Winter is Coming: How a Labor Case in SCOTUS Impacts FDA Injunction Powers

Among the tools that the government has to enforce the FDC Act is the injunctive power granted by Congress in 21 U.S.C. § 332. That statute provides that courts “shall have jurisdiction, for cause shown, to restrain violations” of the FDC Act. Historically, courts have modified, watered down, or altogether eschewed the traditional equitable requirements for an injunction when considering FDA’s request for injunctive relief. The Supreme Court’s decision in Starbucks Corp. v. McKinneystrongly suggests that courts should engage in a different analysis in the future.  

Starbucks was a labor case, but the Court’s decision affects most if not all federal agencies that have injunctive authority. The Court ruled unanimously that the traditional equitable requirements for obtaining an injunction from Winter v. Natural Resources Defense Council, Inc. apply to the National Labor Relations Board. Courts had previously interpreted statutory language to provide for a different pathway, applicable to the agency exercising its enforcement powers. While the decision did not explicitly expand this requirement to other agencies, it’shard not to see how this doesn’t apply to FDA’s injunction authority.

The Starbucks case revolves around the “Memphis Seven,” Starbucks employees who invited media into their shop to highlight their attempt at unionization. Starbucks fired the Memphis Seven, and the NLRB then began administrative proceedings to investigate. The NLRB also went to federal district court for a preliminary injunction to, among other things, prevent Starbucks from firing the employees.

Relying on Section 10(j) of the National Labor Relations Act (NLRA) of 1914, the District court granted the injunction, which the Sixth Circuit upheld. Both courts used a two-part test to determine first if there was “reasonable cause to believe that unfair labor practices had occurred,” and second, relying on the language from Section 10(j), if an injunction was “just and proper.”

Overturning that decision, Justice Thomas wrote that the statutory language of “just and proper” was not a substitute for the traditional equitable standard from Winter. That standard demands that a party seeking relief “must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”

According to Starbucks, a court reviewing a preliminaryinjunction under Section 10(j) has to get to “just and proper” through the Winters standard; NLRB’s status as a federal agency with its own statute and specific mission does not dispense withthat requirement. While the analysis for permanent injunctive relief will be different, Starbucks strongly suggests that agencies will be subject to the traditional rules of equity.

But the 9-0 decision was not unanimous in its reasoning, asJustice Jackson filed a partial dissent. While she agreed with the decision here, she did not join in the Court’s decision that the traditional pillars of equity apply in all cases where a special statute provides for injunctive relief. Where a statute has a distinct purpose, she wrote, courts should additionally assess the specific public interest that the statute seeks to protect.

Notwithstanding Justice Jackson’s partial dissent, it really seems like FDA now faces a new-yet-old standard for obtaining an injunction.

FDA has a history of relying on the weight that courts give to the public health function of the FDCA to bring injunction suits under Section 332. And while the Winter factors do include consideration of the “public interest,” courts reviewing FDCA injunctions have long modified the traditional four-tiered equitable standard that private litigants face, emphasizing the specific public health interests that the FDCA protects. With Starbucks, that looks to be ending.

For FDA regulated industry, injunctions arise most commonly as a result of negotiated consent decrees, but that does not mean that Starbucks is any less relevant. The decision of whether to agree to a consent decree is necessarily informed by a company’s chances in litigating the threatened injunction case. Starbucks almost certainly changes that calculation. How FDA and regulated industry will respond to this decision will likely play out in district courts across the country in the coming months, so stay tuned for future posts on the Starbucks fallout.