Chemicals for Research & Industry v. Thornburgh

• Decision Date: 29 April 1991
• Docket Number: No. C-91-0578 EFL.,C-91-0578 EFL.
• Citation: 762 F. Supp. 1394
• Court: U.S. District Court — Northern District of California
• Parties: CHEMICALS FOR RESEARCH AND INDUSTRY, a California Corporation, Plaintiff, v. Richard THORNBURGH, Attorney General of the United States, Robert C. Bonner, Administrator, Drug Enforcement Administration, Ronald J. Caffrey, Deputy Assistant Administrator for Operations, Drug Enforcement Administration, Defendants.

762 F. Supp. 1394

CHEMICALS FOR RESEARCH AND INDUSTRY, a California Corporation, Plaintiff, v. Richard THORNBURGH, Attorney General of the United States, Robert C. Bonner, Administrator, Drug Enforcement Administration, Ronald J. Caffrey, Deputy Assistant Administrator for Operations, Drug Enforcement Administration, Defendants.

No. C-91-0578 EFL.

United States District Court, N.D. California.

April 29, 1991.

Thomas Steel, San Francisco, Cal., for plaintiff.

George C. Stoll, Asst. U.S. Atty., San Francisco, Cal., for defendants.

ORDER GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

LYNCH, District Judge.

Plaintiff, Chemicals for Research and Industry, Inc. ("CFRI"), has initiated the above-captioned action challenging the constitutionality of certain actions taken by defendants¹ as well as challenging the constitutionality of a 1988 amendment to section 310 of the Chemical Diversion and Trafficking Act ("the CDTA"), 21 U.S.C. § 830(b), or in the alternative, the constitutionality of defendants' interpretation and application thereof. Plaintiff, in its complaint, prays for declaratory and injunctive relief.

On April 12, 1991, plaintiff moved the Court for a preliminary injunction that would rescind certain actions taken by defendants and enjoin defendants from repeating or taking certain actions in the future. For the reasons stated below, the Court grants plaintiff's motion for preliminary injunction and orders preliminary injunctive relief as set forth below.

I. FACTUAL BACKGROUND

Plaintiff is a corporation in the business of distributing new and surplus chemicals as well as new and used laboratory equipment. Defendants' agents suspect that chemicals sold by plaintiff have been diverted to use at illegal methamphetamine manufacturing laboratories. Defendants have notified five chemical suppliers who have sold chemicals to plaintiff in the past that they may no longer sell certain chemicals to plaintiff.² The chemicals that the five suppliers may no longer sell to plaintiff ("the listed chemicals") are, for the most part, relatively common chemicals that have many legitimate uses but may also be used to manufacture illegal drugs.³ Defendants cite 21 U.S.C. section 830(b) as authority for their action. Defendants have not afforded plaintiff a formal hearing regarding defendants' actions or any type of procedural due process.⁴

II. STANDARDS FOR ISSUANCE OF PRELIMINARY INJUNCTION

In order to determine whether a preliminary injunction shall issue, the Court must make two inquiries. First, the Court must inquire as to whether plaintiff might suffer irreparable injury if the Court fails to issue a preliminary injunction. United States v. Odessa Union Warehouse Co-op., 833 F.2d 172, 174 (9th Cir. 1987). Second, the Court must inquire as to whether plaintiff will probably succeed on the merits. Id. If the Court determines that plaintiff might suffer irreparable injury if the Court fails to issue a preliminary injunction and the Court determines that plaintiff will probably succeed on the merits, the Court shall issue a preliminary injunction.⁵ The Court addresses each of these inquiries in turn.

III. DISCUSSION

A. Possibility of Irreparable Injury

The Court finds that there is a good possibility that plaintiff will suffer irreparable injury if a preliminary injunction does not issue. Plaintiff has submitted evidence from which one may infer that plaintiff will lose sales if a preliminary injunction does not issue.⁶ Moreover, plaintiff contends that it is barred by applicable case law from seeking monetary damages. Defendants, without conceding that plaintiff has suffered or will suffer damages, agrees that if plaintiff has suffered or were to suffer damages, plaintiff would be barred from seeking monetary damages. Since monetary damages do not appear to be a remedy that is available to plaintiff, the Court has little difficulty in finding that plaintiff might suffer irreparable injury if an injunction does not issue.

B. Probability of Success on the Merits

For the reasons stated below, the Court also finds that plaintiff will probably succeed on the merits. First, defendants' actions do not appear to be authorized by statute. Second, if the statute were interpreted in such a manner as to authorize defendants' actions, the statute would not appear to comport with the requirements of the due process clause of the fifth amendment. At best, it would appear to the Court, at this juncture, that it would be necessary to add judicial gloss to the statute so that entities and individuals in plaintiff's position would be afforded constitutionally sufficient procedural due process.

1. Statutory Authorization

It appears unlikely that 21 U.S.C. section 830(b) authorizes the actions that defendants have taken with respect to plaintiff's suppliers. Section 830(b) in its entirety reads as follows:

(b) Reports to Attorney General

Each regulated person shall report to the Attorney General, in such form and manner as the Attorney General shall prescribe by regulation—

(1) any regulated transaction involving an extraordinary quantity of a listed chemical, an uncommon method of payment or delivery, or any other circumstance that the regulated person believes may indicate that the listed chemical will be used in violation of this subchapter;

(2) any proposed regulated transaction with a person whose description or other identifying characteristic the Attorney General furnishes in advance to the regulated person;

(3) any unusual or excessive loss or disappearance of a listed chemical under the control of the regulated person; and

(4) any regulated transaction in a tableting machine or an encapsulating machine.

Each report under paragraph (1) shall be made at the earliest practicable opportunity after the regulated person becomes aware of the circumstance involved. A regulated person may not complete a transaction with a person whose description or identifying characteristic is furnished to the regulated person under paragraph (2) unless the transaction is approved by the Attorney General. The Attorney General shall make available to regulated persons guidance documents describing transactions and circumstances for which reports are required under paragraph (1) and paragraph (3).

21 U.S.C. § 830(b) (emphasis added). The sentence upon which defendants rely, underscored above, was not a part of the original bill, H.R. 5210, but was added as an amendment.⁷ Apparently, this amendment was enacted hastily, and the legislative record is devoid of any indication of the amendment's purpose. Plaintiff has come forward, however, with a declaration executed by Eric E. Sterling, a member of the House Judiciary Committee Staff at the time that the amendment was passed. Mr. Sterling declares that he drafted the sentence at issue in order to embrace what he thought was the congressional intention of providing a mechanism "to delay sales to certain individuals so that law enforcement officials could prepare `sting' operations."

While the ex post declaration of a congressional staff member, even one who drafted the statutory language at issue, may not necessarily be deserving of great weight in determining congressional intent, this Court agrees with Mr. Sterling's interpretation. First, it is clear from the language of section 830(b) as a whole that section 830(b)'s primary purpose was to provide information to law enforcement agencies so that traditional law enforcement mechanisms might work more effectively. Interpreting the sentence at issue to authorize the Attorney General to delay a specific transaction until a sting operation can be prepared is entirely consistent with this purpose. Interpreting the sentence at issue to authorize an across the board ban on domestic transactions involving certain individuals is not consistent with this purpose.

Second, another section of the CDTA that the parties agree was intended to provide for the interdiction of imports and exports of listed chemicals—rather than the interdiction of domestic sales as in the case at bar—bears no resemblance at all to 21 U.S.C. section 830(b). Title 21 U.S.C. section 971(c) provides that "the Attorney General may order the suspension of any importation or exportation of a listed chemical ... or may disqualify any regular customer or regular supplier on the ground that the chemical may be diverted to the clandestine manufacture of a controlled substance." Moreover, section 971(c) provides that "the Attorney General must provide written notice of the order (including a statement of the legal and factual basis for the order)" and must provide "an agency hearing on the record in accordance with the Administrative Procedures Act" if such a hearing is requested. 21 U.S.C. § 971(c). The Court believes that if Congress had intended for section 830(b) to authorize the interdiction of domestic sales of listed chemicals, it probably would have used the same language as it did in section 971(c) and provided for the same procedural safeguards as it did in section 971(c).

Finally, the Court has grave concerns as to whether section 830(b) is constitutional as it is being interpreted and applied by defendants. As discussed in section III.B.2. below, defendants' interpretation of section 830(b) probably runs afoul of the due process clause of the fifth amendment. If the Court is forced to choose between an interpretation of a statute that is constitutional and an interpretation of the same statute that is unconstitutional, the constitutional interpretation is favored. Ellis v. Brotherhood of Railway, Airline & Steamship Clerks, 466 U.S. 435, 444, 104 S.Ct. 1883, 1890, 80 L.Ed.2d 428 (1984). Plaintiff's interpretation—that the statute authorizes the attorney general to cause a brief delay in a transaction while a "sting" is prepared—is far more likely to be constitutional than defendant's interpretation —that the statute authorizes an across the board interdiction...