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DELBAY PHARMS., INC. v. DEPARTMENT OF COMMER.

February 10, 1976

DELBAY PHARMACEUTICALS, INC., Plaintiff,
v.
DEPARTMENT OF COMMERCE, ROGERS C. B. MORTON, Secretary, Department of Commerce, Defendants



The opinion of the court was delivered by: GASCH

 This matter is before the Court on plaintiff's motion for preliminary injunction. Upon consideration of the pleadings and submissions of the parties, and the oral argument of counsel, the Court concludes that plaintiff is not entitled to a preliminary injunction. The Court's findings of fact and conclusions of law follow.

 FINDINGS OF FACT

 1. Plaintiff, Delbay Pharmaceuticals, Inc., is a Delaware corporation with its principal place of business in Kenilworth, New Jersey. Delbay is a joint venture of the Schering Corporation and Bayer, A.G., a German corporation. Delbay is engaged in the research, manufacture and marketing in the United States of products researched and developed by Bayer, A.G.

 2. Defendants are the Department of Commerce and its Secretary. The Department of Commerce is charged with the enforcement of the Endangered Species Act of 1973.

 3. The plaintiff seeks to enjoin the defendants from enforcing the provisions of the Endangered Species Act of 1973, 87 Stat. 884, 16 U.S.C. § 1531 et seq. (hereinafter "the 1973 Act") with regard to the sale in interstate commerce of parts or products of endangered species legally held in the United States on December 28, 1973. Specifically, plaintiff claims that the prohibitions in the 1973 Act pertaining to receipt of, or interstate commerce in, parts or products of endangered species do not apply to such parts or products legally held for commercial purposes in the United States on the effective date of the 1973 Act, to wit, December 28, 1973, or, in the alternative, that such prohibitions do not apply to successors in interest in products imported under an economic hardship permit issued pursuant to the Endangered Species Conservation Act of 1969, Pub. L. No. 91-135, 83 Stat. 275 (hereinafter "the 1969 Act").

 4. In December, 1969, the Congress enacted the 1969 Act. This law prohibited the importation of endangered species; however, Section 3(b) of the Act authorized the Secretary of the Interior to issue import permits

 
"In order to minimize undue economic hardship to any person importing any species . . . which are determined to be threatened with worldwide extinction . . . under any contract entered into prior to the date of publication of such determination in the Federal Register . . . ."

 5. On December 28, 1973, the Congress enacted the 1973 Act. This statute is far broader than the provisions of the 1969 Act, which were specifically repealed by Section 14 of the 1973 Act. The 1973 Act prohibits not only importation of endangered species, 16 U.S.C. § 1538(a)(1)(A), but also makes it unlawful to "sell or offer for sale in interstate or foreign commerce" an endangered species, 16 U.S.C.§ 1538(a)(1)(F), or to "deliver, receive, carry, transport, or ship in interstate or foreign commerce, by any means whatsoever and in the course of commercial activity" an endangered species, 16 U.S.C. § 1538(a)(1)(E). These prohibitions extend to parts or products of "fish or wildlife" (whether dead or alive) that are designated as "endangered species." 16 U.S.C. § 1532(5).

 6. The plaintiff is engaged in the manufacture for shipment and sale, in interstate commerce, of a prescription drug, Lotrimin. Lotrimin is a synthetic antifungal agent which inhibits the growth of pathogenic dermatophytes, yeasts and Malassezia furfur. Lotrimin is available in both cream and solution form. Lotrimin is the sole marketed product of plaintiff and is the result of approximately six years of research and the expenditure of approximately five million dollars.

 7. Lotrimin cream contains spermaceti, a waxy substance derived from the sperm whale. The sperm whale was initially listed as an endangered species, pursuant to the provisions of the 1969 Act on December 2, 1970, in the Federal Register, Volume 35, at page 18319. The list of endangered species has been codified in the Code of Federal Regulations, Title 50, at Section 17.11.

 8. The spermaceti utilized by the plaintiff in the manufacture of Lotrimin cream was purchased from the Werner G. Smith Company throughout the period 1974-1975. The spermaceti had been legally imported into the United States under Permit No. ES-50 issued to the Werner G. Smith Company, pursuant to the economic hardship exception to the 1969 Act at Section 3(b), formerly 16 U.S.C. § 668cc-3(b). The permit which was dated January 29, 1971, and expired on December 1, 1971, allowed the Werner G. Smith Company to import 3,070 long tons of oil of the sperm whale.

 9. On December 19 and 23, 1975, pursuant to the enforcement provisions of the 1973 Act, 16 U.S.C. § 1540(e), agents of the National Marine Fisheries Service of the Department of Commerce seized plaintiff's inventory of spermaceti, including all Lotrimin cream containing spermaceti.

 10. The inventory of Lotrimin cream seized by the defendants consisted of 325,791 15-gram tubes and 175,281 30-gram tubes for sale purposes and 528,617 two-gram tubes to be used as samples. In addition, the inventory included approximately 45,000 kits containing assorted numbers of two-gram tubes. ...


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