Appeal from the United States District Court for the Eastern District of New York, John J. Dooling, J.,
Waterman and Gurfein, Circuit Judges, and M. Joseph Blumenfeld, District Judge.*fn*
This appeal involving a regulation of the Food and Drug Administration is not here upon a direct review of agency action. It is an appeal from a judgment of the District Court for the Eastern District of New York (Hon. John J. Dooling, Judge) enjoining the appellants, after a hearing, from processing hot smoked whitefish except in accordance with time-temperature-salinity (T-T-S) regulations contained in 21 C.F.R. Part 122 (1977).*fn1 The thorough analytical opinion of the District Court is reported at 417 F. Supp. 1364 (Aug. 17, 1976).
The injunction was sought and granted on the ground that smoked whitefish which has been processed in violation of the T-T-S regulation is "adulterated." Food, Drug and Cosmetics Act ("the Act") §§ 302(a) and 301(k), 21 U.S.C. §§ 332(a), 331(k).*fn2
Appellant Nova Scotia receives frozen or iced whitefish in interstate commerce which it processes by brining, smoking and cooking. The fish are then sold as smoked whitefish.
The regulations cited above require that hot-process smoked fish be heated by a controlled heat process that provides a monitoring system positioned in as many strategic locations in the oven as necessary to assure a continuous temperature through each fish of not less than 180 degree F. for a minimum of 30 minutes for fish which have been brined to contain 3.5% water phase salt or at 150 degree F. for a minimum of 30 minutes if the salinity was at 5% water phase. Since each fish must meet these requirements, it is necessary to heat an entire batch of fish to even higher temperatures so that the lowest temperature for any fish will meet the minimum requirements.*fn3
Government inspection of appellants' plant established without question that the minimum T-T-S requirements were not being met. There is no substantial claim that the plant was processing whitefish under "insanitary conditions" in any other material respect. Appellants, on their part, do not defend on the ground that they were in compliance, but rather that the requirements could not be met if a marketable whitefish was to be produced. They defend upon the grounds that the regulation is invalid (1) because it is beyond the authority delegated by the statute; (2) because the FDA improperly relied upon undisclosed evidence in promulgating the regulation and because it is not supported by the administrative record; and (3) because there was no adequate statement setting forth the basis of the regulation.*fn4 We reject the contention that the regulation is beyond the authority delegated by the statute, but we find serious inadequacies in the procedure followed in the promulgation of the regulation and hold it to be invalid as applied to the appellants herein.
The hazard which the FDA sought to minimize was the outgrowth and toxin formation of Clostridium botulinum Type E spores of the bacteria which sometimes inhabit fish. There had been an occurrence of several cases of botulism traced to consumption of fish from inland waters in 1960 and 1963 which stimulated considerable bacteriological research. These bacteria can be present in the soil and water of various regions. They can invade fish in their natural habitat and can be further disseminated in the course of evisceration and preparation of the fish for cooking. A failure to destroy such spores through an adequate brining, thermal, and refrigeration process was found to be dangerous to public health.
The Commissioner of Food and Drugs ("Commissioner"), employing informal "notice-and-comment" procedures under 21 U.S.C. § 371(a), issued a proposal for the control of C. botulinum bacteria Type E in fish. 34 F.R. 17,176 (Oct. 23, 1969). For his statutory authority to promulgate the regulations, the Commissioner specifically relied only upon § 342(a)(4) of the Act which provides:
"A food shall be deemed to be adulterated -
"(4) if it has been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health;"
Similar guidelines for smoking fish had been suggested by the FDA several years earlier, and were generally made known to people in the industry. At that stage, however, they were merely guidelines without substantive effect as law. Responding to the Commissioner's invitation in the notice of proposed rulemaking, members of the industry, including appellants and the intervenor-appellant, submitted comments on the proposed regulation.
The Commissioner thereafter issued the final regulations in which he adopted certain suggestions made in the comments, including a suggestion by the National Fisheries Institute, Inc. ("the Institute"), the intervenor herein. 35 F.R. 17,401 (Nov. 13, 1970).*fn5 The original proposal provided that the fish would have to be cooked to a temperature of 180 degree F. for at least 30 minutes, if the fish have been brined to contain 3.5% water phase salt, with no alternative. In the final regulation, an alternative suggested by the intervenor "that the parameter of 150 degree F. for 30 minutes and 5% salt in the water phase be established as an alternate procedure to that stated in the proposed regulation for an interim period until specific parameters can be established" was accepted, but as a permanent part of the regulation rather than for an interim period.
The intervenor suggested that "specific parameters" be established. This referred to particular processing parameters for different species of fish on a "species by species" basis. Such "species by species" determination was proposed not only by the intervenor but also by the Bureau of Commercial Fisheries of the Department of the Interior. That Bureau objected to the general application of the T-T-S requirement proposed by the FDA on the ground that application of the regulation to all species of fish being smoked was not commercially feasible, and that the regulation should therefore specify time-temperature-salinity requirements, as developed by research and study, on a species-by-species basis. The Bureau suggested that "wholesomeness considerations could be more practically and adequately realized by reducing processing temperature and using suitable concentrations of nitrite and salt." The Commissioner took cognizance of the suggestion, but decided, nevertheless, to impose the T-T-S requirement on all species of fish (except chub, which were regulated by 21 C.F.R. 172.177 (1977) [dealing with food additives]).*fn6
He did acknowledge, however, in his "basis and purpose" statement required by the Administrative Procedure Act ("APA"), 5 U.S.C. § 553(c), that "adequate times, temperatures and salt concentrations have not been demonstrated for each individual species of fish presently smoked". 35 F.R. 17,401 (Nov. 13, 1970). The Commissioner concluded, nevertheless, that "the processing requirements of the proposed regulations are the safest now known to prevent the outgrowth and toxin formation of C. botulinum Type E". He determined that "the conditions of current good manufacturing practice for this industry should be established without further delay." Id.
The Commissioner did not answer the suggestion by the Bureau of Fisheries that nitrite and salt as additives could safely lower the high temperature otherwise required, a solution which the FDA had accepted in the case of chub. Nor did the Commissioner respond to the claim of Nova Scotia through its trade association, the Association of Smoked Fish Processors, Inc., Technical Center that "the proposed process requirements suggested by the FDA for hot processed smoked fish are neither commercially feasible nor based on sound scientific evidence obtained with the variety of smoked fish products to be included under this regulation." (Exhibit D, Tab A).*fn7
Nova Scotia, in its own comment, wrote to the Commissioner that "the heating of certain types of fish to high temperatures will completely destroy the product". It suggested, as an alternative, that "specific processing procedures could be established for each species after adequate work and experimention [sic] has been done - but not before." (Id.). We have noted above that the response given by the Commissioner was in general terms. He did not specifically aver that the T-T-S requirements as applied to whitefish were, in fact, commercially feasible.
When, after several inspections and warnings, Nova Scotia failed to comply with the regulation, an action by the United States Attorney for injunctive relief was filed on April 7, 1976, six years later, and resulted in the judgment here on appeal. The District Court denied a stay pending appeal, and no application for a stay was made to this court.
The argument that the regulation is not supported by statutory authority cannot be dismissed out of hand. See Schilling v. Rogers, 363 U.S. 666, 676-77, 80 S. Ct. 1288, 1295-96, 4 L. Ed. 2d 1478 (1960); see Batterton v. Francis, 432 U.S. 416, 97 S. Ct. 2399, 53 L. Ed. 2d 448 (1977). The sole statutory authority relied upon is § 342(a)(4), quoted above. As we were instructed in S.E.C. v. Chenery Corp., 318 U.S. 80, 87, 87 L. Ed. 626, 63 S. Ct. 454 (1943) (Chenery I), "the grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based." Nor is the Commissioner's expressed reliance solely on § 342(a)(4) a technicality which might be removed by a later and wiser reliance on another subsection. For in this case, as the agency recognized, there is no other section or subsection that can pass as statutory authority for the regulation. The categories of "adulteration" prohibited in Section 342 all refer to food as an "adulterated" product rather than to the process of preparing food, except for subsection (a)(4) which alone deals with the processing of food.
Appellants contend that the prohibition against "insanitary conditions" embraces conditions only in the plant itself, but does not include conditions which merely inhibit the growth of organisms already in the food when it enters the plant in its raw state. They distinguish between conditions which are insanitary, which they concede to be within the ambit of § 342(a)(4), and conditions of sterilization required to destroy micro-organisms, which they contend are not.
It is true that on a first reading the language of the subsection appears to cover only "insanitary conditions" " whereby it [the food] may have been rendered injurious to health" (emphasis added). And a plausible argument can, indeed, be made that the references are to insanitary conditions in the plant itself, such as the presence of rodents or insects, e.g., United States v. Park, 421 U.S. 658, 44 L. Ed. 2d 489, 95 S. Ct. 1903 (1975); United States v. Cassaro, Inc., 443 F.2d 153 (1st Cir. 1971); United ...