Court Blesses FDA’s Rarely Used Administrative Search Warrant Authority

A recent decision out of Pennsylvania caught our eye, not because it applied a new enforcement strategy by FDA, but to the contrary, because it relied on FDA’s “oldie but goodie” Inspection Warrant authority.  Not a search warrant, which is subject to the same “probable cause” standard as all criminal search warrants, but an administrative tool that is rooted in the inspection provisions of the FDC Act, 21 U.S.C. § 374(a).  FDA admits it rarely uses this authority: “FDA does not routinely request inspection warrants in order to conduct investigations or inspections of regulated industry. However, warrants have been used effectively to gather information that has been refused improperly.”

FDA’s Regulatory Procedures Manual requires the following criteria to seek an inspection warrant:

1. FDA is entitled by statute or regulation to inspect the facility and to have access to the information which has been refused; and
2. there is a compelling FDA need for that information, and
3. the firm/individuals have refused to allow inspection or access to information in spite of a clear demonstration or explanation of appropriate statutory authority.

In the reported decision, In the Matter of Administrative Establishment Inspection, No. 1:18-MC-546, 2019 U.S. Dist. LEXIS 65476 (M.D. Pa. Apr. 17, 2019), FDA tried five times to inspect Spa & Organic Essentials after a nationwide outbreak of salmonella was linked to kratom distributed by the company.  Kratom is a food, as defined by the FDC Act, and Spa & Organic Essentials is subject to regulation by FDA as a food manufacturer and distributor.  Despite evidence linking the company to the contaminated kratom, the company refused to cooperate with FDA inspectors.  Thus, FDA turned to this rarely used tool, described as an “Inspection Warrant” by FDA, but termed an “Administrative Search Warrant” by the court.  The court issued the warrant on September 27, 2018, and FDA executed the warrant on October 3, 2018.  Both parties filed motions related to the warrant: Spa & Organic Essentials sought to quash the warrant, and FDA sought to require Spa & Organic Essentials to make statements and provide passwords for computers seized by FDA.

The court denied both motions.  The court recognized the strong deference afforded to the magistrate judge’s determination of probable cause, and also reinforced the well-settled proposition that “probable cause” in the criminal law sense is not required for an administrative warrant.  Rather, probable cause may be based on either:

• A particularized showing that the manufacturing plant targeted for the search is the location of suspected . . . violations; or
• A showing that the industry in general poses certain hazards to workers coupled with a showing that the targeted facility was selected at random as part of a general plan to pursue and eliminate suspected industry-wide violations.

The court concluded there was “ample probable cause for the FDA to conduct this search.”  The court was persuaded by the evidence linking Spa & Organic Essentials as the potential source for the salmonella-tainted kratom, and the company’s refusal to cooperate with other investigative measures.

The court denied as premature FDA’s request to compel the company to speak with investigators on the ground that the warrant did not affirmatively require the company to engage in testimonial conduct, just the seizure of records.   Thus, the court instructed FDA to take steps to first compel production of the information. But how can FDA take those steps? As noted above, the administrative warrant is rooted in the FDC Act inspection provisions. There is nothing in those provisions that requires an inspected entity to “allow” FDA to interview the entity’s employees. Thus, short of obtaining a criminal search warrant or getting a criminal subpoena, there is simply no step that FDA can take to compel interviews of the inspected entity.

This case serves as good reminder to all FDA-regulated entities of the arsenal of tools FDA has to conduct its regulatory oversight.  However the case also is a reminder of a key limitation on FDA’s inspectional authority, namely the absence of any statutory authority to compel any company employee to speak about any topic during an FDA inspection. Thus, regulated industry must remember that allowing its employees to speak during an FDA inspection is a purely voluntary decision, and not one that FDA has any statutory authority to compel under the FDC Act.  We assume FDA will only use the Inspection Warrant in limited circumstances, as proscribed by the RPM, but companies should know that a decision to refuse an inspection may be short-lived.