The opinion of the court was delivered by: BY THE COURT; J. CURTIS JOYNER
The Plaintiff United States of America hereby seeks to enjoin the Defendants from continuing their pharmaceutical manufacturing and shipping operations until such time as the Food and Drug Administration (FDA) finds them to be in compliance with applicable federal law and regulations. On September 21, 1992, this Court issued a temporary restraining order, which order was extended on September 25, 1992 and is to remain in effect pending our issuance of this decision. The parties have presented evidence over the course of two days of hearings, and we now make the following factual findings.
1. Defendant Richlyn Laboratories, Inc. is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania with a place of business located at Castor and Kensington Avenues in Philadelphia, Pennsylvania. Richlyn Laboratories is engaged in, among other things, the business of manufacturing, processing, repacking and distributing prescription and over-the-counter drugs in interstate commerce using both generic and private brand names. Defendant manufactures 75 different drug substances in different dosage forms and strengths. Of the 75 drug substances manufactured by the firm, 40 require a prescription. (Declaration of Loren Y. Johnson; N.T. 9/22/92, 90)
2. Defendant Richard S. Weinberg is and for the last fifteen years has been the President of Richlyn Laboratories, Inc. Prior to assuming the position of President, Mr. Weinberg was the Vice President of Richlyn Laboratories and has approximately twenty-five years of experience in the drug manufacturing industry. (N.T. 9/22/92, 84-85, 103)
3. As President, Mr. Weinberg is responsible for and has authority over all of Richlyn Laboratories' operations imcluding ensuring that the firm complies with CGMP regulations.
4. Beginning on March 2, 1992 and ending on April 8, 1992, U.S. Food and Drug Administration investigators Monica S. King and Richard C. Cherry and chemists Joanne Heim and S. Nasir Ali conducted a general inspection of Richlyn Laboratories for purposes of ascertaining whether the defendant company was in compliance with the Agency's Current Good Manufacturing Practice regulations. (CGMP's) (N.T. 9/22/92, 7-9)
5. The Current Good Manufacturing Practices is a set of regulations designed to ensure that prescription and over-the-counter drugs are manufactured in such a way that they meet the requirements of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301, et seq. as to safety and have the identity and strength and meet the purity characteristics that they purport or are represented to possess. (21 C.F.R. 210.1(a); N.T. 9/22/92, 7)
6. As a result of its March-April 1992 inspection, the Plaintiff (U.S.F.D.A.) issued a Form FDA 483 Notice of Inspectional Observations. The FDA 483 contained thirty (30) observations of what the FDA believed were breaches of the CGMP regulations and was issued to Richard Weinberg, as President of Richlyn Laboratories on April 8, 1992. (Exhibit G-1; N.T. 9/22/92, 37)
7. The March-April, 1992 inspection revealed the existence of some thirty deficiencies in Richlyn Laboratories' overall operations primarily in the areas of validation, cross-contamination and stability testing.
8. The FDA 483 did not establish a time frame for Richlyn Laboratories to cure the deficiencies listed therein. Rather, FDA expected that the deficiencies would be cured "as soon as possible." (N.T. 9/22/92, 38-39; Exhibit G-1)
9. In addition to forwarding a 483 Notice of Inspectional Observations, the Food and Drug Administration may also issue a warning letter informing an offending company of objectionable conditions, may force a seizure of such a company's goods by the United States Marshal's Service, or may institute injunction or prosecution proceedings. None of these actions was taken against Richlyn Laboratories immediately after the March-April, 1992 inspection. (N.T. 9/22/92, 51-53)
10. In response to the FDA 483 which he received on April 8, 1992, Richard Weinberg, in his capacity as President and the most responsible party at Richlyn Laboratories, Inc. prepared and submitted a nearly 200-page response to Observations 1-18 to Loren Johnson, the Philadelphia District Director of FDA on April 22, 1992. Mr. Weinberg submitted a second response, consisting of approximately 100 pages, to Observations 19-30 on May 7, 1992. In both responses, Mr. Weinberg stated that "while we do not necessarily agree with all of [the FDA's] observations, we have engaged consultants to assist us in taking corrective action to bolster our controls in those areas which caused a concern to the investigators." (N.T. 9/22/92, 85-88; Exhibits D-1, D-3).
11. The FDA has yet to directly respond in any way to Mr. Weinberg's correspondence of April 22 and May 7, 1992. (N.T. 9/22/92, 41-42, 87)
12. Ostensibly because of the FDA's findings during the March-April, 1992 inspection, Defendants retained one Ira Piene, a consultant, to assist them in preparing and implementing a validation protocol which would cure the deficiencies which then existed in that area. In August, 1992, another validation consultant, John Panek, was retained and in September, 1992, the company retained still another consultant, Philip Seeler. (N.T. 9/22/92, 92-94)
13. In June, 1992, the Plaintiff's inspection team returned to Richlyn Laboratories for purposes of determining whether the deficiencies found in the March-April inspection had been remedied. (N.T. 9/22/92, 39)
14. Although the dusty conditions in the compression area were somewhat improved and validation procedures had been developed for eight products, the June, 1992 inspection nevertheless revealed that some 24 deficiencies still remained to be cured. These deficiencies were again outlined on a Form 483 Notice of Inspectional Observations and issued to the defendant company on June 22, 1992. (N.T. 9/22/92, 27-29, 26, 41-42; Exhibit G-2)
15. No further action other than the issuance of a 483 Notice was taken by the FDA against Richlyn Laboratories immediately after the June, 1992 inspection. (N.T. 9/22/92, 52,99)
16. In early September, 1992, the Philadelphia District Office of U.S.F.D.A. received a report from its manufacturing surveillance branch that on August 10, 1992, a pharmacist in Albuquerque, New Mexico had found a foreign tablet in a bottle of Rugby Laboratories cortisone acetate 25 mg tablets, lot number 44784. The Denver, Colorado District Office had initially investigated the matter with the New Mexico pharmacist and requested that the Dallas District Office arrange to pick up intact samples from the same lot number from the drug's distributor in El Paso, Texas. (N.T. 9/22/92, 68; Exhibit D-2; Declaration of Dan L. Dirks, R.Ph.)
17. On September 9, 1992, an FDA inspector collected a sample of six 100 tablet bottles of Rugby Laboratories cortisone acetate 25 mg tablets, all from lot no. 44784 from the McKesson Drug Co. located at 11401 Pellicano Drive in El Paso, Texas. The sample was then shipped via Federal Express to the FDA Laboratory at 2nd and Chestnut Streets in Philadelphia for analysis. (Declaration of Elvia J. Lopez; Exhibit G-5)
18. The sample arrived at the Philadelphia Laboratory on Friday, September 11, 1992 and was immediately placed, locked and secured in the records office of the Science Branch. On Monday, September 14, 1992, the sample was transfered to the FDA Sample Custodian who, after determining that it had arrived intact and undisturbed, placed it in the ...