judgment in favor of
First Phoenix on the basis that § 381 restricted the government's
authority under § 334 to situations when the goods at issue were in
"interstate commerce."
II
In this appeal, we must consider whether the district court
erred in granting summary judgment in favor of First Phoenix and
dismissing the government's complaint on the grounds that the facts
here failed to demonstrate a claim under § 334.5 To resolve this
5
Because this is a case on appeal from the district court's
grant of summary judgment, we review the record de novo.
Calpetco 1981 v. Marshall Exploration, Inc., 989 F.2d 1408, 1412
(5th Cir.1993).
The government argues that the FDA's interpretation of
the statutes at issue in this case should be given
"controlling weight." See Chevron, U.S.A., Inc. v. Natural
Resources Defense Counsel, Inc., 467 U.S. 837, 843, 104
S. Ct. 2778, 2782, 81 L. Ed. 2d 694 (1984) (holding permissible
interpretation of agency charged with administering statute
at issue must be given controlling weight when Congress had
not addressed question at issue). Because it appears that
the FDA interpreted § 334 and § 381 at such a time and in
such a manner so as to provide a convenient litigating
position for this suit, we disagree and conclude that the
FDA's position is not controlling. See Irving Indep. Sch.
6
question, first, we must determine whether imported goods, which
never are released from Customs Service upon arrival in the United
States satisfy the interstate commerce requirement, as defined in
the FDCA. Second, we must determine whether a § 334 judicial
proceeding may be brought with respect to goods seized at the port
of entry and never released by the Customs Service or whether in
these circumstances, the FDA is limited to the administrative
procedures under § 381. We hold that the interstate commerce
requirement has been satisfied in this case and that goods seized
at the port of entry may be the proper subject of an action under
§ 334. We therefore reverse the judgment of the district court and
remand for further proceedings not inconsistent with this opinion.
III
A
We first examine whether the mushrooms in this case were
introduced into "interstate commerce," as required to initiate a
seizure and condemnation action under § 334. In relevant part, 21
U.S.C § 334(a)(1) provides:
Any article of food, drug, or cosmetic that is adulterated or
misbranded when introduced into or while in interstate
commerce or while held for sale ... after shipment in
interstate commerce ... shall be liable to be proceeded
against while in interstate commerce, or at any time
thereafter, on liable of information and condemned in any
district court of the United States ... within the
jurisdiction in which the article is found.
21 U.S.C. § 334(a)(1) (1972 & Supp.1995). Thus, to initiate an
Dist. v. Packard Properties, 970 F.2d 58, 64 (5th Cir.1992)
(discounting strategically timed and conveniently favorable
agency interpretation given after agency's involvement in
litigation over the disputed provision).
7
action for seizure and condemnation, the FDA must prove only that
the goods have been introduced into interstate commerce,
notwithstanding the fact that the goods may be removed at some
later time from interstate commerce. The FDCA expansively defines
interstate commerce as "commerce between any State or Territory and
any place outside thereof."6 21 U.S.C. § 321(b) (1972). Here,
each shipment was shipped from a place outside the United
States—Taiwan—and entered the United States at Savannah, Georgia,
and Long Beach, California, respectively, where they arrived and
were unloaded.7 There is some suggestion, however, that these
mushrooms may have been effectively detained at sea by the import
alert and thus were removed from the stream of commerce before they
actually entered the United States. If, however, goods are
destined for sale in a state other than the place from which they
are shipped, then goods are in "interstate commerce" without the
necessity of physically crossing a state boundary. Merchants Fast
6
We have found very few cases interpreting this provision
and none within our circuit. In Roseman v. United States, 364
F.2d 18 (9th Cir.1966), cert. denied, 386 U.S. 918, 87 S. Ct. 879,
17 L. Ed. 2d 789 (1967), the Ninth Circuit broadly interpreted
interstate commerce under § 321(b) to include transportation from
Canada into the United States and from Washington to California.
Roseman, 364 F.2d at 24 (citing 230 Boxes, More or Less, of Fish
v. United States, 168 F.2d 361 (6th Cir.1948)). The court noted
that § 321(b) included "importation" within its definition as a
means to avoid the possibility that someone could transport
"merchandise into the United States or from one border state to
another via a foreign country without conforming to the
substantive provision of the FDCA and without violating" the
FDCA. Roseman, 364 F.2d at 26.
7
When these goods left Taiwan, they were destined for New
Orleans and were unloaded in Georgia and California because
overland transportation was more convenient and inexpensive than
direct shipment to New Orleans, Louisiana.
8
Motor Lines, Inc. v. Interstate Commerce Comm'n, 528 F.2d 1042,
1044 (5th Cir.1976); see Texas v. United States, 866 F.2d 1546,
1556 (5th Cir.1989) (stating intent at time of shipment is crucial
to determination of essential character of shipment as interstate
or intrastate). Thus, we conclude that the mushrooms in this case
undoubtedly constituted an interstate shipment from the moment they
left Taiwan.
The question remaining is whether these goods, which were
never released for sale in the United States from the Customs
Service, were also in "commerce," as required by § 321(b). First
Phoenix argues that these mushrooms could not possibly be in
commerce because from the moment the goods were placed on alert,
even before they arrived in the United States, and at all times
thereafter, sale of these goods in the United States was prohibited
by the FDA. First Phoenix additionally argues that because the
mushrooms were held under Customs Service bonds8 since arriving in
the United States, they were never introduced into interstate
commerce as required in § 334 for a condemnation action. First
8
A Customs Service bond includes any bond required under
Customs laws or regulations in order to perform a particular
Customs activity. 19 C.F.R. § 113.61 (1994). Under 19 U.S.C. §
1553, "[a]ny merchandise, other than ... merchandise the
importation of which is prohibited, ... may be entered for
transportation in bond through the United States by a bonded
carrier without appraisement or the payment of duties." 19
U.S.C. § 1553 (1980 & Supp.1995). Here, both shipments were
transported under bond and to New Orleans based on § 1553. These
bonds were obtained to secure duties, taxes, and other charges
due on the shipments of the imported mushrooms. See 19 C.F.R. §
113.62 illust. a (requiring bond securing duties, taxes, and
charges imposed or estimated to be due if merchandise is released
from Customs custody).
9
Phoenix attempts to place an impossibly narrow construction on a
very broad statute. Regardless of the government's impediments to
the sale of these goods once they reached the United States, these
goods nevertheless had been shipped to the United States for the
express purpose of sale when they left Taiwan. Although restricted
from immediate sale by the import alert and other FDA action, and
although they may now have been removed from commerce by the import
alerts, the goods were "introduced" into interstate commerce—for
the purpose of satisfying the statutory requirements here—when they
left Taiwan because they had been then injected into the mercantile
stream and were on their way to a market in the United States where
potential purchasers awaited. In sum, we hold that these mushrooms
had been introduced into interstate commerce at the time they were
detained by the Customs Service, given the expansive and
unrestricted definition of § 321(b).
Having determined that the mushrooms had been introduced into
interstate commerce, it is plain on the face of the statute that §
334 is a judicial remedy available to the FDA in this case. We now
must address, however, First Phoenix's argument that Congress
intended § 334 to apply only to seizures of goods that have been
released from the Customs Service. In short, First Phoenix argues
that only the administrative procedures under § 381 may be invoked
by the FDA when the goods are seized at the port of entry and not
yet admitted into the United States. We now turn to consider this
question of whether § 334 and § 381 create two mutually exclusive
statutory remedies for goods under the FDCA.
10
B
(1)
As earlier discussed, § 334(a) is a judicial remedy available
to the FDA allowing it to seize and condemn any goods that have
been introduced into or are already in interstate commerce or after
shipment is in interstate commerce, but if the FDA chooses to
proceed under this statute it must prove in a court of law by a
preponderance of the evidence that the goods are indeed adulterated
or misbranded. Section 381, on the other hand, is purely an
administrative procedure, which allows a quick and efficient means
of protecting the American public from unhealthy or mislabeled
imported goods. In relevant part, 21 U.S.C. § 381(a) provides:
The Secretary of the Treasury shall deliver to the Secretary
of Health ... samples of food, drugs, and cosmetics which are
being imported or offered for import into the United States
... [and] if it appears from the examination of such samples
... that ... such article is adulterated, [or] misbranded such
article shall be refused admission, except as provided in
subsection (b) of this section. The Secretary of the Treasury
shall cause the destruction of any article refused admission
unless such article is exported, under regulations prescribed
by the Secretary of the Treasury, within ninety days of the
date of notice of such refusal or within such additional time
as may be permitted pursuant to such regulations.
21 U.S.C. § 381(a) (1972 & Supp.1995) (emphasis added).9
Clearly no provision of § 381 expressly restricts the
authority of the FDA from proceeding judicially under § 334 when it
seizes and holds goods at the port of entry in the United States.10
9
The FDA has not issued a formal notice of refusal of
admission of these mushrooms.
10
We point out that § 381 undoubtedly only applies to goods
detained at the port of entry and any seizure of imported goods
after release by the Customs Service must submit to judicial
11
If goods are, in point of time, both "in interstate commerce" and
"being imported or offered for import into the United States," as
the mushrooms here, the plain words of the statutes permit the
government the option of proceeding under either § 334 or § 381.11
We now examine First Phoenix's arguments, based primarily on
legislative history and statutory construction, that these statutes
do create mutually exclusive systems for dealing with imported
adulterated or misbranded goods, i.e., § 381 applies exclusively to
goods at the port of entry and § 334 applies exclusively to goods
that have been released from the Customs Service.
(2)
proceedings under § 334. The question here is whether these
statutes provide overlapping remedies for goods seized at the
port of entry so that the government, at that point, may chose to
proceed under either § 334 or § 381.
11
First Phoenix argues that the express language of § 381
mandates that adulterated goods being imported or offered for
import, as here, shall be refused admission. Once admission is
refused, First Phoenix argues, § 381 grants the importer an
unqualified right to reexport the goods within ninety days of
this refusal. First Phoenix contends, and the district court
agreed, that allowing the FDA the option of proceeding under §
334 or § 381 when the imported goods meet the prerequisites of
both would emasculate its unqualified right granted by § 381 to
reexport goods within ninety days of refusal of admission.
We acknowledge that this plain language projects a
forceful argument that importers have an unequivocal right
to a notice of refusal of admission. And it is true that if
the FDA proceeds under § 334, as they have in this case, the
importer does not receive a notice of refusal of admission
and the concomitant right to reexport. Nevertheless, we are
convinced that the more compelling view of the statutory
scheme, for reasons we express in this opinion, is that the
FDA has an option to proceed under either statute with
respect to goods detained at the port of entry, and if the
government chooses to proceed under § 334, the right to a
notice of refusal and opportunity to reexport provided in §
381 simply is inoperative.
12
When Congress enacted the FDCA in 1938, it intended to
strengthen the provisions of its predecessor act—the Federal Food
and Drugs Act of 1906 (the "1906 Act").12 H.R.REP. No. 2139, 75th
Cong., 3d Sess. (1938), reprinted in FEDERAL FOOD, DRUG, AND COSMETIC
ACT: A STATEMENT OF ITS LEGISLATIVE RECORD 816 (Charles Wesley Dunn ed.,
1987) (hereinafter LEGISLATIVE RECORD). Without substantial change,
Congress modeled § 334 and § 381 of the FDCA13 after § 1014 and §
12
The Supreme Court noted:
By the Act of 1938, Congress extended the range of its
control over illicit and noxious articles and stiffened
the penalties for disobedience. The purposes of this
legislation thus touch phases of the lives and health
of people which, in the circumstances of modern
industrialism, are largely beyond self-protection.
Regard for these purposes should infuse construction of
the legislation if it is to be treated as a working
instrument of government and not merely as a collection
of English words.
United States v. Dotterweich, 320 U.S. 277, 280, 64 S. Ct.
134, 136, 88 L. Ed. 48 (1943) (internal citations omitted).
13
With the exception of the two amendments discussed later
in this opinion, the 1938 versions of § 334 and § 381 are
substantially similar to those presently in effect and quoted in
relevant part earlier in this opinion.
14
The seizure and condemnation provision contained in § 10
of the 1906 Act provided in relevant part:
any article of food ... that is adulterated or
misbranded within the meaning of this act, and is being
transported from one State, Territory, District, or
insular possession to another for sale, or, having been
transported, remains unloaded, unsold, or in original
unbroken packages, or if it be sold or offered for sale
in the District of Columbia or the Territories, or
insular possessions of the United States, or if it be
imported from a foreign country for sale, or if it is
intended for export to a foreign country, shall be
liable to be proceeded against, ... and seized for
confiscation by a process of libel for condemnation.
13
11,15 respectively, of the 1906 Act. See H.R.REP. NO. 2130,
reprinted in LEGISLATIVE HISTORY at 818, 827 (stating that FDCA
retained without substantial change seizure and condemnation
provision of § 10 and import-export provision of § 11 of 1906 Act).
Specifically, the FDA's power to refuse admission under § 381 to
goods appearing adulterated and "being imported or offered for
import into the United States" remained virtually identical to §
11. With regard to the seizure and condemnation provision,
Congress compacted the extensive language of § 10, describing the
legal character of goods subject to condemnation, simply to those
Food and Drugs Act of 1906, § 10, reprinted in LEGISLATIVE
RECORD at 832 (emphasis added). This entire enumeration of
instances when goods could be seized and condemned was
replaced in § 334 with "when introduced into or while in
interstate commerce or while held for sale ... after
shipment in interstate commerce." The underscoring above,
however, demonstrates that § 10, according to its express
terms, would have been clearly applicable to the mushrooms
in this case.
15
The import-export provision contained in § 11 of the 1906
Act provided in relevant part:
The Secretary of the Treasury shall deliver to the
Secretary of Agriculture ... samples of foods and drugs
which are being imported into the United States or
offered for import ... and if it appear from the
examination of such samples that any article of food or
drug offered to be imported into the United States is
adulterated or misbranded within the meaning of this
act ... the said article shall be refused admission,
and the Secretary of the Treasury shall ... cause the
destruction of any goods refused delivery which shall
not be exported by the consignee within three months
from the date of notice of such refusal.
Food and Drugs Act of 1906, § 11, reprinted in LEGISLATIVE
RECORD at 832-33. This provision remained substantially
unchanged when enacted as § 381, with the exception that the
three months given for reexport was technically changed to
ninety days in § 381.
14
goods "introduced into or while in interstate commerce or while
held for sale ... after shipment in interstate commerce."16
First Phoenix primarily relies on the two substantial post-
1938 amendments to § 334 and § 381 as support for its position that
Congress intended § 334 and § 381 to operate mutually exclusively.
Prior to 1949, § 381—unlike § 334—did not allow importers the right
to bring adulterated or misbranded goods into compliance with FDA
standards. In 1949, however, Congress amended § 381 to give
importers this opportunity to cure—an opportunity already
recognized, as put by the congressional reports, "with respect to
articles seized in domestic commerce and condemned by court decree"
under § 334. S.REP. NO. 890, 81st Cong., 1st Sess. (1949),
reprinted in 1949 U.S.C.C.A.N. 2147, 2147 (emphasis added). This
underscored language suggests that Congress understood that § 334
applied to goods in domestic commerce, with the implication that §
381 was the applicable statute for proceeding against goods at the
port of entry. Moreover, First Phoenix argues with some force that
if imported goods detained at the port of entry have already been
16
First Phoenix recognizes that Congress intended no
substantial change from the 1906 Act with respect to the
administrative and judicial proceedings of the FDCA. First
Phoenix contends, however, that the provisions were always
intended to be mutually exclusive remedies for the FDA when
dealing with adulterated or misbranded goods. First Phoenix
argues that § 11 of the 1906 Act provided the government's
exclusive authority with respect to goods detained at the port of
entry and allowed the government only to refuse entry of these
goods into the United States. First Phoenix contends that this
limited power of exclusion for goods detained at the port of
entry continued in § 381 of the FDCA. First Phoenix thus
concludes that the FDA has never had the power to proceed
judicially to destroy the goods that are never released from the
Customs Service.
15
"introduced into interstate commerce" within the meaning of § 334,
then Congress would have had no reason to amend § 381 to give the
FDA the option of allowing the importer to bring his goods into
compliance because this option was already available in § 334 for
goods in interstate commerce. Therefore, First Phoenix contends
that Congress, recognizing that goods detained by the Customs
Service at the port of entry are not subject to § 334, amended §
381 to provide importers the opportunity to cure goods not yet
admitted into the United States.
Next, in 1957, Congress amended § 334 to provide importers an
opportunity, as similarly provided in § 381, to reexport goods in
certain instances when, in the words of the congressional report,
the imported goods "have been seized by the Food and Drug
Administration and condemned at places within the United States
other than at the original port of entry." S.REP. NO. 993, 85th
Cong., 1st Sess. (1957), reprinted in U.S.C.C.A.N. 1791, 1791
(1957). The report explained that "[a]t the present time the
Federal Food, Drug, and Cosmetic Act permits the reexportation of
articles if they were seized at the original port of entry ...
[but] does not permit reexportation of imported articles ... after
such articles have entered domestic commerce." S.REP. NO. 993, 85th
Cong., 1st Sess. (1957), reprinted in U.S.C.C.A.N. 1791, 1791
(1957). Indeed, the Secretary of Health, Education, and Welfare
seemed to take note that § 334 applied when adulterated goods were
seized in domestic situations: his report provided that the
amended § 334 would allow food "imported from foreign countries and
16
entered through customs into the United States, if subsequently
seized under domestic provisions of the law as violative of the
Food, Drug, and Cosmetic Act may under certain conditions be
reexported." S.REP. NO. 993 (quoting Report by M.B. Folsom,
Secretary of the Department of Health, Education, and Welfare
(August 13, 1957)). Those conditions, now part of the statute as
a result of the 1957 amendment, are, first, the FDCA violation must
not have occurred after the article was imported and, second, the
importer must have had "no cause for believing that it was
adulterated, misbranded, or in violation before it was released
from customs custody." 21 U.S.C. § 334(d) (emphasis added). First
Phoenix contends that because the right to reexport under § 334 is
expressly limited to goods that have left the port of entry, no
right to reexport goods condemned under § 334 exists with respect
to goods detained at the port of entry. The right to reexport
goods detained at the port of entry does exist, however, under §
381. This distinction between the two statutes clearly indicates,
according to First Phoenix, that the rights of importers whose
goods are detained at the port of entry are embodied only in § 381
and the rights of importers whose goods are detained after they are
released from the port of entry are found in § 334. Thus, First
Phoenix cites this 1957 amendment to § 334 as evidence that
Congress intended separate, independent and mutually exclusive
procedural mechanisms for goods detained at the port of entry, on
the one hand, and goods admitted into the United States, on the
other hand.
17
In short, First Phoenix concedes that Congress intended to
strengthen the United States' food and drug laws when it enacted
the FDCA, but argues that nothing in the legislative history or
statutory scheme indicates that Congress intended to extend the
FDA's power under § 334 to goods offered for import. Instead,
First Phoenix argues that Congress understood these two statutes
applied at two distinct points in time—before release from the
Customs Service and after release—and amended these statutes in
order to provide parallel rights under § 381 and § 334. First
Phoenix accordingly contends that the legislative history and the
statutory scheme supports its view that Congress intended the
remedies provided under § 334 and § 381 to operate in mutually
exclusive circumstances—an administrative proceeding under § 381 to
refuse adulterated or misbranded goods detained at the port of
entry and a judicial proceeding under § 334 to seize and condemn
goods after admitted into the United States.
(3)
We can appreciate the arguments of First Phoenix as pointing
to how the statues logically and practically operate. It certainly
appears true that Congress assumed that § 381 and § 334 ordinarily
apply in separate factual circumstances. Furthermore, we recognize
the more recent amendments of 1949 and 1957 were intended to
provide certain parallel rights in each situation.
The legislative history, however, also makes clear that
Congress intended to empower the FDA with the broadest possible
authority over imported contaminated goods. The plain words of the
18
statute expansively define "interstate commerce" to effectively
include foreign commerce. Moreover, no statutory language
prohibits the application of § 334 to goods seized at the port of
entry. Although the legislative history demonstrates that Congress
was under the impression that § 334 and § 381 ordinarily operate
exclusive of each other, we cannot say, in the face of Congress's
broad definition of interstate commerce, that Congress intended to
preclude the FDA from ever pursuing the judicial remedy provided in
§ 334 in cases deemed appropriate by the FDA. There will, from
time to time, be plausible and practical bases for allowing the
government the option of proceeding under § 334 or § 381 when goods
are detained at the port of entry. As we have observed, the
procedures and burdens established by these two statutes are quite
different. When the government lacks the ability to prove a
violation of the FDCA by a preponderance of the evidence, or when
the risks to human health are not major or critical, the government
can pursue the administrative procedures of § 381 and simply
require reexportation of the goods. Consequently, the risk of
property loss to the owner of the goods is minimized, threats to
health and other interests of consumers are avoided, and no
significant legal process is required. On the other hand, when the
circumstances pose a critical risk to the health of United States
citizens, the FDA has the option of initiating a judicial
condemnation proceeding under § 334. In this situation, the FDA
can destroy the goods without giving the importer the opportunity
to reexport, but only after proving by a preponderance of the
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evidence that the goods are adulterated or misbranded.
Accordingly, this more cumbersome remedy has the effect of
protecting the property rights of the owner of the goods who do not
have the opportunity to reexport. At the same time, § 334 allows
the government a sure mechanism, i.e., destruction, to prevent the
possibility of undetected reimportation of dangerous goods into the
United States. We find this optional system rational and find no
sufficient reason to disregard the plain language of § 334, which
would be necessary if we accepted the arguments of First Phoenix.
In sum, we find no indication that Congress intended to tie the
hands of the FDA to deny it flexibility.
We therefore hold that the plain language of § 334 permits the
FDA to initiate a seizure and condemnation action, such as the one
before us, when goods are seized at the port of entry. The
district court is REVERSED and the case REMANDED for further
proceedings not inconsistent with this opinion.
REVERSED and REMANDED.
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