Note. The 2006 introduction of Supplemental Rule G described in Civil Resource Manual 146 now requires that a court make a finding of probable cause before issuing a warrant for arrest of property not already in the government's possession. Federal Rules of Civil Procedure, Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, Rule G(3)(b)(ii). We have not encountered significant litigation under this new rule.
Under the former rule governing these procedures, the district court clerk issued a seizure warrant upon filing of the complaint and warrant application as a ministerial act, with no required showing of probable cause. These procedures were upheld against constitutional attack under the Fourth Amendment. United States v. Argent Chemical Laboratories, Inc., 93 F.3d 572 (9th Cir. 1996).
Any attack on the constitutionality of current procedures should fail in light of the requirements of the new rule. More fundamentally, however, the principles discussed below and in the Ninth Circuit's opinion demonstrate that no showing of probable cause is constitutionally required.
Below is the government's brief in this case. See Civil Resource Manual 148 for the reply brief in this case.
STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION
The district court had jurisdiction over the government's complaint for forfeiture under 28 U.S.C. 1331, 28 U.S.C. 1345, and 21 U.S.C. 334.
The district court entered an order quashing the government's Warrant for Arrest In Rem on December 15, 1994. The government filed its notice of appeal on February 7, 1995, within the sixty days permitted by Fed. R. App. P. 4(a)(1). "[I]t has long been understood that valid seizure of the res is a prerequisite to the initiation of an in rem civil forfeiture proceeding." Republic Nat'l Bank of Miami v. United States, 113 S. Ct. 554, 557 (1992). Thus, the order quashing the government's warrant for arrest is effectively a final judgment precluding further proceedings in this case. In any event, the order quashing the warrant for arrest conclusively determines the propriety of the warrantless seizure in a manner that would escape review if a probable cause warrant were now obtained, and thus falls within the collateral order doctrine. United States v. Henderson, 844 F.2d 685, 687 n.1 (9th Cir. 1988). See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). This Court therefore has jurisdiction over this appeal pursuant to 28 U.S.C. 1291.
STATEMENT OF THE ISSUE PRESENTED FOR REVIEW
Whether the issuance of a Warrant for Arrest In Rem against certain veterinary drugs by a district court clerk, in conformity with the procedures outlined in the Federal Food, Drug and Cosmetic Act and the Supplemental Rules for Certain Admiralty and Maritime Claims, violates the Fourth Amendment.
STATEMENT OF THE CASE
A. Nature of the Case.
This is an action to condemn certain veterinary drugs held by Argent Chemical Laboratories, Inc. of Redmond, Washington ("Argent"), that are alleged to be adulterated within the meaning of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301 et seq. ("FDCA"). Pursuant to the Supplemental Rules for Certain Admiralty and Maritime Claims ("Supplemental Rules"), the United States sought and obtained a Warrant for Arrest In Rem for the drugs from the deputy clerk of the United States District Court for the District of Washington.
Argent, which claimed an ownership interest in the drugs, filed a motion to quash the warrant, contending that the seizure of its drugs without a prior judicial determination of probable cause violated the Fourth Amendment. The United States opposed the motion, noting that the Fourth Amendment's warrant requirement does not apply to companies, like Argent, that operate in pervasively regulated industries.
The district court (Coughenour, J.) ordered the warrant quashed and the drugs returned to the company. In the court's view, before seizing Argent's drugs, the government was required to obtain a warrant "based upon probable cause and authorized by a detached judicial officer." Excerpts of Record ("E.R.") 28. On the government's motion, the court stayed its order pending this appeal.
B. Statutory and Regulatory Framework.[FN1]
FN1. Pertinent provisions of the FDCA and the Supplemental Rules are reprinted in the addendum to this brief.
The FDCA generally prohibits persons from adulterating or misbranding medical or veterinary drugs in interstate commerce, and from selling or receiving such drugs. 21 U.S.C. 331(a)-(c). The statute defines the term "drug" to include "articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals," 21 U.S.C. 321(g)(1)(B), "articles (other than food) intended to affect the structure or any function of the body of man or other animals," id. 321(g)(1) (C), and "articles intended for use as a component of" a drug. Id. 321(g)(1)(D).
A drug is "adulterated" if, among other things, "the methods used in, or the facilities or controls used for, its manufacture, processing, packing, or holding do not conform to or are not operated or administered in conformity with current good manufacturing practice to assure that such drug meets the requirement of this chapter as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess." 21 U.S.C. 351(a)(2)(B). The Food and Drug Administration ("FDA"), which administers the FDCA, has promulgated a detailed set of regulations outlining current good manufacturing practice in the manufacture and preparation of human and animal drugs. See 21 C.F.R. Pts. 210 and 211.
The FDCA states that any article of a drug that has been adulterated "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." 21 U.S.C. 334(a)(1). The statute further provides that "[t]he article * * * proceeded against shall be liable to seizure by process pursuant to the libel, and the procedures in cases under this section shall conform, as nearly as may be, to the procedure in admiralty; except that on demand of either party any issue of fact joined in any case shall be tried by jury." Id. 334(b).
The Supplemental Rules for Certain Admiralty and Maritime Claims ("Supplemental Rules") "apply to the procedure in statutory condemnation proceedings analogous to maritime actions in rem, whether within the admiralty and maritime jurisdiction or not." Suppl. Rule A. Under the Supplemental Rules, an action in rem may be brought "[w]henever a statute of the United States provides for a maritime action in rem or a proceeding analogous thereto." Suppl. Rule C(1)(b). Such an action is commenced by a complaint, which must "be verified on oath or solemn affirmation," and which must "describe with reasonable particularity the property that is the subject of the action." Suppl. Rule C(2).
The Supplemental Rules require prior judicial review of the complaint before the issuance of a warrant for arrest of the property subject to the action, "[e]xcept in actions by the United States for forfeitures for federal statutory violations." Suppl. Rule C(3). Where an action by the United States for a forfeiture for a federal statutory violation is involved, the Supplemental Rules provide that the "the clerk, upon filing of the complaint, shall forthwith issue a summons and warrant for the arrest of the vessel or other property without requiring a certification of exigent circumstances." Ibid.
C. Proceedings Below.
Argent is a company that produces and repackages bulk chemicals, herbicides, and drugs for veterinary use. Clerk's Record ("C.R.") 7, at 1. Argent's drugs are used to treat diseases of fish, including diseases in fish that are intended for human consumption. C.R. 11, at 1.
On July 29, 1994, the United States filed a verified complaint for forfeiture of certain drugs held by Argent. E.R. 1. The drugs, which were listed on Attachment A to the government's complaint, consisted of, among other things, various containers of Paracide-F, Prolong, Acriflavine, Finquel, Malachite Green, Trance, and Erythromycin. E.R. 5-7.[FN2]
FN2. Briefly, Paracide-F and Acriflavine are parasiticides used to control external parasites on various species of fish. Malachite Green is intended to combat various funguses and external protozoa that can affect fish. Finquel and Trance are anesthetics/tranquilizers intended to reduce fish mortality during shipping and confinement. Prolong is a product intended to enhance the lifespan of fish and other aquatic life held in confined tanks and other holding facilities by reducing stress and conditioning the water. Erythromycin is a broad-spectrum antibiotic used, among other things, to treat kidney disease in fish.
The government's complaint alleged that the drugs were adulterated within the meaning of the FDCA because their manufacture, processing, packing and holding did not conform to current good manufacturing practice ("GMP") as described in applicable FDA regulations. E.R. 2. Specifically, the government alleged, several recent inspections of Argent's facilities had disclosed that: (1) the company had failed to have a functioning "Quality Control Unit" in place, in violation of 21 C.F.R. 211.22(a), (2) batch records were unavailable in whole or in part for certain lots of drug products, in violation of 21 C.F.R. 211.180 and 211.188, (3) inventory records "frequently do not agree with the amount of drug on hand," and distribution records "frequently do not agree with lot or control numbers so that the product may be traced," in violation of 21 C.F.R. 211.150(b), (4) records "documenting the maintenance, sanitation and cleaning of buildings and equipment" were missing, in violation of 21 C.F.R. 211.182, and (5) manufacturing and packaging operations were being overseen "by a person who lacks training and experience in drug technology" in violation of 21 C.F.R. 211.25(b). E.R. 2-3. The government therefore asked that the drugs be condemned and disposed of in accordance with the FDCA. E.R. 3.
With the filing of its complaint, the government obtained a warrant for arrest of the listed drugs from the clerk of the United States District Court for the Western District of Washington. E.R. 10. The warrant, which was signed by the deputy clerk, commanded the United States Marshal to arrest the drugs, and provided for due notice upon all known potential claimants by personal service as well as by publication in a local newspaper of general circulation. E.R. 10-11.
After asserting its ownership interest and answering the government's complaint, Argent filed a motion to quash the warrant, contending that the use of the Supplemental Rules to seize the drugs without a prior judicial determination of probable cause violated the Fourth Amendment's warrant clause. C.R. 7, at 3-8. Argent also asserted that "nearly all" of the deficiencies described in the government's complaint had been corrected by the date of the seizure. Id. at 9.
The government opposed the motion to quash. C.R. 11. It pointed out that under decisions such as Colonnade Catering Corp. v. United States, 397 U.S. 72 (1970), and United States v. Biswell, 406 U.S. 311 (1972), there is a well-recognized exception to the warrant requirement for businesses, like Argent, that are closely regulated, where the regulatory scheme provides a constitutionally adequate substitute for a warrant. C.R. 11, at 3-9. On the merits, the government noted that any remedial steps Argent might have taken to improve its manufacturing processes would only affect drugs it manufactured or packaged in the future, but could not affect the adulterated status of the seized drugs that were made under previous -- and admittedly inadequate -- manufacturing processes. Id. at 11. In any event, the government explained, Argent's arguments on the merits did not provide a basis for quashing the warrant, but went to the substance of the underlying condemnation action. Id. at 9-10.
Without discussing Argent's assertion that it had corrected "nearly all" of the claimed violations, the district court found that the seizure violated the Fourth Amendment and issued an order granting Argent's motion to quash. E.R. 20-29. The court acknowledged that the Supreme Court has carved out an exception to the Fourth Amendment's warrant requirement for closely regulated businesses, and has applied it in cases involving the liquor industry, firearms dealers, coal mines, and automobile junkyards. E.R. 22-23. The court also recognized that the constitutionality of the FDCA's general authorization of warrantless inspections of drug company premises, see 21 U.S.C. 374, "would obviously be subject to analysis under Colonnade-Biswell," E.R. 26, and that "a well-defined scheme for inspecting pervasively regulated businesses may survive Fourth Amendment scrutiny." E.R. 27 (emphasis added). Nonetheless, finding this Court's decision in United States v. An Article of Device * * * "Theramatic", 641 F.2d 1289 (9th Cir. 1981) ("Theramatic I"), to be "binding authority," the district court concluded that the government could not seize drugs without "a warrant based upon probable cause and authorized by a detached judicial officer." E.R. 27-28. The court therefore ordered the government to return the seized drugs to Argent. Id. at 29.
On the government's motion, the district court stayed its order pending appeal. E.R. 30-32. The court observed that there was "conflicting authority on the question of whether in rem arrest warrants may constitutionally be issued pursuant to 21 U.S.C. § 334 and Supplemental Rule C," and that thus the government's "chances of success on appeal cannot be deemed less than "fair.'" E.R. 30-31. In addition, the court noted, if the drugs were returned, Argent could sell or otherwise transfer them, thereby removing the subject matter of the in rem action from the control of the court and depriving the court of appeals of jurisdiction over the case. E.R. 31. This appeal followed.
SUMMARY OF ARGUMENT
The government's complaint alleges significant deficiencies in Argent's compliance with the FDA's regulations governing current good manufacturing practice. These deficiencies, which include the failure to have experienced quality control personnel in place, as well as the failure to maintain correct and complete records regarding the manufacture, packaging and storage of its drugs, make it impossible to be sure that any of Argent's drugs -- which are intended for use in treating diseases affecting fish destined for human consumption -- meets federal requirements "as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess." 21 U.S.C. 351(a)(2)(B). The lack of assurance of the safety and effectiveness of the drugs held by Argent presents a manifest risk to the public health.
Argent cannot dispute that such a failure to abide by current good manufacturing practice renders its drugs "adulterated" and subject to seizure in an action for condemnation by the government. Ibid.; 21 U.S.C. 334(a). Nor can Argent dispute that the FDCA expressly authorizes seizures of adulterated drugs by means of a warrant obtained in conformity with applicable admiralty rules, 21 U.S.C. 334(b), which explicitly authorize the issuance of warrants to remedy federal statutory violations without a prior judicial determination of probable cause. Suppl. Rule C(3). As the Supreme Court has explained in upholding the FDCA's seizure authority against due process challenge, Congress has authorized the government to employ a more summary process to seize adulterated and misbranded drugs because they pose a risk of physical or economic injury to the public. See Ewing v. Mytinger & Casselberry, 339 U.S. 594, 599-600 (1950).
The Fourth Amendment, like the Due Process Clause, poses no bar to the government's authority to seize adulterated drugs. The Supreme Court has made clear, in discussing the propriety of warrantless government inspections, that there is an exception to the Fourth Amendment (the so-called Colonnade-Biswell exception) for commercial establishments operating in closely regulated industries, where the regulatory scheme is justified by a substantial governmental interest, warrantless inspections further that interest, and the regulatory scheme governing the inspections provides a constitutionally adequate substitute for a warrant. New York v. Burger, 482 U.S. 691, 700-03 (1987).
These same principles apply to justify the FDCA's authorization of the seizures at issue in this case. Argent's operations, like those of any drug manufacturer, have long been closely regulated by the FDCA and applicable federal regulations, which specify in detail the requirements for the approval, manufacture, packaging, labeling and storage of human and animal drugs. 21 U.S.C. 301 et seq.; 21 C.F.R. Pts. 200 to 599. The federal government plainly has a substantial interest in ensuring that such drugs are safe and effective for their intended use, an interest that is directly furthered by seizing drugs when their safety and effectiveness cannot be assured. Finally, the requirements imposed by the FDCA and the Supplemental Rules provide a constitutionally adequate substitute for a judicial warrant, since they give ample notice to the affected industry, the government may only seize goods that are alleged to have been made in violation of the FDCA requirements, 21 U.S.C. 334(b), and any warrant for arrest may be obtained only by means of a verified complaint that states "with reasonable particularity the property that is the subject of the action," as well as "the place of seizure." Suppl. Rule C(2).
The district court acknowledged that warrantless inspections of Argent's property under the FDCA might well fall within the Colonnade-Biswell exception, but refused to find that the exception could protect the seizure of Argent's drugs in this case. In reaching this conclusion, the trial court found itself bound by this Court's decision in United States v. An Article of Device * * * "Theramatic", 641 F.2d 1289 (9th Cir. 1981) ("Theramatic I"), in which this Court held that the government's seizure of a misbranded medical device under the FDCA was in violation of the Fourth Amendment. See E.R. 27. But Theramatic I, a decision expressly limited to its facts, involved the seizure of equipment from the office of a private doctor, who was not subject to comprehensive regulation under the FDCA. The case has nothing to do with the government's power to seize goods from manufacturers of drugs who are affirmatively and in detail required to follow comprehensive FDCA requirements in the manufacture, packaging, labeling and storage of human and animal drugs.
Because of the paramount public health interests at stake, the FDCA grants the federal government the power to swiftly remove from the marketplace drugs whose safety and effectiveness cannot be assured. The manufacturer is free to challenge the truth of the government's allegations in the underlying action for condemnation. But Congress did not intend that potentially harmful drugs remain available for sale or distribution while the government was forced to take the time necessary to prove probable cause or to seek judicial authorization prior to effecting a seizure. Nothing in the Fourth Amendment requires a different result.
STANDARD OF REVIEW
The issue of whether the government's seizure of adulterated drugs in conformance with the FDCA and the Supplemental Rules violates the Fourth Amendment presents a question of law subject to de novo review.
THE GOVERNMENT'S SEIZURE OF ARGENT'S DRUGS DID NOT VIOLATE THE FOURTH AMENDMENT.
A. There Is A Well-Established Exception To The Fourth Amendment Applicable To Searches And Seizures OfClosely Regulated Businesses.
The Fourth Amendment provides:
The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."
U.S. Const., amend IV. Under the Amendment, "except in certain carefully defined classes of cases, a search of private property without proper consent is 'unreasonable' unless it has been authorized by a valid search warrant," Camara v. Municipal Court, 387 U.S. 523, 528-29 (1967), issued by a "neutral and detached magistrate." Coolidge v. New Hampshire, 403 U.S. 443, 449 (1971).While these general principles apply to commercial as well as residential premises, see, e.g., See v. City of Seattle, 387 U.S. 541, 545-46 (1967), "a business, by its special nature and voluntary existence, may open itself to intrusions that would not be permissible in a purely private context." G.M. Leasing Corp. v. United States, 429 U.S. 338, 353 (1977). Thus, it is settled that a judicial warrant is not always required when the government seeks to conduct a search of a business "long subject to close supervision and inspection," Colonnade Catering Corp. v. United States, 397 U.S. 72, 77 (1970), or that has been "pervasively regulated." United States v. Biswell, 406 U.S. 311, 316 (1972). See New York v. Burger, 482 U.S. 691, 702-03 (1987); Donovan v. Dewey, 452 U.S. 594, 599-607 (1981).[FN3]
FN3. Accord Balelo v. Baldrige, 724 F.2d 753, 764-66 (9th Cir.) (en banc), cert. denied, 467 U.S. 1252 (1984); Rush v. Obledo, 756 F.2d 713, 718-21 (9th Cir. 1985); United States v. Kaiyo Maru No. 53, 699 F.2d 989, 995-97 (9th Cir. 1983); United States v. Raub, 637 F.2d 1205, 1208-11 (9th Cir.), cert. denied, 449 U.S. 922 (1980).
The so-called "Colonnade-Biswell" exception to the Fourth Amendment's warrant requirement is justified by the fact that owners of commercial property subject to comprehensive government supervision have a "reduced expectation of privacy," New York v. Burger, 482 U.S. 691, 702 (1987), and "an inspection program may in some cases be a necessary component of federal regulation." Donovan v. Dewey, 452 U.S. 594, 598-99 (1981). Under the exception, the government may conduct a search of a "closely regulated" commercial business without a warrant if three criteria are met. Burger, 482 U.S. at 702. First, the regulatory scheme authorizing the warrantless inspection must be supported by a "substantial" government interest. Ibid. Second, warrantless inspections must be "necessary to further [the] regulatory scheme." Ibid. Third, "the statute's inspection program, in terms of the certainty and regularity of its application, [must] provid[e] a constitutionally adequate substitute for a warrant," that is, the statute must be "sufficiently comprehensive and defined that the owner of commercial property cannot help but be aware that his property will be subject to periodic inspections undertaken for specific purposes," and the statute's inspection program must be "carefully limited in time, place and scope." Ibid. (citations omitted).
The district court recognized that the FDCA's scheme for conducting warrantless inspections of drug manufacturing establishments "would obviously be subject to analysis under Colonnade-Biswell." E.R. 26. See 21 U.S.C. 374. Nonetheless, relying on this Court's decision in United States v. An Article of Device * * * "Theramatic", 641 F.2d 1289 (9th Cir. 1981) ("Theramatic I"), the court suggested that seizures under the FDCA must be analyzed differently.
Theramatic I nowhere suggests that the Colonnade-Biswell exception is generally inapplicable to seizures, however. Instead, the decision -- which was expressly limited to "the particular factual setting involved," 641 F.2d at 1291 -- involved a seizure which took place, not on the manufacturer's premises, but in a doctor's office, where, this Court found, ordinary expectations of privacy are such that "a warrantless search is prima facie unreasonable." 641 F.2d at 1292. It was because the search and seizure at issue "was not part of any statutory program to inspect physician's offices" that the Colonnade-Biswell exception was held not to apply. Id. at 1295. By contrast, this case involves a seizure of drugs from the company that made and repackaged them, and whose operations are subject to comprehensive regulation and periodic inspection under the FDCA.[FN4]
FN4. Contrary to the district court's statement, the government is not urging a distinction between "a business or professional office and a factory." E.R. 28. The distinction between Argent and the doctor from whom the diathermy machine was seized in Theramatic I is between an entity that is closely regulated within the meaning of the Colonnade-Biswell exception (and which thus has a correspondingly attenuated expectation of privacy), and one that is not. The difference is clear, and it is crucial to the appropriate Fourth Amendment analysis.
The district court's suggested distinction between "searches" and "seizures" also ignores the cases that have established and applied the Colonnade-Biswell exception. For example, Colonnade itself was a suit for return of "seized liquor," 397 U.S. at 72, and the Court there took care to emphasize Congress' "broad authority to fashion standards of reasonableness for searches and seizures" in the liquor industry. Id. at 77 (emphasis added). Similarly, in Biswell, the issue revolved around the admissibility of two unlicensed firearms that had been seized during a warrantless search. See 406 U.S. at 312. The Court's refusal to distinguish between the search and the seizures at issue in those cases is consistent with the language of the Fourth Amendment, which applies equally to "searches and seizures." U.S. Const., amend. IV (emphasis added). Finally, in G.M. Leasing Corp. v. United States, 429 U.S. 338 (1977), the Court analyzed the propriety of the government's seizure of a business' books, records and other property in light of Colonnade and Biswell, although it found the exception inapplicable for other reasons. See 429 U.S. at 353-58. There would have been no need for the Court to have engaged in G.M. Leasing's extended reasoning on the Colonnade-Biswell issue if the exception did not apply to seizures at all.
Moreover, the Fourth Amendment is concerned with "reasonable expectations of privacy." Katz v. United States, 389 U.S. 347, 361 (1967) (Harlan, J., concurring); see Burger, 482 U.S. at 699-701. The intrusion on an owner's privacy interests is no greater from the government's seizure of commercial goods than from the government's thorough inspection of the owner's business premises, records and inventory. See 21 U.S.C. 374. Indeed, a seizure limited to property subject to the FDCA should often be less intrusive than a comprehensive search, which might extend to all facets of an owner's business.[FN5]
FN5. The district court also inexplicably appeared to suggest that the seizure in this case could not fall within the Colonnade-Biswell exception because it was "particularized." E.R. 27. But the fact that a seizure may be "particularized" does not pose a danger to Fourth Amendment principles. On the contrary, the intrusion on protected interests is lessened by a seizure limited to goods that have been identified in advance.
In short, the framework outlined in Colonnade, Biswell and their progeny for analyzing whether a governmental search violates the Fourth Amendment applies to "seizures" as well as "searches." Under that framework, as shown below, the seizure at issue in this case was constitutional.
B. The Exception Applies To This Case.
1. Drug Companies Have Long Been Subject To
Close And Comprehensive Federal Regulation.
Businesses engaged in the manufacture, packaging and storage of human and animal drugs plainly are "closely regulated" within the meaning of the Colonnade-Biswell exception. United States v. Jamieson-McKames Pharmaceuticals, 651 F.2d 532, 537 (8th Cir. 1981), cert. denied, 455 U.S. 1016 (1982). The FDCA, as well as the FDA's regulations promulgated thereunder, regulate "virtually every phase of the drug industry * * * from packaging, labeling and certification of expiration dates, to prior FDA approval before new drugs can be marketed." Ibid. See, e.g., 21 U.S.C. 351(a) (regulating manufacture), 351(b) (regulating strength and purity), 352(a), (b), (f), (g), (h), (p) (packaging and labeling), 355 (new drug approvals); 21 C.F.R. Pts. 200-599. These requirements are plainly no less, and arguably far more, comprehensive than the regulations confronting operators of other businesses, such as automobile junkyards, see Burger, 482 U.S. at 703-07, or home day care facilities, see Rush v. Obledo, 756 F.2d 713, 720-21 (9th Cir. 1985), that have been found subject to the Colonnade-Biswell exception.
Moreover, although the exception's primary focus is on the pervasiveness of the regulatory scheme, the duration of the government regulation retains "some relevancy." Burger, 482 U.S. at 705. In this case, the federal government has long overseen the manufacture and packaging of human and animal drugs, beginning nearly ninety years ago with the passage of the original Food and Drug Act of 1906, which initiated federal efforts to regulate the purity and safety of such drugs in interstate commerce. Jamieson-McKames, 651 F.2d at 537. See Act of June 30, 1906, ch. 3915, 34 Stat. 768. Indeed, the government's authority to seize adulterated drugs in an in rem action under the admiralty rules dates from that Act. Act of June 30, 1906, § 10, 34 Stat. 771-72. See also United States v. New England Grocers Supply Co., 488 F. Supp. 230, 238 (D. Mass. 1980) (noting the "pervasive nature and long history of federal regulation of the food and drug industry.").[FN6]
FN6. Even the statute's specification of an adulterated drug to include drugs that have not been made, processed, packed or held in accordance with current good manufacturing practice -- the basis for the seizure in this case -- has been a part of the FDCA for more than thirty years. See Pub. L. No. 87-781, § 101, 76 Stat. 780 (1962) (adding 21 U.S.C. 351(a)(2)(B)).
In short, the threshold requirement for the application of the Colonnade-Biswell exception is easily met in this case: as a company engaged in the manufacture, packaging and storage of veterinary drugs, Argent operates in a business subject to longstanding and comprehensive government regulation.
2. The Federal Government Has A Substantial Interest In Regulating The Drug Industry.
There can also be little doubt that the regulatory scheme governing the drug industry furthers a substantial government interest. See Burger, 482 U.S. at 702. Indeed, "[i]t is difficult to overstate the urgent nature of the public health interests served by effective regulation of our nation's drug manufacturing industry." Jamieson-McKames, 651 F.2d at 537. Drugs intended to treat diseases in human beings that are manufactured, packaged or stored without proper safeguards pose an obvious health and safety risk to those who use them, for in the absence of compliance with regulatory standards, there can be no assurance that the drug is safe for its intended use, or "has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess." 21 U.S.C. 351(a)(2)(B).
The government also has a substantial interest in the safety and effectiveness of animal drugs -- which are also covered by the FDCA -- since unsafe or ineffective animal drugs pose a serious risk to the health and safety of the animals for whom they are prescribed. Moreover, unsafe or ineffective animal drugs may pose a significant risk to human health, when, as here, the diseases for which they are prescribed affect animals destined for human consumption.
3. In Rem Seizures Are Necessary To Further The Regulatory Scheme.
The authority to seize adulterated goods without a judicial warrant is also a necessary aspect of the regulatory scheme governing the preparation, packaging and storage of human and animal drugs. See Burger, 482 U.S. at 709-10. As noted above, a drug that has been improperly manufactured, packaged or stored -- or as to which there is no documentation that regulatory standards have been followed -- poses an obvious risk to the health and safety of those who would use it. Eliminating that threat to health and safety is not simply a matter of determining that a regulatory violation has occurred, and proceeding to impose a penalty or other sanction on the manufacturer. To eliminate the threat to the public the offending drugs must be removed from the marketplace.
It was reasonable, moreover, for Congress to determine that seizure of adulterated drugs must occur swiftly, and that a warrant requirement "might impede the specific enforcement needs" of the FDCA. See Dewey, 452 U.S. at 603. Drugs are easily sold, and there may be little means -- apart from strict compliance with the FDCA's requirements -- for a consumer to know whether the drug he or she has purchased is safe and effective for its intended use. See United States v. Dotterweich, 320 U.S. 277, 280 (1943) ("The purposes of [the FDCA] * * * touch phases of the lives and health of people which, in the circumstances of modern industrialism, are largely beyond self-protection."). Because "the consuming public * * * has no way of learning of violations short of illness resulting from the consumption of defective drug products * * * the enforcement needs of drug-industry regulation are * * * critical." Jamieson-McKames, 651 F.2d at 538.
This Court has recognized the "need for swift governmental action to remove misbranded products from the stream of commerce." United States v. An Article Of Device "Theramatic", 715 F.2d 1339, 1343 (9th Cir. 1983), cert. denied, 465 U.S. 1025 (1984) ("Theramatic II"). In the FDCA, "Congress weighed the potential injury to the public from misbranded articles against the injury to the purveyor of the article from a temporary interference with its distribution and decided in favor of the speedy, preventive device of multiple seizures." Ewing v. Mytinger & Casselberry, 339 U.S. 594, 601 (1950). A warrant requirement, like a pre-seizure hearing requirement, is an interference that would deny to the public "the speedy protection which Congress provided." Ibid.
4. The FDCA And The Supplemental Rules Provide A Con- stitutionally Adequate Substitute For A Warrant.
Finally, the FDCA and the Supplemental Rules provide a "constitutionally adequate substitute for a warrant." Burger, 482 U.S. at 711. The FDCA expressly informs those who manufacture, package or store human or animal drugs that adulterated or misbranded drugs "shall be liable to be proceeded against * * * on libel of information and condemned" in federal district court, 21 U.S.C. 334(a)(1), in accordance with procedures that "conform, as nearly as may be, to the procedure in admiralty." Id. 334(b). Thus, Argent could not "help but be aware" that its drugs would be subject to seizure if they proved adulterated. Dewey, 452 U.S. at 600.
The FDCA also "narrowly define[s]" the scope of the seizures it authorizes. See Burger, 482 U.S. at 711. Government officials are empowered to seize only those drugs that are "adulterated or misbranded," 21 U.S.C. 334(a)(1), terms that the statute defines in detail. The officials are unable to seize by summary process other company assets, such as books, records, or manufacturing equipment. "The discretion of Government officials to determine what" items to seize "is thus directly curtailed by the regulatory scheme." Dewey, 452 U.S. at 605.
Moreover, consistent with the Fourth Amendment's admonition that "the persons or things to be seized" must be "particularly described," U.S. Const., amend. IV, the Supplemental Rules require that the complaint that commences an action to enforce a forfeiture for federal statutory violations "shall describe with reasonable particularity the property that is the subject of the action and state that it is within the district or will be during the pendency of the action," as well as stating "the place of seizure * * * ." Suppl. Rule C(2). See also Suppl. Rule E(2)(a) (requiring the complaint to "state the circumstance from which the claims arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading"). Like the Fourth Amendment, moreover, the Supplemental Rules provide that the government's complaint for forfeiture "shall be verified on oath or solemn affirmation." Ibid. Compare U.S. Const., amend. IV. These provisions impose "judicial restraint," albeit "through a different form of proceeding than the showing of probable cause before a magistrate." United States v. Articles of Hazardous Substance, 588 F.2d 39, 43 (4th Cir. 1978); Founding Church of Scientology v. United States, 409 F.2d 1146, 1150 (D.C. Cir. 1969), cert. denied, 396 U.S. 963 (1969).
Thus, in the present case, the government's complaint for forfeiture informed Argent and any other interested party that certain of Argent's drugs -- specifically listed and described in an attachment to the complaint -- had been determined to be adulterated because they had been made and stored without compliance with the applicable regulations governing current good manufacturing practice. Compl., ¶ 4, E.R. 2-3. In addition, the government's complaint explained in detail the manner in which Argent's operations did not comply with specific regulatory requirements, including those governing quality control and the oversight of manufacturing and packaging operations, and the retention of batch, inventory and maintenance records. Ibid. These allegations were attested to as true "under penalty of perjury" by a compliance officer of the FDA. E.R. 4.
Nor is the decision to commence a forfeiture action lightly undertaken. In most cases, one of FDA's 21 district offices, the appropriate FDA Center in headquarters, the agency's Office of Enforcement, as well as the Office of Chief Counsel all review the merits of a case before a seizure is recommended. FDA Regulatory Procedures Manual, ch. 8-20-20 to 8-20-40 (Aug. 1994).[FN7] Even then, the Department of Justice must approve the seizure before a warrant for arrest is sought. Ibid. See Ewing, 339 U.S. at 599 ("Whether a [seizure action] will be instituted depends on the Attorney General * * * He may or may not accept the agency's recommendation.").
FN7. On occasion, in the case of so-called "direct reference seizures," Center headquarters review is skipped. RPM at Part 8-20-20(B).
In sum, the FDCA, the FDA's regulations, and the Supplemental Rules, taken as a whole, provide a constitutionally adequate substitute for the warrant contemplated by the Fourth Amendment.
Other than the district court, the courts to have considered the question have held that the government's use of the procedure afforded by the FDCA and the Supplemental Rules to seize adulterated drugs does not offend the Fourth Amendment. United States v. Articles of Drug in Bulk, etc., [1981-1982 Transfer Binder] Food Drug Cosm. L. Rep. (CCH) ¶ 38,155, at 38,902-03 (M.D. Fla. Jan. 13, 1982); United States v. Articles of Drug * * * WANS, 526 F. Supp. 703, 706 & n.3 (D.P.R. 1981); United States v. 62 Packages * * * Marmola Prescription Tablets, 48 F. Supp. 878, 884 (W.D. Wisc. 1943), aff'd, 142 F.2d 107 (7th Cir.), cert. denied, 323 U.S. 731 (1944).[FN8]
FN8. See also United States v. 935 Cases * * * Tomato Puree, 136 F.2d 523, 526 (6th Cir.), cert. denied, 320 U.S. 778 (1943); United States v. Undetermined Quantities of Articles of Food * * * Blue-Green Algae, [1983-1984 Transfer Binder] Food Drug Cosm. L. Rep. (CCH) ¶ 38,242, at 39,307 (D. Or. 1983); United States v. Article of Food * * * Lumpfish Roe, 477 F. Supp. 1185, 1191 (S.D.N.Y. 1979) (all upholding in rem seizures of adulterated or misbranded food under FDCA); Founding Church of Scientology v. United States, 409 F.2d 1146, 1150 (D.C. Cir.), cert. denied, 396 U.S. 963 (1969) (upholding in rem seizure of misbranded "device" covered by FDCA); United States v. Article of Hazardous Substance, 588 F.2d 39, 42-43 (4th Cir. 1978) (upholding in rem seizure of children's sleepwear under Federal Hazardous Substances Act provision "modelled after" 21 U.S.C. 334).
This weight of authority is entirely consistent with the Supreme Court explanation, in Colonnade, Biswell and later cases, that the Fourth Amendment does not require that a judicial warrant be obtained to search the premises of or seize goods owned by a business that is subject to close and comprehensive government regulation, where the statutory authority for the search or seizure is supported by a substantial government interest, the search or seizure furthers that interest, and the regulatory scheme provides a constitutionally adequate substitute for a warrant.
In this case, as part and parcel of a longstanding and pervasive federal regulatory regime governing the manufacture, packaging, labeling, and storage of human and animal drugs, the FDCA empowers the United States to seize drugs that are adulterated because they do not conform to accepted manufacturing practice. The government's seizure authority plainly furthers the government's compelling interest in protecting the health and safety of the American public. Because the FDCA and the Supplemental Rules limit permissible seizures to those goods that are alleged with particularity to be in violation of the Act, they provide a constitutionally adequate substitute for a judicial warrant. The Fourth Amendment thus poses no bar to the in rem seizure in this case.
For the foregoing reasons, the district court's order quashing the warrant for arrest should be reversed, and the case remanded to the district court for further proceedings on the government's complaint for forfeiture.
[updated October 2008]
[cited in Civil Resource Manual 148]