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C & K MFG. & SALES CO. v. YEUTTER

August 28, 1990

C & K MANUFACTURING & SALES CO., et al., Plaintiffs,
v.
CLAYTON YEUTTER, Defendant. JETNET CORPORATION, Plaintiff, v. UNITED STATES DEPARTMENT OF AGRICULTURE, et al., Defendants


Stanley S. Harris, United States District Judge.


The opinion of the court was delivered by: HARRIS

This matter is before the Court on motions for a preliminary injunction filed separately by plaintiffs C & K Manufacturing & Sales Company *fn1" and JetNet Corporation in these consolidated actions. Upon consideration of the motions, the Government's opposition thereto, and the entire record herein, plaintiffs' motions are granted in part and denied in part.

 Background

 C & K is an Ohio company engaged in marketing various products to the food processing industry, including what is commonly referred to as stockinette, an elastic netting material which is widely used to package fresh and cooked cured meats and poultry. Stockinette consists of an elasticized rubber material covered with cotton and is used to hold meat and poultry together so that it retains its shape. Ripple Twist Mills, wholly-owned by the stockholders of C & K, manufactures stockinette for C & K under the trade name "Zip-Net." JetNet also produces and distributes an elastic netting similar to Zip-Net, yet somewhat different in chemical composition, and has done so for over 25 years.

 The Food Safety and Inspection Service (FSIS) is the agency of the United States Department of Agriculture (USDA) charged with implementation and execution of the Federal Meat Inspection Act (FMIA), 21 U.S.C. § 601 et seq. Under the FMIA, the FSIS is charged with preventing adulterated meat products from entering the stream of commerce. Prior to 1984, both C & K and JetNet obtained letters of approval from the FSIS for use of stockinette in federally inspected meat and poultry establishments. Those letters indicated that plaintiffs' products were chemically accepted for use as packaging material in direct contact with meat and poultry products, as long as the composition and use of the stockinette remained the same.

 In 1984, the FSIS published new regulations governing the entry and use of packaging materials. 9 C.F.R. § 317.20. Under subsection (a), the responsibility of ensuring that the materials complied with the relevant provisions of the Federal Food, Drug, and Cosmetic Act (FFDCA) essentially was shifted to the packaging manufacturers.

 In August 1988, in response to a request by C & K for approval of a new product, Zip-Net C-656, the FSIS advised C & K that rubber articles for single food use contact were not specifically covered "under federal regulations." The FSIS indicated that it would discuss the matter with officials at the Food and Drug Administration (FDA), but that, until then, it would not disallow the use of Zip-Net C-656 in federally inspected meat and poultry. C & K alleges that it was informed by USDA officials that it would notify C & K if C & K was required to submit a food additive petition for FDA approval pursuant to the FFDCA.

 On January 12, 1989, the FDA issued an opinion to the USDA declaring that an approved food additive petition would be necessary for the use of rubber netting for meat products, but adding that consumers would not be injured by the continued use of the netting during the pendency of the petitions. Neither agency appears to have contacted plaintiffs nor the manufacturers as a group regarding the FDA's position. In March 1989, C & K contacted the FDA about obtaining approval for a new vendor's elastic thread. The FDA informed C & K at that time that it believed that a food additive petition would be appropriate to permit the material for "single food-contact use." *fn2" Although C & K did not necessarily agree that the food additive petition was necessary, it began developing scientific data in response to the FDA's request. *fn3" In addition, C & K sought to refine the scope of the petition form provided by the FDA so that it would be applicable to a food packaging material such as stockinette, through discussions with its own laboratory and correspondence with the FDA.

 On May 8, 1990, C & K submitted its proposed testing procedures to the FDA. The FDA responded to C & K in a May 22, 1990, letter in which it indicated that it would begin reviewing C & K's testing protocol. C & K alleges that it was subsequently orally informed by the FDA both in June and in August that the matter was under consideration by FDA scientists and that a response would be forthcoming.

 In the meantime, in the course of conducting a study designed to evaluate a new ham curing process, the FSIS discovered high levels of dibutylnitrosamine (DBNA) in hams from Hatfield Quality meats in Hatfield, Pennsylvania. Because nitrosamines are carcinogens, the FSIS conducted a controlled confirmation study of 12 hams from the Hatfield plant and concluded that hams cured in elastic netting had higher levels of DBNA than hams in the control group. The results of this study, as well as the results of a 1987 study conducted by Sen and others which showed that cured meats packaged in elastic rubber netting contained significant levels of DBNA, were received by the FSIS administrator, Dr. Lester Crawford, on or about July 13, 1990. A subsequent risk assessment, received on July 27, 1990, showed an insignificant risk of short-term exposure to DBNA through meat consumption, but a significant risk of long-term exposure (an increase in the likelihood of cancer of approximately four out of a million).

 On July 16, 1990, C & K was contacted by one of its customers who informed C & K of the FSIS test at the Hatfield plant. The customer advised C & K that use of its netting materials had been suspended at that facility and that the FSIS was contemplating a national ban on the materials. C & K immediately began discussions with FSIS representatives in an effort to clarify and resolve the issue. After concluding that the FSIS test methods and results were questionable, C & K began its own testing. On June 23, 1990, C & K met with officials of the FSIS and supplied preliminary data indicating the absence of confirmable levels of nitrosamines in the products which it had sampled. C & K also expressed its willingness to cooperate with the FSIS in further, broader-based testing.

 On July 27, 1990, without notice to C & K, JetNet, or apparently any other supplier or packager, the FSIS issued a press release announcing that it would ban the use of all elastic netting materials in cured, cooked meat and poultry products, effective August 13, 1990. *fn4" JetNet learned for the first time that same day, through a customer, that the FSIS was imposing the ban.

 On August 2, 1990, C & K met for one hour with a representative from the USDA General Counsel's office and an FSIS scientist and presented its view that the ban was ill-founded. On August 6, Dr. Crawford confirmed his prior determination as to C & K's elastic netting. That same day, C & K made another request for an administrative hearing. Then, on August 8, it met with Dr. Crawford and others. On August 9, Dr. Crawford advised C & K that it had had an opportunity to present its case, that there would be no hearing, and that it would disapprove C & K's netting for use on cooked, cured meat and poultry.

 Similarly, once JetNet learned of the ban, its President and Senior Vice President met with Dr. Crawford and informed him of JetNet's intention to cooperate in providing the FSIS with data. JetNet conducted its own study and concluded that the presence of nitrosamines could not presumptively be the result of migration from their elastic netting. *fn5" On August 8, JetNet officials met with Dr. Crawford, presented him with their data, and asserted its product was in compliance with the FFDCA and should be excluded from the ban. Alternatively, JetNet requested ...


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