Harline v. Drug Enforcement Admin., 97-4052

• Decision Date: 22 July 1998
• Docket Number: No. 97-4052,97-4052
• Citation: 148 F.3d 1199
• Parties: 98 CJ C.A.R. 3918 Wesley G. HARLINE, M.D., a licensed physician, Plaintiff-Appellant, v. DRUG ENFORCEMENT ADMINISTRATION, an agency of the United States Government; Thomas A. Constantine, Administrator, Drug Enforcement Administration; Gene R. Haislip, Deputy Assistant Administrator, Drug Enforcement Administration; Mary Ellen Bittner, Administrative Law Judge, Drug Enforcement Administration, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1199

148 F.3d 1199

98 CJ C.A.R. 3918

Wesley G. HARLINE, M.D., a licensed physician, Plaintiff-Appellant, v. DRUG ENFORCEMENT ADMINISTRATION, an agency of the United

States Government; Thomas A. Constantine, Administrator,

Drug Enforcement Administration; Gene R. Haislip, Deputy

Assistant Administrator, Drug Enforcement Administration;

Mary Ellen Bittner, Administrative Law Judge, Drug

Enforcement Administration, Defendants-Appellees.

No. 97-4052.

United States Court of Appeals, Tenth Circuit.

July 22, 1998.

J. Bruce Reading (Wesley D. Hutchins with him on the brief), Scalley & Reading, P.C., Salt Lake City, Utah, for Plaintiff-Appellant.

E. Roy Hawkens, Attorney, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C. (Scott M. Matheson, Jr., United States Attorney, and Bill Ryan, Assistant United States Attorney, Salt Lake City, Utah, on the brief) for Defendants-Appellees.

Before SEYMOUR, Chief Judge, EBEL and KELLY, Circuit Judges.

PAUL KELLY, Jr., Circuit Judge.

Plaintiff-Appellant Wesley G. Harline, M.D., challenged the constitutionality of administrative proceedings to revoke his registration to prescribe controlled substances. He appeals from the dismissal of his procedural due process claims and from the denial of preliminary injunctive relief. We have jurisdiction pursuant to 28 U.S.C. § 1291 and vacate the judgment and remand with instructions to dismiss all claims without prejudice for lack of subject-matter jurisdiction.

Background

The Controlled Substances Act, see 21 U.S.C. §§ 801-904, established a comprehensive regulatory framework to prevent the criminal diversion of drugs with legitimate medical purposes but high potentials for abuse. The Act requires practitioners who dispense controlled substances to register with the Attorney General. See 21 U.S.C. § 822. Concomitantly, the Act authorizes the Attorney General to suspend or revoke a registration after issuing an order to show cause and holding a hearing in accordance with the Administrative Procedure Act. See 21 U.S.C. § 824(a), (c). The Attorney General has delegated this authority to Defendant-Appellee Drug Enforcement Administration (DEA).

Dr. Harline is a licensed physician registered by the DEA to prescribe controlled substances. In October 1995, the DEA served him with an order to show cause why his registration should not be suspended or revoked as inconsistent with the public interest. See 21 U.S.C. § 824(a)(4). The order to show cause alleged, among other things, that Dr. Harline (1) failed to provide the DEA required information on controlled substance prescriptions; (2) prescribed controlled substances for no legitimate medical reason, not in the usual course of his practice, and in violation of state law; and (3) is the subject of state administrative proceedings to revoke, suspend, or otherwise restrict his medical license for controlled substance prescription abuses.

Dr. Harline exercised his right under the Act and DEA implementing regulations to a hearing before an Administrative Law Judge (ALJ), and ALJ Mary Ellen Bittner (the ALJ) was assigned to preside. Before his hearing date, Dr. Harline filed a motion for the ALJ to disqualify herself based on her alleged actual or potential bias stemming from her employment by the DEA. The ALJ denied the motion, deeming it "wholly without merit." Aplt.App. at 109.

Dr. Harline brought suit in federal district court, claiming the DEA's use of an ALJ in its employ violated his procedural due process rights to a fair and impartial tribunal. He sought injunctive relief against continuing administrative proceedings presided over by a DEA ALJ, and a declaration that the statutes and regulations allowing a DEA ALJ to preside are unconstitutional. The DEA moved for dismissal for lack of subject-matter jurisdiction and failure to state a claim. The district court concluded it had jurisdiction, but then dismissed all claims under Rule 12(b)(6), and denied preliminary injunctive relief for failure to demonstrate a likelihood of success on the merits.

Discussion

We review de novo the denial of a motion to dismiss for lack of subject-matter jurisdiction. See Brumark Corp. v. Samson Resources Corp., 57 F.3d 941, 944 (10th Cir.1995). If the district court lacked jurisdiction, "we have jurisdiction on appeal, not of the merits but merely for the purpose of correcting the error of the lower court in entertaining the suit." United States v. Corrick, 298 U.S. 435, 440, 56 S.Ct. 829, 80 L.Ed. 1263 (1936); see Steel Co. v. Citizens for a Better Env't, --- U.S. ----, ---- - ----, 118 S.Ct. 1003, 1012-13, 140 L.Ed.2d 210 (1998) (holding assumption of jurisdiction to address merits violates separation of powers).

A. The Exhaustion Requirement

The DEA argues the district court erred in denying its motion to dismiss for lack of subject-matter jurisdiction due to Dr. Harline's failure to exhaust administrative remedies. See Weinberger v. Salfi, 422 U.S. 749, 764, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975) (stating finality of agency decision is "central to the requisite grant of subject-matter jurisdiction"). Dr. Harline does not dispute that he has fallen short in this regard, but argues instead that the exhaustion requirement should be waived. We disagree.

Exhaustion is waivable by an agency, as when the agency itself acknowledges further administrative proceedings would not serve its purposes. See Salfi, 422 U.S. at 764-67, 95 S.Ct. 2457; Bowen v. City of New York, 476 U.S. 467, 484, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986). The DEA obviously has not waived exhaustion here. Nevertheless, agency waiver may be, in the court's discretion deemed improperly withheld where the plaintiff's interest in prompt resolution is so great that deference to the agency's judgment on the utility of exhaustion is inappropriate. See Mathews v. Eldridge, 424 U.S. 319, 330, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 215, 114 S.Ct. 771, 127 L.Ed.2d 29 (1994) (explaining court waiver is not mandatory). This is so where (1) the plaintiff asserts a colorable constitutional claim that is collateral to the substantive issues of the administrative proceedings, (2) exhaustion would result in irreparable harm, and (3) exhaustion would be futile. See Eldridge, 424 U.S. at 330-32, 96 S.Ct. 893; Koerpel v. Heckler, 797 F.2d 858, 862-63 (10th Cir.1986). The plaintiff bears the burden of establishing these elements. See Koerpel, 797 F.2d at 863.

B. The Requirement of a Colorable Claim

We need not address the other elements of court waiver because we agree with the DEA that, even if we were to exercise our discretion to waive exhaustion, Dr. Harline has not satisfied the essential element that his constitutional claim be colorable. The requirement that a constitutional claim be colorable to invoke federal court jurisdiction during pending administrative proceedings is well justified. The exhaustion requirement generally prevents premature interference with agency processes, allowing agencies an opportunity to (1) correct their own errors, (2) afford the parties before them and reviewing courts the benefit of their experience and expertise, and (3) compile a record which is adequate for judicial review. See Salfi, 422 U.S. at 765, 95 S.Ct. 2457. If the mere allegation of a denial of due process could suffice to establish subject-matter jurisdiction, then every act of an agency would be immediately judicially reviewable, undermining a statutory scheme which limits judicial review to further the above policies. Holloway v. Schweiker, 724 F.2d 1102, 1105 (4th Cir.), cert. denied, 467 U.S. 1217, 104 S.Ct. 2664, 81 L.Ed.2d 369 (1984). Furthermore, encouraging parties to circumvent agency procedures would diminish agency effectiveness by making enforcement efforts far more complicated and expensive. See McKart v. United States, 395 U.S. 185, 193-95, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969).

To determine whether a claim is colorable, it is necessary to examine its merits. See Koerpel, 797 F.2d at 863. A determination that a claim lacks merit, however, does not necessarily mean it is so lacking as to fail the colorable test. See id. (citing Boettcher v. Secretary of Health and Human Servs., 759 F.2d 719, 722 (9th Cir.1985)). A constitutional claim in this context is not colorable if it is "immaterial and made solely for the purpose of obtaining jurisdiction or ... is wholly insubstantial or frivolous." Id. (alteration in original) (quoting Boettcher, 759 F.2d at 722 (quoting Bell v. Hood, 327 U.S. 678, 682-83, 66 S.Ct. 773, 90 L.Ed. 939 (1946))). It has also been observed that "[d]ismissal for lack of subject matter jurisdiction because of the inadequacy of [a] federal claim is proper only when the claim is 'so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy.' " Steel, --- U.S. at ----, 118 S.Ct. at 1010 (quoting Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666, 94 S.Ct. 772, 39 L.Ed.2d 73 (1974)).

Dr. Harline's verified complaint alleges the statutes and regulations that allow the ALJ to preside over his registration matter violate his procedural due process rights because the ALJ is employed by the DEA. The basic intuition underlying this claim is certainly not novel in human affairs. The Continental Congress listed among the usurpations of King George III that justified independence: "He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries." The Declaration of Independence para. 11 (U.S.1776). Partially in reaction to these abuses, the Due Process Clause of the Fifth Amendment guarantees a hearing concerning the deprivation of life or a recognized property or liberty interest before a fair and impartial tribunal. See U.S. Const., amend. V; Withrow v. Larkin, 421 U.S. 35, 46, 95...