administrative law

Republic vs Drugmaker’s Lab (GR No. 190837 March 5, 2014)

Republic of the Philippines vs Drugmaker’s Laboratories Inc.
GR No. 190837 March 5, 2014

Facts: The FDA was created pursuant to RA 3720, otherwise known as the “Food, Drug and Cosmetics Act” primarily in order to establish safety or efficacy standards and quality measure of foods, drugs and devices and cosmetics products. On March 15, 1989, the Department of Health, thru then Secretary Alfredo RA Bengzon issued AO 67 s. 1989, entitled Revised Rules and Regulations on Registration of Pharmaceutical products. Among others, it required drug manufacturers to register certain drug and medicine products with FDA before they may release the same to the market for sale. In this relation, a satisfactory bioavailability/bioequivalence (BA/BE) test is needed for a manufacturer to secure a CPR for these products. However, the implementation of the BA/BE testing requirement was put on hold because there was no local facility capable of conducting the same. The issuance of circulars no. 1 s. of 1997 resumed the FDA’s implementation of the BA/BE testing requirement with the establishment of BA/BE testing facilities in the country. Thereafter, the FDA issued circular no. 8 s. of 1997 which provided additional implementation details concerning the BA/BE testing requirement on drug products.

Issue: Whether or not the circular issued by FDA are valid.

Held: Yes. Administrative agencies may exercise quasi-legislative or rule-making power only if there exist a law which delegates these powers to them. Accordingly, the rules so promulgated must be within the confines of the granting statutes and must not involve discretion as to what the law shall be, but merely the authority to fix the details in the execution or enforcement of the policy set out in the law itself, so as to conform with the doctrine of separation of powers and as an adjunct, the doctrine of non-delegability of legislative powers.

An administrative regulation may be classified as a legislative rule, an interpretative rule or a contingent rule. Legislative rules are in the nature of subordinate legislation a d designed to implement a primary legislation by providing the details thereof. They usually implement existing law, imposing general, extra-statutory obligations pursuant to authority properly delegated by the congress amd effect a change in existing law or policy which affect individual rights and obligations. Meanwhile, interpretative rules are intended to interpret, clarify or explain existing statutory regulations under which the administrative body operates. Their purpose or objective is merely to construe the statue being administered and purpory to do no more than interpret the statute. Simply, they try to say what the statute means and refer to no single person or party in particular but concern all those belonging to the same class which may be covered by the said rules. Finally, contingent rules are those issued by an administrative authority based on the existence of certain facts or things upon which the enforcement of the law depends.

In general, an administrative regulation needs to comply with the requirements laid down by EO 292 s. of 1988 otherwise known as the administrative code of 1987 on prior notice, hearing and publication in order to be valid and binding except when the same is merely an interpretative rule. This is because when an administrative rule is merely intepretative in nature its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means that ca  facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed before that new issuance is given the force and effect of law.

A careful scrutiny of the foregoing issuances would reveal that A0 67 is actually the rule that originally introduced the BA/BE testing requirement as a component of applications for the issuamce of CPR covering certain pharmaceutical products as such, it is considered an administrative regulation – a legislative rule to be exact – issued by the Secretary of Health in consonance with the express authority granted to him by RA 3720 to implement the statutory mandate that all drugs and devices should first be registered with the FDA prior to their manufacture and sale. Considering that neither party contested the validity of its issuance, the court deems that AO 67 complied with the requirements of prior hearing, notice and publication pursuant to the presumption of regularity accorded tl the govt in the exercise of its official duties.

On the other hand, circulars no. 1 and 8 s. of 1997 cannot be considered as administrative regulations because they do not: a.) implement a primary legislation by providing the details thereof; b.) Interpret, clarify or explain existing statutory regulation under which FDA operates and/or; c.) Ascertain the existence of certain facts or things upon which the enforcement of RA 3720 depends. In fact, the only purpose of these is for FDA to administer and supervise the implementation of the provisions of AO 67 s. of 1989 including those covering the BA/BE testing requirement consistent with and pursuant to RA 3720. Therefore, the FDA has sufficient authority to issue the said circulars and since theu would not affect the substantive rights of the parties that they seek to govern – as they are not, strictly speaking, administrative regulations in the first place – no prior hearing, consultation and publication are needed for their validity.


Demigillo vs TIDCORP (G.R. No. 168613 March 5, 2013)

Manalang-Demigillo vs Trade and Investment Development Corporation of the Philippines
G.R. No. 168613 March 5, 2013

Facts: On February 12, 1998, the Philippine Export and Foreign Loan Guarantee was renamed Trade and Investment Development Corporation of the Philippines (TIDCORP) pursuant to Republic Act No. 8494 entitled An Act Further Amending Presidential Decree No. 1080, As Amended, by Reorganizing And Renaming the Philippine Export and Foreign Loan Guarantee Corporation, Expanding Its Primary Purpose, and for Other Purposes. Republic Act No. 8494 reorganized the structure of TIDCORP. The issuance of appointments in accordance with the reorganization ensued. Petitioner Rosario Manalang-Demigillo (Demigillo) was appointed as Senior Vice President (PG 15) with permanent status, and was assigned to the Legal and Corporate Services Department (LCSD) of TIDCORP. Petitioner was evaluated and given a ‘poor’ rating for two consecutive evaluations due to her unimproved performance resulting to her name being dropped from the rolls of TIDCORP.

Issue: Whether or not the reorganization is valid resulting to Demigillo’s reassignment valid.

Held: Yes. Under the circumstances, when the members of the Board of Directors effected the assailed 2002 reorganization, they were acting as the responsible members of the Board of Directors of TIDCORP constituted pursuant to Presidential Decree No. 1080, as amended by Republic Act No. 8494, not as the alter egos of the President. We cannot stretch the application of a doctrine that already delegates an enormous amount of power. Also, it is settled that the delegation of power is not to be lightly inferred.

The result of the lengthy consultations and close coordination was the comprehensive reorganization plan that included a new organizational structure, position classification and staffing pattern, qualification standards, rules and regulations to implement the reorganization, separation incentive packages and timetable of implementation. Undoubtedly, TIDCORP effected the reorganization within legal bounds and in response to the perceived need to make the agency more attuned to the changing times.

Having found the 2002 reorganization to be valid and made pursuant to Republic Act No. 8494, we declare that there are no legal and practical bases for reinstating Demigillo to her former position as Senior Vice President in the LCSD. To be sure, the reorganization plan abolished the LCSD, and put in place a setup completely different from the previous one, including a new staffing pattern in which Demigillo would be heading the RCMSS, still as a Senior Vice President of TIDCORP. With that abolition, reinstating her as Senior Vice President in the LCSD became legally and physically impossible.

Demigillo’s contention that she was specifically appointed to the position of Senior Vice President in the LCSD was bereft of factual basis. The records indicate that her permanent appointment pertained only to the position of Senior Vice President. Her appointment did not indicate at all that she was to hold that specific post in the LCSD. Hence, her re-assignment to the RCMSS was by no means a diminution in rank and status considering that she maintained the same rank of Senior Vice President with an accompanying increase in pay grade.

The assignment to the RCMSS did not also violate Demigillo’s security of tenure as protected by Republic Act No. 6656. We have already upheld reassignments In the Civil Service resulting from valid reorganizations. Nor could she claim that her reassignment was invalid because it caused the reduction in her rank, status or salary. On the contrary, she was reappointed as Senior Vice President, a position that was even upgraded like all the other similar positions to Pay Grade 16, Step 4, Level II. In every sense, the position to which she was reappointed under the 2002 reorganization was comparable with, if not similar to her previous position.

TIDCORP vs Manalang-Demigilio (G.R. No. 176343 September 18, 2012)

TIDCORP vs Manalang-Demigilio
G.R. No. 176343 September 18, 2012

Facts: Trade and Investment Development Corporation of the Philippines (TIDCORP) is a wholly owned government corporation whose primary purpose is to guarantee foreign loans, in whole or in part, granted to any domestic entity, enterprise or corporation organized or licensed to engage in business in the Philippines. On May 13, 2003, the Board of Directors of TIDCORP formally charged Maria Rosario Manalang-Demigillo (Demigillo), then a Senior Vice-President in TIDCORP, with grave misconduct, conduct prejudicial to the best interest of the service, .insubordination, and gross discourtesy in the course of official duties. Finally, and after considering Section 19 of the same Rules, which gives authority to the disciplining body to issue an order of preventive suspension, you are hereby preventively suspended for a period of ninety (90) days from receipt hereof.

Issue: Whether or not preventive suspension of Demigilio is valid pending the administrative investigation.

Held: Yes. The Revised Administrative Code of 1987 (RAC) embodies the major structural, functional and procedural principles and rules of governance of government agencies and constitutional bodies like the CSC. Section 1, Chapter 1, Subtitle A, Title I, Book V, of the RAC states that the CSC is the central personnel agency of the government. Section 51 and Section 52, Chapter 6, Subtitle A, Title I, Book V of the RAC respectively contain the rule on preventive suspension of a civil service officer or employee pending investigation, and the duration of the preventive suspension.

Section 51. Preventive Suspension. – The proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation, if the charge against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance of duty, or if there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service.

Pursuant to its rule-making authority, the CSC promulgated the Uniform Rules on August 31, 1999. Section 19 and Section 20 of Rule II of the Uniform Rules defined the guidelines in the issuance of an order of preventive suspension and the duration of the suspension.

It is clear from Section 19, supra, that before an order of preventive suspension pending an investigation may validly issue, only two prerequisites need be shown, namely: (1) that the proper disciplining authority has served a formal charge to the affected officer or employee; and (2) that the charge involves either dishonesty, oppression, grave misconduct, neglect in the performance of duty, or if there are reasons to believe that the respondent is guilty of the charges which would warrant her removal from the service. Proof showing that the subordinate officer or employee may unduly influence the witnesses against her or may tamper the documentary evidence on file in her office is not among the prerequisites.

CSC Resolution No. 030502 apparently reiterates the rule stated in Section 19 of the Uniform Rules, supra, that for a preventive suspension to issue, there must be a formal charge and the charge involves the offenses enumerated therein. The resolution considers an order of preventive suspension as null and void if the order was not premised on any of the mentioned grounds, or if the order was issued without a formal charge. As in the case of Section 19, the resolution does not include as a condition for issuing an order of preventive suspension that there must be proof adduced showing that the subordinate officer or employee may unduly influence the witnesses against her or tamper the documentary evidence in her custody.

Preventing the subordinate officer or employee from influencing the witnesses and tampering the documentary evidence under her custody are mere purposes for which an order of preventive suspension may issue as reflected under paragraph 2 of Section 19, supra. This is apparent in the phrase “for the same purpose” found in paragraph 3 of Section 19. A “purpose” cannot be considered and understood as a “condition.” A purpose means “reason for which something is done or exists,” while a condition refers to a “necessary requirement for something else to happen;” or is a “restriction, qualification.” The two terms have different meanings and implications, and one cannot substitute for the other.