NVE Inc. v. Department of Health & Human Services ( 2006 )

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
2-7-2006
NVE Inc v. Dept Health Human
Precedential or Non-Precedential: Precedential
Docket No. 04-4481
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-4481
NVE INC.,
Appellant
v.
DEPARTMENT OF HEALTH AND HUMAN SERVICES;
TOMMY G. THOMPSON, Secretary Department
of Health and Human Services; FOOD AND DRUG
ADMINISTRATION; *LESTER M. CRAWFORD, JR.,
Acting Commissioner, Food and Drug Administration;
JOHN DOES, 1-10 fictitious individuals
and ABC Agencies 1-10 fictitious agencies
and/or entities
*(Pursuant to Rule 43(c) F.R.A.P.)
Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 04-cv-00999)
District Judge: Honorable Joel A. Pisano
Argued September 26, 2005
Before: RENDELL, FUENTES and GARTH, Circuit Judges.
(Filed: February 7, 2006)
Walter F. Timpone [ARGUED]
McElroy, Deutsch, Mulvaney & Carpenter
1300 Mount Kemble Avenue
P.O. Box 2075
Morristown, NJ 07962
Counsel for Appellant
Douglas N. Letter
Christine N. Kohl [ARGUED]
U.S. Department of Justice
Civil Division
950 Pennsylvania Avenue, N.W.
Washington, DC 20530
Counsel for Appellees
OPINION OF THE COURT
RENDELL, Circuit Judge.
In 1994, Congress passed the Dietary Supplement Health
and Education Act (“DSHEA”), declaring dietary supplements
that “present[] a significant or unreasonable risk of illness or
injury” to be “adulterated food” under the Food, Drug, and
2
Cosmetic Act (“FDCA”). DSHEA § 4, 21 U.S.C. § 342(f)(1)
(2000). In 2004, the Food and Drug Administration (“FDA”)
promulgated a final regulation stating that dietary supplements
containing ephedrine alkaloids (“EDS”) were adulterated under
the “unreasonable risk” standard of DSHEA. 21 C.F.R. § 119.1.
The effect of the regulation was to prohibit the distribution of
these supplements. NVE, a former manufacturer and distributor
of EDS, brought this suit seeking to set aside the regulation.
Relying on a provision of DSHEA that states a “court
shall decide any issue under [21 U.S.C. § 342(f)(1)] on a de
novo basis,” NVE sought to supplement the administrative
record by offering affidavits, expert testimony, and other
evidence. In orders dated August 4, 2004 and August 12, 2004,
the District Court declined NVE’s request, limiting its review
to the 133,000-page administrative record for the challenged
rule. However, pursuant to 28 U.S.C. § 1292(b), the District
Court certified these orders for interlocutory appeal and
identified four questions of law for our review:
1. May the party challenging
the rule supplement the
administrative record?
2. May the party challenging
the rule present expert
affidavits and/or testimony?
3. May the reviewing court
conduct a trial or is its
review limited to a review
3
of the administrative
record?
4. May the party challenging
the rule conduct discovery?
Because we conclude that the de novo standard of 21 U.S.C. §
342(f)(1) does not apply to a private action brought under the
APA to challenge administrative rulemaking, we will answer
the first, second, and fourth questions posed by the District
Court in the negative and conclude with respect to the third
question the District Court’s review is limited to the
administrative record.
We also address the District Court’s ruling that it owed
no deference in this case to the FDA’s legal or factual
conclusions. Though this issue was not one of the questions of
law certified to us by the District Court, it was a part of the
orders from which NVE appeals and is closely related to the
question of whether NVE may supplement the record. Under 28
U.S.C. § 1292(b), we are not limited to the specific questions of
law identified by the District Court when reviewing the orders
certified for appeal. Howard Hess Dental Labs. Inc. v.
Dentsply Int’l, Inc., 424 F.3d 363, 368-369 (3d Cir. 2005). We
therefore take up the question of deference here as part of our
review of the District Court’s orders of August 4, 2004 and
August 12, 2004 and conclude that the normal rules for judicial
deference regarding agency action apply in the instant suit.
I.
4
We begin with a discussion of the regulatory scheme at
issue. The FDCA prohibits “[t]he introduction or delivery for
introduction into interstate commerce of any food . . . that is
adulterated.” 21 U.S.C. § 331(a). The United States enforces
this provision through suits for injunctive relief, id. § 332, fines
or imprisonment, id. § 333, or seizure of the adulterated food,
id. § 334. It is well-established that the government bears the
burden of proving that a food is adulterated in enforcement
actions brought directly under the FDCA. See United States v.
Two Plastic Drums, More or Less of an Article of Food . . ., 984
F.2d 814, 816 (7th Cir. 1993) (noting that the FDA has the
burden of showing that food is injurious to health).
The FDCA also grants to the Secretary of Health and
Human Services broad power “to promulgate regulations for the
efficient enforcement of th[e] Act.” 21 U.S.C. § 371(a). This
provision authorizes the Secretary to issue substantive
regulations, interpretive regulations, and statements of policy.
Pharmaceutical Mfrs. Ass'n v. FDA, 484 F. Supp. 1179, 1182
(D. Del. 1980). Because courts owe deference to an agency’s
interpretation of the statute and regulations it administers,
Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467
U.S. 837, 842-43 (1984), regulations validly promulgated under
the FDCA normally have the force of law in enforcement
proceedings, United States v. Mead Corp., 533 U.S. 218, 227
(2001). See also United States v. Algon Chem. Inc., 879 F.2d
1154, 1159 (3d Cir. 1989) (deferring to FDA regulations in
enforcement proceedings under the FDCA). Thus, where the
FDA determines through rulemaking that a food is adulterated,
the introduction of that food into interstate commerce violates
the FDCA unless the rule is “procedurally defective, arbitrary
5
or capricious in substance, or manifestly contrary to the statute.”
Mead Corp., 533 U.S. at 227; see also United States v.
Undetermined Quantities of Various Articles of Device . . . , 800
F. Supp. 499, 502 (S.D. Tex. 1992) (determining, based on
FDA regulations, that medical device was adulterated and
misbranded under FDCA).
Congress passed DSHEA after a long-running dispute
with the FDA about how strictly dietary supplements should be
regulated. Members of Congress believed the FDA had
“pursued a heavy-handed enforcement agenda against dietary
supplements for over 30 years” prior to DSHEA’s enactment.
S. Rep. 103-410, at 15 (1994). Both Congress and the courts
consistently resisted the FDA’s regulation of dietary
supplements, yet the FDA continued its course. Id. at 16-17.
Senator Orrin Hatch summarized the attitudes of many in
Congress in 1994 when he stated that, with respect to dietary
supplements, “[i]t is the U.S. Congress versus the Food and
Drug Administration.” 140 Cong. Rec. S11708, 11711 (1994);
see also 140 Cong. Rec. S14780-01 (1994) (statement of Sen.
Harkin) (criticizing the FDA for restricting access to
information about dietary supplements). In response to what it
perceived as an “inappropriate regulatory strategy,” S. Rep.
103-410, at 22, Congress passed DSHEA in October 1994 with
strong bipartisan support.
DSHEA changed very little about the basic
administrative tools available to the FDA for the regulation of
dietary supplements. The Agency could still regulate dietary
supplements through enforcement actions or rulemaking.
However, DSHEA provided substantive and procedural limits
6
on the FDA’s ability to restrict the use of dietary supplements.
DSHEA identified the limited alternative conditions under
which a dietary supplement or food containing a dietary
supplement could be deemed adulterated. First, a dietary
supplement is adulterated if it poses a significant or
unreasonable risk of illness or injury. 21 U.S.C. § 342(f)(1)(A).
Second, a dietary supplement is deemed adulterated if it is a
new dietary ingredient for which there is inadequate
information to establish that it does not pose a significant or
unreasonable risk. Id. § 342(f)(1)(B). Third, the Secretary may
declare that a dietary supplement is adulterated if it poses an
imminent hazard to public health or safety, provided that the
Secretary promptly initiates formal adjudication to affirm or
withdraw the declaration. Id. § 342(f)(1)(C). Finally, a dietary
supplement is deemed adulterated if it is poisonous or
unsanitary. Id. § 342(f)(1)(D).1
1
Paragraph 342(f)(1) provides, in full, that a food is deemed
adulterated:
(f)(1) If it is a dietary supplement
or contains a dietary ingredient
that--
(A) presents a significant or
unreasonable risk of illness
or injury under--
(i) conditions of use
re c o m m e n d e d o r
suggested in
labeling, or
7
(ii) if no conditions
of use are suggested
or recommended in
the labeling, under
ordinary conditions
of use;
(B) is a new dietary
ingredient for which there is
inadequate information to
provide reasonable
assurance that such
ingredient does not present a
significant or unreasonable
risk of illness or injury;
(C) the Secretary declares to
pose an imminent hazard to
public health or safety,
except that the authority to
make such declaration shall
not be delegated and the
Secretary shall promptly
after such a declaration
initiate a proceeding in
accordance with sections
554 and 556 of Title 5 to
affirm or withdraw the
declaration; or
(D) is or contains a dietary
ingredient that renders it
8
In addition to providing substantive limits on the
circumstances under which dietary supplements may be
considered adulterated, Congress imposed new procedural
checks on the FDA’s ability to regulate dietary supplements
through the courts. After listing the ways in which a dietary
supplement can be deemed adulterated, the provision states:
In any proceeding under this
subparagraph, the United States
shall bear the burden of proof on
each element to show that a dietary
supplement is adulterated. The
court shall decide any issue under
this paragraph on a de novo basis.
Id. § 342(f)(1) (emphasis added). Congress intended that these
provisions would protect against “unreasonable regulatory
barriers” limiting the flow of safe dietary supplements to
consumers. DSHEA § 2(13) (codified in note to 21 U.S.C. §
321(ff)).
Beginning in 1997, the FDA began to consider
adulterated under paragraph
(a)(1) under the conditions
of use recommended or
suggested in the labeling of
such dietary supplement.
21 U.S.C. § 342(f)(1).
9
regulatory action with respect to certain products containing
EDS. The FDA chose to regulate EDS through administrative
rulemaking rather than through enforcement actions brought
directly under the FDCA. The FDA proposed several
alternatives, including regulation of items containing certain
threshold amounts of EDS, limitations on the duration of use
and daily uses of EDS, labeling requirements on products
containing EDS, and prohibition of mixing certain ingredients
with EDS. See Dietary Supplements Containing Ephedrine
Alkaloids, 62 Fed. Reg. 30678, 30692-30705 (proposed June 4,
1997) (to be codified at 21 C.F.R. pt. 111). In 2000, the FDA
withdrew most of these proposals and ceased activity aimed at
regulatory action in the face of a negative public response and
questions about the sufficiency of evidence that EDS was
unsafe. 65 Fed. Reg. 17474 (April 3, 2000).
In 2002, the FDA received a report from the RAND
Corporation calling for more study of the safety of EDS. The
next year, the FDA reopened the comment period on the 1997
proposed rule in light of “new scientific evidence” about the
effects of EDS on health. 68 Fed. Reg. 10417 (March 3, 2005).
The FDA compiled an administrative record consisting of more
than 48,000 comments and 133,000 pages. See Final Rule
Declaring Dietary Supplements Containing Ephedrine
Alkaloids Adulterated Because They Present an Unreasonable
Risk, 69 Fed. Reg. 6788, 6792 (Feb. 11, 2004) (to be codified
at 21 C.F.R. pt. 119). Based on “the well-known pharmacology
of ephedrine alkaloids, the peer-reviewed scientific literature on
the effects of ephedrine alkaloids, and the adverse events
reported to have occurred in individuals following consumption
of dietary supplements containing ephedrine alkaloids,” id. at
10
6788, the FDA issued a final rule (the “EDS Rule”) declaring
that all dietary supplements containing EDS “present an
unreasonable risk of illness or injury” and were therefore
adulterated under the FDCA. 21 C.F.R. § 119.1.
NVE brought suit in March 2004 to enjoin the
enforcement of the rule. It claimed that the FDA violated the
Administrative Procedure Act (“APA”) by: (1) acting
arbitrarily, capriciously, and contrary to law, in violation of 5
U.S.C. § 706(2)(A); (2) exceeding its statutory authority, in
violation of 5 U.S.C. § 706(2)(C); (3) acting in a manner that is
unwarranted by the facts, in violation of 5 U.S.C. § 706(2)(F);
and (4) failing to give proper notice of the FDA’s intended
actions, in violation of 5 U.S.C. § 553 and § 706(2)(D). NVE
also claimed that the FDA violated its right to due process
under the Fifth Amendment by failing to give NVE a reasonable
opportunity to comment on the substance of the rule.
NVE contended that the de novo provision of § 342(f)(1)
should apply to its suit such that the District Court must decide
the issues NVE raised on a “de novo basis.” 21 U.S.C. §
342(f)(1). NVE argued that under this standard the District
Court should resolve all legal and factual issues anew,
independent of any findings that the FDA made during its
rulemaking. NVE claimed that a true de novo review gives the
District Court the power to consider evidence outside of the
administrative record. Consequently, NVE sought to submit
evidence, such as expert testimony and affidavits, to aid the
District Court in determining whether all dietary supplements
containing EDS are adulterated, as the EDS Rule declared.
NVE also sought to conduct discovery to the same extent as in
11
any other civil case proceeding under the Federal Rules of Civil
Procedure.
The District Court requested that the parties submit briefs
and present oral argument as to the proper standard of review
and whether the parties were entitled to discovery. In an
opinion and order dated August 4, 2004, subsequently clarified
by an August 12, 2004 order, the District Court held that the
case was brought under the APA and the APA therefore
governed the scope of review. Because parties are typically not
permitted to supplement the administrative record or engage in
discovery in APA cases challenging rulemaking, the District
Court ruled that the parties could neither supplement the record
nor conduct discovery. However, the District Court also held
that the de novo provision of DSHEA required that it give no
deference to the FDA’s factual and legal conclusions; rather, it
could decide the issues anew. At NVE’s request, the District
Court certified its August 4, 2004 and August 12, 2004 orders
for immediate appeal under 28 U.S.C. § 1292(b) and identified
four controlling questions of law for our review. We granted
NVE’s Petition for Permission to Appeal on November 1, 2004.
II.
Before we conduct our analysis of the questions the
District Court certified for review,2 we must examine the nature
2
As stated above, the four questions submitted to this Court
for review are:
12
of the suit brought by NVE in the District Court. NVE’s claims
are brought under the APA. DSHEA does not provide a private
cause of action, nor does it contain a waiver of sovereign
immunity that would permit NVE to sue a federal agency. The
only cause of action that NVE can maintain in order to
challenge the EDS Rule arises under the APA, which provides
both a waiver of sovereign immunity and a right of judicial
review for any “person suffering legal wrong because of agency
action.” 5 U.S.C. § 702. NVE’s complaint identifies the APA
as the source of its claims, and NVE has not contended before
this Court that it has a cause of action directly under DSHEA.
Consequently, we agree with the District Court that the APA,
not DSHEA, provides the mechanism for NVE’s challenge of
the EDS Rule. Because NVE’s suit arises under the APA, the
1. May the party challenging
the rule supplement the
administrative record?
2. May the party challenging
the rule present expert
affidavits and/or testimony?
3. May the reviewing court
conduct a trial or is its
review limited to a review
of the administrative record?
4. May the party challenging
the rule conduct discovery?
13
District Court must apply the APA’s standards for scope of
review and discovery, unless we conclude that Congress
intended somehow to override the APA’s standards when it
enacted DSHEA and provided for de novo judicial review as to
issues thereunder. We believe that the determination of the
appropriate standard – whether under the APA or DSHEA –
will dictate the answers to the questions posed to us.
III.
A.
Of the four questions certified to us for review, the first
three comprise a single inquiry into whether NVE may
supplement the administrative record. In a challenge to
administrative action under the APA, the administrative record
cannot normally be supplemented. See Camp v. Pitts, 411 U.S.
138, 142 (1973) (“In applying [the arbitrary and capricious]
standard, the focal point for judicial review should be the
administrative record already in existence, not some new record
made initially in the reviewing court.”); Horizons Int’l, Inc. v.
Baldrige, 811 F.2d 154, 162 (3d Cir. 1987) (describing review
of the existing administrative record as one of “the traditional
limits of judicial review applied under section 10 of the APA”).
The APA explicitly directs a reviewing court to “review the
whole record or those parts of it cited by a party.” 5 U.S.C. §
706.
Only one provision of the APA permits a reviewing court
to look beyond the administrative record. Under 5 U.S.C. §
706(2)(F), a court may conduct a trial de novo to determine if
14
administrative action is “unwarranted by the facts.” NVE
alleged in its complaint that this provision applies here. The
Supreme Court, however, has limited “trial de novo” review
under the APA to two situations: (1) “when the action is
adjudicatory in nature and the agency factfinding procedures are
inadequate,” and (2) “when issues that were not before the
agency are raised in a proceeding to enforce nonadjudicatory
agency action.” Citizens to Preserve Overton Park, Inc. v.
Volpe, 401 U.S. 402, 415 (1971). Neither of these situations
exists in the instant case. NVE is challenging rulemaking, not
adjudicative actions, and the FDA considered the issues raised
in this suit during the administrative proceedings. Therefore,
the scope of review standards contained in the APA would limit
the District Court’s review to the administrative record.
Congress may override the APA’s rule that judicial
review of administrative action is limited to the administrative
record. See United States v. Carlo Bianchi & Co., Inc., 373
U.S. 709, 715 (1963) (noting that Congress can “set[] forth the
standards to be used or the procedures to be followed” during
a court’s review of the record); Upjohn Mfg. Co. v. Schweiker,
681 F.2d 480, 483 (6th Cir. 1982) (“When de novo review of
agency action is not expressly required by statute, it is the
exception rather than the rule.” (emphasis added)). NVE argues
that this is precisely what Congress did by including in DSHEA
a provision requiring courts to “decide any issue under this
paragraph on a de novo basis.” 21 U.S.C. § 342(f)(1). We
disagree and conclude that Congress did not intend reviewing
courts to conduct de novo review in private-party challenges to
FDA rulemaking under DSHEA.
15
B.
A challenge to administrative action under the APA
raises a unique set of issues. Judicial review in such suits
focuses on the agency’s decision making process, not on the
decision itself. “[A] court is not to substitute its judgment for
that of the agency” in an APA challenge. Motor Vehicle Mfrs.
Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983). Rather, it must ensure only that
the agency has applied the procedures for rulemaking required
by law and reached a rational conclusion.
In the instant case, NVE claimed that the defendants
acted arbitrarily and capriciously, contrary to law, in excess of
their statutory jurisdiction, and without adequate notice of, or
opportunity to comment on, the proposed rule. Each of these
claims under the APA is distinct from any substantive inquiry
into whether dietary supplements containing EDS are actually
adulterated under the FDCA.
The arbitrary and capricious standard focuses a court on
the agency’s process of reasoning. To determine whether an
agency acted arbitrarily and capriciously, a court looks to
whether the agency relied on factors outside those Congress
intended for consideration, completely failed to consider an
important aspect of the problem, or provided an explanation that
is contrary to, or implausible in light of, the evidence. Motor
Vehicle Mfrs. Ass’n, 463 U.S. at 43. Reversal is appropriate
only where the administrative action is irrational or not based on
relevant factors. Pennsylvania Dep’t of Pub. Welfare v. United
States Dep’t of Health and Human Servs., 101 F.3d 939, 943
16
(3d Cir. 1996).
Likewise, in evaluating whether the FDA exceeded its
statutory jurisdiction by promulgating the EDS Rule, a court
must consider the scope of authority Congress granted to the
Agency, in this case under 21 U.S.C. § 371(a), and compare it
with the claimed excessive action. Wilkinson v. Abrams, 627
F.2d 650, 660 (3d Cir. 1980); Western Union Tel. Co. v. FCC,
541 F.2d 346, 354 (3d Cir. 1976). “What is important is that
the reviewing court reasonably be able to conclude that the
grant of authority contemplates the regulations issued.”
Chrysler Corp. v. Brown, 441 U.S. 281, 308 (1979). This
review “is so basic that it rarely arises . . . as a meaningful
challenge to agency action.” 33 Charles Alan Wright & Charles
H. Koch, Jr., Federal Practice and Procedure § 8381, p.335
(2006).
With respect to NVE’s claim that the FDA failed to
provide adequate public notice of its contemplated action, the
District Court “must determine whether the notice given was
sufficient to fairly apprise interested parties of all significant
subjects and issues involved.” Am. Iron & Steel Inst. v. EPA,
568 F.2d 284, 291 (3d Cir. 1977) (internal quotation marks
omitted). It will concentrate on whether that notice provided
either “the terms or substance of the proposed rule” or “a
description of the subjects and issues involved,” 5 U.S.C. §
553(b)(3), and whether interested parties had the opportunity to
participate in the rulemaking process, Fertilizer Inst. v.
Browner, 163 F.3d 774, 779 (3d Cir. 1998). In considering
whether the notice was deficient because the final rule differed
from the proposed rule, a reviewing court asks whether the final
17
rule was a logical outgrowth of the rulemaking proposal and
record. Aeronautical Radio, Inc. v. FCC, 928 F.2d 428,
445-446 (D.C. Cir. 1991); United Steelworkers of Am. v.
Pendergrass, 855 F.2d 108, 114 (3d Cir. 1988). The District
Court will follow this same analysis in determining whether the
FDA violated NVE’s due process right to comment on the rule.
See Vermont Yankee Nuclear Power Corp. v. Natural Res. Def.
Council, Inc., 435 U.S. 519, 524-25 (1979) (holding that where
rulemaking fulfills basic APA standards for notice and
procedure, a court will not impose additional process).
Thus, in this case the District Court should concern itself
solely with whether the challenged administrative action
followed the procedures for legitimate rulemaking. Nothing
about DSHEA indicates that Congress intended the courts to
consider on a de novo basis issues concerning the process of the
agency’s reasoning or the notice it provided to the public. To
the contrary, Congress was clear that DSHEA’s de novo
standard applies only when a court is deciding an “issue under
this paragraph.” Used in this context, “this paragraph” refers to
21 U.S.C. § 342(f)(1). See Koons Buick Pontiac GMC, Inc. v.
Nigh, 543 U.S. 50, 125 S. Ct. 460, 467 (2004) (describing the
hierarchical scheme for subdividing statutory sections).
Paragraph 342(f)(1) defines the conditions under which a
dietary supplement may be deemed adulterated. An issue
therefore arises under that paragraph only if it is probative of
the question of whether a dietary supplement qualifies as an
adulterated food. As discussed above, a dietary supplement
may be deemed adulterated under DSHEA when one of four
conditions is satisfied. See 21 U.S.C. §§ 342(f)(1)(A)-(D).
Consequently, by its own terms, application of the de novo
18
provision is limited to judicial inquiries aimed at establishing
the presence or absence of one of these conditions of
adulteration. In the instant case, the District Court must not
consider whether the FDA’s determination that EDS is
adulterated was correct, but rather if its action in rulemaking
was arbitrary, capricious, contrary to law, in excess of the
FDA’s statutory jurisdiction, or preceded by inadequate notice.
Congress did not state any intention that rulemaking was to be
reviewed on a de novo basis. Indeed, as noted below, there is
no mention in DSHEA of “review” of agency action.
There are other clues in the text of DSHEA that reinforce
this conclusion. The de novo provision immediately follows the
sentence stating that “the United States shall bear the burden of
proof on each element to show that a dietary supplement is
adulterated.” 21 U.S.C. § 342(f)(1). The fact that the United
States bears the burden of proof is significant for determining
the type of “proceedings” to which Congress was referring in
this context. It is the United States – not the FDA, its
Commissioner, the Department of Health and Human Services,
or its Secretary – that is the named party in enforcement actions.
See 21 U.S.C. § 337(a) (“[A]ll such proceedings for the
enforcement, or to restrain violations, of this chapter shall be by
and in the name of the United States.”) By contrast, private
parties challenging agency rulemaking generally name as a
defendant the agency or administrative officials responsible for
the regulation, not the United States. See 5 U.S.C. § 702(requiring any mandatory or injunctive decree under the APA
to “specify the Federal officers or officers (by name or by title),
and their successors in office, personally responsible for
compliance”); 11B Am. Jur. Pl. & Pr. Forms Fed. Pract. & Proc.
19
§ 1364 (2005) (providing form of complaint under APA in
which agency and agency officers, but not United States, are
named defendants); 8 Fed. Proc. Forms § 21:18 (2005) (same);
10B Fed. Proc. Forms § 37:41 (2005) (same).3 This strongly
suggests that the “proceedings” in which the United States has
the burden of proof under § 342(f)(1), and as to which the de
novo standard is to apply, are enforcement proceedings brought
by the United States to enforce DSHEA.
This view is bolstered by the fact that Congress made
another provision of subsection 342(f) specifically apply to the
Secretary of Health and Human Services. In § 342(f)(2),
Congress distinguished between the Secretary and the United
States attorneys, to whom the Secretary reports violations of §
342(1)(A), indicating that Congress did not use the terms “the
3
While it is common practice to name the agency or officers
as defendants in APA actions, a plaintiff may name the United
States directly. See 5 U.S.C. § 703 (“If no special statutory
review proceeding is applicable, the action for judicial review
may be brought against the United States, the agency by its
official title, or the appropriate officer.”) (emphasis added). We
believe, however, that the fact Congress limited § 342(f)(1) to
proceedings in which the United States is a party – rather than
the “United States, the agency by its official title, or the
appropriate officer,” id. – indicates that it was referring to
enforcement proceedings. Had Congress intended § 342(f)(1)
to apply to private suits under the APA, it would have used
broader language specifying that federal agencies or
administrative officers would also bear the burden of proof.
20
Secretary” and “the United States” interchangeably in DSHEA.
Had Congress intended the burden of proof provision to apply
to APA actions as well as enforcement actions, it would have
indicated that the provision applied to proceedings to which the
Secretary was a party as well.
In light of our view that the United States bears the
burden of proof only in enforcement actions, the most natural
reading of the de novo provision – which immediately follows
the burden of proof provision – is that it applies to the same
“proceedings” in which the United States bears the burden of
proof. See Koons Buick Pontiac GMC, 125 S. Ct. at 467(noting that ambiguity can often be resolved by reference to
“‘the remainder of the statutory scheme’” (quoting United Sav.
Assn. of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484
U.S. 365, 371 (1988))); Deal v. United States, 508 U.S. 129,
132 (1993) (“[T]he meaning of a word cannot be determined in
isolation, but must be drawn from the context in which it is
used.”). Thus, application of the de novo standard, like the
burden of proof provision, is limited to enforcement actions
brought by the United States.
We also note that DSHEA’s de novo provision instructs
courts to decide “issues” under § 342(f)(1) “on a de novo
basis,” rather than to conduct “de novo review.” This
distinction is highly significant given that a court’s function in
an APA suit is always to review administrative action. See 5
U.S.C. § 702 (“A person suffering legal wrong because of
agency action . . . is entitled to judicial review thereof.”); id. §
706 (defining standards under which a “reviewing court” may
“set aside agency action, findings, and conclusions”). By
21
contrast, in an enforcement action under § 342(f)(1), a court’s
role is not to review an underlying administrative action, but
rather to decide in the first instance whether a dietary
supplement is adulterated. This choice of language in the de
novo provision further suggests that the de novo standard does
not apply in APA suits for judicial review of agency action.
NVE contends that differences between a draft of
DSHEA passed by the Senate and the final bill suggest that
Congress intended the de novo provision to apply to private
challenges to rulemaking.4 The version of DSHEA first passed
4
DSHEA’s chief sponsors stated their intent that a joint
Statement of Agreement would comprise the entire legislative
history for DSHEA and that “no other reports or statement be
considered as legislative history for the bill.” 140 Cong. Rec.
H11173, 11179 (1994); 140 Cong. Rec. S14798, 14801 (1994).
The effect of such a disclaimer, even by the bill’s sponsors, is
debatable. Compare Neutraceutical Corp. v. Crawford, 364 F.
Supp. 2d 1310, 1319 (D. Utah 2005) (citing legislative history
not included in the Statement of Agreement), with Whitaker v.
Thompson, 239 F. Supp. 2d 43, 51 (D.D.C. 2003) (limiting its
analysis of the legislative history to the Statement of Agreement)
and United States v. Ten Cartons, More or Less, of an Article .
. ., 888 F. Supp. 381, 395 (E.D.N.Y 1995) (holding it could not
rely on a Senate Report that the Statement of Agreement
excluded from the legislative history). We withhold judgment
about the overall effectiveness of this disclaimer, see
Pharmanex v. Shalala, 221 F.3d 1151, 1158 (10th Cir. 2000)
(refusing to rule “on the legitimacy or effectiveness of such a
22
by the Senate would have required the Secretary to promulgate
regulations in order to declare that a dietary supplement posed
an “unreasonable risk of illness or injury.” The Senate draft did
not include a provision that required courts to decide issues on
a de novo basis.5 In the final version of the bill, the FDA could
disclaimer”), but assume that, despite the Statement of
Agreement, previous drafts of DSHEA are indicative of
congressional intent, see United States v. Ten Cartons, More or
Less, of an Article . . . , 72 F.3d 285, 286 (2d Cir. 1995) (relying
on previous version of DSHEA to interpret the enacted statute).
5
The Senate draft of the DSHEA read, in pertinent part:
(f) [A food shall be deemed to be
adulterated i]f it is a dietary
supplement that-
(1) the Secretary finds, after
rulemaking, presents a
substantial and unreasonable
risk of illness or injury
under conditions of use
recommended or suggested
in labeling;
(2) the Secretary declares to
pose an imminent and
substantial hazard to public
health or safety, except that
the authority to make such
23
employ the “unreasonable risk” standard in both rulemaking
and enforcement actions. See 21 U.S.C. § 342(f)(1)(A); id. §
342(f)(2). Along with this change, Congress added the de novo
standard for judicial decision of “any issue under this
paragraph.”
declaration shall not be
delegated and the Secretary
shall promptly thereafter
convene rulemaking
pursuant to section 701(e),
(f), and (g) to affirm or
withdraw the declaration; or
(3) is or contains a dietary
ingredient that renders it
adulterated under paragraph
(a)(1) under the conditions
of use recommended or
suggested in the labeling of
such dietary supplement.
In any proceeding under this
section, the United States bears the
burden of proof on each element to
show that a dietary supplement is
adulterated.
DSHEA § 4, 140 Cong. Rec. S11708, 11713 (as passed by
Senate Aug. 13, 1994) (emphasis added).
24
NVE argues that the changes from one legislative draft
to the next demonstrate that the concept of rulemaking was
clearly in the forefront of Congress’s mind, and if it had wanted
to exempt rulemaking from the de novo standard, it would have
done so explicitly. NVE argues that because Congress did not
trust the FDA, see 140 Cong. Rec. S11708, 11711 (1994)
(statement of Sen. Hatch) (“It is the U.S. Congress versus the
Food and Drug Administration.”), it did not intend to make
such an exception.
NVE’s argument is unpersuasive for two reasons. First,
we disagree with its reading of the legislative history. The de
novo provision was added at the same time as Congress
broadened the FDA’s civil enforcement power under §
342(f)(1), suggesting that it was coupled with this additional
power, and not the FDA’s rulemaking authority. If Congress
had intended the de novo standard to apply to judicial review of
rulemaking, one might well have expected to find it along with
the rulemaking language in the Senate’s draft of the bill as well
as the final version. Thus, we believe that the legislative history
NVE cites could just as easily be interpreted as supporting our
view that Congress intended DSHEA to require courts to apply
the de novo standard only in enforcement actions.
NVE’s argument is also unconvincing because it turns on
its head the presumption that traditional APA standards should
apply in APA suits. See Carlo Bianchi & Co., Inc., 373 U.S. at
715. Overriding the normal rules for judicial review of
administrative rulemaking would be a significant step for
Congress to take, and one that we would not lightly read into a
statute. Had Congress intended to supplant the well-established
25
procedures for APA challenges, it would have been clearer
about its objective. NVE would have us conclude that the de
novo provision applies to judicial review of rulemaking because
Congress contemplated that the FDA would promulgate
regulations under DSHEA and historically distrusted the FDA
to regulate dietary supplements. These factors, however, do not
convince us that Congress intended to overcome the
presumption that APA standards apply in APA suits when it
enacted DSHEA. Given that the text and drafting history of
DSHEA indicates the de novo standard applies only to
enforcement actions, we hold that the de novo provision of §
342(f)(1) has no application in a private-party challenge to
rulemaking.
Finally, NVE has argued that our holding today will
open a gaping loophole that eviscerates DSHEA’s de novo
provision. It contends that the FDA can simply avoid de novo
judicial review by issuing regulations on dietary supplements
instead of bringing individual enforcement actions. While we
do not downplay the significance of this allegation, we cannot
legislate to correct it, if that is in fact what is occurring here. If
Congress perceives the agency’s action to be an end-run around
the standard it legislated for enforcement actions, surely it can
amend DSHEA or the APA to remedy the situation.
Furthermore, nothing we hold here does away with the
congressional command in the text of § 342(f)(1) regarding de
novo determination of issues in enforcement proceedings. It is
only through enforcement proceedings that the EDS Rule, or
any other regulation promulgated under DSHEA, is given
effect. The de novo standard will apply when the FDA brings
an enforcement action and a court is faced with the issue of
26
whether a specific supplement is adulterated. Thus, the de novo
standard remains available when it matters most: when the
United States singles out an individual or entity for violating the
FDCA and seeks injunctive relief, seizure, or civil or criminal
penalties.6
Because we conclude that the de novo standard does not
apply in suits brought under the APA, we must answer the first
three questions posed to us in the negative and hold that the
District Court’s review must be limited to the administrative
record before the FDA.
IV.
NVE claims that, even if it cannot supplement the record,
the de novo provision authorizes it to conduct discovery in
order to determine what evidence the FDA considered in
reaching its decision. NVE also seeks discovery to determine
6
Because we hold that the de novo provision does not apply
to APA suits, we leave for another day the question of how
precisely the de novo provision will operate in enforcement
actions given the existence of an applicable regulation. See,
e.g., Stephen H. McNamara et al., DSHEA Provisions Confine
FDA’s Authority to Issue Regulations That Concern Allegedly
Adulterated Dietary Supplements, 54 Food Drug L.J. 595, 597
(1999) (arguing that regulations promulgated under DSHEA do
not have the force of law in enforcement proceedings like other
regulations properly promulgated by agencies). This issue is not
before us, and our holding today does not encompass it.
27
whether the administrative record is complete. Again, if NVE
has the right to conduct discovery, it must derive this right from
the APA, not DSHEA.
There are no grounds in the APA to permit discovery in
this case. As we have noted in the past, “[i]t has long been
recognized that attempts to probe the thought and decision
making processes of judges and administrators are generally
improper.” Grant v. Shalala, 989 F.2d 1332, 1344 (3d Cir.
1993). There is a strong presumption against discovery into
administrative proceedings born out of the objective of
preserving the integrity and independence of the administrative
process. We have carved out an exception to this rule only in
cases involving alleged bias on the part of an agency. See id.(discussing the holding of Hummel v. Heckler, 736 F.2d 91 (3d
Cir. 1984), which permits discovery on the issue of an ALJ’s
bias).
NVE alleges no such bias here, but nevertheless
questions whether the 133,000-page administrative record is
complete. FDA rules establish the contents of the
administrative record for any promulgation of regulations, 21
C.F.R. § 10.40(g), and the administrative record is intended to
be the sole basis for the Agency’s decision, 21 C.F.R. §
10.45(f). NVE supports its call for discovery with nothing more
than speculation that the FDA may not have produced the full
record. In the absence of even a hint of evidence that the FDA
failed to follow its own procedures for compiling the record, we
will not permit discovery. To do so would undermine the
presumption against discovery into administrative proceedings.
28
NVE cites for support Dopico v. Goldschmidt, 687 F.2d
644 (2d Cir. 1982). In that case, the Court of Appeals for the
Second Circuit ordered discovery to determine whether an
agency had submitted the full administrative record. However,
Dopico differed from the instant case in two important respects.
There, the plaintiffs were not challenging agency rulemaking,
but rather an agency’s decision to grant federal money to local
transit authorities. Furthermore, the agency in that case
submitted an administrative record that lacked the fundamental
documents that would have formed the very basis for the
agency’s decisions about mass transit grants. Under these
circumstances, the Court believed that discovery was
appropriate. Id. at 654. NVE has not demonstrated the
presence of any comparable factors in this case.
NVE’s reliance on Exxon Corporation v. Department of
Energy, 91 F.R.D. 26 (N.D. Tex. 1981), is similarly misplaced.
That court was faced with a 126-page record that was
incomplete on its face. Id. at 34. We agree with NVE that the
size of the record alone is not dispositive of the question of
whether discovery is appropriate. Nevertheless, the size of the
record is certainly a factor that a court should consider in
deciding whether to take the unusual step of permitting invasive
discovery into administrative decision-making. NVE has
pointed to nothing about the administrative record here that
suggests it is incomplete. Given the breadth of the record
submitted and the clarity of the FDA’s own regulations
regarding the content of the record, we agree with the District
Court’s decision not to permit discovery.
V.
29
Finally, we address the District Court’s ruling that the
FDA’s factual determinations and legal conclusions are not
entitled to deference in the instant suit. Though the District
Court did not identify this issue as one of the four questions of
law that we should address, our review in a § 1292(b) appeal is
not limited to the specific questions certified by the District
Court. Howard Hess Dental Labs., 424 F.3d at 368. Rather,
we may address “any issue fairly included within the certified
order because it is the order that is appealable, and not the
controlling question[s] identified by the [D]istrict [C]ourt.”
Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 205
(1996) (emphasis in original) (internal quotation marks
omitted); see also 16 Charles Alan Wright et al., Federal
Practice and Procedure § 3929, p. 388 (2d ed. 1996) (“The
court may . . . consider any question reasonably bound up with
the certified order, whether it is antecedent to, broader or
narrower than, or different from the question specified by the
district court.”). Since the issue of what deference the District
Court owes the FDA is unquestionably a component of the
orders certified to us, we have authority to resolve it in this
appeal.
The sole basis for the District Court’s holding that it
owed no deference to the legal and factual determinations the
FDA made during rulemaking was its belief that the de novo
standard applied in the instant case. Our conclusion that the de
novo standard applies only in enforcement actions squarely
implicates this holding. Because DSHEA’s de novo standard is
inapplicable in an APA challenge to administrative rulemaking,
the normal rules for judicial deference regarding agency action
apply in the instant suit. See United States v. Mead
30
Corporation, 533 U.S. 218, 226-27 (2001) (holding that
administrative implementation of a particular statutory provision
qualifies for Chevron deference when Congress delegated
authority to agency “to make rules carrying the force of law”);
Southwestern Pennsylvania Growth Alliance v. Browner, 121
F.3d 106, 117 (3d Cir. 1997) (“A reviewing court ‘must
generally be at its most deferential’ when reviewing factual
determinations within an agency’s area of special expertise.”
(quoting New York v. EPA, 852 F.2d 574, 580 (D.C. Cir.
1988)). We therefore disagree with this aspect of the District
Court’s ruling in the August 4, 2004 order.
VI.
We hold that DSHEA’s de novo provision does not
apply to NVE’s challenge to the EDS Rule. Because the APA
limits judicial review of rulemaking to the administrative record
and does not permit discovery under the circumstances before
us, we will answer the first, second, and fourth questions posed
by the District Court in the negative and conclude with respect
to the third question the District Court’s review is limited to the
administrative record. In addition, we hold that the normal
rules for judicial deference apply to NVE’s challenge under the
APA. Having reviewed the orders certified to us, we now
remand the case to the District Court for further proceedings.
31