Hemp Industries Association v. DEA

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 19, 2022 Decided June 10, 2022
No. 21-5111
HEMP INDUSTRIES ASSOCIATION AND RE BOTANICALS, INC.,
APPELLANTS
v.
DRUG ENFORCEMENT ADMINISTRATION AND ANNE MILGRAM,
IN HER OFFICIAL CAPACITY AS ADMINISTRATOR OF THE UNITED
STATES DRUG ENFORCEMENT ADMINISTRATION,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:20-cv-02921)
Matthew C. Zorn argued the cause for appellants. With
him on the briefs were Shane Pennington, Shawn Hauser, and
David C. Kramer.
Sarah Carroll, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Brian M. Boynton, Acting Assistant Attorney General, and
Mark B. Stern, Attorney.
Before: HENDERSON and ROGERS, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
2
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: This appeal
centers on recent statutory and regulatory changes to the legal
status of hemp—a non-psychoactive variant of the Cannabis
sativa L. (cannabis) plant that is related to but distinct from
marijuana, the more well-known psychoactive variant. In
August 2020, the United States Drug Enforcement
Administration (DEA) issued a rule meant to conform its
existing regulations to recent congressional amendments to the
Controlled Substances Act (CSA or Act), 21 U.S.C. § 801 et
seq., in its treatment of hemp. Shortly thereafter, the Hemp
Industries Association (Hemp Association), a trade association
of the hemp industry, and RE Botanicals, Inc. (RE Botanicals),
a manufacturer and seller of consumer products derived from
hemp, (collectively, the Plaintiffs) filed suit against the DEA,
seeking declaratory and injunctive relief preventing the agency
from enforcing the CSA against two necessary byproducts of
the hemp-extract production process. The district court
dismissed for lack of subject matter jurisdiction, concluding
that the Plaintiffs’ suit impermissibly challenged the DEA rule
by failing to use the statutory review provision for rules
promulgated under the CSA. See generally Hemp Indus. Ass’n
v. DEA, 539 F. Supp. 3d 120 (D.D.C. 2021). As detailed infra,
we affirm.
I. Background
At the motion-to-dismiss stage, we “assume the truth of all
material factual allegations in the complaint and ‘construe the
complaint liberally, granting plaintiff[s] the benefit of all
inferences that can be derived from the facts alleged.’” Am.
Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011)
(quoting Thomas v. Principi, 394 F.3d 970, 972 (D.C. Cir.
2005)).
3
A.
In 1970, the Congress passed the Controlled Substances
1
Act, “a comprehensive statute designed to rationalize federal
control of dangerous drugs.” Nat’l Org. for Reform of
Marijuana Laws (NORML) v. DEA, 559 F.2d 735, 737 (D.C.
Cir. 1977). Under the CSA, each “controlled substance,” see
21 U.S.C. § 802(6) (defining the term), is placed on one of five
“schedules”—designated as Schedules I through V—of
descending regulatory severity based on the risks and benefits
associated with the substance. See id. § 812(a)–(b)
(establishing and defining each schedule). The controls
imposed on the manufacture, acquisition and distribution of
substances listed under the CSA and the penalties for violations
of those controls vary according to the schedule in which a
substance is listed. See id. §§ 821–32 (controls), 841–65
(offenses and penalties); see also Gonzales v. Raich, 545 U.S.
1, 13–14 (2005). For example, Schedule I substances—which
have “a high potential for abuse,” “no currently accepted
medical use in treatment” and “a lack of accepted safety for use
. . . under medical supervision”—are subject to the most
stringent controls and penalties. See id. §§ 812(b)(1)(A)–(C),
841. The Attorney General has delegated his authority under
the CSA, including his rulemaking and scheduling authority, to
the DEA. See 28 C.F.R. § 0.100(b); see also 21 U.S.C. § 871(a)
(permitting delegation). The court of appeals has exclusive
jurisdiction of “[a]ll final determinations, findings, and
conclusions” issued by the DEA pursuant to the CSA.
21 U.S.C. § 877; see John Doe, Inc. v. DEA, 484 F.3d 561, 568
(D.C. Cir. 2007).
1
The Controlled Substances Act comprises Title II of the
Comprehensive Drug Abuse Prevention and Control Act of 1970,
Pub. L. No. 91-513, 84 Stat. 1242.
4
The CSA lists marijuana as a Schedule I substance. See 21
U.S.C. § 812(c) (Schedule I (c)(10)). Before 2018, the statutory
definition of marijuana excluded hemp from its purview by
carving out the non-psychoactive parts of the cannabis plant:
The term “marihuana” 2 means all parts of the
plant Cannabis sativa L., whether growing or
not; the seeds thereof; the resin extracted from
any part of such plant; and every compound,
manufacture, salt, derivative, mixture, or
preparation of such plant, its seeds or resin.
Such term does not include the mature stalks of
such plant, fiber produced from such stalks, oil
or cake made from the seeds of such plant, any
other compound, manufacture, salt, derivative,
mixture, or preparation of such mature stalks
(except the resin extracted therefrom), fiber, oil,
or cake, or the sterilized seed of such plant
which is incapable of germination.
Id. § 802(16) (emphasis added) (2012). The Congress also
listed tetrahydrocannabinols (THC), the key psychoactive
compound found in the cannabis plant, as a Schedule I
controlled substance, see 21 U.S.C. § 812(c) (Schedule
I (c)(17)), but it did not define the term, leaving the definition
up to the DEA, see 21 C.F.R. § 1308.11(d)(31).
After what one can fairly characterize as a series of
longstanding disputes among the hemp industry, the DEA,
States and the Congress regarding the DEA’s authority to
regulate hemp, see Am. Compl. ¶¶ 40–61; see also Monson v.
DEA, 589 F.3d 952, 957 (8th Cir. 2009); United States v.
2
The Controlled Substances Act and implementing regulations
often use the “marihuana” spelling. Other than direct references to or
quotations of either, we use “marijuana.”
5
Mallory, 372 F. Supp. 3d 377, 382–83, 384–85 (S.D. W. Va.
2019), the Congress significantly altered the CSA regulation of
hemp as part of the Agricultural Improvement Act of 2018,
Pub. L. No. 115–334, 132 Stat. 4490 (2018 Farm Bill).
Relevant here, the 2018 Farm Bill included a new definition of
“hemp”:
“[H]emp” means the plant Cannabis sativa L.
and any part of that plant, including the seeds
thereof and all derivatives, extracts,
cannabinoids, isomers, acids, salts, and salts of
isomers, whether growing or not, with a delta-9
tetrahydrocannabinol concentration of not more
than 0.3 percent on a dry weight basis.
7 U.S.C. § 1639o(1). 3 It also amended the CSA in two key
respects. First, it clarified that “[t]he term ‘marihuana’ does not
include . . . hemp, as defined in section 1639o of Title 7.” 21
U.S.C. § 802(16)(B)(i). Second, it removed “[THC] in hemp
(as defined under section 1639o of Title 7)” from the statutory
listing of THC. Id. § 812(c) (Schedule I (c)(17)). The 2018
Farm Bill granted the Secretary of the United States
Department of Agriculture (USDA)—subject to exceptions not
pertinent here—“sole authority to promulgate Federal
regulations and guidelines that relate to the production of
hemp,” 7 U.S.C. § 1639r(b); see also id. § 1639o(3), and
3
The Congress first differentiated hemp from marijuana based
on delta-9 THC concentration in the Agricultural Act of 2014, Pub.
L. No. 113-79, 128 Stat. 649, which authorized the cultivation of
“industrial hemp,” defined according to the same 0.3 per cent delta-
9 THC concentration threshold as the 2018 Farm Bill’s definition of
“hemp,” for agricultural and academic purposes pursuant to a state
pilot program. See 7 U.S.C. § 5940.
6
directed the USDA Secretary to administer and implement
hemp production plans, 4 see id. §§ 1639q, 1639p.
In August 2020, the DEA published an interim final rule
intended to “conform[] [its] regulations” to the 2018 Farm
Bill’s amendments to the CSA. See Implementation of the
Agriculture Improvement Act of 2018, 85 Fed. Reg. 51,639,
51,639 (Aug. 21, 2020) (Interim Final Rule or IFR). The IFR
noted that to be deemed marijuana under the CSA, “cannabis
and cannabis-derived material must both fall within the pre-
[2018 Farm Bill] CSA definition of marihuana”—the
definition that excluded particular parts of the cannabis plant—
“and contain more than 0.3 percent [delta-9]-THC on a dry
weight basis.” Id. at 51,640–41. The rule accordingly limited
the agency’s definition of THC, a Schedule I controlled
substance, to exclude “any material, compound, mixture, or
preparation that falls within the [2018 Farm Bill’s] definition
of hemp set forth in 7 U.S.C. § 1639o.” Id. at 51,641; see also
21 C.F.R. § 1308.11(d)(31)(ii). Of note here, the DEA
specifically addressed products derived from the hemp plant,
stating that “the definition of hemp does not automatically
exempt any product derived from a hemp plant, regardless of
the [delta-9]-THC content of the derivative” and “[i]n order to
meet the definition of ‘hemp,’ and thus qualify for the
exemption from schedule I, the derivative must not exceed the
0.3% [delta-9]-THC limit.” 85 Fed. Reg. at 51,641. The agency
also declared that “entities no longer require a DEA registration
4
The USDA has since issued a rule for the regulation of hemp
production. See Establishment of a Domestic Hemp Production
Program, 86 Fed. Reg. 5,596 (Jan. 19, 2021). Notably, its rule
“do[es] not cover hemp or its products beyond production,” noting
that “DEA has issued regulations covering some of these products or
‘in-process materials.’” Id. at 5,649.
7
or import and export permits to handle hemp extract that does
not exceed the statutory 0.3% THC limit.” Id. at 51,644.
B.
As an agricultural commodity, hemp has a wide variety of
uses, including in the production of textiles, fabrics and paper.
Hemp seeds are used in beverages and foods. Hemp extracts
are used in a wide range of products like soaps, shampoo,
lotions, bath gels and cosmetics. Hemp extracts can be
particularly lucrative; according to the Plaintiffs, “[t]he U.S.
wholesale market for hemp extracts currently stands at $2
billion” and “the wholesale market for products containing
extracts exceeds $5 billion.” Am. Compl. ¶ 29.
This appeal focuses on the hemp-extract production
process. As the Plaintiffs see it, the process produces
intermediate and waste byproducts that exceed the 0.3 per cent
delta-9 THC concentration threshold, thereby raising
understandable confusion regarding DEA regulation even after
the 2018 Farm Bill. To briefly summarize the production
process: After hemp plants are determined to be below the 0.3
per cent delta-9 THC threshold and cultivated, the milling
process separates the hemp flowers, which are high in THC,
from the remainder of the plant, which is comparatively low in
THC. The milled hemp flower material is then mixed with an
extraction solvent meant to extract the cannabinoids—
compounds including THC and cannabidiol (CBD) found in
the cannabis plant. The hemp flower material is discarded,
leaving behind an oil comprised of the extracted cannabinoids
and the extraction solvent. The oil is subjected to evaporation
in order to isolate what the Plaintiffs call “intermediate hemp
material” (IHM), which, at this point, contains highly
concentrated levels of cannabinoids like THC. The Plaintiffs
assert that “IHM itself is not added to, or used as an ingredient
8
in, any consumer product; rather, IHM is refined into extracts
or isolates containing not more than 0.3% [delta-9] THC.” Id.
at ¶ 35. If the processor creates cannabinoid isolates, the
evaporation process generates a waste output the Plaintiffs call
“waste hemp material” (WHM), which they similarly assert “is
not added to, or used as an ingredient in, any consumer
product.” Id. at ¶ 36. Because both IHM and WHM are
produced after stripping or evaporating away parts of the hemp
plant that are low in THC, the two byproducts have high THC
concentrations. “As a result, IHM and WHM naturally (and
unavoidably) exceed 0.3% [delta-9] THC,” notwithstanding
the “harvested hemp plant contains 0.3% or less [delta-9]
THC.” Id. at ¶ 39.
C.
In September 2020, the Plaintiffs petitioned for review of
the IFR. See Hemp Indus. Ass’n v. DEA, No. 20-1376 (D.C.
Cir.). While the petition levies a series of challenges against the
IFR, it does not make any explicit reference to the status of
IHM, WHM or any particular byproduct of the hemp-extract
production process under the CSA. See generally Pet. for
Review, Hemp Indus. Ass’n v. DEA, No. 20-1376 (D.C. Cir.).
Less than one month later, the Plaintiffs filed suit in district
court. They initially sought a declaration that IHM and WHM
are no longer subject to the CSA after the enactment of the
2018 Farm Bill regardless of their THC concentration, see
Compl. ¶¶ 85–102, a related declaration that the DEA lacks
authority to regulate “any aspect of hemp production, including
the production of IHM and WHM[,]” after the 2018 Farm Bill,
see id. at ¶¶ 103–110, and “an injunction enjoining the IFR and
enjoining DEA from promulgating rules that relate to the
production of hemp,” id. at ¶ 111–14. While the Plaintiffs’ suit
was pending in the district court, they requested this Court to
9
hold their September 2020 petition for review in abeyance
pendente lite, which we granted. See Order, Hemp Indus. Ass’n
v. DEA, No. 20-1376 (D.C. Cir. Oct. 21, 2021). 5
The DEA moved to dismiss the Plaintiffs’ initial complaint
for lack of subject matter jurisdiction on a variety of grounds,
including that 21 U.S.C. § 877 divested the district court of
jurisdiction and that the Plaintiffs lacked standing; the
Plaintiffs then amended their complaint. The amended
complaint sought a judicial declaration that either the definition
of “hemp” set forth in 7 U.S.C. § 1639o encompasses IHM and
WHM or that the 2018 Farm Bill otherwise immunizes the
possession and manufacture of IHM and WHM so that “the
possession and manufacture of IHM and WHM during the
hemp production process does not require registration under
the CSA,” Am. Compl. ¶ 105, as well as an injunction
“enjoining DEA from enforcing the CSA as to IHM and
WHM,” see id. at ¶ 110. The Plaintiffs alleged that the DEA
“publicized its view” that it possessed authority to regulate
hemp byproducts like IHM and WHM “in multiple forums,
including in the explanatory text of its August 2020 interim
final rule . . . and through the public statements of [DEA] staff
and representatives.” Id. at ¶ 3. The amended complaint
dropped the Plaintiffs’ original request to enjoin the IFR but it
repeatedly references and challenges the DEA’s conclusions
contained therein. See, e.g., id. at ¶ 82 (“In defiance of
Congress’s delegation of exclusive authority to regulate hemp
production to USDA, DEA promulgated its own interim final
rule . . . .”); id. at 84 (describing IFR as “DEA’s most direct
5
The abeyance was lifted once the district court dismissed the
Plaintiffs’ suit. Oral argument on the petition was held on the same
day as the instant appeal and the petition is today dismissed. See
Hemp Indus. Ass’n v. DEA, No. 20-1376, slip op. at 5 (D.C. Cir. June
10, 2020).
10
claim that IHM and WHM are illegal”); id. at ¶ 101 (quoting
IFR in describing instant suit against DEA).
The district court granted the DEA’s motion to dismiss for
lack of subject matter jurisdiction, concluding that the
Plaintiffs erroneously sought review of the IFR in district court,
instead of this Court, in contravention of 21 U.S.C. § 877. See
Hemp Indus. Ass’n, 539 F. Supp. 3d at 123. The district court
acknowledged that the Plaintiffs’ amended complaint did not
“seek a declaration that the IFR itself is invalid or an injunction
directly enjoining its application” but it also recognized that the
“Amended Complaint specifically identifies the IFR as
embodying what [Plaintiffs] contend is an incorrect
interpretation of the relevant statutes and an unlawful assertion
[of] regulatory authority.” Id. at 129–30. Further, it held, that
the Plaintiffs effectively “seek an injunction enjoining DEA
from asserting that regulatory authority and a judicial
declaration that their own, contrary interpretation is the correct
one, and that they should be exempt from its application.” Id.
at 129 (second and third alterations in original) (internal
quotation marks and citation omitted); see also id. (“For relief,
[the Plaintiffs] seek a declaration that—contrary to the IFR—
‘the definition of hemp as set forth in [the 2018 Farm Bill]
includes IHM and WHM,’ or that the [2018 Farm Bill]
‘authorizes and/or immunizes the possession and manufacture
of IHM and WHM’ such that the substances need not be
registered under the CSA.” (quoting Am. Compl. ¶ 105)). The
Plaintiffs timely appealed and we have appellate jurisdiction
pursuant to 28 U.S.C. § 1291.
II. Analysis
In reviewing a district court’s dismissal of a complaint for
lack of subject matter jurisdiction, we review the district
court’s legal determinations de novo. See Am. Nat’l Ins., 642
11
F.3d at 1139; Am. Clinical Lab’y Ass’n v. Azar, 931 F.3d 1195,
1202–03 (D.C. Cir. 2019). As explained infra, we, like the
district court, conclude that the Plaintiffs’ amended complaint
impermissibly seeks review of the same issues addressed in the
IFR—the authorization (or lack thereof) of the manufacture
and possession of IHM and WHM—outside the review scheme
set forth in 21 U.S.C. § 877. In addition, to the extent the
Plaintiffs seek a declaration that the IFR does not address either
authorization or liability regarding IHM and WHM, they have
failed to plead a plausible injury-in-fact related to enforcement
against their manufacture or possession of IHM and WHM.
A.
“Within constitutional bounds, Congress decides what
cases the federal courts have jurisdiction to consider.” Am.
Fed’n of Gov’t Emps., AFL-CIO v. Trump, 929 F.3d 748, 754
(D.C. Cir. 2019) (quoting Bowles v. Russell, 551 U.S. 205, 212
(2007)). The district court possesses jurisdiction of questions
of federal law by statute, see 28 U.S.C. § 1331, but the
Congress may circumscribe this authority “by establishing an
alternative statutory scheme for administrative and judicial
review.” Am. Fed’n of Gov’t Emps., 929 F.3d at 754. “If a
special statutory review scheme exists, . . . ‘it is ordinarily
supposed that Congress intended that procedure to be the
exclusive means of obtaining judicial review in those cases to
which it applies.’” Jarkesy v. SEC, 803 F.3d 9, 15 (D.C. Cir.
2015) (quoting City of Rochester v. Bond, 603 F.2d 927, 931
(D.C. Cir. 1979)); see also Telecomms. Rsch. & Action Ctr. v.
FCC, 750 F.2d 70, 77 (D.C. Cir. 1984) (“[A] statute which
vests jurisdiction in a particular court cuts off original
jurisdiction in other courts in all cases covered by that
statute.”).
12
The CSA provides that the DEA’s “final determinations,
findings, and conclusions” under the CSA “shall be final and
conclusive decisions of the matters involved, except that any
person aggrieved by a final decision” of the DEA “may obtain
review of the decision” in the court of appeals. 21 U.S.C. § 877.
This Court has previously concluded that section 877 “vests
exclusive jurisdiction in the courts of appeals over ‘[a]ll final
determinations, findings, and conclusions’ of the DEA
applying the CSA.” John Doe, Inc., 484 F.3d at 568 (alteration
in original) (quoting 21 U.S.C. § 877). Thus, claims falling
within the ambit of section 877—those challenging a final
decision of the DEA under the CSA—are considered by the
courts of appeals, not the district courts. The question here is
whether the Plaintiffs’ claims challenge a final decision of the
DEA—namely the IFR. 6 If so, section 877 deprives the district
court of subject matter jurisdiction. See Jarkesy, 803 F.3d at
15.
The Plaintiffs’ principal argument on appeal is that their
amended complaint does not seek to challenge or invalidate the
IFR but instead seeks a declaratory judgment that the
manufacture and possession of hemp byproducts is authorized
by the 2018 Farm Bill or otherwise immune from the CSA’s
registration and enforcement provisions, whether or not it is
deemed a controlled substance by the DEA per its IFR. See
Appellants’ Br. 30–31; see also Am. Compl. ¶ 105. The
Plaintiffs attempt to draw a meaningful distinction between
what the IFR purportedly does—that is, it conforms DEA’s
regulations to the 2018 Farm Bill’s classification decision
6
The district court concluded that the IFR is a “final decision”
under 21 U.S.C. § 877, see Hemp Indus. Ass’n, 539 F. Supp. 3d at
128, and the Plaintiffs do not argue otherwise. Further, the fact that
a rule is characterized as an “interim” rule is of no consequence. See
Mack Trucks, Inc. v. EPA, 682 F.3d 87, 95 (D.C. Cir. 2012)
(reviewing and vacating interim final rule).
13
regarding hemp and hemp-based substances—and the relief the
Plaintiffs seek—immunization from registration requirements
for IHM and WHM, regardless of the classification decision.
See Appellants’ Br. 31–32. In the Plaintiffs’ view, the IFR
“adopts no position on the question of whether the 2018 Farm
Bill authorizes the manufacture and possession of intermediate
and waste hemp material,” which they contend is the crux of
their challenge, and that silence allows their suit to proceed
notwithstanding 21 U.S.C. § 877. Id. at 35.
The classification/liability distinction drawn by the
Plaintiffs has some superficial appeal. Granted, the CSA is
intended to be a “comprehensive regime” to control the
“legitimate and illegitimate traffic in controlled substances,”
Raich, 545 U.S. at 12, but its individual Parts serve distinct
purposes in achieving those ends: Part B defines a controlled
substance, see 21 U.S.C. §§ 811–14, Part C provides regulatory
requirements (e.g., registering, labeling and packaging, and
recordkeeping) for those substances, see id. §§ 821–32, and
Parts D and E provide enforcement mechanisms and penalties
to enforce the controls placed on controlled substances, see id.
§§ 841–65 (Part D), 871–90 (Part E).
The problem for the Plaintiffs is that the IFR addresses
both classification (whether IHM and WHM are controlled)
and authorization (what controls or immunities do or do not
apply to IHM and WHM)—a conclusion that even the
Plaintiffs cannot help but reach—meaning that the
classification/authorization distinction drawn by the Plaintiffs
does not help them evade 21 U.S.C. § 877. See Hemp Indus.
Ass’n, 539 F. Supp. 3d at 128–30.
Begin with the DEA’s position on hemp and hemp-derived
substances as articulated in the IFR. The DEA adopts the view,
as the Plaintiffs relate in their amended complaint, that “the
14
definition of hemp [in the 2018 Farm Bill] does not
automatically exempt [from Schedule I] any product derived
from a hemp plant, regardless of the [delta-9]-THC content of
the derivative” and that “a cannabis derivative, extract, or
product that exceeds the 0.3% [delta-9]-THC limit is a schedule
I controlled substance, even if the plant from which it was
derived contained 0.3% or less [delta-9]-THC on a dry weight
basis.” 85 Fed. Reg. at 51,641; see Am. Compl. ¶ 83 (quoting
same). Because, as the Plaintiffs assert, both IHM and WHM,
which are “derived from” the cannabis plant, generally exceed
this 0.3 per cent threshold, see Am. Compl. ¶ 37 (“IHM and
WHM naturally (and avoidably) exceed 0.3% [delta 9]-
THC.”), the DEA could reasonably view both byproducts as
controlled substances. But the IFR also abjures regulation of
cannabis-derived substances below the 0.3 per cent delta-9
THC concentration threshold: “[E]ntities no longer require a
DEA registration or import and export permits to handle hemp
extract that does not exceed the statutory 0.3% THC limit.” 85
Fed. Reg. at 51,644; see Am. Compl. ¶ 83 (quoting same).
These two provisions could lead to the not unreasonable
interpretation that notwithstanding the 2018 Farm Bill, hemp-
derived substances exceeding the 0.3 per cent threshold—a
group that could include IHM and WHM—are still subject to
registration requirements and import/export controls.
Indeed, the Plaintiffs allege that “the necessary
implication” of the IFR’s explanatory language is “that the
CSA’s registration requirements do continue to apply to
entities handling any hemp extract that exceeds the 0.3%
[delta-9]-THC limit, including IHM and WHM.” Am. Compl.
¶ 83 (emphases omitted); see also id. at ¶ 3 (alleging the IFR
“publicized” the DEA’s “mistaken[]” view that it possesses
“authority to impose criminal and/or civil liability against
unregistered hemp processors who manufacture and/or process
IHM and WHM”); id. at ¶ 84 (characterizing the IFR as
15
“DEA’s most direct claim that IHM and WHM are illegal”); id.
at ¶¶ 100–01 (quoting the IFR as evidence of DEA’s position
that the 2018 Farm Bill does not “authorize[] the manufacture
of byproducts necessarily or unavoidably created during the
production of hemp-based” substances). Thus, the Plaintiffs
cannot avoid the conclusion that the IFR is as much about
registration requirements and liability as it is about
classification.
This brings us to the Plaintiffs’ amended complaint and
requested relief. They allege that the DEA’s “asserti[on] [of]
authority to regulate the hemp production process” constitutes
“an affront to Congress’s clear command that possession and
manufacture of IHM and WHM be permitted.” Id. at ¶ 90; see
also id. at ¶¶ 99–101; id. at ¶ 83 (“The explanatory language
accompanying the text of the IFR, however, confirms DEA’s
intent to regulate hemp production in defiance of Congress’s
express mandate in the 2018 Farm Bill.”); id. at ¶ 88 (touting
letters from senators and members of Congress asserting the
IFR “rewrites the 2018 Farm Bill contrary to Congressional
intent”). Accordingly, the Plaintiffs request “a judicial
determination” that, contrary to the IFR, “the definition of
‘hemp’ as set forth in [7 U.S.C. § 1639o], includes IHM and
WHM” or that the 2018 Farm Bill “authorizes and/or
immunizes the possession and manufacture of IHM and
WHM”—with the result of either declaration being that “the
possession and manufacture of IHM and WHM during the
hemp production process does not require registration under
the CSA.” Id. at ¶ 105. The Plaintiffs also request injunctive
relief that, again contrary to the IFR, “enjoin[s] DEA from
enforcing the CSA as to IHM and WHM.” Id. at ¶ 110.
Taken together, the Plaintiffs’ amended complaint, “[i]n
substance,” seeks review of the “same issue[]” the IFR
purportedly addresses—whether CSA controls continue to
16
apply to the manufacture and possession of hemp-derived
substances like IHM and WHM—and requests the district court
“require the [DEA] to conduct future [action] on the terms that
[the Plaintiffs] proposed.” FCC v. ITT World Commc’ns, Inc.,
466 U.S. 463, 468 & n.5 (1984); see also Hemp Indus. Ass’n,
539 F. Supp. 3d at 131 (Plaintiffs “ask the Court to endorse
their own desired statutory interpretation—which just so
happens to be the complete opposite of the position they claim
DEA adopted in a promulgated rule—and to enjoin the agency
from acting any differently.”). Both the Supreme Court and this
Court have stressed, however, that “[l]itigants may not evade”
an exclusive review provision like 21 U.S.C. § 877 “by
requesting the District Court to enjoin action that is the
outcome of the agency’s order.” ITT World Commc’ns, 466
U.S. at 468; see also Heller, Ehrman, White & MacAuliffe v.
Babbitt, 992 F.2d 360, 361, 363–64 (D.C. Cir. 1993) (“[E]ager
litigant[s]” may not “circumvent a congressional grant of
exclusive jurisdiction . . . by simply converting the suit into one
for injunctive relief.”); Daniels v. Union Pac. R.R. Co., 530
F.3d 936, 942–43 (D.C. Cir. 2008) (Litigants may not
“circumvent[] review of the [agency’s] regulations in this
Court . . . by instead indirectly . . . seeking review of the
regulations in district court.”).
The Plaintiffs’ remaining arguments are unavailing. They
first fault the district court for not “accept[ing] [their] view of
the case at the pleadings stage”—presumably their assertion
that they do not directly attack the IFR. Appellants’ Br. 30. A
court is obliged to accept “as true all of the factual allegations
contained in the complaint and draw[] all inferences in favor of
the nonmoving party,” City of Harper Woods Emps.’ Ret. Sys.
v. Olver, 589 F.3d 1292, 1298 (D.C. Cir. 2009); see Browning
v. Clinton, 292 F.3d 235, 240 (D.C. Cir. 2002) (same), but there
is no such requirement with respect to a litigant’s “view” or
“characterization” of the complaint. In fact, “constru[ing] [a]
17
complaint liberally in the plaintiff’s favor” does not entail
“accept[ing] inferences unsupported by facts or legal
conclusions cast in the form of factual allegations.” Harper
Woods, 589 F.3d at 1298 (citing Kowal v. MCI Commc’ns
Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994)). Further, in the
context of exclusive review statutes, we have cautioned against
being lulled to sleep by “creative[] framing.” Heller, Ehrman,
White & MacAuliffe, 992 F.2d at 363; Daniels, 530 F.3d at942–43; accord ITT World Commc’ns, 466 U.S. at 468. We
therefore find no basis for the Plaintiffs’ proposition that the
district court was obligated to accept their “view” of the case.
The Plaintiffs also assert that their action is nothing more
than a “mirror image” of a government action brought under 21
U.S.C. § 882. See Appellants’ Br. 45–46 (quoting Menominee
Indian Tribe of Wis. v. DEA, 190 F. Supp. 3d 843, 850 (E.D.
Wis. 2016)). Section 882 grants “district courts of the United
States . . . jurisdiction in proceedings” brought by the
government “to enjoin violations of” the CSA. 21 U.S.C.
§ 882. But a narrow grant of jurisdiction in favor of the
government simply underscores that the Congress “knew how
to provide alternative forums for judicial review based on the
nature of a[] [plaintiff’s] claim,” Elgin v. Dep’t of Treasury,
567 U.S. 1, 13 (2012), and instead chose to require that litigants
“proceed exclusively through” section 877 in making a
challenge within its scope, Jarkesy, 803 F.3d at 15; cf. id. at 17
(“Congress, though, gave the SEC the option to pursue
violations in district court. Congress did not thereby
necessarily enable respondents in administrative
proceedings to collaterally attack those proceedings in court.”
(emphases in original)).
The Plaintiffs finally spill much ink arguing that the
district court erred in not applying Thunder Basin to determine
whether 21 U.S.C. § 877 in fact divested it of jurisdiction. See
18
Appellants’ Br. 43–58; see generally Thunder Basin Coal Co.
v. Reich, 510 U.S. 200 (1994). But Thunder Basin is
unilluminating here. The “ultimate question” Thunder Basin
asks is “whether Congress intended exclusivity when it
established the statutory scheme” at issue. Jarkesy, 803 F.3d at
12. Following the Supreme Court’s lead, our Court employs a
two-part framework: “Congress intended that a litigant proceed
exclusively through a statutory scheme . . . when (i) such intent
is fairly discernible in the statutory scheme, and (ii) the
litigant’s claims are of the type Congress intended to be
reviewed within [the] statutory structure.” Am. Fed’n of Gov’t
Emps., 929 F.3d at 754 (internal quotation marks omitted)
(quoting Jarkesy, 803 F.3d at 15); accord Free Enter. Fund v.
Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 489–90 (2010);
Elgin, 567 U.S. at 10, 15.
We have already answered the first part of the Thunder
Basin framework with respect to the exclusivity of 21 U.S.C.
§ 877 by concluding that it “vests exclusive jurisdiction in the
courts of appeals over ‘[a]ll final determinations, findings, and
conclusions’ of the DEA applying the CSA.” John Doe, Inc.,
484 F.3d at 568 (emphasis added) (quoting 21 U.S.C. § 877).
Thus, we can definitively “discern that Congress intended the
statutory scheme to be exclusive with respect to claims within
its scope.” Am. Fed’n of Gov’t Emps., 929 F.3d at 755. The
second step, whether a claim is “of the type Congress intended
to be reviewed within [the] statutory structure,” id. at 754
(quoting Jarkesy, 803 F.3d at 15), reduces to whether the
Plaintiffs’ claims challenge a final agency decision subject to
section 877. See Hemp Indus. Ass’n, 539 F. Supp. 3d at 134.
We have already affirmed that it does.
19
B.
Alternatively, the Plaintiffs strenuously argue on appeal
that the IFR makes no “mention [of] the manufacture and
possession of hemp byproducts.” Appellants’ Br. 35. But even
if we accept this reframing of the Plaintiffs’ position, see supra
p. 14–15, there we fail to find any plausible basis to support the
requisite injury-in-fact to support the Plaintiffs’ claims. 7 We
note that at the pleading stage, a complaint need only contain
“sufficient factual matter, accepted as true, to state a claim [of
standing] that is plausible on its face.” Kareem v. Haspel, 986
F.3d 859, 866 (D.C. Cir. 2021) (internal quotation marks
omitted and alteration in original) (quoting Ashcroft v. Iqbal,
566 U.S. 662, 678 (2009)).
In their amended complaint, the Plaintiffs invoked the
district court’s authority under the Declaratory Judgment Act,
see Am. Compl. ¶ 8, which provides that “[i]n a case of actual
controversy within its jurisdiction,” a district court may
“declare the rights and other legal relations of any interested
party seeking such declaration, whether or not further relief is
or could be sought,” 28 U.S.C. § 2201(a), and order “[f]urther
necessary or proper relief based on [the] declaratory judgment
or decree,” id. § 2202. “[J]ust like suits for every other type of
remedy, declaratory-judgment actions must satisfy Article III’s
case-or-controversy requirement.” California v. Texas, 141 S.
Ct. 2104, 2115 (2021) (citing MedImmune, Inc. v. Genentech,
7
The district court did not reach the DEA’s argument that the
Plaintiffs lack standing, see Hemp Indus. Ass’n, 539 F. Supp. 3d at
135, but the DEA has raised the argument on appeal, see Appellee’s
Br. 32–33. And, of course, we operate under the “well established”
background principle that courts have the “independent obligation to
assure that standing exists.” Shea v. Kerry, 796 F.3d 42, 49–50 (D.C.
Cir. 2015) (quoting Summers v. Earth Island Inst., 555 U.S. 488, 499
(2009)).
20
Inc., 549 U.S. 118, 126–27 (2007)). This includes, inter alia,
demonstrating an injury-in-fact that is both “concrete and
particularized” and “actual or imminent, not conjectural or
hypothetical.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560
(1992) (internal quotation marks and citation omitted). In other
words, a plaintiff cannot simply rest on some abstract desire to
know his rights or status under a statute, see, e.g., Ashcroft v.
Mattis, 431 U.S. 171, 172 (1977); Golden v. Zwickler, 394 U.S.
103, 109 (1969), but rather needs to connect the requested
declaration to some actual or imminent injury, see Steffel v.
Thompson, 415 U.S. 452, 458–59 (1974).
The Plaintiffs’ asserted injury is that the DEA’s position
on hemp byproducts like IHM and WHM presents them with
“the immediate dilemma of choosing between ceasing to
process, manufacture and/or store hemp; obtaining a Schedule
I registration from DEA; or risking criminal and/or civil
prosecution under the CSA by DEA for conducting such
activities.” Am. Compl. ¶ 102. Neither the Plaintiffs nor the
DEA asserts that the agency is currently undertaking or has
undertaken an enforcement action against the Plaintiffs’
possession or manufacture of hemp byproducts, meaning that
the Plaintiffs’ challenge is therefore grounded in the alleged
threat of enforcement. Although a plaintiff requesting pre-
enforcement review “is not required ‘to expose himself to
liability before bringing suit to challenge the basis’ for an
enforcement action by the government,” Matthew A. Goldstein,
PLLC v. U.S. Dep’t of State, 851 F.3d 1, 4 (D.C. Cir. 2017)
(quoting MedImmune, 549 U.S. at 128–29); see also Susan B.
Anthony List v. Driehaus (SBA List), 573 U.S. 149, 158 (2014)
(“When an individual is subject to [] a threat, an actual arrest,
prosecution, or other enforcement action is not a prerequisite
to challenging the law.”), he must nevertheless demonstrate
that either the threatened enforcement injury is “certainly
impending” or there is a “substantial risk” such injury will
21
occur, see Attias v. Carefirst, Inc., 865 F.3d 620, 627 (D.C. Cir.
2017) (quoting SBA List, 573 U.S. at 158); see also TransUnion
LLC v. Ramirez, 141 S. Ct. 2190, 2210 (2021) (“[A] person
exposed to a risk of future harm may pursue forward-looking,
injunctive relief to prevent the harm from occurring, at least so
long as the risk of harm is sufficiently imminent and
substantial.”).
Here, the Plaintiffs have failed to assert a sufficiently
imminent or substantial risk of enforcement against their
desired course of conduct: handling hemp byproducts, like
IHM and WHM, that exceed the 0.3 per cent delta-9 THC
concentration threshold set forth in the 2018 Farm Bill. If we
accept the Plaintiffs’ preferred interpretation, the IFR answers
only the question whether hemp byproducts are “controlled in
the schedules after the 2018 Farm Bill,” not the separate
question whether “the manufacture and possession of hemp
byproducts during the hemp production process [is]
authorized” or, conversely, prohibited absent DEA registration.
Appellants’ Br. 32; see also id. at 35 (“The [IFR] adopts no
position on the question of whether the 2018 Farm Bill
authorizes the manufacture and possession of intermediate and
waste hemp material.”). We would be hard-pressed to conclude
that an agency rule that allegedly takes no position on the
liability or immunity of a desired course of conduct can
simultaneously proscribe or deny immunity for that same
conduct. Cf. Matthew A. Goldstein, 851 F.3d at 5 (finding lack
of credible threat of enforcement from plaintiff’s allegations of
“vague and general descriptions of legal activities that the firm
intends to undertake, none of which the State Department
views as” unlawful).
The Plaintiffs also point to several statements by DEA
officials that purportedly highlight the view “that IHM and
WHM are illegal,” Am. Compl. ¶ 84, and have caused the
22
Plaintiffs and their members to live in fear of DEA action, see
id. at ¶ 93; see also Decl. of Rick Trojan III (Trojan Decl.) ¶ 4,
reprinted in Appendix (App.) 098–99. For example, the
Plaintiffs cite a statement from Chief of the DEA Office of
Intergovernmental Affairs Sean Mitchell:
When asked about DEA’s position regarding
elevated levels of [delta-9]-THC during “CBD
extraction,” Mr. Mitchell responded that DEA
retains discretion to enforce the CSA as to hemp
byproducts such as IHM and WHM, adding
“you’ll never hear DEA say that we’re not going
to enforce any federal law . . . .”
Am. Compl. ¶ 84 (emphasis added). They also point to
Mitchell’s statement that allegedly “equated hemp processors
with pharmaceutical companies that ‘take[]non-controlled raw
materials’ but are nevertheless ‘required to be [] registered with
DEA as a controlled substance manufacturer’ because they
‘produce[] or manufacture[] controlled substances . . .’ ‘during
th[e] manufacturing of that not controlled end product.’” Id. at
¶ 85 (alterations in original). But even if we accept these
statements as true—as well as the Plaintiffs’ legal contention
that the 2018 Farm Bill leaves the DEA no enforcement
discretion with respect to IHM and WHM—they fail to evince
any credible or imminent threat that the DEA will use its
enforcement discretion against the Plaintiffs or any of the
Hemp Association’s members. Mitchell’s statements are akin
to a statement of intent to “prosecut[e] all violators of the
statute under normal prosecutorial standards” that, absent
allegations of “prior threats” or “characteristics indicating an
especially high probability of enforcement,” do not constitute
a threat of enforcement. Seegars v. Gonzales, 396 F.3d 1248,
1255 (D.C. Cir. 2005) (internal quotation marks and citation
omitted); see also Aeronautical Radio, Inc. v. FCC, 983 F.2d
23275, 284 (D.C. Cir. 1993) (finding “no indication in the record
. . . that the [agency] is likely to attempt to [enforce the
challenged interpretation against the petitioner]” and
concluding that the petitioner’s “alleged injury is therefore
merely conjectural” (internal quotation marks omitted)).
The Plaintiffs also cite a statement from “DEA spokesman
Michael Miller” that the 2018 Farm Bill “‘exempted any
product from a Cannabis sativa L. plant with a delta-9 THC
content of less than 0.3% by dry weight basis.’” Am. Compl.
¶ 86. This is nothing more than a restatement of law that cannot
plausibly constitute a threat of enforcement. Compare 7 U.S.C.
§ 1639o(1) (“The term ‘hemp’ means the plant Cannabis sativa
L. and any part of that plant, including the seeds thereof and all
derivatives, extracts, cannabinoids, isomers, acids, salts, and
salts of isomers, whether growing or not, with a delta-9
tetrahydrocannabinol concentration of not more than 0.3
percent on a dry weight basis.”), with 21 U.S.C.
§ 802(16)(B)(i) (“The term ‘marihuana’ does not include . . .
hemp, as defined in section 1639o of Title 7.”).
The Plaintiffs also point to three additional sources for
their alleged threat of enforcement, none of which provides a
plausible basis for a threat of enforcement against the
possession and/or manufacture of IHM and WHM. First, the
Plaintiffs point to letters from a handful of Senators and
members of Congress objecting to the DEA’s stance and
asserting that the IFR “criminalizes the intermediate steps of
hemp processing, which is wholly inconsistent with . . . the
2018 Farm Bill.” Letter from Senators Ron Wyden and Jeffrey
A. Merkley to Acting DEA Administrator Timothy J. Shea
(Oct. 22, 2020), reprinted in App. 093; see also Letter from
Members of Congress to Acting DEA Administrator Timothy
J. Shea (Oct. 20, 2020), reprinted in App. 095–97. But these
letters involve the DEA’s assertion of authority under the IFR
24
and, if anything, largely support our overarching conclusion
that the source of the Plaintiffs’ aggrievement is the IFR.
Second, the Plaintiffs point to instances of alleged DEA
overreach in the marijuana and hemp industries predating the
2018 Farm Bill. See Am. Compl. ¶¶ 40–61; Appellants’ Reply
Br. 24–25. “‘[P]ast wrongs’ may serve as ‘evidence bearing on
whether there is a real and immediate threat of repeated
injury,’” N.B. ex rel. Peacock v. District of Columbia, 682 F.3d
77, 84 (D.C. Cir. 2012) (quoting City of Los Angeles v. Lyons,
461 U.S. 95, 102 (1983)), but a plaintiff seeking prospective
declaratory and injunctive relief may not rest on past injuries
alone, see Dearth v. Holder, 641 F.3d 499, 502 (D.C. Cir.
2011); Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015).
Further, the pre-2018 Farm Bill conduct cited by the Plaintiffs
involves the agency’s treatment of THC naturally occurring in
the cannabis plant, see Am. Compl. ¶¶ 44–49, and hemp pilot
programs administered by states for academic and research
purposes, see id. at ¶¶ 50–59, meaning it has nothing to do with
IHM, WHM or any other byproduct of the hemp-extract
production process and no “bearing on whether there is a real
and immediate threat of repeated injury” to the Plaintiffs’
production of hemp extracts after the 2018 Farm Bill. N.B. ex
rel. Peacock, 682 F.3d at 84 (quoting Lyons, 461 U.S. at 102).
Third, and finally, the Plaintiffs assert that the DEA’s
statements and history of enforcement conduct have caused
hemp manufacturers to curtail their operations and reduced
their access to financial services. See Am. Compl. ¶¶ 91–95;
see also Trojan Decl. at ¶¶ 4–7. But we have previously held
that “broad-based market effects stemming from regulatory
uncertainty are quintessentially conjectural, and it is difficult to
imagine a[n] [agency] action that would not
confer standing under this theory.” New England Power
Generators Ass’n, Inc. v. FERC, 707 F.3d 364, 369 (D.C. Cir.
25
2013) (rejecting petitioner’s argument that “chilling effect” on
petitioner’s ability to attract capital investments conferred
standing) (citing Shell Oil Co. v. FERC, 47 F.3d 1186, 1202
(D.C. Cir. 1995)); cf. Clapper v. Amnesty Int’l USA, 568 U.S.
398, 418 (2013) (“[A]llegations of subjective chill are not an
adequate substitute for a claim of specific present objective
harm or a threat of specific harm.” (internal quotation marks
omitted) (quoting Laird v. Tatum, 408 U.S. 1, 13–14 (1972))).
In sum, if we were to view the IFR as agnostic regarding
the manufacture and/or possession of IHM and WHM, the
Plaintiffs fail to plausibly allege an enforcement action that is
“certainly impending” nor a “substantial risk” that such action
will occur, thereby failing to assert a sufficient injury-in-fact to
survive dismissal. See Attias, 865 F.3d at 627 (quoting SBA
List, 573 U.S. at 158). This accords with our overarching
conclusion that the IFR is the target of the Plaintiffs’ challenge.
For the foregoing reasons, the district court’s judgment is
affirmed.
So ordered.