United States v. Oncology

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
7-21-1995
United States v Oncology
Precedential or Non-Precedential:
Docket 94-7741
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Recommended Citation
"United States v Oncology" (1995). 1995 Decisions. Paper 190.
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 94-7741
___________
UNITED STATES OF AMERICA,
Appellant
v.
ONCOLOGY SERVICES CORPORATION
___________
Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civ. No. 93-cv-00207)
___________
Submitted Under Third Circuit LAR 34.1(a)
June 26, 1995
Before: MANSMANN, GREENBERG and SAROKIN, Circuit Judges.
(Filed July 21, 1995)
___________
Frank W. Hunger, Esquire
David M. Barasch, Esquire
Barbara C. Biddle, Esquire
Katherine S. Gruenheck, Esquire
United States Department of Justice
Civil Division
10th & Pennsylvania Avenue, N.W.
Washington, DC 20530-0001
Charles E. Mullins, Esquire
United States Nuclear Regulatory Commission
Office of General Counsel
1717 H Street, N.W.
Washington, DC 20530
COUNSEL FOR APPELLANT
Jonathan P. Phillips, Esquire
10 Westwood Road
P.O. Box 1190
Pottsville, Pennsylvania 17901
1
COUNSEL FOR APPELLEE
2
_________
OPINION OF THE COURT
__________
MANSMANN, Circuit Judge.
The Nuclear Regulatory Commission appeals from the
dismissal of a petition for enforcement of its subpoena. The
district court held that the action was rendered moot for lack of
a justiciable case or controversy when the NRC closed its formal
investigation of Oncology Services Corporation, a nuclear
medicine licensee. Because an agency may seek information on
mere suspicion that there is a violation of the law, we will
vacate the order of the district court dismissing the petition
and remand for a determination of the enforceability of the
subpoena.
We are compelled to further comment on the standards
for enforcing the subpoena given the district court's intention
to conduct an in camera review of documents produced by Oncology
Services in redacted form to determine the reasonableness of the
redactions. The district court must enforce the subpoena so long
as the requested information is reasonably related to a
legitimate NRC inquiry or investigation. Thus, the purpose of
any in camera review, if one need be conducted, is to determine
whether the information sought is reasonably related to an
inquiry that the NRC is authorized to conduct, not whether the
redactions were reasonable.
3
I.
In December of 1992, the Office of Investigation of the
Nuclear Regulatory Commission1 conducted an incident
investigation regarding the November 21, 1992 death of a nursing
home patient who had received radiation therapy at an Oncology
Services' cancer treatment center. During that therapy, a
radioactive source was placed in the patient's abdominal catheter
but was not removed. The source of the radioactivity was
discovered nearly one week later after it was removed from the
patient and disposed of at a waste dump. The NRC's incident
investigation team concluded that weaknesses in the Oncology
Services radiation program were a contributing cause of the
patient's death and caused subsequent radiation exposure to
employees and the general public.
The NRC initiated a second investigation to determine
whether Oncology Services intentionally violated NRC regulations
during the period from June of 1990 to February 15, 1993. On
February 25 and 26, 1993, the NRC served seven identical
subpoenas, one to Oncology Services' headquarters in State
College, Pennsylvania and the remainder to Oncology Services'
treatment facilities located throughout Pennsylvania. The
subpoenas requested information regarding Oncology Services'
application to the NRC for its license, radiation safety training
procedures and policies, purchase and repair records for
radiation detection devices, training-related expense and travel
1
The Office of Investigation of the Nuclear Regulatory
Commission is referred to as the NRC.
4
vouchers, employment applications of certain personnel, and
business records related to Oncology Services' license. Oncology
Services provided documents responsive to the subpoenas but
objected to the production of other documents on grounds that
they were not relevant to the NRC investigation. Despite its
objections, Oncology Services produced additional documents in
late July of 1993.
On August 24, 1993, the NRC served a second subpoena to
Oncology Services' headquarters requesting the production of the
balance of the documents sought in the first subpoena. The NRC
sought information relating to Oncology Services' licensed
activities, training policies and radiation equipment. The
compliance date for the subpoena was September 13, 1993. By
letter dated September 16, 1993, Oncology Services objected to
requests for various categories of documents on grounds that the
information was irrelevant to the NRC investigation, outside of
the NRC's jurisdiction, unduly burdensome or had previously been
responded to by Oncology Services. Oncology Services, however,
never sought to quash the subpoena prior to the compliance date
although the procedure for doing so was noted on the subpoena.
Oncology Services produced redacted copies of the weekly activity
reports, and notes and minutes of regional administrator meetings
and medical director meetings. Oncology Services asserted that
the redacted information related to non-licensed matters and
therefore was not relevant to the NRC's investigation.
Oncology Services did not produce the balance of the
5
documents, causing the NRC to file a petition for summary
enforcement of its administrative subpoena, pursuant to 42 U.S.C.
§ 2281, on November 15, 1993. The district court initially
granted enforcement but subsequently vacated that order to give
Oncology Services time to brief the issue. On March 9, 1994, the
district court conducted an off-the-record hearing regarding the
disputed materials to determine the reasonableness of the
redactions. The court identified the disputed materials on the
record as: (1) weekly activity reports and minutes of regional
administrator and medical director meetings, (2) payroll
information, and (3) resumes and employment applications received
by Oncology Services. The district court ordered that the first
category of disputed materials be provided to the court for an in
camera review to determine the reasonableness of the redactions.
By letter dated May 11, 1994, the NRC informed the district court
that the parties had agreed to the production of the second and
third categories of documents and that the only remaining issue
pertained to the in camera review of the weekly activity reports
and the notes and minutes of regional administrator and medical
director meetings.
The NRC issued a Report of Investigation dated May 25,
1994 based on the documentary evidence then in its possession.
The Report indicated that the NRC "closed" its formal
investigation of Oncology Services subject to reopening upon the
district court's disposition as to disputed documents relating to
the investigation. By letter dated August 2, 1994 directed to
the district court, the NRC inquired as to the status of the in
6
camera review. By letter dated August 16, 1994, Oncology
Services notified the district court that the NRC's May 25 Report
of Investigation rendered the subpoena enforcement action moot
because there was no justiciable case or controversy.
The NRC responded by letter dated September 22, 1994,
asserting that the subpoena enforcement action was not moot
merely because the NRC had issued the Report based on the
documentary evidence then in its possession. Rather, the NRC
closed the investigation with the report "so as not to further
impede other administrative actions involving the same licensee."
2
The NRC noted that the Report left open the potential for
further inquiry stemming from the documents pending before the
district court at the time the Report was issued. In this regard
the NRC highlighted the testimony of Gerard F. Kenna, the NRC
investigator whose deposition was taken in connection with the
license suspension hearing, who testified:
Q: How long was the ... investigation?
A: From December of '92 ... until May of '94.
Q: Is it now closed?
A: Status is closed.
Q: Does that mean its closed?
A: There are some open matters that are listed in the
report.
Q: Okay, what are the open matters?
A: There's some... matters before a District Court to
be resolved, and the judge, to my knowledge has
not ruled on those matters.
2
The report was prepared in anticipation of the
administrative hearing on Oncology Services' license suspension
before the NRC's Atomic Safety and Licensing Board. Additionally,
there were two relevant related administrative actions involving
the same Oncology Services' materials license: In the Matter of
Oncology Services Corp., No. 030-31765-EA and In the Matter of
Indiana Regional Cancer Center, No. 030-30485-EA, both of which
were subsequently settled.
7
(June 28, 1994 Deposition of Gerard F. Kenna at 57-58). The NRC
still sought to review the disputed documents to assess their
relevancy to the allegations supporting the investigation. If
the NRC discovered new information from the review that bore on
those allegations, the NRC was authorized to reopen the
investigation.
The district court treated the August 16, 1994 letter
from Oncology Services as a motion to dismiss the subpoena
enforcement action as moot and the September 22, 1994 letter from
the NRC as the NRC's opposition to the motion. The district
court determined that the subpoena enforcement action was
rendered moot given that there was no current controversy between
the parties as a result of the NRC's May 25, 1994 Report of
Investigation, which closed the formal investigation of Oncology
Services. Despite the NRC's contention that it may reopen its
investigation if such action is warranted after reviewing the
documents at issue in the subpoena enforcement action, the
district court concluded that its resolution of the enforcement
action would serve to incite or initiate litigation rather than
bring closure. Thus, the district court concluded there was no
controversy remaining between the parties and dismissed the NRC's
petition as moot.
The NRC appeals the district court's dismissal of the
petition for enforcement as moot and its failure to grant summary
enforcement of the subpoena absent a claim of privilege or a
showing that the documents were irrelevant to any NRC
investigation. The district court had jurisdiction pursuant to
8
42 U.S.C. § 2281 and 28 U.S.C. §§ 1331 and 1345. We have
jurisdiction over this appeal based on 28 U.S.C. § 1291. Our
standard of review in this matter is plenary. Dole v. Trinity
Industries, Inc., 904 F.2d 867, 870 (3d Cir.), cert. denied, 498
U.S. 998 (1990).
II.
It is not necessary for the NRC to establish liability
in order to seek to enforce a subpoena. See Federal Deposit Ins.
Corp. v. Wentz, No. 94-5556, 1995 WL 329921 at *3 (3d Cir. June
5, 1995). The mere possibility of a new or continued
investigation from the NRC's review of the disputed documents
provided a sufficient basis to seek judicial enforcement of the
NRC's subpoena. The Supreme Court characterized the
investigative power of administrative agencies as follows:
The only power that is involved here is the
power to get information from those who best
can give it and who are most interested in
not doing so. Because judicial power is
reluctant if not unable to summon evidence
until it is shown to be relevant to issues in
litigation, it does not follow that an
administrative agency charged with seeing
that the laws are enforced may not have and
exercise powers of original inquiry. It has
a power of inquisition, if one chooses to
call it that, which is not derived from the
judicial function. It is more analogous to
the Grand Jury, which does not depend on a
case or controversy for power to get evidence
but can investigate merely on suspicion that
the law is being violated, or even just
because it wants assurance that it is not.
When investigative and accusatory duties are
delegated by statute to an administrative
body, it, too, may take steps to inform
9
itself as to whether there is probable
violation of the law.
(Emphasis Added). United States v. Morton Salt Co., 338 U.S.
632, 642-43 (1950). See also United States v. Powell, 379 U.S.
48, 57 (1964).
The NRC is authorized to make such studies and
investigations and obtain such information as necessary to assist
it in exercising its statutory authority and any regulations
thereunder. 42 U.S.C.A. § 2201(c) (West 1994). This includes
the authority to issue subpoenas to require any person to appear
and produce documents at any designated place. Id. The NRC
delegated its investigative authority to the Office of
Investigations, which is authorized to conduct investigations of
licensees; to maintain current awareness of inquiries and
inspections by other NRC offices; to identify the need for formal
investigations; and to issue subpoenas where necessary or
appropriate for the conduct of investigations. 10 C.F.R. § 1.36.
The NRC broadly interprets its investigative authority, pursuant
to 10 C.F.R. § 1.36, to include a continuum of activities from
simple inquiries to formal investigations. (Reply Brief of
Appellant at 4). This interpretation is entitled to deference.
United States v. Westinghouse Electric Corp., 638 F.2d 570, 575
(3d Cir. 1980); United States v. Westinghouse Electric Corp., 788
F.2d 164, 171 (3d Cir. 1986).
In Morton Salt, the Supreme Court established that
"[w]hen investigative . . . duties are delegated by statute to an
. . . [agency], it . . . may take steps to inform itself as to
10
whether there is a probable violation of the law." Dole, 904
F.2d at 872 (quoting Morton Salt, 338 U.S. at 643). The NRC's
pursuit of the disputed information after the Report was issued
is consistent with its investigative authority. See 10 C.F.R.
§1.36 (authorizing the Office of Investigation to conduct both
investigations of licensees and identify the need for formal
investigations); see generally Morton Salt, 338 U.S. 632 (1950);
Dole, 904 F.2d at 872. Although the cover of the Report
patently indicates that the formal investigation of Oncology
Services was "closed", the body of the 80-page Report
characterizes the district court's review of the disputed
documents as an open matter. The NRC thereafter affirmed its
interest in the disputed documents by inquiring in its August 2,
1994 letter to the district court as to the status of its in
camera review. Contrary to the district court's conclusion, the
NRC's investigative authority was not restricted to the formal
investigation that was closed by the issuance of the May 25
Report of Investigation especially given that the Report was
issued so as not to impede the progress of concurrent NRC
proceedings involving Oncology Services' license. Thus, the
district court had jurisdiction to consider the petition for
enforcement of the subpoena based on the NRC's authority to
conduct investigations of licensees to assure that there were no
violations of NRC regulations pertaining to the use and handling
of radioactive material.
III.
11
The requirements for judicial enforcement of an
administrative subpoena duces tecum are that: (1) the inquiry
must be within the authority of the agency, (2) the demand for
production must not be too indefinite, and (3) the information
sought must be reasonably relevant to the authorized inquiry.
United States v. Westinghouse Electric Corp., 638 F.2d 570, 574
(3d Cir. 1980) (citing Morton Salt, 338 U.S. at 652). "Reasonably
relevant" means merely "that the information must be relevant to
some (any) inquiry that the [agency] is authorized to undertake",
not that it must be reasonably relevant to the particular
authorized inquiry. Dole, 904 F.2d at 872.
The district court must enforce the subpoena unless the
information is "plainly incompetent or irrelevant to any lawful
purpose of the [NRC] . . . ." Dole, 904 F.2d at 872 (quoting
Endicott Johnson Corp. v. Perkins, 317 U.S. 501 (1943)). In
Dole, although the employer safety records sought by the
Occupational Safety and Health Administration were not relevant
to OSHA's investigation of an employee complaint which authorized
inspection of the workplace, the records were relevant to OSHA's
general review of employer health and safety records to determine
if a broader inspection was required. Here it was within the
NRC's authority to continue a general investigation of Oncology
Services subsequent to the issuance of the Report of
Investigation. The NRC is best able to determine what is
relevant to its investigation of Oncology Services' compliance
with regulations for the safe handling and use of radioactive
material. Indeed, Oncology Services acknowledged the relevance
12
of the disputed documents to the NRC investigation by producing
them in redacted form in response to the NRC subpoena. It only
disputes the relevance of specific information contained in those
documents on grounds that certain information does not pertain to
the NRC license at issue in the investigation. Oncology Services
does not, however, raise any privacy interest or privilege that
would preclude its compliance with the subpoena. See
Westinghouse, 638 F.2d at 578 (agency request for medical records
implicated privacy rights). Oncology Services bears a heavy
burden to establish that enforcement of the subpoena will result
in an abuse of judicial process. FDIC, 1995 WL 329921 at *3.
The district court intended to conduct an in camera
review of the redacted portions of the weekly activity reports
and notes and minutes of administrative and medical meetings to
determine the reasonableness of Oncology Services' redactions.
The proper inquiry in a subpoena enforcement action, however, is
whether the request was reasonably relevant to the NRC's
authorized investigation. The basis of Oncology Services'
objections to complying with the subpoena, however, have no
bearing on the enforceability of the subpoena. As such, the in
camera review was not necessary for the district court's
disposition of the petition for enforcement.
IV.
We conclude that the district court erred in dismissing
the petition for enforcement of subpoena for lack of a case or
controversy. Accordingly, we will remand this matter for
13
consideration of the merits of the petition. The district court
need not undertake an in camera review of the redactions to
determine their "reasonableness" as Oncology Services asserts
since their reasonableness has no bearing on the enforceability
of the subpoena.
14