Miami-Luken, Inc. v. U.S. Dep't of Justice, Case No. 1:16-mc-012

CourtUnited States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
Writing for the CourtBowman, M.J.
Docket NumberCase No. 1:16-mc-012
Decision Date01 August 2017

MIAMI-LUKEN, INC., Plaintiff,

Case No. 1:16-mc-012


August 1, 2017

Dlott, J.
Bowman, M.J.


Pursuant to custom and practice, this miscellaneous action was referred to the undersigned magistrate judge. Currently pending is the DEA's Rule 60(b)(5) motion to set aside the prior decision of this Court. I now recommend that the DEA's motion be DENIED.

I. Background

The underlying action was initiated in this Court on May 18, 2016, when Plaintiff Miami-Luken, Inc. ("Miami-Luken") filed an "emergency motion" seeking to compel the Drug Enforcement Administration ("DEA") to comply with an administrative subpoena1 issued by Chief Administrative Law Judge ("CALJ") John J. Mulrooney.2 However, the administrative proceedings that led to this federal litigation began much earlier.

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Plaintiff Miami-Luken is a Dayton Ohio pharmaceutical wholesaler with a DEA registration that permits it to operate its business. For nearly a decade,3 Plaintiff has been under DEA scrutiny for "facilitat[ing] the diversion of significant quantities of the highly addictive pain killers, oxycodone and hydrocodone." (Doc. 11 at 2.) The Court takes judicial notice of the fact that the referenced prescription drugs are among a class of opioids that have been commonly recognized as contributing to an ongoing opioid crisis in the United States. Over the course of its investigation, the DEA has issued numerous investigatory subpoenas to Miami-Luken, requiring the production of documents to DEA investigators, primarily in the Cincinnati, Ohio office.

The DEA conducts administrative, civil, and criminal proceedings. Among the administrative tools that the DEA has employed to combat the opioid crisis are immediate suspension orders and revocation orders. Although an immediate suspension order may be entered without a hearing, revocation orders involve a different administrative process. Compare 21 U.S.C. § 824(c) and (d). On November 23, 2015, the DEA issued an Order to Show Cause ("OSC") against the Plaintiff to begin the process of revoking the Plaintiff's registration to distribute controlled substances under a provision of the Controlled Substances Act, as "inconsistent with the public interest." (Doc. 1-2.); see 21 U.S.C. § 824(a)(4). As part of the revocation process, an evidentiary hearing (at which the DEA bears the burden of proof) was scheduled by CALJ Mulrooney to take place on May 10, 2016. See 21 C.F.R. §1301.44(e).

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Prior to that revocation hearing, Miami-Luken filed a Request for Issuance of a Subpoena (Doc. 1-3) that sought a large number of DEA records that Plaintiff asserted were necessary to adequately defend itself. An ALJ has the power to receive evidence and to issue subpoenas to compel the attendance of witnesses and the production of materials "necessary" for the hearing. See 21 C.F.R. §1316.52(d). However, administrative revocation hearings do not include the type of discovery process that is available to civil litigants in this Court. Citing that principle, the DEA objected to the issuance of an adjudicatory subpoena that would require the DEA to produce any records, other than those that the DEA itself planned to use at the hearing. In an April 12 omnibus order denying Miami-Luken's request, CALJ Mulrooney agreed that the subpoena was "simply too broad," with portions amounting to an impermissible "fishing expedition" (Doc. 1-4 at 14). Nevertheless, the CALJ denied the request without prejudice to Miami-Luken to amend its request by April 18, 2016. (Doc. 1-4 at 16, n.24).

On April 18, 2016, Miami-Luken timely submitted a Supplemental Request for Issuance of a Subpoena, requesting four specific categories of documents. (Doc. 1-5). The same day, without awaiting any additional response from the DEA, the CALJ granted the amended request and issued the subpoena, directing DEA to produce three of the four categories of documents prior to the administrative hearing. (Doc. 1-6). On May 3, the DEA filed a motion for reconsideration or, in the alternative, for leave to file an interlocutory appeal to the DEA Administrator. (Doc. 1-8). In part, the DEA argued that to comply with the subpoena would cause the DEA "irreparable harm." (Id.)

On May 4, the CALJ denied the DEA's motion, refusing either to reconsider the issuance of the subpoena or to allow an interlocutory appeal. (Doc. 1-9). Instead, the CALJ held that to the extent that the DEA wished to further contest the subpoena,

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further arguments "are properly made only before a 'court of the United States.'" (Id. at 7). The Office of Chief Counsel for the DEA filed a "Government Notice" in response to the CALJ's May 4 order on the same day, which "respectfully decline[d] to comply" with the subpoena. (Doc. 1-10).

In response to the DEA's refusal to comply with the subpoena issued by CALJ Mulrooney, Miami-Luken requested a stay of the scheduled hearing, and the CALJ granted that request. (Doc. 1-11). To date, the stay of the revocation proceeding at the administrative level remains in effect, pending the outcome of this federal litigation.

As stated, after the DEA refused to comply with the subpoena, Miami-Luken filed an "emergency motion" in this Court seeking to enforce the subpoena as necessary to the hearing in part on due process grounds. The DEA vigorously defended its refusal to comply with the subpoena, arguing that its issuance contravenes "decades of practice and precedent regarding the scope of disclosures that are required or appropriate in DEA administrative proceedings." (Doc. 11 at 10). On July 15, 2016, the undersigned filed a Memorandum Order that granted in part Plaintiff's motion to enforce the administrative subpoena. The undersigned directed the DEA to comply with the subpoena within 21 days, but narrowed its scope. (Doc. 15). Thus, the undersigned directed production of only two categories of materials out of the three categories authorized by the CALJ. The Order further stated that the DEA would be permitted to respond to the remaining two categories by disclosing "reasonably redacted" documents that protected "sensitive information in ...investigative reports not relevant to the [DEA's] findings as they relate to Miami-Luken - for example, investigatory techniques." (Doc. 15 at 18).

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On July 29, 2016, U.S. District Judge Dlott granted the DEA's unopposed motion to stay the Order pending the Court's ruling on Objections. Following full briefing by the parties, Judge Dlott granted the DEA's request for oral argument on its Objections, setting a hearing for February 17, 2017. (Doc. 23). On April 21, 2017, after considering "de novo all the filings in this matter," Judge Dlott overruled the DEA's Objections and adopted the undersigned's Memorandum Order.4 Judge Dlott's Order also terminated the case. (Doc. 24).

The entry of the April 21, 2017 Order enforcing the subpoena reinstated the 21 day clock for the DEA to comply with that subpoena, as modified by this Court. However, on the last date for compliance, the DEA filed an "Emergency Motion to Stay" dismissal of this case and to excuse any further compliance with the Court's Order. The DEA's motion stated that the DEA Acting Administrator had issued a May 12, 2017 Order that quashed the subpoena issued by CALJ Mulrooney. Because this Court's Order directs the DEA to comply with a subpoena that (purportedly) has been quashed, the DEA stated its intention to move for relief from this Court's judgment. On May 16, 2017, Judge Dlott granted the DEA's motion for a temporary emergency stay "pending the later of (i) the resolution of the DEA's forthcoming motion for relief from judgment or (ii) any appeal of the Court's judgment has been resolved." (Doc. 26).

The DEA did not appeal this Court's final order of enforcement of the subpoena to the Sixth Circuit, but instead, filed a motion seeking relief from this Court under Rule 60(b)(5) of the Federal Rules of Civil Procedure. Miami-Luken has filed a response, to

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which the DEA has filed a reply. On June 14, 2017, Judge Dlott referred the Rule 60(b)(5) motion to the undersigned.

On June 15, 2017, the parties filed a Joint Notice of Related Case, attesting to the fact that Miami-Luken independently has appealed the DEA Administrator's May 12, 2017 Order to the Sixth Circuit Court of Appeals. See Miami-Luken, Inc. v. DEA, Case No. 17-3614 (6th Circuit). The pendency of that appeal impacts this case, but does not stay proceedings in this Court.

II. Analysis

The issues presented form a procedural maze (or perhaps quagmire), with sufficient interplay between the Administrative Procedures Act and the Controlled Substances Act, that proverbial rabbit holes abound at every twist and turn. However, keeping the Court's focus on the standards of Rule 60(b)(5), and for the reasons that follow, the undersigned recommends the denial of Defendant's motion for relief of judgment, without prejudice to renew such motion following disposition of the related appeal in the Sixth Circuit Court of Appeals.

Rule 60(b), Fed. R. Civ. P., provides that "[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order or proceeding" based on a list of specified reasons. Rule 60(b)(5), the provision under which the DEA proceeds, offers relief if "the judgment has been satisfied, released or discharged, it is based on an earlier judgment that has been reversed or vacated, or applying it prospectively is no longer equitable." The DEA readily admits it has not complied with this Court's April 21, 2017 Order directing it to immediately comply with the adjudicatory subpoena, with a corresponding production of materials to Miami-

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Luken. However, the DEA argues that the Order requiring the DEA to comply with the administrative subpoena "is no...

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