Harkonen v. United States Department of Justice

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
W. SCOTT HARKONEN, M.D., No. 13-15197
Plaintiff-Appellant,
D.C. No.
v. 4:12-cv-00629-
CW
UNITED STATES DEPARTMENT OF
JUSTICE; UNITED STATES OFFICE OF
MANAGEMENT AND BUDGET, OPINION
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Claudia Wilken, Senior District Judge, Presiding
Argued and Submitted
March 9, 2015—San Francisco, California
Filed September 8, 2015
Before: John T. Noonan, William A. Fletcher,
and Andre M. Davis,* Circuit Judges.
Opinion by Judge Noonan
*
The Honorable Andre M. Davis, Senior Circuit Judge for the U.S.
Court of Appeals for the Fourth Circuit, sitting by designation.
2 HARKONEN V. U.S.D.O.J.
SUMMARY**
Information Quality Act
The panel affirmed the district court’s Fed. R. Civ. P.
12(b)(6) dismissal of Dr. W. Scott Harkonen’s action seeking
the correction of statements the United States Department of
Justice made about Dr. Harkonen in a 2009 press release.
The Information Quality Act required the Office of
Management and Budget to draft guidelines for federal
agencies that disseminate information, and required each
agency to issue its own agency-specific guidelines to correct
disseminated information. The DOJ issued a 2009 press
release concerning Dr. Harkonen’s wire fraud conviction, and
Dr. Harkonen alleged that DOJ’s refusal to issue a correction
was arbitrary and capricious.
The panel applied Chevron analysis, and held that the
Office of Management and Budget’s and DOJ’s exclusion of
press releases from the coverage of the Information Quality
Act guidelines was not arbitrary and capricious, or manifestly
contrary to the Information Quality Act. The panel also held
that DOJ’s exclusion of press releases applied to the press
release of which Dr. Harkonen sought correction.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
HARKONEN V. U.S.D.O.J. 3
COUNSEL
Mark E. Haddad (argued), Sidley Austin LLP, San Francisco,
California; Coleen Klasmeier and Kathleen M. Mueller,
Sidley Austin LLP, Washington, D.C., for Plaintiff-
Appellant.
Melissa N. Patterson (argued) and Alisa B. Klein, Appellate
Staff Attorneys, Melinda Haag, United States Attorney, and
Stuart F. Delery, Assistant Attorney General, United States
Department of Justice, Civil Division, Washington, D.C., for
Defendants-Appellees.
William G. Kelly, Jr., Multinational Legal Services, PLLC,
Driggs, Idaho, for Amicus Curiae Center for Regulatory
Effectiveness.
OPINION
NOONAN, Circuit Judge:
In this case we must decide whether the Administrative
Procedure Act and the Information Quality Act confer the
right to judicial review of a federal agency’s refusal to correct
allegedly false or misleading information published by the
agency in a press release. Dr. W. Scott Harkonen argues that
he has the right to obtain, and that the Department of Justice
(“DOJ”) has an obligation to provide, the correction of
statements DOJ made about him in a 2009 press release. Not
so, the government counters: Individuals have no such right,
even if the information DOJ published was misleading, false,
or even defamatory. We conclude that in the circumstances of
4 HARKONEN V. U.S.D.O.J.
this case the government is correct, and therefore we
AFFIRM.1
I.
A.
The Information Quality Act (“IQA”) was included as a
brief note to the Consolidated Appropriations Act of 2001,
Pub. L. No. 106-554, 114 Stat. 2763 (2000). The IQA
required the Office of Management and Budget (“OMB”) to
draft guidelines “that provide policy and procedural guidance
to Federal agencies for ensuring and maximizing the quality,
objectivity, utility, and integrity of information . . .
disseminated by Federal agencies in fulfillment of the
purposes and provisions” of the Paperwork Reduction Act. Id.§ 515(a). The IQA further required each agency to which the
guidelines applied to issue its own agency-specific guidelines
and to “establish administrative mechanisms allowing
affected persons to seek and obtain correction of information
maintained and disseminated by the agency that does not
comply with the guidelines . . . .” Id. § 515(b)(2). OMB
published its proposed guidelines with a request for public
comment on June 28, 2001, an interim set of guidelines on
September 28, 2001, and its final guidelines on February 22,
2002.
In formulating its guidelines, OMB attempted to balance
several often-competing concerns. OMB recognized that “the
fact that the Internet enables agencies to communicate
1
Because we find that Harkonen does not have the right to judicial
review of DOJ’s refusal to correct information DOJ published about him,
we do not reach his contention that some of the information was false.
HARKONEN V. U.S.D.O.J. 5
information quickly and easily to a wide audience . . .
increases the potential harm that can result from the
dissemination of information that does not meet basic
information quality guidelines.” Guidelines for Ensuring and
Maximizing the Quality, Objectivity, Utility, and Integrity of
Information Disseminated by Federal Agencies;
Republication (“Final OMB Guidelines”), 67 Fed. Reg. 8452(Feb. 22, 2002). OMB also recognized that “information
quality comes at a cost.” Id. at 8453. Based on this concern,
OMB instructed that “agencies should weigh the costs . . . and
the benefits of higher information quality” during the
formulation of their guidelines. Id. After receiving
commentary from, among other sources, several federal
agencies, OMB revised its definition of “dissemination” to
exclude information distributed through press releases from
coverage by the guidelines. Guidelines for Ensuring and
Maximizing the Quality, Objectivity, Utility, and Integrity of
Information Disseminated by Federal Agencies (“Interim
Final OMB Guidelines”), 66 Fed. Reg. 49,718, 49,723,
49,725. (Sept. 28, 2001). OMB’s final guidelines maintained
the exclusion of press releases from the definition of
“dissemination.” Final OMB Guidelines, 67 Fed. Reg. at
8460.
DOJ subsequently issued its own agency-specific
guidelines on October 4, 2002. See Information Quality:
DOJ Information Quality Guidelines, available at
http://www.justice.gov/iqpr/information-quality (updated
Dec. 31, 2014). These closely mirrored the OMB final
guidelines. Id. Relevant here, the scope of the guidelines
“does not apply to information disseminated in . . . press
releases fact sheets, press conferences or similar
communications (in any medium) that announce, support or
6 HARKONEN V. U.S.D.O.J.
give public notice of information in DOJ.” Id. DOJ also
expressly stated that the
guidelines are not a regulation. They are not
legally enforceable and do not create any legal
rights or impose any legally binding
requirements or obligations on the agency or
the public. Nothing in these guidelines affects
any otherwise available judicial review of
agency action.
Id.
B.
W. Scott Harkonen is a medical doctor who served as
Chief Executive Officer and member of the Board of
Directors for InterMune, Inc. InterMune developed,
marketed, and sold drugs, including a drug called
Actimmune. Actimmune was approved by the FDA for the
treatment of two rare disorders, chronic granulomatous
disease and severe, malignant osteopetrosis. In October
2000, InterMune began a Phase III clinical trial (GIPF-001)
to determine whether Actimmune would be effective in
treating patients suffering from a different, more common
disorder, idiopathic pulmonary fibrosis (“IPF”). Enrollment
of 330 patients in the clinical trial was completed in October
2001. On August 27, 2002, Harkonen and other InterMune
employees met with staff of the FDA to review the results of
an interim analysis of the GIPF-001 study data. The FDA
staff told Harkonen that because the study did not meet its
primary endpoint–Actimmune had failed to reduce death or
disease progression in the entire group of treated subjects–the
HARKONEN V. U.S.D.O.J. 7
data were insufficient for the FDA to grant approval for the
use of Actimmune in the treatment of IPF.
Nonetheless, on August 28, 2002, Harkonen distributed
a press release titled “InterMune Announces Phase III Data
Demonstrating Survival Benefit of Actimmune in IPF.” The
first paragraph of the press release stated that the GIPF-001
study “demonstrate[d] a significant survival benefit in
patients with mild to moderate disease randomly assigned to
Actimmune versus control treatment.” The first paragraph
concluded that “[t]here was also approximately a 10%
relative reduction in the rate of progression-free survival
associated with Actimmune versus placebo, the trial’s
primary endpoint, but this was not a statistically significant
difference.” The third paragraph of the press release quoted
Harkonen as stating, “Actimmune may extend the lives of
patients suffering from [IPF].” The fourth paragraph quoted
a study investigator as stating, “Actimmune should be used
early in the course of [IPF] in order to realize the most
favorable long-term survival benefit.” Not until the sixth
paragraph did the press release again address the failure of the
study to reach its primary endpoint. Even there, the press
release described the failure as demonstrating “a strong
positive trend in increased survival in the overall patient
population.” The tenth paragraph quoted an InterMune
officer as stating “we believe [there] is compelling rationale
for consideration of Actimmune for the treatment of patients
with [IPF].”
On March 18, 2008, the government indicted Harkonen
on one count of wire fraud for making allegedly false
statements in the press release, and one count of felony
misbranding related to InterMune’s alleged off-label
marketing and sale of Actimmune for IPF. Following a jury
8 HARKONEN V. U.S.D.O.J.
trial, Harkonen was convicted on September 29, 2009, of wire
fraud but was acquitted on the misbranding count.
Harkonen’s appeal of his criminal conviction and sentence
was affirmed by this court on March 4, 2013. United States
v. Harkonen, 510 Fed. App’x. 633 (9th Cir. 2013), cert.
denied, 134 S. Ct. 824 (2013).
On the day the verdict was announced, DOJ issued a press
release titled “W. Scott Harkonen, Former Biotech CEO,
Convicted of Wire Fraud.” The DOJ press release included
the two statements at issue in this case:
• “Mr. Harkonen lied to the public about the
results of a clinical trial and offered false
hope to people stricken with a deadly
disease.”
• “The actions of this defendant served to
divert precious financial resources from
the VA’s critical mission of providing
healthcare to this nation’s military
veterans.”
The press release was posted on the DOJ website.
On February 11, 2010, during the pendency of his appeal
of his conviction and sentence, Harkonen filed a “Request for
Correction under Information Quality Guidelines” with DOJ.
Harkonen requested that “the government issue a retraction
of the statement in the September 29, 2009 press release that
[he had] ‘falsif[ied] test results,’” publish the retraction, and
“remove the original September 29 press release from all
official government websites.”
HARKONEN V. U.S.D.O.J. 9
On March 15, 2010, DOJ denied Harkonen’s request,
explaining in a letter to Harkonen’s counsel that the request
“falls outside the scope of the Department’s guidelines,” and
further stating that “regardless of the guidelines’ application,
we do not believe a retraction is warranted under the
circumstances.” Letter from H. Marshall Jarrett, Director of
the Executive Office for United States Attorneys, to
Harkonen’s Counsel. DOJ explained that under DOJ
guidelines, “press releases . . . that announce, support or give
public notice of information in DOJ” were excluded from
coverage of the guidelines. Id. Further, DOJ maintained the
challenged statement was correct. Id. DOJ admitted that
while Harkonen did not change the study data, “he
nevertheless used it to support his false and misleading
conclusions.” Id.On April 20, 2010, Harkonen filed a “Request for
Reconsideration under Information Quality Guidelines.”
DOJ rejected this request on July 2, 2010.
On June 8, 2011, Harkonen filed another request for
correction with the DOJ, requesting the retraction of the
statement in the DOJ press release that Harkonen “divert[ed]
precious financial resources from the VA’s critical mission of
providing healthcare to this nation’s military veterans.” DOJ
denied this request on August 4, 2011, and denied
Harkonen’s request for reconsideration on October 7, 2011.
On February 8, 2012, Harkonen filed a complaint in the
U.S. District Court for the Northern District of California,
claiming DOJ’s denials of his requests for correction under
Information Quality Guidelines was arbitrary and capricious,
an abuse of discretion, and contrary to law (Count I), and that
the exclusion of press releases from DOJ’s and OMB’s
10 HARKONEN V. U.S.D.O.J.
Information Quality Guidelines was arbitrary and capricious,
an abuse of discretion, and contrary to law (Counts II and III).
Harkonen sought declaratory judgments that DOJ’s denials of
his requests for correction and DOJ’s and OMB’s exclusion
of press releases from their guidelines were arbitrary and
capricious, an abuse of discretion, and contrary to law. He
sought a permanent injunction requiring DOJ to retract the
press release statements about falsifying test results and
diverting financial resources from the VA, and to remove the
press release from all official government websites.
On December 3, 2012, the district court granted the
government’s motion to dismiss under Rule 12(b)(6).
Harkonen timely appealed.
II.
We review de novo a district court’s dismissal for failure
to state a claim under Rule 12(b)(6). ASARCO, LLC v. Union
Pac. R.R. Co., 765 F.3d 999, 1004 (9th Cir. 2014). In order
for Harkonen to prevail, he must be able to assert a cause of
action for the violation of a legal right. Absent a statutory
provision, an individual can not assert a cause of action
against the government for the dissemination of inaccurate,
incorrect, or defamatory information. See Salt Inst. v. Leavitt,
440 F.3d 156, 158 (4th Cir. 2006) (“[T]here is no general
common law right to . . . informational correctness . . . .”). It
is against this backdrop that we must inquire as to whether
Congress intended the IQA to provide individuals a right to
judicial review of a federal agency’s rejection of a request to
obtain correction of information disseminated by the
government.
HARKONEN V. U.S.D.O.J. 11
A.
Harkonen argues that the APA provides for judicial
review of DOJ’s denial of his correction requests under the
IQA. The IQA directs OMB to “issue guidelines . . . that
provide policy and procedural guidance to Federal agencies
for ensuring and maximizing the quality, objectivity, utility,
and integrity of information (including statistical information)
disseminated by Federal agencies in fulfillment of the
purposes and provisions of . . . the Paperwork Reduction
Act.” Consolidated Appropriations Act of 2001, Pub. L. No.
106-554, 114 Stat. 2763 (2000). The guidelines “apply to the
sharing by Federal agencies of, and access to, information
disseminated by Federal agencies.” Id. The guidelines “shall
. . . require that each Federal agency to which the guidelines
apply . . . establish administrative mechanisms allowing
affected persons to seek and obtain correction of information
maintained and disseminated by the agency that does not
comply with the guidelines.” Id. The IQA further establishes
an administrative mechanism that enables OMB to track the
“number and nature of complaints received by” each covered
agency and “how such complaints were handled by the
agency.” Id.The focus of the IQA, as stated in Section 515(b), is on
the quality of information shared by federal agencies, and on
ensuring broad access to information. Id. Thus, the IQA
creates an administrative system designed to permit federal
agencies and OMB to monitor and improve the information
used and disseminated by federal agencies. Harkonen argues
on appeal that the IQA imposes an obligation on the DOJ to
correct information disseminated by the agency, and creates
a right under the APA to judicial review of DOJ decisions not
to correct this information. (Harkonen denied in the district
12 HARKONEN V. U.S.D.O.J.
court that he was arguing the IQA created a private right of
action, claiming instead that his claim arose under the APA).
The government argues the IQA does not authorize courts to
review the correctness of information disseminated by an
agency.
We have no reason in this case to reach the broad
question of whether the IQA confers upon a private
individual the right to seek judicial review of the correctness
of all information published by the government. Here, both
OMB and DOJ excluded press releases from the coverage of
the IQA guidelines. If these decisions were within the
agencies’ authority, the review and correction mechanisms
required by § 515(b)(2) do not apply to press releases, and
neither OMB nor DOJ had an obligation to review for
correctness the DOJ press release about Harkonen. Thus, our
review must begin with the threshold question of whether
OMB and DOJ had the authority to exclude press releases
from the coverage of the IQA guidelines.
B.
1.
Whether OMB’s and DOJ’s decisions to exclude press
releases from the coverage of the IQA guidelines were within
their authority is analyzed using the familiar two-step
framework established by Chevron, U.S.A., Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837 (1984). At the first step,
if Congress “has directly spoken to the precise question at
issue . . . the court, as well as the agency, must give effect to
the unambiguously expressed intent of Congress.” Id. at 842.
The issue here is whether the IQA unambiguously expressed
HARKONEN V. U.S.D.O.J. 13
the intent of Congress to include press releases in the
guidelines.
The analysis begins with the plain language of the statute.
Resident Councils of Wash. v. Leavitt, 500 F.3d 1025, 1034
(9th Cir. 2007). The relevant provision of the Act states:
The guidelines under subsection (a) shall
(1) apply to the sharing by Federal
agencies of, and access to, information
disseminated by Federal agencies; and
(2) require that each Federal agency to
which the guidelines apply
(A) issue guidelines ensuring and
maximizing the quality, objectivity, utility,
and integrity of information (including
statistical information) disseminated by the
agency, by not later than 1 year after the date
of issuance of the guidelines under subsection
(a);
(B) establish administrative mechanisms
allowing affected persons to seek and obtain
correction of information maintained and
disseminated by the agency that does not
comply with the guidelines issued under
subsection (a).
Consolidated Appropriations Act of 2001, Pub. L. No. 106-
554, 114 Stat. 2763 (2000).
14 HARKONEN V. U.S.D.O.J.
The issue here is whether “disseminated” unambiguously
applies to information contained in a press release. The IQA
does not define “disseminated.” See generally id. Nor does
the Paperwork Reduction Act, which the IQA amended. See
44 U.S.C. §§ 3501–3521 (using, but not defining,
“disseminated” in multiple provisions). There is minimal
legislative history for the IQA, and the scope of
“disseminated” appears not have been discussed at all.
FEDERAL ADMINISTRATIVE PROCEDURE SOURCEBOOK
779–80 (William F. Funk et al. eds., 4th ed. 2008). The
overall structure of the IQA indicates that Congress had two
concerns. First, Congress was concerned that information
shared by Federal agencies, Sec. 515(b)(1), be of maximal
“quality, objectivity, utility, and integrity,” Sec. 515(a).
Second, Congress was concerned that access to information
possessed by Federal agencies be ensured. Sec. 515(b)(1).
Neither of these concerns reflects, or even suggests, an intent
by Congress that all information released by the government
fall under the ambit of the guidelines.
The only other appellate court to examine this issue has
found the IQA to have committed the definition of
“disseminated” to OMB’s discretion. Prime Time Int’l Co. v.
Vilsack, 599 F.3d 678, 685 (D.C.C. 2010).
Because Congress was silent on the definition of
“dissemination,” and left OMB at least some discretion to
determine how broadly “dissemination” applied, we must
proceed to the second step of the Chevron analysis.
2.
If a statute is ambiguous with respect to a specific issue,
the second step of the Chevron analysis establishes that “the
HARKONEN V. U.S.D.O.J. 15
question for the court is whether the agency’s answer is based
on a permissible construction of the statute.” Chevron,
467 U.S. at 843. If “Congress has left a gap for the
administrative agency to fill, we . . . must uphold the
administrative regulation unless it is arbitrary, capricious, or
manifestly contrary to the statute.” Defenders of Wildlife v.
Browner, 191 F.3d 1159, 1162 (9th Cir. 1999) (internal
quotation marks omitted).
Here, Congress left a gap in the IQA for OMB and DOJ
to fill regarding the definition of “disseminated.” Thus, the
highly deferential standard of review at Step Two of the
Chevron analysis applies. This analysis leads to the
conclusion OMB’s and DOJ’s exclusion of press releases was
not arbitrary and capricious, or manifestly contrary to the
statute.
Government agencies make extensive use of press
releases. In formulating its guidelines, and specifically its
definition of the scope of “dissemination,” OMB balanced
several concerns. OMB recognized that “the fact the Internet
enables agencies to communicate information quickly and
easily to a wide audience . . . increases the potential harm that
can result from the dissemination of information that does not
meet basic information quality guidelines.” Final OMB
Guidelines, 67 Fed. Reg. at 8452. OMB also recognized that
“information quality comes at a cost.” Id. at 8453. After
considering comments received from, among others, several
federal agencies, OMB revised its definition of
“dissemination” to exclude information distributed through
press releases. Interim Final OMB Guidelines, 66 Fed. Reg.
at 49,725. Given the deference accorded to agency
interpretations of ambiguous statutes and the careful
consideration OMB, and DOJ, gave to the relevant issues, we
16 HARKONEN V. U.S.D.O.J.
find that excluding press releases from the ambit of the IQA
guidelines was “a permissible interpretation of the statute.”
Prime Time Int’l, 599 F.3d at 685.
3.
Having determined that DOJ’s exclusion of press releases
from the ambit of the IQA guidelines was within the
discretion accorded to the agency, the only remaining
question is whether DOJ’s exclusion of press releases applies
to the press release of which Harkonen seeks correction.
An agency’s interpretation of its own regulations is
entitled to judicial deference unless that interpretation is
“plainly erroneous or inconsistent with the regulation.” Auer
v. Robbins, 519 U.S. 452, 461 (1997). The scope of DOJ’s
guidelines “does not apply to information disseminated in . . .
press releases fact sheets, press conferences or similar
communications (in any medium) that announce, support or
give public notice of information in DOJ.” Information
Quality: DOJ Information Quality Guidelines, available at
http://www.justice.gov/iqpr/information-quality (updated
Dec. 31, 2014). DOJ’s determination that the 2009 press
release fell within its exclusion of press releases is neither
erroneous nor inconsistent with the scope of dissemination as
defined in the agency-specific guidelines. Therefore, DOJ’s
determination is accorded Auer deference.
III.
Harkonen relies heavily on this court’s decision in Barber
v. Widnall, 78 F.3d 1419 (9th Cir. 1996). There, a retired Air
Force pilot sought correction of his military records under a
federal statute providing “the Secretary ‘may correct any
HARKONEN V. U.S.D.O.J. 17
military record . . . when the Secretary considers it necessary
to correct an error or remove an injustice.’” Id. at 1423(quoting 10 U.S.C. § 1552). However, in Barber there was no
question that the plaintiff’s military records fell within the
scope of § 1552; clearly, the plaintiff had the right to invoke
the administrative process that had been created to evaluate
requests for corrections of military records. The issue in
Barber was not that the Secretary refused to put the request
through the administrative process. In fact, that process had
been conducted extensively, resulting in the inability of the
Air Force Board for Correction of Military Records to reach
consensus and the Secretary’s subsequent denial of the
request. Id. at 1422. Here, the guidelines clearly exclude press
releases from the coverage of the guidelines and hence from
application of the administrative review process for
correction. Thus, Harkonen’s primary challenge is not to a
decision made after a review, but rather is a challenge to
OMB’s and DOJ’s interpretation of the IQA that excluded
press releases from the definition of disseminated
information. Because this challenge fails the test established
by Chevron, U.S.A., Inc., Harkonen’s references to Barber are
inapposite.
AFFIRMED.