Alpharma, Inc. v. Pennfield Oil Company

Full title: ALPHARMA, INC., Plaintiff, v. PENNFIELD OIL COMPANY d/b/a PENNFIELD ANIMAL…

Court: United States District Court, D. Nebraska

Date published: Jul 13, 2004

8:03CV401 (D. Neb. Jul. 13, 2004)

Opinion

8:03CV401.

July 13, 2004

MEMORANDUM AND ORDER

JOSEPH BATAILLON, District Judge

INTRODUCTION

The matters before the court are (1) plaintiff's motion for preliminary injunction, Filing No. 13; and (2) defendant's motion to dismiss, Filing No. 26. A hearing was held regarding these motions on February 25, 2004. I denied the motion for preliminary injunction, making findings on the record. Filing No. 48. I took the motion to dismiss under advisement and indicated to counsel that I would issue a written order on the motion to dismiss. I have carefully reviewed the record, relevant case law, the briefs in support and opposition, and have considered the arguments of counsel. I find that the motion to dismiss should be granted.

FACTS

Plaintiff filed a complaint in this case alleging false, deceptive and misleading advertising by defendant of its goods and services in violation of 15 U.S.C. § 1125(a), § 43(a)(1) of the Lanham Act, and deceptive trade practices under Neb. Rev. Stat. §§ 87-301 — 87-306 of the Nebraska Uniform Deceptive Trade Practices Act, and unfair competition and unjust enrichment under Nebraska common law. Filing No. 1.

Plaintiff is a pharmaceutical company that sells products including animal drugs used to supplement feed and prevent disease in both poultry and livestock. Filing No. 1. The product at issue in this lawsuit is Type A Medicated Article containing Bacitracin Methylene Disalicylate (Bacitracin MD). The defendant is allegedly selling a product containing Bacitracin MD which is known as Pennitracin MD 50-G (Pennitracin MD). Filing No. 1.

All animal drugs must be approved for sale by the Federal Drug Administration (FDA). The FDA determines allowable uses, supplements, animal species that can receive the drug, labeling, and what companies are so approved. Plaintiff alleges that since 2002 defendant has been selling and has been falsely advertising FDA approval for Pennitracin MD. Plaintiff contends that defendant does not have FDA approval to sell this product. Defendant argues that its predecessor in interest received approval to sell Pennitracin, that it is being used and sold for approved FDA purposes, and that the FDA is currently in the process of reviewing these issues.

STANDARD OF REVIEW

In considering a motion to dismiss a complaint under Rule 12(b)(6), the court must assume all the facts alleged in the complaint are true and must liberally construe the complaint in the light most favorable to the plaintiff. Schmedding v. Tnemec Co., 187 F.3d 862, 864 (8th Cir. 1999). A Rule 12(b)(6) motion to dismiss a complaint should not be granted unless it appears beyond a doubt that the plaintiff can prove no set of facts which would entitle him to relief. Id. Thus, as a practical matter, a dismissal under Rule 12(b)(6) should be granted only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief. Id.

ANALYSIS

I am concerned that this lawsuit is premature, as the issues appear to be in the midst of FDA review. "Judicial relief is available only after administrative remedies have been exhausted." Weinberger v. Hynson, 412 U.S. 609, 627 (1973). Courts are not as equipped as administrative agencies, such as the FDA, to judge the merits of scientific issues. Bradley v. Weinberger, 483 F.2d 410, 415 (1st Cir. 1973). The agency should also be given the opportunity to determine the meaning of its own regulations. Id. at 417. It is the responsibility of the administrative agency to interpret its own regulations. Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 231 (3rd Cir. 1990). The purposes of invoking the exhaustion doctrine include (1) discouraging the avoidance of the administrative process; (2) allowing the agency autonomy and use of its expertise; (3) development of a factual record for judicial review; and (4) reduction of duplicity of judicial resources. McKart v. United States, 395 U.S. 185, 193 (1969). When the FDA has primary jurisdiction over a matter, the party must exhaust all administrative remedies prior to seeking judicial review. Biotics Research Corp. v. Heckler, 710 F.2d 1375, 1376-77 (9th Cir. 1983).

I must balance the individual's interest in prompt court intervention with the interests of the FDA that favor exhaustion. The facts in this case lead me to the conclusion that plaintiff's failure to exhaust requires dismissal. First, there is a total lack of administrative finality with regard to the issues before me. The FDA is reviewing what appears to be completely confusing historical records to determine the extent of the authority authorized with regard to defendant's product. Further, there are pending FDA hearings on the issues set forth in this case. The FDA has agency expertise on these issues and should be entitled to make a determination prior to court intervention. It is the responsibility of the administrative agency to interpret its own regulations, and at this point in time, that has not occurred. The FDA needs an opportunity to conduct its own hearings and investigation and to correct any errors. Nothing in the record would support an argument that exhaustion would be ineffective or futile in this case. I do not believe these issues of false advertising should be decided in the first instance under a false advertising claim. Sandoz Pharmaceuticals Corp., 902 F.2d at 231. Consequently, I conclude that this case should be dismissed. I further conclude that the state law claims rely on the same factual assumptions as do the federal claims, and thus I shall not entertain those claims at this time for the reasons stated herein.

THEREFORE, IT IS ORDERED that the defendant's motion to dismiss, Filing No. 26, is hereby granted.