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Nor-Am Agricultural Products Inc. v. Hardin

November 9, 1970

NOR-AM AGRICULTURAL PRODUCTS, INC. AND MORTON INTERNATIONAL, INC., PLAINTIFFS-APPELLEES,
v.
CLIFFORD M. HARDIN, SECRETARY OF AGRICULTURE, G. W. IRVING, JR., ADMINISTRATOR AGRICULTURAL RESEARCH SERVICE AND HARRY W. HAYS, DIRECTOR PESTICIDES REGULATION DIVISION, DEFENDANTS-APPELLANTS



Swygert, Chief Judge, and Kiley, Fairchild, Cummings, Kerner and Pell, Circuit Judges. Pell, Circuit Judge (dissenting).

Author: Cummings

CUMMINGS, Circuit Judge.

This is an appeal from a preliminary injunction granted by the district court which effectually restrains the Secretary of Agriculture and other personnel of the Department of Agriculture from continuing the suspension of the registration of 17 Panogenic compounds as "economic poisons" under the Federal Insecticide, Fungicide and Rodenticide Act. 7 U.S.C. § 135 et seq. A three-judge panel of this Court, one judge dissenting, upheld the preliminary injunction. 435 F.2d 1133. Subsequently, the Government's petition for a rehearing en banc was granted.

Plaintiff Morton International, Inc. manufactures seventeen types of cyano (methylmercuri) guanadine known as Panogens. Plaintiff Nor-Am Agricultural Products, Inc. distributes Morton's Panogens. These mercury compounds are used as fungicides in treating seeds intended for planting. They were duly registered as "economic poisons" with the Secretary of Agriculture, as required by Section 4(a) of the Federal Insecticide, Fungicide and Rodenticide Act. 7 U.S.C. § 135b(a).

Pursuant to Section 4(c) of the Act (7 U.S.C. § 135b(c)), on February 18, 1970, the Department of Agriculture telegraphed plaintiff Nor-Am that its Panogen registrations had been suspended "in view of the recent accident involving the ingestion of pork from hog feed seed treated with cyano (methylmercuri) guanadine." On the same date, Dr. Harry W. Hays, Director of the Pesticides Regulation Division of the Agricultural Research Service, sent a letter to Nor-Am more fully explaining the Department's action. That letter indicated that the registration of the 17 Panogens was suspended "to prevent an imminent hazard to the public from the use of cyano (methylmercuri) guanadine as a seed treatment." The letter referred to three New Mexico children who had been hospitalized in a comatose condition because they had eaten pork from hogs fed screenings and sweepings from seed previously treated with a fungicide product containing cyano (methylmercuri) guanadine. The letter added that the Panogen labels were inadequate to prevent the treated seed screenings and sweepings from being fed to hogs. Dr. Hays further said that other incidents had been reported showing that mercury treated seed screenings and sweepings had been fed to livestock or "disposed of in a manner that results in wildlife feeding on them." Finally, the letter noted that the ingestion of cyano (methylmercuri) guanadine reportedly caused irreversible injury to the central nervous system.

On March 27, 1970, the Director of Science and Education in the office of the Secretary again wrote Nor-Am. This letter elaborated the reasons for the emergency suspension:

"The action * * * was based on the fact that the directions for use and precautionary statements have failed to prevent treated seed from being used as feed. Recent reports also indicate that birds feeding on treated seed have significant levels of mercury in their tissues.

"In view of the insidious nature of alkyl mercury poisoning and the irreversible injury to the central nervous system, we firmly believe that this class of compounds should be discontinued for seed treatment. To allow new stocks to enter channels of trade would increase the risk of injury to man and other vertebrate animals."

On March 9, 1970, the registrations of similar products of other manufacturers were suspended. The suspensions prevent the shipment of these products until their registration is again permitted. Plaintiffs and the other distributors and manufacturer were not, however, required to recall existing stocks from their customers.

Administrative review of the Secretary's order was initiated on March 27, 1970, when Nor-Am requested an expedited administrative hearing as provided by Section 4(c) of the Act.*fn1 Instead of awaiting such a hearing, however, plaintiffs filed this suit on April 9, 1970, and quickly sought a preliminary injunction. Thereupon defendants moved to dismiss the proceeding. They claimed that the district court lacked jurisdiction to review the suspension order in advance of the hearing established by the statute; that plaintiffs had not exhausted the administrative procedures established by the Act; that the Secretary's order was a non-reviewable, discretionary act; and that the Secretary had not acted arbitrarily or capriciously. This motion was supported by an affidavit of Dr. Hays describing two specific instances of contamination of meat resulting from the consumption of mercury-treated seed by swine or cattle.*fn2 The affidavit noted action taken by Sweden in November 1965 to restrict the use of alkyl mercury as a result of studies indicating contamination of fish. Dr. Hays further cited an available publication describing numerous reports of accidents associated with the use of mercury in treating seeds.*fn3 He averred that alkyl mercury can produce permanent damage to the central nervous system, and that there are no known effective antidotes for chronic poisoning by that substance. Finally, as additional support for the emergency action, the affidavit stated that the Advisory Center on Toxicology, National Academy of Sciences, had expressed the opinion in March 1970 that all alkyl mercury compounds should be considered alike in terms of their toxicological properties, and that on February 27, 1970, the Public Health Service of the Department of Health, Education, and Welfare had recommended the cancellation of organo mercury compounds for seed treatment because of the hazard associated with their use.

At the hearing on the motion for the preliminary injunction, two Nor-Am employees and the general manager of a seed improvement association testified that Panogen products had been marketed for 20 years as a very useful fungicide seed treatment. Nothing as economical or efficacious is available as a satisfactory substitute for liquid methylmercury seed treatment products. Plaintiffs added a red dye to their products in order to prevent misuse of treated seed as human or animal feed. Warning labels were also prepared by plaintiffs for use on their products and on the treated seed containers. Plaintiffs' witnesses knew of no "permanent" injuries caused by Panogens.

Dr. Hays testified that when the February 18th suspension telegram was sent, to his knowledge the only permanent human injuries resulting from the use of Panogens were to the three Alamogordo, New Mexico, children. Twelve of the 14 hogs fed the treated seed near Alamogordo died. He stated that alkyl mercury compounds have a propensity to accumulate in the central nervous tissues, particularly in the brain. Such effects have not only been reported in laboratory animals but observed in pheasants, quail and other wildlife. The scientific community has discovered no effective antidote for alkyl mercury compounds. High levels of mercury have been found in the tissues of pheasants and quail in California and Ohio. He considered alkyl mercury substances used for the treatment of seed as imminently hazardous to the public because they "can be ingested by wildlife, or inadvertently used by domestic animals, or ingested by man." There is an inadequate degree of control in preventing treated seed from getting into feed or food, as evidenced by the number of grain seizure actions taken in the past by the Food and Drug Administration after finding such treated seed in grain. He felt that such treated seeds involve an undue risk to the public and that labels are inadequate to prevent any accidental misuse.

After the hearing, the district judge found that the court had jurisdiction over the subject matter of the dispute pursuant to the provisions of 28 U.S.C. § 1331, 28 U.S.C. § 1337, 28 U.S.C. §§ 2201-2202, Section 10 of the Administrative Procedure Act, 5 U.S.C. §§ 701-706, and the "general equity powers of this Court." The district judge also determined that unless preliminary injunctive relief were granted, plaintiffs would suffer irreparable harm for which they had no adequate administrative or legal remedy, although they were "likely to prevail on the merits." The judge further concluded that preliminary relief was "consistent with the public interest." Accordingly, he held the suspension of the Panogen registrations to have been arbitrary, capricious, and contrary to law, and defendants were enjoined from taking action against plaintiffs or the Panogens in reliance on the suspension order. Defendants were also ordered to give notice that the Panogens may again be distributed and sold in interstate commerce. Finally, the preliminary injunction permitted defendants to issue notices of cancellation of the registrations of these "economic poisons" effective only after the public hearing permitted by Section 4(c) of the Act.*fn4 Upon consideration of this cause by the entire Court, we are of the opinion that the district court lacked power to grant this relief because the plaintiffs have not exhausted their administrative remedy.

The fundamental provisions regulating judicial review of administrative actions are contained in the 1946 Administrative Procedure Act. 5 U.S.C. § 701 et seq. Section 10(c) of that Act governs which agency actions shall be reviewable:

"Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. * * *" 5 U.S.C. § 704.

I

In determining the status of the instant suspension in the light of the Administrative Procedure Act, we must turn first to the pertinent provisions of the Federal Insecticide, Fungicide and Rodenticide Act. 7 U.S.C. § 135 et seq. The 1964 amendments to Section 4 of that Act (Pub.L. 88-305, 88th Cong., 2nd Sess.) greatly strengthened the ability of the Secretary of Agriculture to take affirmative action protecting the public from hazardous and mislabeled commodities. Congress enacted new powers to deny, suspend, and cancel registrations where the Secretary had previously been compelled to accede to registration under protest should he be faced with an adamant demand. In Section 4(c), Congress also added hearing procedures guiding the exercise of these new powers. 7 U.S.C. § 135b(c). The Secretary was required to give notice to the appellant or registrant of asserted defects and, upon request, was obliged to refer the dispute to an "advisory committee" of experts or to a public hearing. In the event of an adverse determination by the Secretary after consideration of the matter by an advisory committee, the applicant or registrant could again request a public hearing.

Notwithstanding these procedural specifics, Congress provided for emergency action by permitting immediate suspension of registration in the face of "an imminent hazard to the public." 7 U.S.C. § 135b(c). In almost the same breath, however, Congress recognized the need for prompt determination of the accuracy of the Secretary's judgment and provided that in the wake of an emergency suspension the Secretary should

"give the registrant prompt notice of such action and afford the registrant the opportunity to have the matter submitted to an advisory committee and for an expedited hearing under this section."

The 1964 Amendments also added special provisions for judicial review of agency actions directed toward denial, suspension, or cancellation of the registration of "economic poisons." After describing the Secretary's expanded powers and their mode of exercise, Section 4(c) states that

"final orders of the Secretary under this section shall be subject to judicial review, in accordance with the provisions of subsection d. * * *" 7 U.S.C. § 135b(c).

Section 4(d) outlines the mechanics, forum, and character of the judicial review contemplated by Congress:

"d. In a case of actual controversy as to the validity of any order under this section, any person who will be adversely affected by such order may obtain judicial review by filing in the United States court of appeals for the circuit wherein such person resides or has his principal place of business, or in the United States Court of Appeals for the District of Columbia Circuit, within sixty days after the entry of such order, a petition praying that the order be set aside in whole or in part. * * * The findings of the Secretary with respect to questions of fact shall be sustained if supported by substantial evidence when considered on the record as a whole, including any report and recommendation of an advisory committee. * * * The commencement of proceedings under this section shall not, unless specifically ordered by the court to the contrary, operate as a stay of an order. The court shall advance on the docket and expedite the disposition of all causes filed therein pursuant to this section." 7 U.S.C. § 135b(d).

Together, these statutory provisions do not expressly or impliedly contemplate immediate review of emergency suspensions by either district or appellate courts. The reference to review of "any order" contained in Section 4(d) indicates no broadening of the class of reviewable orders under Section 4(c), for judicial review must conform to the nature of the order, "the context of the Act," and "the relation of judicial power to the subject-matter." Chicago & Southern Air Lines, Inc. v. Waterman Steamship Corp., 333 U.S. 103, 106, 68 S. Ct. 431, 434, 92 L. Ed. 568; see also, Federal Power Commission v. Metropolitan Edison Co., 304 U.S. 375, 384-385, 58 S. Ct. 963, 82 L. Ed. 1408. Implicit in Section 4(d) is the limitation on judicial review resulting from the specific extension on review in Section 4(c) only to "final orders of the Secretary." Section 4(d) thus merely details the prodecural aspects and standards of the judicial review permitted by Section 4(c). Cf. McManus v. Civil Aeronautics Board, 286 F.2d 414 (2d Cir. 1961).

Equally unacceptable is the contention that an emergency suspension order is a "final order" of the Secretary made reviewable by Section 4(c). That limitation on judicial review serves to avoid delay and interference with agency proceedings by confining review to orders effectively terminating administrative adjudication. Cf. Foti v. Immigration and Naturalization Service, 375 U.S. 217, 224, 232, 84 S. Ct. 306, 11 L. Ed. 2d 281. The suspension order and surrounding procedural scheme of the 1964 Statute refute the conclusion of finality under this Act. See Jaffe, Judicial Control of Administrative Action, p. 418 (1965). By its very nature and within the explicit purview of Section 4(c), the emergency suspension of registration represents a tentative, temporary measure. This interlocutory character is unaltered by the inclusion of the customary prerequisite that the hazard be "imminent." It is preliminary to more thorough administrative consideration of the hazardous condition of the "poisons." The statute expressly contemplates special proceedings to follow suspension post-haste. These include the informal submission of the disputed matters to an advisory committee of experts whose report and recommendations become part of the record for consideration at the expedited hearing and, under Section 4(d), on judicial review. The emergency suspension becomes final only if unopposed or affirmed, in whole or in part, by subsequent decision based upon a full and formal consideration.

The provisions for judicial review spelled out in the statute also compel the inference that the emergency action of the Secretary by no means culminates administrative proceedings on the matters of registration of an "economic poison." Review is not "de novo" in a trial court; rather, it is based on the substantiality of the evidence in the administrative record and is before the appropriate court of appeals. Such provisions with respect to judicial review are classic indications that Congress intended administrative adjudications to proceed to conclusion prior to judicial scrutiny.

We conclude that Congress intended to confine judicial review of registration disputes under Section 4(c) of the Act to final orders of the Secretary culminating administrative adjudication. Under this Act, the emergency suspension of registration preceding such adjudication does not constitute such a final order and is therefore not "reviewable by statute" within Section 10(c) of the Administrative Procedure Act, supra, p. 1155.

II

Plaintiffs contend that this order should nevertheless entitle them to review under the "final agency action" provision of Section 10(c) of the Administrative Procedure Act. They argue that suspension of registration by the Secretary possesses sufficient "finality" as an administrative action to warrant immediate recourse to the courts despite its status as a preliminary act within the framework of Section 4(c) of the Federal Insecticide, Fungicide and Rodenticide Act. Suspension, they urge, immediately and drastically affects their rights and interests as greatly as formally finalized cancellation. They suggest that neither subsequent agency proceedings nor judicial review established by Section 4(d) adequately test the Secretary's determination of "imminent hazard to the public." Unless they are permitted this exceptional remedy, they claim that the Secretary's findings amount to autonomous discretion.

Under Section 10(c) of the Administrative Procedure Act, the concept of finality of administrative action encompasses a complex array of considerations which may vary in accordance with the character and activities of the administrative agency, and with the nature and role of the agency action from which judicial review is sought. See Abbott Laboratories v. Gardner, 387 U.S. 136, 148-156, 87 S. Ct. 1507, 18 L. Ed. 2d 681.*fn5 The flexibility of the finality concept does not, however, permit facile disregard of the purposes of congressional delegation of power and of the clear procedural scheme delineated in this particular statute. The importance of executive and administrative autonomy, as well as respect for the will of Congress, was observed in Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U.S. 752, 767-768, 67 S. Ct. 1493, 1500-1501, 91 L. Ed. 1796:

"The very purpose of providing either an exclusive or an initial and preliminary administrative determination is to secure the administrative judgment either, in the one case, in substitution for judicial decision or, in the other, as foundation for or perchance to make unnecessary later judicial proceedings. Where Congress has clearly commanded that administrative judgment be taken initially or exclusively, the courts have no lawful function to anticipate the administrative decision with their own, whether or not when it has been rendered they may intervene either in presumed accordance with Congress' will or because, for constitutional reasons, its will to exclude them has been exerted in an invalid manner. To do this not only would contravene the will of Congress as a matter of restricting or deferring judicial action. It would nullify the congressional objects in providing the administrative determination. In this case ...


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