ORAL HISTORY OF WILLIAM BARNETT SCHULTZ
This is the fourth in a series of interviews of William B. Schultz conducted by Stephen J. Pollak
on behalf of the Oral History Project of the District of Columbia Circuit. This interview was
conducted on Friday, May 28, 2021, in Washington, D.C.
Mr. Pollak: When we concluded your third interview, we were discussing a Supreme Court
case that you handled as an attorney with Ralph Nader’s Public Citizen Litigation
Group. Would you set the stage for other Supreme Court cases that you handled
in that period?
Mr. Schultz: Sure. The second case I argued was Young v. Community Nutrition Institute.
Frank Young at that time was the Commissioner of the Food and Drug
Administration. Public Citizen Litigation Group represented Nader’s
organizations, but we also represented a lot of other public interest groups around
Washington, D.C. The Community Nutrition Institute at that time was a leading
group that advocated for food safety and nutrition. They brought us a problem
involving a substance called aflatoxin, which was a contaminant that appeared in
corn and other food and was thought to be a carcinogen, dangerous but avoidable.
FDA set what the agency called action levels, a level at which products were
permitted to have aflatoxin. The Community Nutrition Institute thought it was too
high and when FDA set these action levels, they were written in a mandatory
way. FDA said if you comply with this, if the levels are below the action level,
we will not prosecute you. CNI brought it to me and said, “What can we do?” I
looked at it and there was a specific provision in the statute that said if the agency
5 Community Nutrition Institute v. Young, 757 F.2d 354 (D.C. Cir. 1985), rev’d, 476 U.S. 974 (1986), remanded to
818 F.2d 943 (D.C. Cir. 1987).
set this level for unavoidable contaminants such as aflatoxin, it then had to go
through a formal hearing process, and they had not done that. We filed a lawsuit;
I think directly in the D.C. Circuit.
Mr. Pollak: Can you file suit directly in the D.C. Circuit?
Mr. Schultz: I think the Food, Drug, and Cosmetic Act provided for direct appeal to the D.C.
Circuit. That was a long time ago, I should check but I think here we determined
that even though there had not been a hearing from which to appeal, there should
have been, and it went to the D.C. Circuit.
Mr. Pollak: Bill, could I interrupt the flow just to say it would be helpful if you spelled out
your thinking as to why speaking about what are undoubtedly interesting
litigations, you’ve chosen these and how they fit into your history. How do you
Mr. Schultz: These are three cases that went to the Supreme Court.
Mr. Pollak: That you handled personally?
Mr. Schultz: That I argued. The Litigation Group and I had a ton of work in the Supreme
Court. So much so that I got to know the Supreme Court Clerk very well
personally. I was involved in many cases including cert petitions where I was the
lead attorney that the Court did not accept. But these are the three cases I argued
in the Supreme Court, so I thought they were significant. This one fits in because
my specialty, about half my work, was in the FDA area. I was considered to be
an FDA expert, and I was the lawyer that public interest groups went to in
Washington to consult on FDA issues. This was one of them and it went to the
We argued that there was a provision in the statute that required a
hearing. It’s a technical lawyer’s argument, and we had a second technical
lawyer’s argument, which was an argument under the Administrative Procedure
Act. It says if the agency is going to issue a rule, a binding statement, then it has
to go through notice and comment rulemaking. Instead of any process, the FDA
just set the action levels, allowing contamination of the food supply. I argued the
case in the D.C. Circuit, and we prevailed. Ken Starr was on the panel and wrote
the majority opinion in our favor.6 After we won, the Government petitioned for a
writ of certiorari and the Supreme Court accepted the case.
In preparing for the argument, I read every FDA Supreme Court case that
had ever been decided.
Mr. Pollak: Were there are a lot of them?
Mr. Schultz: There might have been ten, but the remarkable thing was the FDA had never lost
a case, and in fact had won all their cases unanimously.
Mr. Pollak: Was that your first Supreme Court argument?
Mr. Schultz: No it’s the second. The first was Duke Power that we talked about last time and
that was very early on in my career. This was 1986 and one interesting thing is
that right after I argued it, I went on my first date with Sari, my future wife. She
6 757 F.2d 354 (D.C. Cir. 1985), rev’d, 476 U.S. 974 (1986), on remand, 818 F.2d 943 (D.C. Cir. 1987).
asked me what I had done lately, and I was able to say “Well, I just had an
argument with the Supreme Court.”
We lost the case. The core issue was whether the FDA could read the
word “shall” as “may.” In her opinion ruling against us, Justice Sandra Day
O’Connor said there is a misplaced modifier in the statute, and she was able to
take a provision in this sentence pretty far away from the word “shall” and say it
modified it and turned it into “may.” But unlike every other FDA case that I was
able to identify, we did get a dissent. I got one vote from Justice John Paul
The Supreme Court decided the issue under FDA’s statute, but we had
another argument, which the Court sent back to the D.C. Circuit. I argued the
case for a second time there, and we won. We ended up winning the case even
though we lost in the Supreme Court. This made it more difficult for FDA to
allow contaminants in food.
Mr. Pollak: What was the third case you argued in the Supreme Court?
Mr. Schultz: It was about a merger that was being proposed between the two newspapers in
Detroit: The Detroit News and the Detroit Free Press. They were owned by the
two largest newspaper conglomerates in the country, Gannett and Knight Ridder.
A reporter from the Detroit Free Press and his union had challenged this and had
received a favorable decision from an administrative law judge at the Department
of Justice and from the head of the Antitrust Division. They ruled against the
merger, saying it was antitrust violation.
The newspapers appealed to Attorney General Edwin Meese. After an
intense lobbying campaign by Knight Ridder led by Clark Clifford, a prominent
Washington lawyer who had been counsel to President Harry Truman in the
White House and Secretary of Defense during the Johnson Administration, the
Attorney General overturned the decision and at that point the union decided not
to pursue it. The two newspapers were getting ready to merge and a lone
reporter, Lou Mleczko, called Ralph Nader and asked whether he could do
anything about this. Literally they were connecting the phone lines for both
papers and I think they had ten days from the Attorney General’s decision to
appeal. I was working at the office on a Sunday afternoon when Ralph called and
asked whether I could check into this. I checked into it and didn’t think we could
bring a case on behalf of a single reporter. Lou Mleczko started contacting other
potential interested parties. He enlisted some small newspapers around Detroit,
and he found some other individuals who wanted to challenge the decision. I got
my colleague David Vladeck to help, and we put together an organization named
“The Michigan Citizens for an Independent Press.” The name of the case we
filed was Michigan Citizens for an Independent Press v. Thornburgh.
Within a few days we put together a motion for a temporary restraining
order. The research showed us that a statute called The Newspaper Preservation
Act creates an exception to the antitrust laws. Normally the two major
newspapers in a market couldn’t merge because such a merger would essentially
7 Michigan Citizens for an Independent Press v. Thornburgh, 868 F.2d 1285 (D.C. Cir. 1989), reh’g denied, 868
F.2d 1300 (D.C. Cir. 1989), aff’d, 493 U.S. 38 (1989).
eliminate competition. But the Act says if there is a failing newspaper, it can
merge with another newspaper even if they would completely dominate the
market. In that situation it’s not a violation of the antitrust laws since the merger
would save a newspaper that was failing.
We had a very unusual situation because both newspapers were losing
money. One of them was fifteen cents an issue and the other was ten cents an
issue. Our theory of the case was they were both failing intentionally because
these two major conglomerates wanted them to fail so they could merge and
make monopoly profits. There had never been a case where two newspapers
This was the first time two failing papers tried to qualify for the
exemption under the Newspaper Preservation Act. We argued that if Justice
didn’t give them the exemption, they’re not both going to fail. They will start
raising their prices and they will raise their advertising and they will do just fine.
One was the morning paper and one the afternoon paper.
We filed our motion for a temporary restraining order, which we put
together in a couple of days. We drew Joyce Hens Green in the District Court of
the District of Columbia and she granted the temporary restraining order. It’s an
example of the power of being a lawyer and bringing in the courts. Here are
these two major companies and they thought this was all done. Literally they
were combining the phone lines and we stopped it. Completely stopped it in its
place. Judge Green wrote a 30-page opinion but unfortunately had only been
assigned the case for the emergency motion. For the emergency motion, the
newspapers hired Philip Lacovara, a very prominent D.C. attorney, but he lost the
case. The case then got assigned to Judge George Revercomb, who heard the
preliminary injunction motion and the merits.
We thought the first step in the case should be to take the deposition of
the Attorney General because it was very clear to us from what we had read in the
papers that there had been this intense lobbying campaign. We thought we could
use discovery to show that this had not been any type of reasoned decisionmaking. But discovery was denied, and we briefed the merits. The newspapers
replaced Phil Lacovara with Clark Clifford, who was a board member of Knight
Ridder. He had engineered the Meese decision and was hired to argue the case.
The next thing I knew I got a call from Clark Clifford. I answered the
phone and he said, “My name is Clark Clifford” – as if I didn’t know who he
was – “I’m a lawyer in town and I started out in Kentucky where we had a
tradition of when you have a new case you walk over to your opponent’s office
and meet with him to introduce yourself.” He said, “I would like to come over to
your office and meet with you to introduce myself.” I said that’s very nice, but I
would be happy to come to his office. I said that for two reasons. One, we had
pretty shabby offices. It was Ralph Nader after all. But I also thought out of
respect he was clearly the senior lawyer, and I should travel to his office. I went
over and met with him. He had an office on 17th Street on the top floor that
overlooked the White House, with all sorts of memorabilia.
Mr. Pollak: What was the burden of the first meeting?
Mr. Schultz: Nothing.
Mr. Pollak: Just to introduce?
Mr. Schultz: Yes. Just to introduce, and he continued this way. He would periodically call me
and ask me a question about the District Court rules. He continued in this
deferential manner which made no sense but that was his way. He rose for the
oral argument before Judge Revercomb and had a single piece of paper with four
points in large printing.
Mr. Schultz: He was very deliberate, of course, in style and presentation. He had put the paper
on a little shelf under the podium so as he walked up to the podium, he had
nothing in his hands, and he pulled the paper out and put it on the podium. He
didn’t make a legal argument. His argument was, I’m on the Board of Directors
and I can assure you that if you rule against me, we are closing this newspaper
down. That would be the consequences of your ruling. He made his argument.
Mr. Schultz: Judge Revercomb was in awe because after all this was Clark Clifford and the
judge did not ask him a single question. Then I got up and made my argument,
which was uneventful as far as I remember. We got our ruling fairly quickly and
we lost the case. We got a stay pending appeal, briefed the case in the D.C.
Circuit, and I argued that case against Clark Clifford and the Justice Department
lawyer, Doug Letter, whom I knew. In fact, when I was growing up Doug lived
next door to me for several years, and our mothers were good friends. He
represented the Government in other Litigation Group cases, and later we also
worked together at the Department of Justice.
The D.C. Circuit assigned Clark Clifford ten minutes because he had to
share time with the Government. Often in the D.C. Circuit you get a short amount
of time but the Court has questions and it can go on for quite a while. After I
made my argument, Clark Clifford started his. Unlike the district court, he
received questions. The panel was Laurence Silberman, Ruth Bader Ginsburg,
and Spottswood Robinson. Judge Silberman asked Clark Clifford how a case
named Chevron applied to construing an exception to the antitrust laws. Chevron8
was a D.C. Circuit/Supreme Court case that is one of the most cited cases of all
It had been cited in Clark Clifford’s brief and in those days, you had to
star cases principally relied on, and it had been starred in his brief. Judge
Silberman was interested in whether the Attorney General was entitled to
deference in connection with his construction of the statute, and so he asked, “to
what extent does Chevron apply?” And Clark Clifford said, I don’t believe it has
any application. It was quite clear to everybody in the courtroom that he never
read the case, even though it was in his brief. When it got to ten minutes, Judge
Robinson, the presiding judge, said, “Mr. Clifford, your time is up.” This was not
the deference Mr. Clifford experienced in the District Court.
8 Chevron USA Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
Then Doug Letter got up to argue for the government and Doug Letter
knew exactly what was happening. He said, “Before I start my prepared
argument, I would like to answer the $64,000 question.”
Mr. Schultz: Everybody knew he was talking about the question that Clark Clifford couldn’t
answer about Chevron. Judge Silberman interrupted him and said, “Actually Mr.
Letter, it’s the sixty-four-million-dollar question and if you answer it the way Mr.
Clifford did, I think you lose the case.” Doug Letter took the hint, although he
probably didn’t need a hint, and made his argument about why Chevron applied.
The argument concluded. My wife Sari was at the argument. She had
some interesting comments about the judges and about Clark Clifford’s
performance. When we got the decision, we learned that we lost 2-1. We lost
Judge Silberman which was predictable. Ruth Bader Ginsburg dissented but,
unfortunately, we lost Spottswood Robinson.
Mr. Schultz: We petitioned for rehearing en banc, rehearing before the whole court. We got
the decision and I think two of the judges had recused themselves, and we lost 5-
4. They gave us a short stay to give us time to get to the Supreme Court which
they knew was where the case was going. The first thing we needed to do was to
ask a single justice on the Supreme Court for a stay. You can go to any Justice
that you want, I think, and we went to Justice Brennan. We were very anxious
about all this because the papers could start merging at any time. I was in
constant communication with the Clerk of the Court. When I called him on
Friday he said, “We still don’t have anything for you.”
There was nothing Friday, but Saturday morning the Supreme Court
Clerk called me and said, “Well, Justice Brennan decided to come in on a
Saturday and he granted the stay.” We got the immediate stay from a single
justice, but later after briefing the full court denied the stay. They don’t tell you
the votes, but we knew that at least five Justices had voted against us since we
needed a majority for a stay. Only four Justices are required for certiorari, a full
hearing before the Court.
I’ll divert for a moment. Sometime during all of this, Clark Clifford
asked me to come back to his office. David Vladeck and I went. He told us he
wanted to settle the case. You might ask how do you settle a case like this? You
either merge or you don’t. But his offer was no merger and significant money,
including attorneys’ fees. We obviously couldn’t accept.
Here’s another detour. During the case Clark Clifford’s argument was
that if we you win this case, Knight Ridder would close. We had no way to
evaluate that, but this wasn’t the result we were looking for. We didn’t believe it,
but we had no way to evaluate it.
Sometime in the past one of the lawyers who worked at the Public
Citizen Health Research Group had a girlfriend named Susie Buffett, daughter of
Warren Buffett, whom he later married. Warren Buffett, a nationally known
billionaire, was on the board of The Washington Post and owned a number of
newspapers. We thought maybe we could get a conversation with him to find out
whether there was anything to the idea that Knight Ridder would fold if we won.
Alan Greenberg, our friend, arranged for me to have a conversation with Warren
Buffett. He gave me his number and I called him at home. He was skeptical
about Clark Clifford’s position but in the end, he said it was hard to know. This
didn’t dissuade us from pursuing the case.
Back to the Supreme Court, which denied the stay. We petitioned for
certiorari, which required only four votes. Certiorari was granted. Knight Ridder
and Gannett decided not to merge, to see what was going to happen in the
Supreme Court even though the denial of a stay would have permitted them to do
I argued the case at the Supreme Court, and I will say this case got
tremendous attention because we were up against the two biggest newspaper
publishers in the country. And, of course, the case was discussed on the front
page of the Detroit papers many, many times.
I enlisted various people to review the brief, one of them being Merrick
Garland. He was a close friend who had expertise in antitrust law and also knew
a lot about administrative law. Ernest Gelhorn, who was also a very prominent
antitrust and administrative lawyer and one of my teachers in law school, also
reviewed the brief. We threw everything we could into the case.
Mr. Pollak: What happened next?
Mr. Schultz: We always knew that the vote would be close since we lost the motion for a stay,
but the Court had granted certiorari. After I argued the case, we got a notice that
Justice White had recused himself. We never learned why. We knew that Justice
White had a Detroit connection. He had been in my father’s class at Yale Law
School, and my father told me that he attended only the spring semester, and
played football in the fall for the Detroit Lions. In fact, he was rookie of the year
his first year, while he was in law school.
So, Justice White had very close connections to Detroit. I don’t think
playing football would have been enough for him to recuse himself, but he may
have had some relationships with officials at The Detroit News or Detroit Free
After he recused himself and we got our decision, it was a 4-4 tie, with
no opinions as is traditional when there is a tie. This meant that the 2-1 panel
opinion in the D.C. Circuit controlled. I counted this up at one point and there
were 19 judges and Justices who ruled on this case. Ten ruled against us, nine for
us, but the papers did merge and I don’t think it was nearly as successful as they
That was the best case Ralph Nader ever gave me. He brought a lot of
cases and a lot of ideas to us, and some of them were terrific and some of them
weren’t so good. He was very, very creative. I remember one time he came to
me because a pizza place in Amherst, Massachusetts had run an ad that said,
“When Ralph Nader comes to Massachusetts, he eats at Pinocchio’s Pizza.” And
then it says, “and I would not tell a lie,” with a picture of Pinocchio with a long
nose. Ralph Nader wanted to sue them for trademark infringement, but I talked
him out of it. He was very good to work with in that way because he did listen.
You could talk him out of things that weren’t a good idea.
Mr. Pollak: Did losing the case affect your view of the legal process and its outcomes, losing
the newspaper case?
Mr. Schultz: No, I had many times where I lost a case where I thought I was totally right, and
other times that the decision was completely wrong, and this was certainly one of
Mr. Pollak: It was based on Chevron?
Mr. Schultz: The two judges on the D.C. Circuit panel gave Attorney General Meese a lot of
deference. I guess in the end the issue was whether two newspapers could fail
simultaneously, and they were willing to defer to Meese. I would point out the
administrative law judge and even the Republican Assistant Attorney General for
Antitrust voted our way. When they looked at the facts, they didn’t think this
was justified. I had no doubt we were right but no, I think all the judges and
Justices took the case very seriously and did the best they could. I was
The biggest disappointment is that we didn’t get Judge Robinson. I think
we should have gotten him, and if we had we would have won the case since the
panel’s decision was the one that prevailed. I have no explanation for his vote,
but otherwise the votes fell along political lines. I think we got the Democrats
and liberal Republicans and lost the others.
Mr. Pollak: Well, it was a great case.
Mr. Schultz: It was a great case.
Mr. Pollak: You’ve said to me in thinking about doing this history that the core of your work
at the Public Citizen Litigation Group was related to actions of the Food and
Drug Administration. Who was your client there, what issues did you address,
and at what level of the system?
Mr. Schultz: My main client was the Health Research Group, which was a division of Public
Citizen. The director was Sidney Wolfe. He was a doctor and he was my most
frequent client. It was a great collaboration because he was a doctor/scientist, but
he was an unusual scientist. Most scientists are pretty cautious, but he was
willing to take clear positions and to be an advocate. He was willing to take on
doctors, he was willing to take on government agencies, and he was willing to be
very, very clear in his public statements. He was a favorite of the press.
What I liked about it and underneath it is that he was a scientist. Once I
heard him talk CBS’s 60 Minutes out of attacking a drug company that Sid really
disliked, where he said science just didn’t justify it. He wasn’t willing to put
aside the science to be an advocate, but he was able to use it and we developed a
terrific working relationship. He really saw the value in lawyers. He deferred to
lawyers on the legal issues but understood a lot about the law.
Mr. Pollak: Had you had any FDA background as this developed?
Mr. Schultz: No. We had an FDA course in law school, but I didn’t take it. So, I had no FDA
background. I just happened into it because that first day I got assigned an FDA
case and then I developed a good working relationship. Soon after that I got a
second case, a challenge to a trivial carcinogen called chloroform that appeared in
drugs, and the Health Research Group had petitioned FDA to ban it.
Mr. Pollak: What do you mean they had petitioned —
Mr. Schultz: The Health Research Group had asked FDA to take this carcinogen out of drugs.
The FDA denied and I appealed to the D.C. Circuit. The only significant thing
about that case is I argued it early on and it was the only appellate case I had
argued before I argued the Duke Power case in the Supreme Court. It just got to
the point that whenever Sid had a case he wanted to pursue, he would always
come to me with it. Often I would enlist somebody else in the Litigation Group
to take the lead, but I would always be involved. As I explained last time, we
always had two or three lawyers on the case.
Other public interest groups from around DC also came to us with FDA
cases, among them the Community Nutrition Institute and the Center for Science
in the Public Interest, which today is the leading food group. I also did cases for
the American Public Health Association, the National Council for Senior
Citizens, the Environmental Defense Fund, and the National Resources Defense
Council, but usually with an FDA bent. The case for NRDC went to the Ninth
Circuit and involved pesticides where regulation was shared by FDA and EPA.
We were a litigation group for any public interest cause. We would
consider the case of any group that came to us, and very likely if we thought it
was a strong case we would take it. The nice thing is we never had to charge a
fee, and we never had to keep track of time except if the case had the prospect of
collecting attorney’s fees. We could spend as much time as we needed to spend
on the case to do the very best job we could do. It was a real luxury.
Mr. Pollak: Where did FDA practice take you?
Mr. Schultz: We were the Litigation Group, but I got very involved in legislative matters on
Capitol Hill. We had a lobbying group and I often worked with them. If there
was legislation about nuclear power, I might testify on that. If there was
legislation about food safety I would be involved.
We would work very closely with congressional staff. We would testify
very frequently at hearings on a whole range of issues. When the FDA wanted to
allow prescription drug advertising, John Sims and I testified about the First
Amendment implications. John was another lawyer at the Litigation Group and a
First Amendment expert.
Mr. Pollak: Did you spend a lot of time on Capitol Hill?
Mr. Schultz: Yes. For example, at one point there was an issue about saccharin, which was a
sweetener used in Coca-Cola and other sodas, and it was found to be an animal
carcinogen. There was an issue about whether FDA should ban it. Under the
Food, Drug, and Cosmetic Act, there is a provision called the Delaney Clause
which said you cannot intentionally add a carcinogen to food. A lot of our work
involved carcinogens. Aflatoxin, at issue in the Community Nutrition Supreme
Court case, was a carcinogen unintentionally added. Saccharin was intentionally
added to food and it was found to be a carcinogen in animals, which meant it had
to be banned.
The FDA thought it was not a health hazard and the agency asked
Congress to grant an exemption by passing a law. We disagreed and I wrote two
published articles about the value of the Delaney Clause and why it is so
I testified on Capitol Hill about it and I remember at one point I was
testifying before the Energy and Commerce Subcommittee on Health and the
Environment, which was Henry Waxman’s subcommittee. David Stockman, who
later became the head of the Office of Management and Budget under President
Reagan, was a very conservative congressman at the time and he started
questioning me and belittling my point. He said what’s the big deal, it’s such a
small risk. I made the point that you have to be concerned about children, who
sometimes can consume very high volumes of soda, and we just don’t know
about their developing bodies and their susceptibility to carcinogens. He kept
interrupting me and wouldn’t let me answer. Congressman Waxman interrupted
him, which was very unusual. He said, “Mr. Stockman, let the witness answer the
question.” I was allowed to answer and when I got the transcript, the exchange
between Stockman and Waxman wasn’t there because it was an embarrassment to
David Stockman. I ultimately developed a very good working relationship with
Congressman Waxman’s staff and particularly with Bill Corr, the FDA staff
9 William B. Schultz, The Bitter Aftertaste of Saccharin, 40 Food Drug Cosm. L.J. 66 (1985); William B. Schultz,
Why the FDA’s De Minimis Interpretation of the Delaney Clause Is a Violation of the Law, 7 J. Am. Coll. of
Toxicology 521 (1988).
I should explain that Ralph Nader had several different groups that
specialized. We were Public Citizen Litigation Group. Congress Watch was the
lobbying group. They lobbied for progressive legislation. The Health Research
Group focused on the Food and Drug Administration and the Occupational
Health and Safety Administration. There was also a tax group and a nuclear
I think the most significant piece of legislation I worked on was the Drug
Price Competition and Patent Term Restoration Act of 1984. That law created
the generic drug industry. It’s called the Hatch-Waxman Act because it was a
famous compromise between Henry Waxman in the House and Orrin Hatch in
the Senate. The compromise combined two bills.
One was the Patent Term Restoration Act. The drug industry had argued
that instead of getting seventeen years of patent protection because of what they
said was the slow drug approval process, they were getting less than ten years, so
they wanted a patent extension. This bill allowed them up to five additional years
for a maximum of fourteen years. That was Senator Hatch’s bill, after it was
Congressman Waxman had introduced a generic drug bill. The idea there
was that once the patents had expired, the generic drug company should not have
to redo all the expensive testing to show the drug was safe and effective. It
should be able to rely on the tests that the pharmaceutical company had done, and
its job would be to show that it could make a good copy, which was much
quicker and less expensive.
Mr. Pollak: Were you involved in that as a member of the Nader group?
Mr. Schultz Yes, I represented the consumer groups. There was a coalition of consumer
groups that included the Nader groups, the American Association of Senior
Citizens, Consumers Union, and other groups interested in drug prices. I worked
on this with Nancy Drabble, the head of Congress Watch, the lobbying group.
Nancy was an expert on legislation and knew all the players on Capitol Hill.
We were allowed to be in the drafting sessions and negotiated
amendments. I remember that at one point in this whole process, Congressman
Waxman had made a deal with a couple of the pharmaceutical companies. He
agreed to patent extensions on a few drugs in exchange for their support of the
bill. It split the members of PMA, the companies’ trade association, and was key
to the bill’s passing.
I remember being upset by the deal, particularly since we had not been
consulted. I asked for a meeting with the Congressman, which he granted. At the
meeting I said, “Congressman Waxman, why did you do this horrible thing?”
And he looked at me and said, “Because I wanted a bill.” It was an answer that I
had no response to. But after that I think he felt bad that the deal had surprised us,
and he told his staffer Bill Corr to include us in all the other discussions. We
were part of all the negotiation and drafting sessions after that.
The bill passed the House and went to the Senate at the end of the
session. This is what often happens. It’s a two-year Congress and very often
everything goes to the end, which means there wouldn’t be enough time to defeat
a filibuster even if there were enough votes. As a result, any legislation must be
passed in the Senate by unanimous consent. A single Senator can block a bill.
It passed the House after lots of negotiation. The representatives of the
generic drug industry had managed to bring Senator Hatch along, but in the final
days Senator Howard Metzenbaum of Ohio put a hold on the bill which basically
means he was willing to filibuster and block the bill until he could be satisfied.
His concern was the patent extensions, which were central to the deal that Hatch
and Waxman had made.
Now Public Citizen becomes key in this legislation because we’re the
only ones that Senator Metzenbaum, a very progressive Senator, would listen to.
He’s not going to listen to the pharma companies, he’s not going to listen to
Senator Hatch, he’s not going to listen to the generic drug companies, but he
might listen to Public Citizen. And he was playing hard to get. I remember
Nancy Drabble and I talked about this because we had mixed feelings about the
bill. We made the decision: We needed to have a strong relationship with
Congressman Waxman who supported many of our efforts, so we decided to help
in any way we could.
Meanwhile Senator Metzenbaum was enjoying the attention. Once we
wanted to talk to him and he indicated, “Well, I’m on my way home for dinner
but maybe tomorrow.” Meanwhile time was running out.
Senator Metzenbaum and Senator Hatch’s offices were across the hall
from each other. We were in the position of shuttling back and forth. Now that
he had a deal that the brand drug companies supported, Senator Hatch was
determined to pass this bill and all of a sudden we were his best friends. He
never had any affection for Public Citizen, but now he would call us into his
office, throw his staff out, and strategize with us about how he could help and
what we could do. In the end, we were able to negotiate something with Senator
Metzenbaum. There were a few changes that satisfied him and everybody else,
and the bill passed.
It was a momentous piece of legislation that marked the beginning of the
generic drug industry. Today the generic drug industry manufactures 90% of all
drugs sold in this country, which account for only about 10% of the costs. It was
a very good moment for us.
In addition to litigation and lobbying we did a lot of writing. I wrote oped articles in The Washington Post, some of them with Ralph Nader. I wrote
articles in scientific journals. The great thing about this job was I didn’t get paid
much but I got paid for all of this. This was all considered part of the work.
Mr. Pollak: You must have worked hard?
Mr. Schultz: I did. I worked all the time.
Mr. Pollak: Just let the record show the period you were with the Nader group.
Mr. Schultz: January 5, 1976, until the very end of 1989.
Mr. Pollak: So, it’s 14 years?
Mr. Schultz: Yes.
Mr. Pollak: And when were you married to Sari?
Mr. Schultz: Sari and I got married in 1988. We met in 1986 so it was at the end of my time
Mr. Pollak: I see. Sari said I need more of you.
Mr. Schultz: Well, that’s not really what happened.
Mr. Pollak: That was a joke.
Mr. Schultz: I know. The amount I worked was probably something of an issue in some of my
relationships. Soon after I met Sari, she became a night police reporter and
worked from maybe 10:00 p.m. until 6:00 in the morning. Sometimes I would
work late and then we’d go out to breakfast after she was done. Her work
schedule was such that my work was never a problem. She worked very hard as
a reporter. So that was never an issue.
One additional thing about the Hatch-Waxman bill. Congressman
Waxman tried to get the generic drug piece passed in the early1980s and Al Gore
was very involved. This was when he was still in the House. In addition to
working with Congressman Waxman, I worked closely with Al Gore and there
was one point when I was assigned to debate the merits of this before
congressional staff. We were having this debate and it was quite interesting
because Al Gore came in and joined my side.
He is a very prepared and very good debater and I remember he was just
doing great. Then he stopped and said you know I don’t think it’s really
appropriate for me to be doing this. It’s probably unfair for your opponent. So he
got up and walked out. He was very accessible and very energetic and very
strong on public policy.
I also participated in the Scheuer-Gore Commission, the Commission on
the Federal Drug Approval Process, which was established by Al Gore and
Congressman James Scheuer. Its charge was to examine the drug approval
process because there had been charges that FDA was taking too long to approve
drugs, longer than Europe. This was called “the drug lag.” I was the consumer
representative on this commission which found that most of the delay was not
due to FDA as many had claimed, but rather how long the pharmaceutical
industry took to test the drugs. There was some criticism of FDA, but through
this commission and work on other legislation I got to know Al Gore.
Mr. Pollak: Do you want to discuss other litigation activity with the Litigation Group?
Mr. Schultz: I did considerable litigation on FDA issues. There were various color additives
that were also carcinogens. Color additives called coal-tar dyes actually made out
of coal tar were shown to be carcinogenic in animals. During the Reagan
Administration, FDA developed a theory that it could do a risk assessment and
show the risk is less than one in a million, so the risk should be allowed because
it’s a trivial risk. The government concocted a legal theory, called a de minimis
amount, as in very little.
After FDA invoked the de minimis exception to the Delaney Clause and
approved one of these carcinogenic color additives, we challenged the decision in
court, arguing that FDA was violating the Delaney Clause.
I argued the case before a D.C. Circuit panel of Judges Harold Greene,
Ruth Bader Ginsburg, and Stephen Williams. My opponent was Peter Barton
Hutt. He had been chief counsel of the FDA during the Nixon Administration
and at the time he was the most prominent food and drug lawyer in the country,
although he didn’t typically appear in court. He had probably convinced the FDA
to adopt the de minimis policy and he argued for the industry that had intervened.
Harold Greene, whose name was ironic given the subject matter of the
case, was an outstanding district court judge who sat on the court of appeals
occasionally, asked me a good question: “Well, if we eliminate this color
additive, what’s the cost of that? I understand these color additives are used to
distinguish drugs and they’re used in cosmetics and for other purposes. Does that
mean that we won’t have this particular color?” And I said, “No. This case is
about Red Number 3, but there’s Red Number 4, Red Number 16, and lots of
other red colors, so nothing would be lost.”
Peter Hutt, when it was his turn, argued that it would be horrible to lose a
color and Judge Greene said, “Well, Mr. Schultz said that there are other colors.
It just doesn’t really matter.” And Peter Hutt said, “Well, Judge Greene, these are
used in cosmetics and it’s kind of like the Mona Lisa, when a woman is using
cosmetics if you eliminate a color, it could have a really important impact. If you
eliminate a color from Michelangelo’s palette, the Mona Lisa wouldn’t look the
same.” At which point Judge Ruth Bader Ginsburg said, “Mr. Hutt, are you
daring to compare the Mona Lisa to cosmetics that a woman uses to color her
face?” And Peter Hutt backed down. He lost the case.
I remember Sari attended the argument and asked, “How long will it take
to get a decision?” When I said it could be six months or a year or more and that I
had one case where the D.C. Circuit took five years, she seemed very surprised
and said, “I don’t understand why they don’t go to their offices and write the
opinion right away.” After all that’s what daily reporters do. The name of the case
is Public Citizen v. Young.
In addition to this case, I also brought several cases against FDA for
unreasonable delay, arguing that the FDA was required to do something, and it
wasn’t doing it.
We brought these cases in the district court. In some cases, FDA was 30
years late but amazingly we lost a lot of those cases. Although I will say today,
the law has gotten better in this area and FDA has lost a number of cases where it
has missed statutory deadlines for regulator action. In those days the courts were
very receptive to the argument that FDA should get to choose how to use its
10 831 F.2d 1108 (D.C. Cir. 1987).
We brought cases about nitrites, a carcinogen being used as a food
additive in bacon. The issue was whether it was regulated by FDA or USDA,
because if the jurisdiction was with FDA it would have had to have been banned
under the Delaney Clause.
I took over a case called American Public Health Association v.
Veneman11 involving the delays in the FDA’s review of prescription drugs.
When Congress passed the requirement in 1962 that drugs have to be effective —
before that they only had to be proven safe – it told FDA to go back and look at
all the drugs approved between 1938 and 1962 and decide whether they were
effective. FDA didn’t consider this important and took forever to do this. FDA
was much more interested in reviewing new drugs but there was a court order,
and I took over the responsibility of making sure it was enforced. We at Public
Citizen reached a new agreement about a schedule, and I met every six months
with the FDA official who reported to me. They took the deadlines in the
schedule seriously because they knew I could go back to the court if they were
out of compliance. They had been in violation of a court order for years. For me
this was a good management experience. The way to get the federal government
to do something is to set deadlines, require frequent reports and most importantly
stay on top of it. We accomplished a lot and we ultimately got it all done.
Mr. Pollak: You also litigated extensively under the Freedom of Information Act?
11 See 349 F. Supp. 1311 (D.D.C. 1972).
Mr. Schultz: Yes, I did. The Litigation Group had a significant practice litigating cases under
the Freedom of Information Act (FOIA). It was a very important statute to Ralph
Nader because the Act gave the public access to government documents, with
exceptions. I had one case where we argued that the documents for the Office of
Management and Budget (OMB) were subject to FOIA. The White House is
exempt from the Act and the issue was whether OMB is covered by that
exemption. That case ended up being heard en banc in the D.C. Circuit. We
didn’t win but it was an important case.
In most of the other FOIA cases we were trying to get documents that
drug companies had submitted to FDA. Typically, the Health Research Group
was interested in them because they concerned drug safety. We prevailed mostly
through settlement in almost all those cases. The lesson was that if you went to
the trouble to bring the lawsuit against the FDA, the company would intervene.
The FDA usually didn’t care that much and if we brought the case and maybe did
a little discovery, we were getting the documents that we wanted.
Mr. Pollak: Did you think the FOIA instrument was drawn appropriately and worked
Mr. Schultz: It was very beneficial to us. The government hated it. I remember when I left the
Litigation Group, I went to work on Capitol Hill, and I was interviewed by Legal
Times about my new job. The quote that ended up in the article was, “Well, now I
can get documents without going through the Freedom of Information Act.”
Congress has subpoena power and doesn’t recognize a lot of the FOIA
exemptions that apply to the general public. As a result, it had much more access
to documents than I had at Litigation Group.
I have to say that when I later worked in the executive branch, I began to
appreciate some of the FOIA exemptions, and I thought that Congress’s almost
unlimited access to documents was a problem. In the end, it discouraged
government from writing things down.
Mr. Pollak: Tell me about your First Amendment litigation on videotaping of FDA hearings?
Mr. Schultz: We represented some reporters who wanted to videotape an FDA hearing. We
made the argument that the reporters had a First Amendment right to do so and I
think we lost the temporary restraining order and an emergency appeal to the
D.C. Circuit. We didn’t prevail. Later in a speech Judge Patricia Wald remarked
on what an interesting case it was.
Mr. Pollak: Tell me about your highway safety cases, voting rights cases, and the insurance
Mr. Schultz: As I said we represented other Nader groups and public interest groups. Ralph
Nader had started a group called the Center for Auto Safety. Ralph made his
name with Unsafe at any Speed, a book about manufacturing defects in the
Chevrolet Corvair. Joan Claybrook, who became the head of Public Citizen, had
been the director of the National Highway Traffic Safety Administration in the
The Reagan Administration weakened automobile standards. One
standard concerned air bags and that case went to the Supreme Court. Another
related to tire standards. I challenged that decision in the D.C. Circuit, and we
In addition, I got involved in a voting rights case about the right to a
referendum in the District of Columbia.
The one other case I’ll mention shows the variety of the work I got to do
there. We got a call from an insurance agent one day, Joseph Blumenthal. He
said, “I work as an insurance agent down here in Florida and I get a fixed
commission. I want to compete by giving a portion of my commission back to my
customers in the form of rebates, but this would be illegal in the State of Florida.
The state says I can’t do that and that I am required to charge a full commission.
Is there anything you can do about this?”
I thought this was an interesting case, but I didn’t know if we could do
anything. I did the research and found that Florida still had substantive due
process which is the outmoded idea that was used to strike down Franklin D.
Roosevelt’s New Deal laws in the 1930s. Ultimately the Supreme Court rejected
the idea that economic legislation could be challenged because it was a violation
of the due process clause. But Florida’s Constitution as interpreted by the Florida
courts still recognized substantive due process.
So, there was room in Florida to argue that a law was unconstitutional
because it was illogical, contrary to public interest, bad for consumers, and served
no legitimate purpose.
We brought the case in Tallahassee. I think I lost it in the trial court, and
I don’t remember the outcome in the Court of Appeals. But in the Florida
Supreme Court, the insurance industry was so concerned about the case that it
hired a former justice from the Florida Supreme Court to argue against me.
Interestingly, the argument was videotaped even though this was rarely done in
those days. The taping was not apparent and when I walked out of the courtroom,
a clerk handed me a tape of the argument. I wasn’t optimistic about my chances,
but when I got the decision it turns out that I’d won in a split decision, and the
law was held to be unconstitutional. It gave me a very good feeling about that
Court. They took the case very seriously and voted against their former