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FOOD, DRUGS, AND COSMETICS
findings could be sustained. For the full effect of section 23, sections 9 and 10 of the Federal Trade Commission Act, which is incorporated by reference, must be consulted. Among other things it provides that if anyone neglects or refuses to attend and to testify or to produce any documentary evidence in his power in obedience to the subpena he shall be punished by a fine of from $1,000 to $5,000 or imprisoned for not more than 1 year or both.
Section 15 (b) provides that the United States District Attorney must institute criminal or seizure actions upon demand of the Secretary, leaving no discretion to such district attorney; that this is the meaning of the provision is clear from the fact that it makes it the duty of the district attorney to 80 act when any State, Territory, or county health, food, or drug officer “presents evidence satisfactory to the United States attorney of any such violation.'
The next paragraph (c) provides that the Secretary must give notice before reporting any violation for criminal prosecution (but not for seizure or injunction proceedings).
Section 16: Paragraph (a) provides that any article of food, drug, or cosmetic in interstate commerce that is either adulterated or misbranded or which has been manufactured, processed or packaged in a plant which did not hold a valid permit if required by the Secretary (under sec. 12) shall be subject to seizure either in a libel'action or, if any designated employee of the Department has probable cause to belief that the product is so adulterated as to be imminently dangerous to health, just by order of that officer or employee. (Twice in this paragraph the bill refers to "libel of information"; if I am not mistaken, it should be "process of libel for condemnation.")
Paragraph (b) of section 16 provides for the payment of any judgment for damages against any officer, agent, or employee of the Department for wrongful seizure by the Government, out of appropriations for the administration of this act."
(“Those manufacturers who "voluntarily” apply for the voluntary inspection service must pay such fees as are fixed by the Secretary to cover the cost of the "service" "together with the reasonable cost of administration.") The purpose of the provisions of this paragraph is to make the employees and inspectors of the Department fearless and independent in ordering seizures providing "there is probable cause for the acts done" or providing they are done under the direction of the Sccretary or under the direction of any employee of the Department whom he authorizes to direct such acts.
The next paragraph (c) simply provides that any “party to a condemnation proceeding" may obtain a representative sample of the article seized "before trial"; it should be noted that this does not provide that the manufacturer or owner may obtain such sample, unless and until he enters an appearance in the action and becomes a "party thereto (so that the judgment of the court will be binding upon him and constitute res adjudicata as to him, which is not the case where he lets the case go by default.) Also note that it applies only to parties “to a condemnation proceeding”, that is, to a libel action, and that it does not provide that a person prosecuted criminally for alleged misbranding or adulter tion of a product, shall be permitted to obtain a sample of the lot of merchandise alleged to be adulterated or misbranded, in order adequately to prepare bin defense.
Paragraph (d) contains the old provision that upon decree of condemnation of merchandise, the payment of the costs and the execution of a good and bufficient bond the court "may" direct the articles to be delivered to the owner thereof. The writer has had experience with this provision in a libel action in which over $10,000 worth of merchandise was seized and condemned for alleged misbranding. The Department did not contend that the product was without merit but it had taken exception to some of the wording on the label and to the trade name of the product and had had the large stock of merchandise seized without warning or opportunity to change the labeling to conform to its views. I went to Washington, conferred with officials of the Department and Boon agreed upon changes in the wording which wcre perfectly satisfactory to the Depart ment and to the owner and manufacturer. The owner and manufacturer then applied for the return of the merchandise under such a provision as this, agreeing to relabel the product according to the wishes of the Department and to post the bond for the faithful performance of its undertaking. Although the Depart ment officials no longer contended that the name of the product was improper or constituted misbranding and although the wording of the old label which the Department alleged amounted to misbranding, had been incorporated on the label in good faith and without any intent to deceive, mislead, or defraud, the court refused (under a Department policy which it recognized and enforced us if it were law) to allow the property to be delivered to the manufacturer unless FOOD, DRUGS, AND COSMETICS
it would admit every allegation of the libel (among other things upless it would admit that it had acted fraudulently and that the very name of the product worth to the manufacturer at least $100,000 constituted misbranding),
Rather than make such untrue admissions reflecting upon its honor and integ. rity and that would destroy its property in the valuable and proper trade name of the product, the manufacturer naturally refused to comply with the unreasonable demand and, under the order of the United States district court, over $10,000 worth of valuable merchandise was ruthlessly destroyed. This case is pot unique; it is typical of how this same provision in the existing law is administered by the courts under the influence of the Food and Drug Administration. One would have to be more optimistic than the writer to expect that this provision, that "the court may by order direct such article be delivered to the owner thereof", would be enforced with any greater consideration for manufacturen or owners than has been the analagous provision in the existing law. It should be provided that under similar conditions “the court shall by order direct” the return of the property.
The next two paragraphs (e) and (f) of section 16 provide that the proceedings shall conform to proceedings in admiralty cases, as at present, except that either party may demand trial by jury, on any issue of fact, and that upon decree of condemnation the court costs and fees, storage and other expenses shall be tased against the person, if any, intervening in the action as claimant.
Section 17: Paragraph (a) of section 17 makes any of the following acts crimi pal, whether committed by the manufacturer, wholesaler, advertiser, publisher, radio broadcast licensee, advertising agency, railroad or other common carrier or by anyone else: Shipping, or receiving or delivering or offering to deliver, in interstate commerce any food, dng, or cosmetic product that is either adulterated (see secs. 3, 4, and 5) or misbranded (see secs. 6, 7, and 8); dissemination of any "false advertisement” by radio broadcast, United States mails, freight, express or in any other way, to induce either the purchase or sale of such products (see sec. 9); shipping in interstate commerce any food, drug, or cosmetic if the manufacturer, processor or packer does not hold a valid permit aben so required by the Secretary (see sec. 12); the refusal of any common carrier to permit access to, or copying of, any record showing shipments of sucb products (see sec. 14).
This is followed by paragraph (b) which fixes the penalties for any of the criminal acts defined in the preceding paragraph: For the first, unintentional violation, imprisonment for not more than 1 year or a fine from $100 to $1,000, or both; for a second or subsequent, unintentional violation, imprisonment for not more than 2 years or a fine from $500 to $3,000 or both. The provision relating to the first unintentional offense declares that the act shall constitute a misdemeanor; the provision relating to the second and to each subsequent offense (and every shipment of a package would constitute a separate offense) does not state that it makes the second and subsequent offenses felonies, but it does because any crime which can be punished by death or imprisonment in the penitentiary for 1 year or more is a felony. That these provisions relate to unintentional violations is apparent from the deliberate omission of any word which, by judicial construction could import any knowledge, intention, fraud or criminal intent and from the following provision, in paragraph (c), which fixes the penalty for any "willful offense" and provides that for any such offense the heavier penalties shall be enforced "not withstanding the provision of paragraph (b)" of the same section.
Paragraph (c) provides that in case of any intentional violation the penalty must be imprisonment from 6 months to 3 years (making the offense a felony) or fine from $1,000 to $10,000, or both.
In neither paragraph (b) nor paragraph (c) is the court allowed any discretion to impose only a nominal fine or less than the prescribed minimum penalties, under excusable or extenuating circumstances.
Paragraph (d) provides that no publisher, advertising agency, or radio station shall be prosecuted under the two preceding paragraphs of this section "for dis scminating a false advertiseinent it, on request of an officer or employee desig. nated by the Secretary, he furnishes the name and address of the person who contracted for” the advertisement or had it disseminated. Probably publisher would not normally be criminally prosecuted under the law but, whenever the Department wanted to punish a particular publisher it could do so by simply not requesting the information, Nute how cleverly this is worded. The bil does noi provide that the publisher or advertising agent shall not be convicted is be gives the informaion or except for refusal to give it; it provides that be shall not be prosecuted in those casos in which an officer or employee "designated by the Secretary" asks for the information and it is supplied. In most cases the infor 274
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mation is in the posscasion of the Department; in any case the Department could elect not to excmpt the publisher or advertising agent from punishment. Proba ably the worst effect it would have would be to make the press too subservient to the Food and Drug Administration.
The practical effect of the legislation, if this bill is permitted to pass, will be to reduce very much the amount of space used by food, drug, and cosmetic advertisers and it will injure publishers almost as much as inanufacturers in a pecuniary way, although for publisers it would not establish such an intolerable interference in the management of their plants. I think it would result in the Food, Drug and Cosmetic Administration dictating to a considerable extent the editorial policies of the press regarding the law, its
enforcement, the activities of the Food, Drug and Cosemtic Control and with reference to package medicines and "self-medication."
Almost any publisher carrying food, drug, or cosmetic advertising in his pages and therefore knowing that any time any advertiser in his pages violated the law the Food and Drug Administration could subject him to the fines and imprisonments provided for in the bill would not be very likely to severely criticise the Administration or any bureaucratic excesses on its part and also would probably be quite responsive to "suggestions" from it regarding editorial policy concerning the law, package medicines, “self-medication" and the like.
I have heard that at least one publishers' trade association advised its members that publishers, licensees and agencies would not be punished criminally unless they withheld information regarding the identity of the advertiser. Section 17, (a) shows that publishers, radio broadcast licensees and advertising agencies are just as much subject to prosecution as their advertisers or clients. And this is made certain by section 17, (d) which defines the conditions under which the Administration can exempt them rit sees fit to do so.
Paragraph (e) provides that no dealer shall be prosecuted under paragraph (b) if he establishes a guaranty signed by the manufacturer or person within the United States from whom he received the product or advertising, by which the latter assumes full responsibility for any violation of the law, giving his name and address. The operation of this paragraph, if the bill becomes law, will probably move all dealers to require such guarantees from manufacturers of food, drug and cosmetic products.
The last paragraph of section 17 makes it a crime to forge, counterfeit, simulate or falsely represent without authority any marks, stamps, tags, labels or other identification devices authorized by the provisions of section 12 (for licenses) or 22 (department's seal of approval) and fixes the penalty at imprisonment for not more than one year or fine from $1,000 to $5,000 or both.
Section 18: This section provides that the acts, omissions or failures of an employee acting within the scope of his employment or office shall be deemed to be the acts, omissions, or failures of the employer as well as his own, (paragraph (a)), and that individual directors, officers or agents of a corporation or association shall be responsible for the violations of the corporation authorized, ordered or done, in whole or in part, by them, so that they can be jailed and fined (paragraph (b)).
Section 19: It is provided by section 19 that the “repetitious” shipping of either adulterated or misbranded food, drug or cosmetic products or the repetitious dissemination of false advertising by radio broadcasts, United States mails or otherwise can be enjoined by the district courts, by either temporary (with Do preliminary hearing) or permanent injunction, that to secure-such injunction.it shall not be necessary for the Government to show any intention on the part of the defendant to continue such acts and that any violation of such injunction may be summarily tried and punished by the Court as a contempt and arrest can be made anywhere in the United States. Probably some such provision to prevent “repetitious" violations, whether by injunction as provided in this section of the bill or hy a cease and desist order issued by the Secretary after proper notice and hearing, is advisable. The present method of attempting to discourage such repetitious acts by multiple or successive seizures as provided for in section 16, is clumsy, expensive and not expeditious or effective. Provision for informal conferences with possibility for cease and desist orders would do more than anything else towards adequately empowering the Food and Drug Administration to really clean up labels, labeling and advertising of food, drug and cosmetic products in the most efficient manner, smoothly, expeditiously, with sufi. cient protection to the public and without undue hardship or expense to the manufacturer, distributor, dealer or advertiser. With such a provision no provision for criminal prosecution, except for intentional violations of the law, should be necessary; nor would there be need for provisions for the clumsy, expensive and FOOD, DRUGS, AND COSMETICS
inefficient procedure by seizure in libel actions (see section 16), except wbero products imminently dangerous to human life have found their way into inter. state commerce. In this connection I quote from a letter which I wrote on May 13, 1933, to Assistant Secretary of Agriculture Rexford G. Tugwell, upon tho request of an official of the Department of Agriculture (which letter was never acknowledged by Professor Tugwell or by anyone for the Department). In that letter I wrote:
“I come now to a suggestion which, so far as I know, is original and which I think, and believe you will think, is unselfish and constructive. I think tho present set-up for enforcing regulation of label claims, standards of products, and advertising representations is clumsy, unwieldy, inconvenient, inadequate, and too expensive as well as unduly harmful to legitimate business. The method of suppressing vawarranted label claims and forcing the removal of substandard products from the market by seizure in libel actions is not sufficiently directo The distribution of enforcement powers between the Food and Drug Administra tion and the Federal Trade Commission is senseless and unsatisfactory;
all of the regulatory power in the food and drug field should be bested in the Food and Drug Administration. The injurious publicity that attende governmental action before the manufacturer or advertiser
has been given a fair trial and found guilty is unnecessary, un-American, ard unfair. My suggestion is that all regulatory power over food and drug products, labels and collateral adver tising be vested in the Secretary of Agriculture and administered by the Food. and Drug Administration; that when the administration has reason to believe that a product, its trade name, label claims or collateral advertising is unwar. ranted it should first, except in cases where danger to human life is involved, be compelled to summon the manufacturer or advertiser to appear informally for discussion of the matter in an effort to secure voluntary change or withdrawal of product, name, label claims, or advertising statements, before taking any other regulatory action; that only in event such informal action fails or the manufacturer or advertiser fails to appear, a formal citation should issue commanding him to appear at a time and place certain to show cause why a cease and desist order should not issue commanding him to discontinue the product, name, label or advertising statemert, and an appropriate complaint should be served upon him detailing
the alleged violation of law; in reasonable time a hearing should be had, and the complaint either dismissed or a proper cease and desist order entered; of course there would have to be the opportunity of appeal to the courts which would be empowered to affirm or set aside a cease and desist order; at no stage of the proceedings until a cease and desist order is actually entered (except where danger to human life exists or where there is reason to believe the manufacturer or advertiser is acting fraudulently or in intentional violation of the law) should any publicity be given because the manufacturer or advertiser has not been found, after fair trial, to be guilty. The cease and desist order should be enfora ible by penalties. I think this procedure would be about as direct, expeditious, and effective, with the minimum hardship to reputable mar.ufacturers and advertisers, as any that has been proposed.'
I still entertain the views expressed in that letter.
Section 20: This is the only section in the bill under which poners would be vested not comletely in the Secretary of Agriculture and his Department. This section pertains only to the importation into the United States of food, drug, or cosmetic products and to products so imported. (Under the existing law regulations are issued, at least theoretically, jointly by the Secretaries of Agriculture, of Commerce and of the Treasury.) The only exception in this bill is (see Sec. 23 (a)) that the Secretary of the Treasury shall join with the Secretary of Agriculture in issuing regulations under this Section 20, and shall cooperate in the administration of this section. I do not appreciate that there is anything objec tionable about this section and I think that it is proper to vest in the Secretary of Agriculture full authority and responsibility for the administration of the law except as otherwise provided in this Section 20 and in Section 23 (a).
Section 21: This section authorizes the existing "legal blackmail" by which the Department distributes at public expense and all over the country reports of seizures (before any trial, opportunity for defense or judicial finding) which are frequently very damaging to the manufacturers whose names and products are mentioned. Worse, under the provisions of this section the Secretary can publish any "such information regarding any food, drug, or cosmetic as he deems necessary in the interests of public health and for the protection of the consumer against Iraud." This can be done without any conviction, hearing or oppor tunity for defense and only the Secretary is the judge regarding what information shall be distributed and the frequency and extent of such distributions at blio
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expense. There would be nothing to prevent him from “deeming” information to be in the interests of public health or for the protection of consumers against fraud although it would be of little or no interest except "to discourage self. medication" or to otherwise "educate the public” up to calling in their physiciano and veterinatians more frequently, to point out the “dangers" in the use of pack. age medicines or to otherwise injure the package medicine industry.
Section 22 provides for the voluntary inspection service. Under its provisions the Secretary may, upon "voluntary” application of any manufacturer or packer of foods, drugs, or cosmetics, appoint "supervisory inspectors", to examine and inspect all premises, equipment, methods, materials, containers, and labels used by the manufacturer or packer.' Here, then, is the bait to induce manufacturers to be hooked; if, and so long as, everything is found to conform to the provisions of this bill and to all “regulations”, a mairfacturer may be authorized to attach some kind of seal of approval of the Department on this product.
Under the practical operations of the law it probably will become advisable for every manufacturer of food, drug, or cosmetic products “voluntarily" to apply for this "service."
Of course, it will require thousands of "supervisory inspectors" to inspect and regulate all of the plants; the Department could not hope to get sufficient appro priations to enable it to support such a host of taxeaters. So point number ono (of the two pointed hook) is that the manufacturer shall pay fees to be fixed by regulations in such amount as to cover the cost of the supervisory inspection and examination, together with the reasonable costs of administration. The other point of the hook is that the concern will practically pass under the manage ment of the Food and Drug Administration regarding all matters of plant, per. sonnel, equipment, formulae, methods, and operation.
I don't think there is any doubt but that, if the bill becomes law, the Depart ment will push the expense of inspection off on the manufacturers by making it very advisable that they voluntarily apply fo: this service. They will get inspection anyhow, under the licensing provision (sec. 12) or under the factory inspection provision (sec. 13), and the "supervisory inspectors" under the “Voluntary Inspection Service will probably be much more reasonable fellows and much easier to satisfy than the inspectors sent out to “Doncooperating". manufacturers, under those other two sections and at the expense of the Food and Drug Administration.
Under this section, and by a rigid or ruthless enforcement of sections 12 and 13 which can drive most manufacturers of food, drug, and cosmetic products to "voluntarily" come under section 22, the administration can put over a gigantic plan for the management and control of those concerns and at the manufacturers' expense.
If this bill becomes law the chief of the food, drug, and cosmetic control will become a powerful man with an army of underlings and will be tsar of the food, drug, and cosmetic industries. He will be treated with deference and regarded with fear and trembling by them and by all publications that carry food, drug, or cosmetic advertising and by the radio industry. Managing, supervising, or regulating concerns that now do a business running into the billions of dollars annually, he should then be entitled to a raise and to get a big salary. He will be able to pass out lots of patronage for the political party in power. Probably the concerns that exist only at his will, or which he could effectively put out of business, will be willing to make “voluntary” and substantial contributions to the campaign fund of the political party represented by him or by his Secretary of Agriculture; it will take only the tactful suggestion of the supervisory inspector in charge of the particular plant that it has been “put down” for $1,000 or $10,000, as the case may be.
I think that this section 22 is one of the cleverest in the whole bill. Officials of the Food and Drug Administration realize that it would be impossible to get sufficient appropriations from Congress to support the whole army of inspectors that they would like to have under them and that would be necessary in order to control and manage all the food, drug, and cosmetic plants of the country as they want to manage and control them. So this plan to get the effective manage ment of the plants and at the same time make the manufacturers pay the entiro load was devised.
Section 23: As broad as his powers are that are explicitly conferred upon him by other provisions of this bill, paragraph (a) of section 23 veets in the Secretary authority to prescribe any regulations he may deem necessary for tho efficient enforcement of the law and provides that his regulations regarding notice and conduct of hearings shall have the force and effect of law. It provides that his regulations shall be promulgated in such manner, and shall take effect, as