Case Summary (G.R. No. 244242)
Factual Background
On October 16, 2007, complainant Mymanette M. Jarra purchased one (1) pack of Nestle Bear Brand Powdered Filled Milk, 150-gram. Upon opening the foil pack, Jarra observed objects resembling larvae and noted the powder to be yellowish and lumpy. She filed a complaint with the CAO-NCR on October 17, 2007, which initiated conciliation and prompted a laboratory test by the Bureau of Food and Drugs (BFAD).
BFAD Report and CAO-NCR Proceedings
The BFAD issued Report of Analysis No. FCM07-10-18-151 dated October 22, 2007, which found live insect larvae in the sample and described the cream powder as having a strong stale odor rendering it unfit for human consumption. On January 11, 2016, the CAO-NCR resolved in favor of Jarra, finding violation of RA 7394 and ordering, among other reliefs, payment of an administrative fine of Php20,000.00, assurance to comply with the law, restitution of two bottles of RC Cola or reimbursement, payment of Php5,000.00 for expenses, and condemnation of the subject product. Nestle sought reconsideration, which the CAO-NCR denied on June 8, 2016.
Ruling of the Secretary of Health
On April 17, 2017, Secretary of Health Paulyn Jean B. Rosell-Ubial issued a Decision affirming the CAO-NCR resolution with modification. The Secretary upheld the BFAD findings as presumptively entitled to great weight because BFAD possessed technical expertise, and the DOH found no clear and convincing showing of grave abuse of discretion by the Acting Consumer Arbitration Officer. The Secretary deleted the award of Php5,000.00 as actual damages and rephrased the restitution order. Nestle's motion for reconsideration was denied by Resolution dated September 11, 2017.
Proceedings in the Court of Appeals
Nestle filed a petition for certiorari under Rule 65 before the Court of Appeals, alleging grave abuse of discretion amounting to lack or excess of jurisdiction by the DOH. In a Decision dated October 19, 2018, the CA reversed and set aside the DOH Decision. The CA concluded that the BFAD report did not establish when or under what conditions the contamination occurred and that infestation might have arisen during transit, storage, or at the point of sale. The CA found that the report was too ambiguous to support the conclusion that the product was adulterated due to Nestle's defective processes or negligence. The CA denied Nestle’s motion for reconsideration, prompting the DOH to elevate the matter to the Supreme Court under Rule 45.
Issues on Review
The DOH presented two issues for resolution: whether the DOH acted with grave abuse of discretion in affirming the CAO-NCR decision, and whether the CAO-NCR and the DOH properly found Nestle liable under RA 7394 for distribution of adulterated products on the basis of substantial evidence. The narrow legal question before the Supreme Court was whether the CA correctly determined that the DOH committed grave abuse of discretion amounting to lack or excess of jurisdiction.
Parties’ Contentions
The DOH argued that the CA erred by converting a petition for certiorari into a vehicle for reviewing intrinsic correctness of the administrative findings and that no grave abuse of discretion was shown. The DOH maintained that its findings rested on substantial evidence, including the BFAD report and the complainant’s account. Nestle contended that the courts are not bound by administrative findings when those findings lack evidentiary support or reflect arbitrariness, and it argued that the CA properly reweighed the evidence to reject the BFAD conclusions.
Standard for Certiorari and Scope of Review
The Court reiterated that a writ of certiorari under Rule 65 issues only where a tribunal or quasi-judicial officer acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and that certiorari is not a remedy to review the intrinsic merits of a decision. The Court quoted precedent explaining that a petition for certiorari cannot be used to correct mere errors of judgment and that supervisory jurisdiction is limited to correcting jurisdictional defects or grave abuse characterized by arbitrariness, caprice, or omission to weigh pertinent considerations.
Court’s Analysis on the Evidence
The Court examined the record and found that the DOH and the CAO-NCR reasonably credited the BFAD Report of Analysis and the complainant's complaint. The Court applied the doctrine of conclusiveness of administrative findings of fact when supported by substantial evidence, noting that administrative bodies are specialists in their fields and their factual findings warrant great weight. The BFAD report constituted relevant evidence which a reasonable mind could accept as adequate to support the conclusion that the product was adulterated. The Court observed that Nestle offered a report from its Quality Assurance Department and advanced hypotheses that contamination could have occurred after manufacture, but it failed to overcome the BFAD findings or to demonstrate that the DOH acted with grave abuse of discretion in accepting the BFAD report.
Legal Basis and Application of Statutory Provisions
The Court held that the DOH correctly applied Article 23(3) and Article 40(a) of RA 7394, which deem food adulterated when it consists in whole or in part of filthy or decomposed substance or is otherwise unfit for food, and which prohibit the manufacture, importation, sale, or distribution of adulterated food. Given the BFAD findings that the sample contained live larvae and was stale and unfit for human consumption, the Court concluded that substantial evidence supported the administrative finding of adulteration and liability under RA 7394.
Disposition and Relief Ordered
The Supreme Court granted the Petition for Review on Certiorari, reversed the Court of
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Case Syllabus (G.R. No. 244242)
Parties and Procedural Posture
- Department of Health, represented by its Secretary filed a Petition for Review on Certiorari under Rule 45, Rules of Court assailing the Court of Appeals Decision dated October 19, 2018 and its Resolution dated January 17, 2019 in CA-G.R. SP No. 153068.
- Nestle Philippines, Inc. was the respondent in the administrative and judicial proceedings arising from a consumer complaint about an allegedly adulterated product.
- The CA reversed and set aside the DOH Decision dated April 17, 2017 and Resolution dated September 11, 2017, prompting the present appeal to the Supreme Court.
- The relief sought by the petitioner to the Supreme Court was reinstatement of the DOH rulings and correction of the CA’s use of certiorari review.
Key Factual Allegations
- Mymanette M. Jarra purchased one Bear Brand Powdered Filled Milk (150 grams) on October 16, 2007 and discovered apparent larvae and yellowish, lumpy powder upon opening the foil pack.
- Jarra filed a complaint before the Consumer Arbitration Office of the National Capital Regional Office (CAO-NCR) on October 17, 2007, which led the acting officer to request laboratory analysis from the Bureau of Food and Drugs (BFAD).
- BFAD issued Report of Analysis No. FCM07-10-18-151 dated October 22, 2007, finding live insect larvae in the sample and concluding that the cream powder had a strong stale odor rendering it unfit for human consumption.
- The CAO-NCR issued a Resolution dated January 11, 2016 finding a violation of Republic Act No. 7394 and ordering penalties, restitution, reimbursement of expenses, and condemnation of the subject product.
- The Secretary of Health affirmed the CAO-NCR Resolution with modification on April 17, 2017 and deleted an award of Php5,000.00 as actual damages.
- Nestle moved for reconsideration administratively and then filed a petition for certiorari under Rule 65 before the Court of Appeals, which granted the petition and reversed the DOH.
Statutory Framework
- Republic Act No. 7394 (the Consumer Act of the Philippines) governed the adulteration and prohibited acts at issue in the administrative adjudication.
- Article 23(3), RA 7394 defines adulterated food to include food that consists in whole or in part of any filthy, putrid or decomposed substance or is otherwise unfit for food.
- Article 40(a), RA 7394 prohibits the manufacture, importation, sale, distribution, or transfer of any food that is adulterated or mislabeled.
- Rule 65, Rules of Court prescribes the grounds for a petition for certiorari as acting without or in excess of jurisdiction or with grave abuse of discretion.
- Rule 45, Rules of Court governs petitions for review on certiorari from the Court of Appeals to the Supreme Court.
Issues Presented
- Whether the DOH acted with grave abuse of discretion in affirming the CAO-NCR Decision.
- Whether the CAO-NCR properly found Nestle liable for violation of RA 7394 on the distribution of adulterated products on the basis of substantial evidence.