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Venus Commercial Co., Inc. vs. Department of Health

The Supreme Court denied the petition filed by Venus Commercial Co., Inc. (Venus) challenging the constitutionality of certain provisions of Republic Act No. 3720 (Food, Drugs and Devices, and Cosmetics Act), as amended by Republic Act No. 9711 (Food and Drug Administration Act of 2009), and its Implementing Rules and Regulations (IRR), as well as FDA Personnel Order No. 2014-220 authorizing the inspection, seizure of Artex Fine Water Colors, and padlocking of Venus's establishment due to high lead content. The Court upheld the validity of the assailed provisions and the FDA order, finding them to be a legitimate exercise of police power aimed at protecting public health and safety, and that the administrative actions did not violate Venus's rights against unreasonable searches and seizures, undue delegation of legislative power, or self-incrimination, and complied with due process.

Primary Holding

The challenged provisions of Republic Act No. 3720, as amended by Republic Act No. 9711, specifically Sections 10(ff), 12(a), and 30(4), as well as Section 2(b) paragraph (5), Article III of Department Circular No. 2011-0101 (IRR), and FDA Personnel Order No. 2014-220, are not unconstitutional. The FDA's authority to issue orders of seizure, hold products in custody, and padlock establishments, even pending hearing, is a valid exercise of police power for public health protection, falls under permissible administrative searches, does not constitute undue delegation of legislative power, and does not violate due process or the right against self-incrimination.

Background

The case arose from a complaint by EcoWaste Coalition to the Food and Drug Administration (FDA) regarding the alleged high lead content in Artex Fine Water Colors manufactured by petitioner Venus Commercial Co., Inc. (Venus) without FDA approval. Subsequent FDA laboratory analysis confirmed that the lead content in the watercolor samples exceeded the maximum tolerable limits. This led the FDA to issue Personnel Order No. 2014-220 authorizing the inspection of Venus's premises, seizure of the violative watercolors, and/or padlocking of the establishment, prompting Venus to challenge the legality and constitutionality of the FDA's actions and the underlying laws.

History

  1. Venus Commercial Co., Inc. filed a petition for certiorari and prohibition with application for writ of preliminary injunction and/or TRO in the Regional Trial Court (RTC)-Branch 74, Malabon City (SCA 14-010-MN) on June 4, 2014.

  2. The RTC issued an Order dated July 25, 2014, granting Venus's prayer for a writ of preliminary injunction.

  3. The RTC rendered a Decision dated September 23, 2015, declaring FDA Personnel Order No. 2014-220 null and void insofar as it ordered seizure and padlocking, and made the writ of preliminary injunction permanent.

  4. Respondents' partial motion for reconsideration was denied by the RTC per Order dated December 4, 2015.

  5. Respondents appealed to the Court of Appeals (CA-G.R. SP No. 144844).

  6. The Court of Appeals issued a Decision dated February 23, 2018, reversing the RTC decision, declaring FDA Personnel Order No. 2014-220 valid, and dissolving the writ of permanent injunction.

  7. Venus's motion for reconsideration was denied by the Court of Appeals in a Resolution dated July 11, 2018.

  8. Venus filed the present petition for review on certiorari under Rule 45 before the Supreme Court.

Facts

  • The FDA received a letter dated April 7, 2014, from EcoWaste Coalition alleging high lead content in Artex Fine Water Colors manufactured by petitioner Venus Commercial Co., Inc. (Venus) without FDA approval.
  • FDA purchased samples of Artex Fine Water Colors and laboratory analysis showed lead content exceeding maximum tolerable limits.
  • On May 28, 2014, the FDA Acting Director-General issued FDA Personnel Order No. 2014-220, authorizing FDA officers to enter Venus's premises, conduct an inspection, seize violative Artex Fine Water Colors, and/or padlock the establishment, citing that Venus also had no valid license to operate as a manufacturer/distributor of the product.
  • On May 29, 2014, FDA agents attempted to implement the order at Venus's office in Malabon City but were denied entry by security guards. They served Venus a Notice of Violation Report.
  • On June 4, 2014, Venus filed a petition for certiorari and prohibition with the RTC, seeking to declare unconstitutional Section 30(4) of RA 3720, as amended by RA 9711, and Section 2(b) paragraph (5), Article III of its IRR, and Section 10(ff) of RA 3720, and to invalidate FDA Personnel Order No. 2014-220 for violating due process and the right against illegal search and seizure.
  • The RTC granted a writ of preliminary injunction and later, in its decision, declared FDA Personnel Order No. 2014-220 null and void for violating Venus's right to due process, as there was no clear showing that the samples tested by FDA were products of Venus, and avoided ruling on the constitutional issues.
  • The Court of Appeals reversed the RTC, upholding the validity of FDA Personnel Order No. 2014-220 and the constitutionality of the assailed provisions, stating Section 30(4) is a police power measure, the laboratory findings constituted probable cause for administrative warrantless search, Section 10(ff) was not an undue delegation of power, and the authority to padlock was implied.

Arguments of the Petitioners

  • Section 30(4) of RA 3720, as amended, and Section 2(b) paragraph (5), Article III of its IRR, violate the constitutional right against warrantless search and seizure, as searches and seizures should be covered by judicial warrants.
  • Section 10(ff) of RA 3720, as amended, constitutes an undue delegation of legislative power by granting the FDA Director-General unbridled discretion to classify health products.
  • FDA Personnel Order No. 2014-220 is akin to a judicial search warrant and violates the right to due process and the right against self-incrimination.
  • Section 12(a) of RA 3720, as amended, which allows seizure without hearing or court order when the director-general has reasonable cause to believe products may cause injury, is unconstitutional.
  • Implementation of FDA Personnel Order No. 2014-220 would incriminate Venus under Section 11 of RA 3720, using evidence procured through an illegal search and seizure.
  • The FDA had sufficient time to secure a judicial search and seizure warrant.
  • There is no law permitting the FDA Director-General to padlock a production facility.

Arguments of the Respondents

  • The FDA Director-General has the authority to issue FDA Personnel Order No. 2014-220 pursuant to Section 30(4) of RA 3720, as amended.
  • Section 30(4) of RA 3720 is a police power measure intended to protect public health and safety.
  • The search of establishments producing toxic products is a form of administrative search, not violative of the right against illegal search and seizure, and prior notice and hearing would render the FDA's authority illusory.
  • The inspection and closure by FDA personnel were temporary and preventive, subject to the affected party's right to be heard.
  • Section 10(ff) of RA 3720 does not constitute undue delegation of legislative power.
  • The issues concern administrative searches and seizures for regulatory purposes, not for determining criminal liability, and their validity hinges on reasonableness within the regulatory scope.
  • The FDA's authority to temporarily close establishments is a necessary aspect of police power, similar to the "close now, hear later" procedure.
  • The objective of FDA Personnel Order No. 2014-220 is to protect public health, not determine criminal liability.

Issues

  • Whether Sections 12(a) and 30(4) of RA 3720, as amended, and Section 2(b) paragraph (5), Article III of Department Circular No. 2011-0101 (IRR) violate the constitutional proscription against unreasonable searches and seizures.
  • Whether Section 10(ff) of RA 3720, as amended, constitutes an invalid delegation of legislative power.
  • Whether FDA Personnel Order No. 2014-220 violates the guarantee against due process and the right against self-incrimination.

Ruling

  • The petition is denied. Sections 10(ff), 12(a), and 30(4) of Republic Act No. 3720, as amended by Republic Act No. 9711, as well as Section 2(b), paragraph (5), Article III of Department Circular No. 2011-0101 and FDA Personnel Order 2014-220 are declared NOT UNCONSTITUTIONAL.
  • Sections 12(a) and 30(4) of RA 3720, as amended, and the IRR provision do not violate the constitutional proscription against unreasonable searches and seizures. These provisions are a valid exercise of police power, authorizing administrative searches which are exceptions to the warrant requirement, aimed at protecting public health. The means employed are reasonably necessary and not unduly oppressive, especially for "closely regulated" industries like drug manufacturing. FDA Personnel Order No. 2014-220 was issued after confirming hazardous lead content, justifying immediate seizure and temporary closure to prevent harm.
  • Section 10(ff) of RA 3720, as amended, does not constitute an undue delegation of legislative power. RA 3720, as amended, is complete in itself, setting forth the policy for the FDA to implement. It also fixes a sufficient standard, as "health products" are defined, and petitioner's watercolors squarely fall under "household/urban hazardous substances" defined in Section 10(gg), making the FDA's authority to regulate them clear.
  • FDA Personnel Order No. 2014-220 did not violate Venus's right to due process or its right against self-incrimination. Procedural due process in administrative proceedings allows for ex parte orders in situations requiring immediate action to protect public interest, as in pollution control and public health. The FDA Act and its IRR provide for notice and hearing. The right against self-incrimination was prematurely invoked as the order was never executed and no incriminating question was propounded.
  • The FDA Director-General is authorized to padlock erring establishments under the doctrine of necessary implication and the catch-all provision (Section 30(6) of RA 3720, as amended), as such power is essential to effectuate the FDA's mandate to seize hazardous products and protect public health. This is further supported by the IRR.

Doctrines

  • Police Power of the State — The inherent power of the state to promote public welfare by restraining and regulating the use of liberty and property. It was applied to uphold RA 9711 and the FDA's actions (issuance of Personnel Order No. 2014-220 for seizure and padlocking) as legitimate measures to protect public health from hazardous products like watercolors with high lead content.
  • Administrative Searches — Searches incident to inspection, supervision, and regulation sanctioned by the State in the exercise of its police power, which are exceptions to the warrant requirement, particularly for "closely regulated" businesses. This doctrine was applied to validate the FDA's authority to inspect, seize, and padlock Venus's establishment without a judicial warrant, as these actions were for regulatory purposes to ensure public safety.
  • Undue Delegation of Legislative Power (Completeness Test and Sufficient Standard Test) — The principle that Congress cannot delegate its legislative power, but can delegate the power to fill in details in the execution of a law, provided the law is complete and sets sufficient standards. This was applied to find that RA 3720, as amended by RA 9711, particularly Section 10(ff), is not an undue delegation because the law sets a clear policy and provides sufficient standards for the FDA to identify "health products" subject to its regulation, with Venus's product falling under "household/urban hazardous substance."
  • Due Process (Substantive and Procedural) — Substantive due process refers to the intrinsic validity of a law interfering with rights, while procedural due process refers to compliance with prescribed procedures ensuring fair play. The Court held that the FDA's actions, including the potential ex parte seizure and padlocking, did not violate due process as such measures are permissible under police power to protect vital public interests, and the FDA Act and its IRR provide for subsequent notice and hearing.
  • Right Against Self-Incrimination — The constitutional guarantee that no person shall be compelled to be a witness against himself. The Court ruled that Venus's invocation of this right was premature as FDA Personnel Order No. 2014-220 was never executed, no watercolors were seized, and no question calling for an incriminating answer was propounded.
  • Doctrine of Necessary Implication — What is implied in a statute is as much a part thereof as that which is expressed; every statutory grant of power includes all incidental powers necessary to make the grant effective. This was used to affirm the FDA Director-General's authority to padlock establishments, even if not expressly stated in RA 3720, as it is necessary to effectuate the power to seize hazardous products and prevent their disposition.
  • Lis Mota — The cause or motivation of a legal action; in judicial review, a constitutional question will not be passed upon if the case can be disposed of on other grounds, unless the constitutional question is essential to the resolution. The Court found that the constitutional issues raised by Venus were the very lis mota of the case, as the validity of FDA Personnel Order No. 2014-220 was intrinsically linked to the constitutionality of the empowering provisions of the FDA law and its IRR.
  • Requisites for Judicial Review — (1) Actual case or controversy; (2) Standing of the challenger; (3) Constitutional question raised at the earliest opportunity; (4) Constitutional question is the lis mota. The Court found these requisites present, allowing it to rule on the constitutional challenges, noting that while Section 12(a) was raised for the first time on appeal, its close intertwinement with other challenged provisions justified its cognizance.

Key Excerpts

  • "[P]olice power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property. It is the most pervasive, the least limitable, and the most demanding of the three fundamental powers of the State."
  • "Searches and seizures are ordinarily unreasonable in the absence of individualized suspicion of wrongdoing. However, because administrative searches primarily ensure public safety instead of detecting criminal wrongdoing, they do not require individual suspicion. Where the risk to public safety is substantial and real, blanket suspicionless searches calibrated to the risk may rank as 'reasonable.'"
  • "The doctrine [of necessary implication] states that what is implied in a statute is as much a part thereof as that which is expressed. Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms."
  • "First, there is a seizure without court order because precisely, if you have a court order they will run away with the products. And after that is repossessed, then we have the proceedings to finally be able to dispose of the matter." (Quoting Rep. Rodriguez from House deliberations on the FDA Act).

Precedents Cited

  • Gerochi v. Department of Energy — Cited for its description of police power as the state's power to promote public welfare by restraining liberty and property.
  • Didipio Earth-Savers' v. Gozun — Referenced to distinguish police power from eminent domain, noting that property condemned under police power is usually noxious and no compensation is paid.
  • Carlos Superdrug Corporation v. DSWD — Cited to illustrate that property rights must yield to the primacy of police power for the general welfare.
  • William Case, et al. v. La Junta de Sanidad de Manila — Used as an example where an ordinance promoting public health was upheld as a valid exercise of police power.
  • People of the Philippines v. O'Cochlain — Referenced for the recognition of administrative searches as exceptions to the warrant requirement in situations with special needs beyond normal law enforcement, particularly for ensuring public safety.
  • Camara v. Municipal Court and See v. City of Seattle — U.S. Supreme Court cases cited to discuss the evolution of standards for administrative searches, initially requiring warrants but with a different probable cause standard based on reasonable goals of code enforcement.
  • United States v. Biswell — U.S. Supreme Court case cited for upholding warrantless inspection of pervasively regulated businesses (firearms), where legality depends on a valid authorizing statute, not consent.
  • United States v. Jamieson-McKames Pharmaceuticals — U.S. Court of Appeals case cited for upholding warrantless FDA inspections in the drug manufacturing industry (a closely regulated business) as reasonable and not violative of the Fourth Amendment.
  • Matibag v. Benipayo — Cited for the rule that a question of constitutionality must be raised at the earliest opportunity, meaning in the pleadings before a competent court.
  • Dasmariñas Water District v. Monterey Foods Corporation — Cited for the principle that the constitutionality of laws cannot be attacked collaterally and must be raised at the earliest opportunity.
  • Sotto v. Commission on Elections — Referenced for the rule that courts should not pass upon a constitutional question if the case can be decided on other grounds, unless unavoidable (lis mota).
  • Parcon-Song v. Parcon — Cited regarding the presumption of constitutionality and the lis mota requirement for judicial review.
  • Alliance for the Family Foundation, Philippines, Inc. v. Garin — Cited for defining substantive and procedural due process.
  • Pollution Adjudication Board v. Court of Appeals — Referenced to support the validity of ex parte cease and desist orders in situations requiring immediate action to protect vital public interests under police power, where ordinary due process requirements yield.
  • LLDA v. Court of Appeals — Cited to affirm that a regulatory agency's authority to issue cease and desist orders can be implied from its express powers to prevent it from being a "toothless" agency.
  • Central Bank of the Philippines v. Court of Appeals — Referenced for the "close now, hear later" policy of the Monetary Board, likening the FDA's power to temporarily seize and close establishments as a valid exercise of police power to protect the public.

Provisions

  • Republic Act No. 9711 (FDA Act of 2009) — The primary law amending RA 3720, strengthening the FDA and its regulatory powers over health products. Its provisions, particularly those granting powers of seizure and defining health products, were central to the case.
  • Republic Act No. 3720 (Food, Drugs and Devices, and Cosmetics Act) — The original law creating the FDA (then BFAD). Sections 4(j), 10(ff), 11, 12(a), and 30(4) as amended by RA 9711 were specifically challenged and analyzed.
    • Section 3 (Policy and Objectives of RA 9711) — Cited to show the legislative intent to protect public health and establish an effective health products regulatory system.
    • Section 4(j) (Power to issue cease and desist orders) — Mentioned by the Court as closely intertwined with the challenged provisions, granting FDA power to issue cease and desist orders motu proprio.
    • Section 10(ff) (Definition of 'Health products') — Challenged for undue delegation. The Court upheld it, finding sufficient standards and that petitioner's product fell under the definition.
    • Section 10(gg) (Definition of 'Household/urban hazardous substance') — Used by the Court to demonstrate that petitioner's Artex Fine Water Colors fall under a category of "health products" explicitly defined, countering the undue delegation argument.
    • Section 11 (Prohibited acts) — Mentioned as the basis for potential incrimination if the FDA order was implemented.
    • Section 12(a) (Penalties and seizure power) — Challenged for allowing seizure without hearing or court order. Upheld as a valid police power measure for administrative searches.
    • Section 30(4) (Additional powers of Director-General to issue seizure orders) — Challenged for violating right against warrantless search. Upheld as authorizing valid administrative searches under police power.
    • Section 30(6) (Director-General's power to exercise necessary functions) — Cited as a catch-all provision supporting the FDA's implied power to padlock establishments.
  • Department Circular No. 2011-0101 (IRR of RA 9711) — Implementing rules for RA 9711.
    • Article III, Section 2(b) paragraph (5) (Quasi-judicial power of Director-General to issue seizure orders) — Challenged along with RA 3720 provisions. Upheld as part of valid administrative action.
    • Article VII, Section 3 (Temporary and/or Preventive Measure Order, including padlocking) — Cited to show the DOH provided for the FDA's power to padlock establishments.
  • 1987 Constitution, Article III, Section 2 (Right against unreasonable searches and seizures) — The constitutional provision petitioner claimed was violated. The Court ruled it was not violated due to the administrative search exception.
  • 1987 Constitution, Article VIII, Section 1 (Judicial Power) — Cited as the basis for the Court's power of judicial review.
  • U.S. Constitution, Fourth Amendment (Right against unreasonable searches and seizures) — Mentioned as the pattern for Article III, Section 2 of the Philippine Constitution, allowing reference to U.S. jurisprudence on administrative searches.

Notable Concurring Opinions

  • Justice Caguioa — Concurred with the ponencia, emphasizing that the FDA's regulatory authority over health products under Section 10(ff) of RA 3720, as amended, should be circumscribed by a holistic reading of the entire law. He argued that the FDA's discretion in determining what constitutes a "health product" is limited by the types of products managed by its established Centers (e.g., for Drugs, Food, Cosmetics, Devices) and by Section 25 of RA 9711, which excludes products under the jurisdiction of other specialized agencies. This ensures the FDA does not overextend its regulatory reach beyond its legislative mandate and expertise.