Inspection of Enterprises | jgersen | February 11, 2016


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Inspection of Enterprises

by jgersen Show/Hide
  1. 1 Show/Hide More United States v. New England Grocers Supply Co.
    Original Creator: jgersen

    <p>1. Search, Seizure, and Warrants. It is blackletter law that a warrant is required for a search to be considered reasonable under the Fourth Amendment, whether the search is of a home or a business. See See v. City of Seattle, 387 U.S. 541, 545 (1967). For businesses, however, the Court has also relaxed the requirement because there is said to be a lesser expectation of privacy. New York v. Burger, 482 U.S. 691, 699 (1987). Moreover, the warrant requirement has been further relaxed to account for administrative inspections “designed to enforce regulatory statutes.” Id. at 700.</p> <p>2. Pervasively Regulated Industries. As the Supreme Court said in United States v. Biswell, 406 U.S. 311 (1972), “When a dealer chooses to engage in a pervasively regulated business and to accept a federal license, he does so with the knowledge that his business records, . . . will be subject to effective inspection.” Biswell at 406 U.S. at 316. Biswell was a case involving warrantless inspection in the gun industry, but many circuits including the Eight, Ninth, and Sixth, have subsequently held the same is true for <span class="caps">FDCA</span> inspections. See United States v. Jamieson–McKames Pharmaceuticals, Inc., 651 F.2d 532 (8th Cir.1981) (holding drug manufacturing industry; United States v. Argent Chemical Laboratories, Inc., 93 F.3d 572 (9th Cir.1996) (finding pharmaceutical industry “closely regulated”); United States v. Acklen, 690 F.2d 70, 75 (6th Cir.1982) (same).</p> <p>3. What is Reasonable? In what is known as the Colonnade-Biswell doctrine, the Supreme Court has articulated three criteria to determine what constitutes a reasonable warrantless government inspection:</p> <p>This warrantless inspection, however, even in the context of a pervasively regulated business, will be deemed to be reasonable only so long as three criteria are met. First, there must be a “substantial” government interest that informs the regulatory scheme pursuant to which the inspection is made. See Donovan v. Dewey, 452 U.S., at 602, 101 S.Ct., at 2540 (“substantial federal interest in improving the health and safety conditions in the Nation's underground and surface mines”); United States v. Biswell, 406 U.S., at 315, 92 S.Ct., at 1596 (regulation of firearms is “of central importance to federal efforts to prevent violent crime and to assist the States in regulating the firearms traffic within their borders”); Colonnade Corp. v. United States,397 U.S., at 75, 90 S.Ct., at 776 (federal interest “in protecting the revenue against various types of fraud”).</p> <p>Second, the warrantless inspections must be “necessary to further [the] regulatory scheme.” Donovan v. Dewey, 452 U.S., at 600, 101 S.Ct., at 2539. For example, in Dewey we recognized that forcing mine inspectors to obtain a warrant before every inspection *703 might alert mine owners or operators to the impending inspection, thereby frustrating the purposes of the Mine Safety and Health Act-to detect and thus to deter safety and health violations. Id., at 603, 101 S.Ct., at 2540.</p> <p>Finally, “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.” Ibid. In other words, the regulatory statute must perform the two basic functions of a warrant: it must advise the owner of the commercial premises that the search is being made pursuant to the law and has a properly defined scope, and it must limit the discretion of the inspecting officers. See Marshall v. Barlow's, Inc., 436 U.S., at 323, 98 S.Ct., at 1826; see also id., at 332, 98 S.Ct., at 1830 (<span class="caps">STEVENS</span>, J., dissenting). To perform this first function, 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.” Donovan v. Dewey,452 U.S., at 600, 101 S.Ct., at 2539. In addition, in defining how a statute limits the discretion of the inspectors, we have observed that it must be “carefully limited in time, place, and scope.” United States v. Biswell, 406 U.S., at 315, 92 S.Ct., at 1596.</p> <p>New York v. Burger, 482 U.S. 691, 702-03 (1987).</p> <p>4. From routine administrative inspection to criminal investigation. The defendants in new England Grocers Supply argued that even if no warrant was required, the inspections became unreasonable once the <span class="caps">FDA</span> agents had probable cause to suspect violations of the Act. As the court held, however, so long as the inspection is otherwise valid, there is no legal requirement to suspend the inspection and obtain a warrant once there is reason to believe violations have occurred.</p>
  2. 2 Show/Hide More Federal Inspections
    Renee Johnson, The Federal Food Safety System: A Primer, Congressional Research Service RS22600 (Dec. 16 2016) (excerpt)
    <p>1. Some <span class="caps">FDA</span> Inspection Numbers. As the <span class="caps">CRS</span> Report explains, more than 300,000 domestic and foreign food facilities are registered withe the <span class="caps">FDA</span>, of which about 88,000 are domestic. Somewhere between 70-90 percent of these facilities are inspected even once in a given year. Unannounced compliance inspections range from once every five years to once every ten years. Those facilities that are judged to be &#8220;high-risk&#8221; are usually visited once per year. Some 98 percent of food import lines are not inspected by <span class="caps">FDA</span>. It is hard to avoid the conclusion that <span class="caps">FDA</span> inspections cannot possibly detect the vast majority of food safety risks. Even if the specter of a potential inspection keeps most facilities honest, an inspection every five to ten years is not the sort of threat likely to create a powerful incentive.</p> <p>2. Some <span class="caps">USDA</span> Inspection Numbers. The Food Safety and Inspection Service (<span class="caps">FSIS</span>) is an entity located within the United States Department of Agriculture (<span class="caps">USDA</span>). <span class="caps">FSIS</span> conducts inspections in about 6,000 establishments, including about 350 so-called Talmadge-Aiken plants, where are facilities in which state inspectors perform inspections under federal inspectors' supervision.</p> <p>3. Needles, Haystacks, and Illness. Needless to say, these numbers present a daunting challenge for government inspectors. Efforts in recent years have turned to methods like audits and an emphasis on ensuring facilities have adequate hazard protection plans in place, rather than relying on frequent physical inspections. If ex ante inspections are unlikely to ensure safe food, what are the other legal or technological alternatives?</p>
  3. 3 Show/Hide More Inspections, Searches, and Seizures
    Original Creator: jgersen

    The Fourth Amendment of the U.S. Constitution states as follows:

    • 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.  In brief, before searching or seizing, state actors must traditionally obtain a warrant supported by probable cause that a crime has been committed.  Subject to many nuances and caveats that are beyond our topic of study, evidence obtained during an illegal—that is to say, warrantless—search may not generally be used to prosecute a criminal case.  The Fourth Amendment protects against unreasonable searches and seizures.  

    FDA and USDA have been given inspection authority by virtue of a range of federal statutes like the Meat Inspection Act.  Is such inspection authority constiututional or does it consist of a warrantless or unreasonable search.  Is an inspection the same legal entity as a search?  What if evidence of illegal activity is discovered during an inspection?  Can that evidence always, sometimes, or never be used to sanction the facility?  The next cases illustrate how courts have grappled with these questions.  

  4. 4 Show/Hide More Photography
    Original Creator: jgersen
    May FDA inspectors take pictures of the facilities that are undergoing inspection? FDA has repeatedly answered the question in the affirmative, telling inspectors that photography is a critical part of the inspection process. The food industry disagrees and has argued that photographs are authorized neither by statute nor by judicial doctrine. For an overview of these issues, see Neal D. Fortin, Is a Picture Worth More than 1,000 Words? The Fourth Amendment and the FDA's Authority to Take Photographs Under the Federal Food, Drug, and Cosmetic Act, 1 J. Food L. & Pol'y 239 (2005). The following excerpt summarizes the apparent view of the courts on the matter.
  5. 6 Show/Hide More Durovic v. Palmer
    Original Creator: jgersen

    <p>1. Statutes and the Constitution. Section 704 of the <span class="caps">FDCA</span>, 21 U.S.C. 374 authorizes inspections &#8220;at reasonable times and within reasonable limits and in a reasonable manner.&#8221; By and large this means that inspections usually occur during normal business hours rather than in midnight raids. Durovic sought to argue that an inspection outside of normal business hours is not at a reasonable time and therefore not authorized by the statute. Although this turned out to be a losing argument, note the close relationship between the statutory and constitutional tests. In order to pass constitutional muster according to the Colonnade-Biswell doctrine, the inspection must be authorized by a statute limiting discretion and providing notice. If an inspection is not authorized by statute meeting these requirements, then any occurring inspection would likely be a prohibited warrantless unreasonable search. What does section 704 authorize? Inspections occurring a reasonable times. If the actual <span class="caps">FDA</span> inspection occurred at an unreasonable time, then it is an inspection not authorized by the statute. If it is not authorized by the statute, the inspection constitutes an unconstitutional search. The constitutional validity of a given inspection then can turn on the seemingly mundane issue of what constitutes a reasonable time for an inspection.</p> <p>2. Rules of Reasonableness. Section 704 authorizes <span class="caps">FDA</span> employees to enter and inspect a food enterprise, factory, warehouse, establishment, or vehicle, after presenting appropriate credentials and a written notice. 21 U.S.C. 374(A). The statutory requirements for reasonable time, reasonable limits, and reasonable manners have been interpreted in a series of <span class="caps">FDA</span> Rules and Policies. See, e.g., U.S. Food and Drug Administration Investigations Operations manual 2014. As noted in Durovic, the &#8220;reasonable time&#8221; requirement typically means normal business hours. The &#8220;reasonable limits&#8221; requirement typically means that the area or goods inspected must be relevant to the goal of the inspection. The &#8220;reasonable manner&#8221; requirement has been interpreted to mean that inspectors must present their credentials to gain entry into the facility and must issue the firm a Notice of Inspection at the commencement of the inspection.</p> <p>3. Inspect What? In addition to equipment, storage facilities, foods, containers, and labels, <span class="caps">FDA</span> inspection authority includes the power to obtain company records of the interstate shipment of foods. <span class="caps">FDA</span>, Draft Guidance, Records Access Authority under Sections 414 and 704 Federal Food, Drug, &amp; Cosmetic Act: Questions and Answers (Feb. 2012). Excepted from the records authority are records of recipes, financial data, pricing data, personnel data, sales data, and research data. 21 U.S.C. 350&#169;. Moreover, any confidential or trade secret information is protected from public disclosure. The food industry is notoriously secretive and it is not hard to imagine the anxiety about opening recipe records to government inspectors. See generally Trade Secrets, U.S. Food &amp; Drug Administration (June 1, 2010).</p>
  6. 7 Show/Hide More Munsell v. Dept. of Agriculture, 509 F.3d 572 (D.C. Cir. 2007).
    Munsell v. Dept. of Agriculture, 509 F.3d 572 (D.C. Cir. 2007) provides an overview the statutory history of the Meat Inspection Act, the Poultry Products Inspection Act, and the Food Safety Inspection Service—the other major federal food inspection agency. Although all of the claims brought were eventually dismissed, the case illustrates a fairly common procedural posture for those hoping to challenge the inspection regime.
    <p>1. <span class="caps">FSIS</span> Authority. <span class="caps">FSIS</span> is given inspection authority by virtue of three different statutes: the Federal Meat Inspection Act of 1906 (<span class="caps">FMIA</span>), the Poultry Products Inspection Act of 1957 (<span class="caps">PPIA</span>), and the Egg Product Inspection Act of 1970 (<span class="caps">EPIA</span>). <span class="caps">FSIS</span> carries out mandatory inspections at facilities that slaughter livestock or poultry and that process eggs.</p> <p>2. The <span class="caps">FMIA</span>, enacted in the early 1900's, requires that certain animals&#8212;cattle, sheep, swine, goats, horses and mules&#8212;be visually inspected before entering a slaughter facility. See 21 C.F.R. 603. A federal inspector must conduct both an inspection before slaughter (an antemortem inspection) and an inspection after slaughter (a postmortem inspection). 21 C.F.R. 604. At facilities that &#8220;process&#8221; meat food products, an inspector checks facilities regularly but is not constantly present. While the <span class="caps">FMIA</span> provides for both civil and criminal penalties, the simple refusal to certify the meat product tends to be a powerful tool for ensuring compliance.</p> <p>3. The <span class="caps">PPIA</span> dictates inspection for poultry and poultry products capable for use as human food. 21 C.F.R. 451. While the text of the <span class="caps">PPIA</span> does not require antemortem inspection of all poultry, <span class="caps">FSIS</span> has discretion to so require. The Act does require postmortem inspection on a bird-by-byrd basis whenever processing operations are being conducted. 21 U.S.C. 455(b). <span class="caps">USDA</span> Rules, however, provide for sampling techniques and fewer inspectors than traditionally used. The next case considers a challenge to the rule.</p> <p>4. The <span class="caps">EPIA</span> requires inspection for (a) egg products and (b) shell eggs. A shell egg or egg is defined to include eggs of the domesticated chicken, turkey, duck, goose, or guinea. 21 U.S.C. 1033(b). An &#8220;egg product&#8221; is &#8220;any dried, frozen, or liquid eggs, with or without added ingredients.&#8221; 21 U.S.C. 1033(f). The <span class="caps">USDA</span> and <span class="caps">FDA</span> share enforcement authority under the statute. How? <span class="caps">FDA</span> has authority over shell eggs, while <span class="caps">USDA</span> has authority over egg products. <span class="caps">FDA</span> inspectors inspect egg packers at least once every there months. <span class="caps">USDA</span> inspection of egg products is more rigorous and extensive. An official inspector must be present at all times when eggs are being processed. The inspector must examine the eggs both before and after breaking. 9 C.F.R. 420. U.S. egg farmers produce about 79 billion eggs each year. Approximately 30 percent go into egg products, meaning that approximately 23 billion eggs are required by law to be inspected both before and after they are cracked into egg products. We leave it to the reader to judge whether such an inspection regime is likely to be effective.</p> <p>5. Inspectors and the Constitution. One of Munsell's claims was that <span class="caps">FSIS</span> inspectors retaliated against him for complaining and pointing to ConAgra (correctly, as it turned out) as the likely source of an E Coli outbreak. He claimed to have been harassed by the agency, who threatened him with regulatory sanctions, requested unexplained changes to his hazard plan, and routinely rejected his proposed changes. Setting aside the factual merits of his allegations, his basic claim was that inspectors used their discretion to violate his constitutional rights. The remedy for such a claim, if it exists, is known as a Bivens action. As the D.C. Circuit explains, part of the judicial calculus about when to provide a Bivens remedy turns on whether there are other adequate remedies to address the underlying wrong. Did the D.C. Circuit hold there was or was not an adequate alternative remedy?</p>

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February 11, 2016

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