DiCola v. Food and Drug Admin., 94-1689

Decision Date01 March 1996
Docket NumberNo. 94-1689,94-1689
Citation77 F.3d 504
Parties, 64 USLW 2552 Charles G. DiCOLA, Petitioner, v. FOOD AND DRUG ADMINISTRATION, Respondent.
CourtU.S. Court of Appeals — District of Columbia Circuit

On Petition for Review of an Order of the Food and Drug Administration.

Robert A. Dormer argued the cause, for petitioner, with whom Roger C. Thies, Washington, DC, and Alan G. Minsk, Arlington, VA, were on the briefs.

Andrew E. Clark, Attorney, U.S. Department of Justice, argued the cause, for respondent, with whom Frank W. Hunger, Assistant Attorney General, Eugene M. Thirolf, Jr., Director, and Lawrence G. McDade, Deputy Director, Office of Consumer Litigation, U.S. Department of Justice, were on the brief. Gerald C. Kell, Attorney, Washington DC, U.S. Department of Justice, entered an appearance.

Before: BUCKLEY, GINSBURG, and TATEL, Circuit Judges.

Opinion for the court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

Charles DiCola petitions this court for review of a final order of the Food and Drug Administration permanently debarring him from "providing services in any capacity" to the pharmaceutical industry. Finding no merit in any of the three constitutional claims he raises, we deny the petition.

I. Background

From 1980 to 1990 DiCola worked for Bolar Pharmaceutical Company, Inc. As General Manager of Production and Vice President of Operations, he was responsible for supervising the manufacture and distribution of Bolar's drug products.

In 1992 DiCola pled guilty to violations of the Federal Food, Drug, and Cosmetic Act, as currently codified at 21 U.S.C. §§ 331(e) & (k), 333(a)(2), to wit, adulterating a drug product, within the meaning of 21 U.S.C. § 351(a)(2)(B), and failing to keep accurate batch production records, as required by 21 U.S.C. § 355(j)(1). Specifically, DiCola directed Bolar employees to manufacture a drug using ingredients and following procedures different from those that had been approved by the Food and Drug Administration and to conceal the differences from the FDA by preparing false records. DiCola paid a fine and served a prison sentence.

Prior to DiCola's guilty plea but still several years after the conduct to which he confessed, the Congress passed the Generic Drug Enforcement Act of 1992, an amendment to the FDCA. 21 U.S.C. §§ 335a-335c. In the 1992 Act, the Congress reported having found "substantial evidence [of] significant corruption" in the drug approval process, and the need for measures "designed to restore and to ensure the integrity of the ... process and to protect the public health." 21 U.S.C. § 335a note (quoting Pub.L. No. 102-282, § 1(c)). To that end, the Congress required the Secretary of Health and Human Services to debar anyone convicted of a felony related to the federal regulation of drug products from thereafter "providing services in any capacity to a person that has an approved or pending drug product application." 21 U.S.C. § 335a(a)(2).

In February 1993 the Secretary, proposing to debar DiCola, notified him of his right to a hearing if he could establish a genuine issue of fact relevant to the proposed debarment. See 21 U.S.C. § 335a(i). DiCola requested the hearing but raised no issue of fact. Instead, he objected to his proposed debarment on the ground that it would violate the Ex Post Facto and Double Jeopardy Clauses of the United States Constitution (Article I, § 9 and Amendment V, respectively). In addition, DiCola claimed that the vagueness of the proposed order of debarment--which reiterated the terms of § 335a(a)(2) without further specification--would prevent him from engaging in "activities [that] could not adversely affect the regulatory process or public health and safety" and thus impose upon him a penalty "unrelated to any valid regulatory purpose." Specifically, DiCola informed the FDA that prior to his conviction he had been "employed as a salesman of printing materials including labels and labeling used with drug products" and that he feared "such activities might be debarred because of the vagueness of [§ 355a(a)(2) ] combined with the FDA's lack of interpretation." In a follow-up letter, DiCola asked the FDA to define the phrase "service in any capacity" and to indicate whether DiCola's renewed employment as a salesman of drug labels and labeling would indeed be precluded by his debarment.

In November 1993 the Secretary denied DiCola's request for a hearing, rejected DiCola's constitutional claims, and permanently debarred him. 58 Fed.Reg. 59,044. As for DiCola's request for clarification, the Secretary concluded that the statutory phrase "provide services in any capacity" is "clear on its face." To wit: "A debarred individual cannot provide any type of service to a person that has an approved or pending drug product application." Id. at 59,045/2. To DiCola's objection that the phrase, read literally, describes conduct unrelated to any valid regulatory purpose, the Secretary responded that the

Congress can legitimately achieve [its] purpose [of protecting the public health] by prescribing "all services" due to the serious administrative difficulties involved in distinguishing between those positions clearly related to drug regulation from those clearly not regulated. These difficulties would include the problem of ascertaining the exact nature of the employee's relationship with the employer as well as defining what constitutes a sufficient nexus with the regulatory scheme under all circumstances.

Id. at 59,045/2-3.

When the Secretary denied his petition for reconsideration, DiCola petitioned this court for review of the final debarment order. Here he renews his claims that the order violates the double jeopardy and ex post facto clauses of the Constitution and reasserts as a deprivation of due process his claim that the order does not give him adequate notice of what conduct it prohibits. The parties agree that DiCola raised these issues before the agency, that no material facts are in dispute, and that this court should review DiCola's legal arguments de novo. *

II. Analysis

The validity of DiCola's debarment under the double jeopardy and ex post facto clauses of the Constitution depends upon whether it is a wholly remedial or in part a punitive measure. DeVeau v. Braisted, 363 U.S. 144, 160, 80 S.Ct. 1146, 1155, 4 L.Ed.2d 1109 (1960) ("The mark of an ex post facto law is the imposition of what can fairly be designated punishment for past acts [or] ... whether the restriction of the individual comes about as a relevant incident to a regulation of a present situation"); United States v. Halper, 490 U.S. 435, 446-451, 109 S.Ct. 1892, 1900-1903, 104 L.Ed.2d 487 (1989) (discussing "whether and under what circumstances a civil penalty may constitute punishment for the purpose of the Double Jeopardy Clause"). The Supreme Court's decision in United States v. Halper, supra, governs that question. DiCola's due process claim turns upon whether the terms of the debarment order, which are prescribed by the statute itself, provide him with fair notice of the conduct they forbid.

A. The Double Jeopardy and Ex Post Facto Claims: Punishment vs. Remediation

In Halper, supra, the Supreme Court gave us what the Second Circuit has aptly dubbed a "rule of reason," see United States v. Certain Real Property and Premises, 954 F.2d 29, 34 (1992), for the resolution of disputes such as this:

[T]he determination whether a given civil sanction constitutes punishment in the relevant sense requires a particularized assessment of the penalty imposed and the purposes that the penalty may fairly be said to serve.

[A] civil sanction that cannot fairly be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes, is punishment, as we have come to understand this term. [A] defendant who already has been punished in a criminal prosecution may not be subjected to an additional civil sanction to the extent that the second sanction may not fairly be characterized as remedial, but only as a deterrent or retribution.

Halper, 490 U.S. at 448-49, 109 S.Ct. at 1901-02. DiCola argues that a debarment imposed pursuant to § 335a(a) must be regarded as punitive because of its (1) broad sweep, (2) unlimited duration, and (3) origin in the purpose of the Congress (as reflected in legislative history) to punish. The Seventh Circuit recently rejected the same arguments and endorsed the agency's view of the matter, holding that a debarment under § 335a(a) is "solely remedial." See Bae v. Shalala, 44 F.3d 489, 497 (7th Cir.1995). For the reasons set forth below, so do we.

1. Breadth. DiCola argues that the statutory terms, which the agency incorporated into the order, describe "more than those activities that are rationally related to the drug approval process"; as a result, he urges, the debarment is "so broad as to be excessive and serves no valid [i.e., remedial] regulatory purpose." For example, says DiCola, under the order he cannot be employed by "a construction company that builds a drug manufacturing facility," "a telephone company that provides service to a drug company," or "a company that prints labels approved by FDA for a drug company."

The FDA concedes that in some applications the literal terms of the statute (and hence of the order) would be "absurd." We take this as an acknowledgment that the FDA must construe and apply those terms with an eye to the remedial purpose of the statute and that this remedial purpose does not justify a literal reading of those terms. If the FDA had not wisely conceded the point, we would have insisted upon it in order to save the statute from constitutional infirmity under the double jeopardy clause. See DeBartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council, 485 U.S. 568, 575, 108 S.Ct. 1392, 1397, 99 L.Ed.2d 645 (1988).

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