Hoffmann-La Roche, Inc. v. Kleindienst

• Decision Date: 28 March 1973
• Docket Number: No. 71-1299.,71-1299.
• Citation: 478 F.2d 1
• Parties: HOFFMANN-La ROCHE, INC., Petitioner, v. Richard G. KLEINDIENST, Attorney General of the United States, and John E. Ingersoll, Director, Bureau of Narcotics and Dangerous Drugs, United States Department of Justice, Respondents.
• Court: U.S. Court of Appeals — Third Circuit

478 F.2d 1 (1973)

HOFFMANN-La ROCHE, INC., Petitioner, v. Richard G. KLEINDIENST, Attorney General of the United States, and John E. Ingersoll, Director, Bureau of Narcotics and Dangerous Drugs, United States Department of Justice, Respondents.

No. 71-1299.

United States Court of Appeals, Third Circuit.

Argued June 25, 1971.

Decided March 28, 1973.

As Amended July 3, 1973.

COPYRIGHT MATERIAL OMITTED

Thomas D. Finney, Jr., John J. Kovin, Thomas Richard Spradlin, Clifford, Warnke, Glass, McIlwain & Finey, Washington, D. C., Ralph N. Del Deo, Crummy, O'Neill, Del Deo & Dolan, Newark, N. J., for petitioner.

Allan P. Mackinnon, U.S. Dept. of Justice, Washington, D. C., for respondents.

Before BIGGS and ROSENN, Circuit Judges, and KRAFT, District Judge.

OPINION OF THE COURT

BIGGS, Circuit Judge.

The petitioner, Hoffmann-La Roche, Inc. (Hoffmann), has brought this special statutory proceeding against the Honorable Richard G. Kleindienst, Attorney General of the United States, and John E. Ingersoll, Director of the Bureau of Narcotics and Dangerous Drugs of the United States Department of Justice (respondents), to review a Final Order issued by the Director, filed on February 5, 1971 (36 Fed.Reg. 2555 (1971)).¹ The proceedings were commenced pursuant to § 201(v) of the 1965 Amendments to the "Federal Food, Drug, and Cosmetic Act"² and were proceeded with under the "Comprehensive Drug Abuse Prevention and Control Act of 1970." Title II of the 1970 Act deals with the control of drugs and is separately entitled the "Controlled Substances Act," 21 U.S.C. § 801 et seq.³ Review is sought pursuant to 21 U.S.C. § 371(f) and 5 U.S.C. § 706, formerly Section 10(e) of the Administrative Procedure Act.

Chlordiazepoxide⁴ (Librium) and diazepam (Valium) are described as a new class of drugs which differ chemically from barbiturates and other drugs known at the time of their synthesis. Librium has been in general medical use since 1960 and Valium since 1963. In 1966 at the original hearing before the Bureau it was estimated that over fifteen million patients had taken Librium and over five million patients had received doses of Valium. The 1965 Act set up special controls over the prescription and distribution of "depressant and stimulant drugs." Depressant or stimulant drugs" were defined to include barbiturates, amphetamines, and any other drug which the Secretary of Health, Education and Welfare designated by regulation as having a potential for abuse because of its depressant or stimulant effect on the central nervous system.

The legislative history of the Act must be referred to. Very relevant to that history is the Final Report of the President's Advisory Commission on Narcotics and Drug Abuse, at 2 (1963), which states: "When this report speaks of `drug addiction' it is using the term in its full technical sense to include both the psychological and the physical dependence. When it speaks of `drug abuse' it is referring to the broader problem which includes also those drugs which create only psychological dependency. We will use the term `drug abuse' in this report as existing when an individual takes psychotoxic drugs under any of the following circumstances: (a) in amounts sufficient to create a hazard to his own health or to the safety of the community; or (b) when he obtains drugs through illicit channels; or (c) when he takes drugs on his own initiative rather than on the basis of professional advice. Drug abuse today involves not only the narcotic drugs and marihuana, but to an increasingly alarming extent other drugs such as the barbiturates, the amphetamines and even certain of the `tranquilizers.' This latter group will be referred to in this report as the `dangerous drugs.'"

Regulation 21 C.F.R. § 166.2(e) (1967), follows the Final Report of the President's Advisory Commission on Narcotics and Drug Abuse, supra at 2, and states in part as follows: "(e) The Commissioner may determine that a substance has a potential for abuse because of its depressant or stimulant effect on the central nervous system or its hallucinogenic effect if: (1) There is evidence that individuals are taking the drug or drugs containing such a substance in amounts sufficient to create a hazard to their health or to the safety of other individuals or of the community; or (2) There is significant diversion of the drug or drugs containing such a substance from legitimate drug channels; or (3) Individuals are taking the drug or drugs containing such a substance on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice * * *."

This case was begun by a proposed regulation filed by Acting Commissioner Rankin on January 17, 1966.⁵ 31 Fed.Reg. 565 (1966). The issues presented by this, the present proceeding, were stated to be as follows in the notice of May 16, 1966:⁶ "1. Whether there is evidence that individuals are taking the drug or drugs Librium or Valium containing such substances in amounts sufficient to create a hazard to their health or to the safety of other individuals or of the community; 2. Whether there is evidence of significant diversion of the drug or drugs Librium or Valium containing such substances from legitimate drug channels; 3. Whether there is evidence that individuals are taking the drug or drugs Librium or Valium containing such substances on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice; and 4. Whether, if chlordiazepoxide Librium has been the subject of abuse, diazepam Valium, a newer drug, is so related to it as to make it likely that the drug will have the same potentiality for abuse." 31 Fed.Reg. 7174 (1966) The proceeding culminated in the Final Order of Director Ingersoll filed February 5, 1971,⁷ ruling that chlordiazepoxide and its salts, and diazepam, respectively Librium and Valium, were depressant drugs having a potential for abuse because of their depressant effect on the central nervous system. This is the order which we review here. If the order is sustained, Librium and Valium, already available only upon prescriptions of licensed physicians, will be subject to additional record-keeping, inspection, regulation, and labeling requirements by legitimate channels of distribution. Moreover, illicit, i. e., non-allowable, possession and distribution would be illegal and subject to criminal sanctions as is presently the case in respect to barbiturates and amphetamines, commonly considered as "depressant" and "stimulant" drugs. Hoffmann concedes that Librium is a depressant drug. "The conclusion that Librium has a depressant effect is not controverted." Hoffmann's brief at 9. Hoffmann objected to Librium and Valium being made subject to regulation, filed its petition for review and injunctive relief, and this court stayed Director Ingersoll's Final Order until our disposition of the case.⁸

The issues presented are rather hard to frame for they are differently stated by the parties. Hoffmann asserts in its brief at 1-2: "The issues are whether the order of the Director should be held unlawful and set aside because—(1) the order is in excess of statutory authority or limitation in that it employs a decisional standard different from that established by Congress; (2) the conclusions as to chlordiazepoxide (Librium) are not supported by adequate findings or substantial evidence on the whole record; (3) the listing of diazepam (Valium) cannot be based on the experience with Librium, and the conclusions as to Valium are not supported by adequate findings or substantial evidence on the whole record; and (4) the order was issued without observance of procedure required by law and due process." The respondents' "Counterstatement of the Issues Presented for Review" is as follows: "1. Whether the findings of the Director, Bureau of Narcotics and Dangerous Drugs, that Librium and Valium are `depressant drugs' subject to control under the Drug Abuse Control Amendments of 1965, are supported by substantial evidence of record. 2. Whether the Administrative order listing Librium and Valium as drugs subject to control under the Drug Abuse Control Amendments of 1965 should be set aside on the ground that it was entered without due process of law." Another issue which we disignate as "(3)" and which must be discussed is whether the proceedings before the Director were "rule making" or "adjudication," as defined in 5 U.S.C. § 551(5) and 5 U.S.C. § 551(7).⁹

I.

We deal first with this case on the basis of the evidence which was before the Director, without regard to the matters discussed under the later headings of this opinion. Hoffmann contends that the Director's order is based on a decisional standard different from that established by the statute and that the agency has not met the requirements of the applicable statutes in that "`1 the agency must make findings that support its decision and 2 those findings must be supported by substantial evidence.' Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 83 S.Ct. 239, 9 L.Ed.2d 207 (1962) Moreover, mere `conclusionary statements . . . are not the sort of findings which enable the Court intelligently to pass upon the correctness of the judgment reached.' `The agency's findings must . . . be sufficiently definite to enable the courts to perform the task of judicial review.' Braniff Airways, Inc. v. Civil Aeronautics Board 113 U.S.App.D.C. 132 306 F.2d 739, 742 (D.C.Cir. 1962)."

The applicable law is cogently set out by Judge Butzner in Carter-Wallace, Inc. v. Gardner, 417 F.2d 1086 (4 Cir. 1969), in which Carter-Wallace, Inc. attacked a Food and Drug Administration order subjecting meprobamate to control as a depressant drug. The court stated: "In selecting `potential for abuse' as one of the criteria for subjecting a drug...