Bonds v. Tandy, 05-60478.

• Citation: 457 F.3d 409
• Decision Date: 19 July 2006
• Docket Number: No. 05-60478.,05-60478.
• Parties: Michael E. BONDS, Petitioner, v. Karen TANDY, Administrator, United States Drug Enforcement Administration, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

457 F.3d 409

Michael E. BONDS, Petitioner, v. Karen TANDY, Administrator, United States Drug Enforcement Administration, Respondent.

No. 05-60478.

United States Court of Appeals, Fifth Circuit.

July 19, 2006.

Matthew Yarbrough Harris (argued), Rutledge & Davis, New Albany, MS, for Bonds.

Teresa Ann Wallbaum (argued), U.S. Dept. of Justice, Narcotics & Dangerous Drug Section, Washington, DC, Karen Tandy, Cynthia R. Ryan, U.S. Dept. of Justice, Drug Enforcement Admin., Alexandria, VA, for Tandy.

Petition for Review from a Decision of the Drug Enforcement Administration.

Before GARZA, PRADO and OWEN, Circuit Judges.

PRADO, Circuit Judge:

Michael Bonds petitions for review of the Drug Enforcement Administration's ("DEA") decision denying Rick Quinn's waiver application that would have allowed Medical Plaza Pharmacy ("MPP") to hire Bonds. Because we hold that 21 U.S.C. § 877 limits petitions for judicial review to those litigants with Article III standing and who are also arguably within the zone of interests of the Controlled Substances Act ("CSA"),¹ we find that Bonds lacks standing to challenge the agency's final decision. Accordingly, we dismiss the petition for lack of jurisdiction.

I. BACKGROUND

Bonds, currently a licensed pharmacist in the State of Mississippi, applied for employment as a pharmacist at MPP. Because Bonds had a prior felony conviction for the illegal distribution of a controlled substance, and because he once owned a pharmacy that had its DEA registration revoked, 21 C.F.R. § 1301.76 prevented MPP from hiring Bonds unless the DEA waives the restriction.² On August 23, 2004, Quinn, on behalf of MPP, applied for a waiver, but the DEA denied the application based on Bonds's criminal history and the criminal histories of MPP's owner and two of its former employees.

II. DISCUSSION

A. Standard of Review

Bonds petitions this Court for review, claiming that the DEA's decision was arbitrary and not supported by substantial evidence. The Government counters that Bonds lacks standing to appeal the DEA's decision. We review questions of jurisdiction, and specifically standing, de novo. See, e.g., Pederson v. La. State Univ., 213 F.3d 858, 869 (5th Cir.2000). Although the DEA raises standing, Bonds bears the burden of persuasion. BCCA Appeal Group v. U.S. Envtl. Prot. Agency, 355 F.3d 817, 825 (5th Cir.2003).

B. Scope of Judicial Review Under the Controlled Substances Act

The CSA's judicial review provision provides that "any person aggrieved by a final decision of the Attorney General" may obtain review of "[a]ll final determinations, findings, and conclusions of the Attorney General under this subchapter." 21 U.S.C. § 877. The Government contends that the CSA's judicial review provision requires, at a minimum, two standing components, one constitutional, which is based on Article III's provision for judicial review of a case or controversy,³ and the other prudential.⁴ Specifically, the Government argues that Bonds lacks standing because he fails to meet the prudential standing requirements. It contends that Bonds is not a "person aggrieved" under the CSA because: (1) the alleged injury does not fall within the zone of interests protected or regulated by the CSA; (2) Bonds is not an employer-registrant or waiver applicant; and (3) Bonds cannot raise the legal rights of a third party. Bonds asserts that he meets the prudential standing requirements because he is a "person aggrieved" under the CSA's judicial review provision, 21 U.S.C. § 877.

"The phrase `person adversely affected or aggrieved' is a term of art used in many statutes to designate those who have standing to challenge or appeal an agency decision, within the agency or before the courts." Dir., Office of Workers' Comp. Programs v. Newport News Shipbuilding & Dry Dock Co., 514 U.S. 122, 126, 115 S.Ct. 1278, 131 L.Ed.2d 160 (1995). We have not yet addressed the scope of the term "person aggrieved" under 21 U.S.C. § 877. Because Congress could have, through 21 U.S.C. § 877, expanded judicial reviewability to litigants who do not meet the prudential standing requirements, we look to the Act to determine whether Congress intended the prudential standing doctrine to apply to suits brought under the CSA. See Assoc. of Cmty. Orgs. for Reform Now v. Fowler, 178 F.3d 350, 356, 363 (5th Cir.1999). However, we recognize that "Congress legislates against the background of [the] prudential standing doctrine, which applies unless it is expressly negated." Bennett v. Spear, 520 U.S. 154, 163, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).

In drafting the CSA, Congress did not expressly expand judicial review to litigants not meeting the prudential standing requirements.⁵ Moreover, in the context of the similarly-worded judicial review provision in the Administrative Procedure Act ("APA"), the Supreme Court, in Newport News, suggested that to be a person aggrieved, the litigant must "show at the outset of the case, that he is injured in fact by agency action and that the interest he seeks to vindicate is arguably within the `zone of interests to be protected or regulated by the statute' in question."⁶ Id. at 126-27, 115 S.Ct. 1278 (citation omitted).

The D.C. Circuit applied Newport News, and also reached our conclusion regarding the standing requirements under 21 U.S.C. § 877. In PDK Laboratories Inc. v. United States Drug Enforcement Administration, the court stated:

In view of the interpretation of statutes applicable to other agencies containing language identical to § 877, we hold that if PDK has Article III standing, which no one doubts, and if its interests are "arguably within the zone of interests" § 971(c)(1) regulates, which we believe they are, PDK is a "person aggrieved" within § 877's meaning and is entitled to prosecute its case in court.

362 F.3d 786, 793 (D.C.Cir.2004)(citing Newport News, 514 U.S. at 126-27, 115 S.Ct. 1278). Therefore, according to PDK Laboratories, the term "person aggrieved" merely requires that the litigant have Article III standing and prudential standing— i.e., arguably be within the "zone of interests." We agree with the D.C. Circuit's application of Newport News to 21 U.S.C. § 877. Accordingly, because we find that the background understanding of "person aggrieved" includes both the constitutional and prudential limits on standing, we hold that 21 U.S.C. § 877 limits petitions for judicial review to those litigants with Article III standing and who are also arguably within the zone of interests⁷ protected by the CSA.

C. Whether Bonds Is A "Person Aggrieved" Under 21 U.S.C. § 877.

Because we conclude that Bonds meets the Article III standing requirements,⁸ our inquiry is whether Bonds has prudential standing. In deciding whether a litigant has prudential standing, we must identify what interest the litigant seeks to assert and then decide if that interest is arguably within the zone of interests to be protected or regulated by the statute. "Under the `zone of interests' test, we liberally construe Congressional acts to favor a plaintiff's standing to challenge administrative actions. This is not to say, however, that all plaintiffs affected by a regulation or order have standing to sue . . . ." Corrosion Proof Fittings v. Envtl. Prot. Agency, 947 F.2d 1201, 1209 (5th Cir.1991) (citation omitted).⁹ "In cases where the plaintiff is not . . . the subject of the contested regulatory action, the test denies a right of review if the plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit suit." Clarke v. Sec. Indus. Ass'n, 479 U.S. 388, 399, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987).

Section 823(b) of the CSA expressly indicates that the interest protected by the regulation's registration requirement is the public's interest in the legitimate use of controlled substances and to inhibit the pernicious consequences to the public's health and safety of illegitimate use. 21 U.S.C. § 823(b) provides:

(b) The Attorney General shall register an applicant to distribute a controlled substance in schedule I or II unless he determines that the issuance of such registration is inconsistent with the public interest. In determining the public interest, the following factors shall be considered:

(1) maintenance of effective control against diversion of particular controlled substances into other than legitimate medical, scientific, and industrial channels;

(2) compliance with particular State and local law;

(3) prior conviction record of applicant under Federal or State laws relating the manufacture, distribution, or dispensing of such substances;

(4) past experience in the distribution of controlled substances; and

(5) such other factors as may be relevant to and consistent with the public health and safety.

Because the language of the CSA specifically states that the Act is meant to protect the public from the deleterious effects of the illegitimate use and distribution of controlled substances, and does not mention the employment rights of pharmacists, Bonds' desire to be employed by MPP is not arguably within the zone of interests protected by the CSA.

Moreover, the Supreme Court, on several occasions, has acknowledged that, in drafting the CSA, Congress intended to protect the public from the deleterious effects of the illegitimate use and distribution of controlled substances. For example, in Gonzales v. Oregon the Court recognized that Congress drafted the CSA to "combat[] drug abuse and control[] legitimate and illegitimate traffic in controlled substances." ___ U.S. ___, ___, 126 S.Ct. 904, 911, 163 L.Ed.2d 748 (2006). Additionally, in Gonzales v. Raich, the Court noted that Congress found that "[t]he illegal importation, manufacture, distribution, and possession and improper use of controlled substances have a substantial and detrimental effect on the health and general welfare of the...