Gardner v. Toilet Goods Association, Inc./Opinion of the Court

In Toilet Goods Assn. v. Gardner, 387 U.S. 158, 87 S.Ct. 1520, 18 L.Ed.2d 697, we affirmed a judgment of the Court of Appeals for the Second Circuit holding that judicial review of a regulation concerning inspection of cosmetics factories was improper in a pre-enforcement suit for injunctive and declaratory judgment relief. The present case is brought here by the Government seeking review of the Court of Appeals' further holding that review of three other regulations in this type of action was proper. 360 F.2d 677. We likewise affirm.

For reasons stated in our opinion in Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 68, we find nothing in the Federal Food, Drug, and Cosmetic Act, (52 Stat. 1040, as amended), 21 U.S.C. § 301 et seq., that precludes resort to the courts for preenforcement relief under the Administrative Procedure Act, 5 U.S.C. §§ 701-704 (1964 ed., Supp. II), and the Declaratory Judgment Act, 28 U.S.C. § 2201. And for reasons to follow, we believe the Court of Appeals was correct in holding that the District Court did not err when it refused to dismiss the complaint with respect to these regulations.

The regulations challenged here were promulgated under the Color Additive Amendments of 1960, 74 Stat. 397, 21 U.S.C. §§ 321 376. These statutory provisions, in brief, allow the Secretary of Health, Education, and Welfare and his delegate, the Commissioner of Food and Drugs, 22 Fed.Reg. 1051, 25 Fed.Reg. 8625, to prescribe conditions for the use of color additives in foods, drugs, and cosmetics. The Act requires clearance of every color additive in the form of a regulation prescribing conditions for use of that particular additive, and also certification of each 'batch' unless exempted by regulation. A color additive is defined as 'a dye, pigment, or other substance * *  * (which) when added or applied to a food, drug, or cosmetic, or to the human body or any part thereof, is capable (alone or through reaction with other substance) of imparting color thereto *  *  * ,' 21 U.S.C. § 321(t)(1).

Under his general rule-making power, § 701(a), 21 U.S.C. § 371(a), the Commissioner amplified the statutory definition to include as color additives all diluents, that is, 'any component of a color additive mixture that is not of itself a color additive and has been intentionally mixed therein to facilitate the use of the mixture in coloring foods, drugs or cosmetics or in coloring the human body.' 21 CFR § 8.1(m). By including all diluents as color additives, the Commissioner in respondents' view unlawfully expanded the number of items that must comply with the premarketing clearance procedure.

The Commissioner also included as a color additive within the coverage of the statute any 'substance that, when applied to the human body results in coloring * *  * unless the function of coloring is purely incidental to its intended use, such as in the case of deodorants. Lipstick, rouge, eye makeup colors, and related cosmetics intended for coloring the human body are 'color additives." 21 CFR § 8.1(f). Respondents alleged that in promulgating this regulation the Commissioner again impermissibly expanded the reach of the statute beyond the clear intention of Congress.

A third regulation challenged by these respondents concerns the statutory exemption for hair dyes that conform to a statutory requirement set out in § 601(e), 21 U.S.C. § 361(e). That requirement provides that hair dyes are totally exempt from coverage of the statute if they display a certain cautionary notice on their labels prescribing a 'patch test' to determine whether the dye will cause skin irritation on the particular user. The Commissioner's regulation recognizes that the exemption applies to the Color Additive Amendments, but goes on to declare: 'If the poisonous or deleterious substance in the 'hair dye' is one to which the caution is inapplicable and for which patch-testing provides no safeguard, the exemption does not apply; nor does the exemption extend to the poisonous or deleterious diluents that may be introduced as wetting agents, hair conditioners, emulsifiers, or other components in a color shampoo, rinse, tint, or similar dual-purpose cosmetics that alter the color of the hair.' 21 CFR § 8.1(u).

Respondents contend that this regulation too is irreconcilable with the statute: whereas the statute grants an across-the-board exemption to all hair dyes meeting the patch-test notice requirement, the regulation purports to limit that exemption to cover only those dyes as to which the test is 'effective.' Moreover, it is said, the regulation appears to limit the exemption only to the coor ing ingredient of the dye, and to require clearance for all other components of a particular hair dye.

We agree with the Court of Appeals that respondents' challenge to these regulations is ripe for judicial review under the standards elaborated in Abbott Laboratories v. Gardner, supra, namely the appropriateness of the issues for judicial determination and the immediate severity of the regulations' impact upon the plaintiffs.

The issue as framed by the parties is a straightforward legal one: what general classifications of ingredients fall within the coverage of the Color Additive Amendments? Both the Government and the respondents agree that for any color additive, distribution is forbidden unless the additive is (1) listed in a Food and Drug Administration regulation as safe for use under prescribed conditions, and (2) comes from a 'certified' batch, unless specifically exempted from the certification requirement. The only question raised is what sort of items are 'color additives.' The three regulations outlined above purport to elaborate the statutory definition; they include within the statutory term certain classes of items, e.g., diluents, finished cosmetics, and hair dyes, that respondents assert are not within the purview of the statute at all. We agree with the District Court and the Court of Appeals that this is not a situation in which consideration of the underlying legal issues would necessarily be facilitated if they were raised in the context of a specific attempt to enforce the regulations. Rather, 'to the extent that they purport to apply premarketing requirements to broad categories like finished products and non-coloring ingredients and define the hair-dye exemption, they appear, prima facie, to be susceptible of reasoned comparison with the statutory mandate without inquiry into factual issues that ought to be first ventilated before the agency.' 360 F.2d at 685.

For these reasons we find no bar to consideration by the courts of these issues in their present posture. Abbott Laboratories v. Gardner, supra; United States v. Storer Broadcasting Co., 351 U.S. 192, 76 S.Ct. 763, 100 L.Ed. 1081; Frozen Food Express v. United States, 351 U.S. 40, 76 S.Ct. 569, 100 L.Ed. 730.

This result is supported as well by the fact that these regulations are self-executing, and have an immediate and substantial impact upon the respondents. See Abbott Laboratories v. Gardner, 386 U.S. pp. 152-153, 87 S.Ct. pp. 1517-1518. The Act, as noted earlier, prescribes penalties for the distribution of goods containing color additives unless they have been cleared both by listing in a regulation and by certification of the particular batch. Faced with these regulations the respondents are placed in a quandary. On the one hand they can, as the Government suggests, refuse to comply, continue to distribute products that they believe do not fall within the purview of the Act, and test the regulations by defending against government criminal, seizure, or injunctive suits against them. We agree with the respondents that this proposed avenue of review is beset with penalties and other impediments rendering it inadequate as a satisfactory alternative to the present declaratory judgment action.

The penalties to which cosmetics manufacturers might be subject are extensive. A color additive that does not meet the premarketing clearance procedure is declared to be 'unsafe,' § 706(a), 21 U.S.C. § 376(a), and hence 'adulterated,' § 601, 21 U.S.C. § 361(e). It is a 'prohibited act' to introduce such material into commerce, § 301, 21 U.S.C. § 331, subjec t o injunction, § 302, 21 U.S.C. § 332, criminal penalties, § 303, 21 U.S.C. § 333, and seizure of the goods, § 304(a), 21 U.S.C. § 334(a). The price of noncompliance is not limited to these formal penalties. Respondents note the importance of public good will in their industry, and not without reason fear the disastrous impact of an announcement that their cosmetics have been seized as 'adulterated.'

The alternative to challenging the regulations through noncompliance is, of course, to submit to the regulations and present the various ingredients embraced in them for premarketing clearance. We cannot say on this record that the burden of such a course is other than substantial, accepting, as we must on a motion to dismiss on the pleadings, the allegations of the complaint and supporting affidavits as true. The regulations in this area require separate petitions for listing each color additive, 21 CFR §§ 8.1(f), 8.1(m), 8.4(c), at an initial fee, subject to refunds, of $2,600, a listing. 21 CFR § 8.50(c). One respondent Kolmar Laboratories, Inc., in affidavits submitted to the District Court, asserted that more than 2,700 different formulae would fall under the Commissioner's regulations and would cost some $7,000,000 in listing fees alone. According to the allegations the company also uses 264 diluents which under the challenged regulations must be included as color additives as well. Moreover, a listing is not obtained by mere application alone. Physical and chemical tests must be made and their results submitted with each petition, 21 CFR § 8.4(c), at a cost alleged by Kolmar of up to $42,000,000. Detailed records must be maintained for each listed ingredient, 21 CFR § 8.26, and batches of listed items must ultimately be certified, again at a substantial fee, 21 CFR § 8.51.

Whether on not these cost estimates are exaggerated it is quite clear that if respondents, failing judicial review at this stage, elect to comply with the regulations and await ultimate judicial determination of the validity of them in subsequent litigation, the amount of preliminary paper work, scientific testing, and recordkeeping will be substantial. The District Court found in denying the motion to dismiss: 'I conclude that in a substantial and practical business sense plaintiffs are threatened with irreparable injury by the obviously intended consequences of the challenged regulations, and that to resort to later piecemeal resolution of the controversy in the context of individual enforcement proceedings would be costly and inefficient, not only for the plaintiffs but as well for the public as represented by the defendants.' 235 F.Supp. 648, 651.

Like the Court of Appeals, we think that this record supports those findings and conclusions. And as in Abbott Laboratories, supra, we have been shown no substantial governmental interest that should lead us to reach a conclusion different from the one we have reached in that case. We hold that this action is maintainable.

Affirmed.

Mr. Justice BRENNAN took no part in the consideration or decision of this case.

Mr. Justice FORTAS, with whom THE CHIEF JUSTICE and Mr. Justice CLARK join, concurring in No. 336, and dissenting in Nos. 39 and 438.