U.S. v. Garfinkel, 93-3160

• Citation: 29 F.3d 451
• Decision Date: 13 July 1994
• Docket Number: No. 93-3160,93-3160
• Parties: , 93 Ed. Law Rep. 53 UNITED STATES of America, Appellant, v. Barry GARFINKEL, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 451

29 F.3d 451

63 USLW 2115, 93 Ed. Law Rep. 53

UNITED STATES of America, Appellant, v. Barry GARFINKEL, Appellee.

No. 93-3160.

United States Court of Appeals Eighth Circuit.

Submitted March 18, 1994.

Decided July 13, 1994.

Douglas Letter, Washington, DC, argued (Frank W. Hunger, Francis X. Hermann, Douglas N. Letter and Thomas M. Bondy, Washington, DC, and Margaret J. Porter and Mark S. Brown, Rockville, MD, on the brief), for appellant.

Lawrence Saul Robbins, Washington, DC, argued (Douglas A. Kelly and Steven E. Wolter, Minneapolis, MN, on the brief), for appellee.

Before MAGILL, Circuit Judge, HEANEY, Senior Circuit Judge, and HANSEN, Circuit Judge.

MAGILL, Circuit Judge.

In this appeal, the government challenges the district court's order dismissing two counts of the indictment brought against Barry Garfinkel. The two dismissed counts charged Garfinkel with the violation of Food and Drug Administration (FDA) regulations. We reverse and remand to the district court for further proceedings.

I. BACKGROUND

The grand jury returned a twenty-five count indictment against Garfinkel, a child psychiatrist employed by the University of Minnesota. Garfinkel, the principal investigator for an experimental drug study, was responsible for the clinical treatment and follow-up of patients receiving the experimental drug, Anafranil. The indictment charged Garfinkel in counts 24 and 25 with failing to establish and maintain accurate drug-protocol records required by FDA regulations.

The use of experimental drugs is regulated by FDA, pursuant to the authority of the Food, Drug, and Cosmetic Act (the Act), 21 U.S.C. Secs. 301-395. Drug manufacturers must apply for an exemption from the otherwise applicable premarketing approval requirements of 21 U.S.C. Sec. 355 and Sec. 357 by submitting an investigational new drug application (IND). An IND allows qualified experts or investigators, such as Garfinkel, to conduct investigations on the safety and effectiveness of the experimental drug. See 21 U.S.C. Sec. 355(i) (1988). The pharmaceutical company filing an IND is referred to as the sponsor of the proposed new drug.

Prior to commencing any clinical study, FDA regulations require a sponsor to provide FDA with extensive information regarding the proposed study, including a detailed investigation plan known as the study protocol. All physicians participating in a study as investigators must adhere to the study protocol. Pursuant to Sec. 355(i) of the Act, FDA regulations impose explicit recordkeeping requirements upon protocol investigators such as Garfinkel. See 21 C.F.R. Secs. 312.62, 312.64, 312.68 (1993).

Garfinkel's motion to dismiss counts 24 and 25 of the indictment argued (1) that Sec. 355(i), the relevant subsection of the Act, places the entire recordkeeping burden upon the manufacturer and sponsor rather than the clinical investigator; and (2) that executive agencies do not have the authority to establish regulations enforceable by criminal penalties ¹ in the absence of sufficient congressional guidelines and standards for the exercise of that authority. Garfinkel's second argument relied upon the holding of a Ninth Circuit case, United States v. Smith, 740 F.2d 734 (9th Cir.1984). The government argued in response that such reliance was misplaced because the FDA regulations at issue in Smith had been superseded by new, more explicit regulations.

The district court, dismissing the indictment, adopted Smith's holding stating that "[a]lthough the regulations promulgated under Sec. 355(i) have changed since the Ninth Circuit issued Smith, Congress has not amended Sec. 355(i) to legislatively address or overrule the Ninth Circuit." United States v. Garfinkel, 822 F.Supp. 1457, 1460 (D.Minn.1993). The district court noted that the government's argument ignored the Ninth Circuit's holding that "the statute's general regulatory authority which allows the Secretary to establish 'other conditions relating to the protection of public health' ... is insufficient legislative guidance for the issuance of regulations which, if violated, would furnish the basis for criminal liability." Id. at 1460-61 (emphasis added) (quoting Smith, 740 F.2d at 738-39) (internal quotations omitted). The district court further stated that "[t]his court concurs with the Ninth Circuit that Sec. 355(i) contains no language authorizing the FDA to promulgate regulations covering protocol investigators." Id. at 1461 (emphasis added). After the district court dismissed counts 24 and 25 of the indictment, the government timely appealed pursuant to 18 U.S.C. Sec. 3731 (1988).

II. DISCUSSION

We note at the outset that two distinct arguments are articulated: (1) that Sec. 355(i) fails to authorize the FDA regulations at issue, and (2) that Sec. 355(i) provides insufficient guidance for the issuance of clinical- investigator regulations that provide for criminal penalties. The first argument raises a question of statutory construction, while the second argument raises a question of constitutional dimension, namely, the effect of the nondelegation doctrine. Upon which basis the district court relied--statutory authority or insufficient guidance--is unclear. Because both the district court and Garfinkel rely on the Smith opinion, we examine it for guidance.

A. United States v. Smith

In Smith, three protocol investigators were charged with, among other charges, failing to maintain accurate drug testing records in violation of 21 U.S.C. Secs. 331(e), 333(b), and 355(i). 740 F.2d at 736. The district court in Smith dismissed the recordkeeping counts, "concluding that the statute requiring the maintenance of accurate records applied only to manufacturers and sponsors of research and did not apply to the clinical investigators." Id.

On appeal, the Ninth Circuit affirmed, but stated,

[a]lthough the statute expressly authorizes regulations which impose affirmative duties on manufacturers and the sponsors of clinical investigations, we are reluctant to read the statute as authorizing criminal penalties for the violation of any regulation promulgated pursuant to the statute's general authorizing language.... The government asks that we extend the statutory obligation to include clinical investigators pursuant to the statute's general regulatory authority which allows the Secretary to establish 'other conditions relating to the protection of public health' before exempting manufacturers from the statute's basic drug approval application requirements, Sec. 355(i). Such general authorizing language, however, is insufficient legislative guidance for the issuance of regulations which, if violated, would furnish the basis for criminal liability. Executive agencies have the authority to establish regulations which are enforced by criminal penalties only when Congress has provided "sufficient guidelines and standards for the exercise of the authority." United States v. Davis, 564 F.2d 840, 844 (9th Cir.1977), cert. denied, 434 U.S. 1015, 98 S.Ct. 733, 54 L.Ed.2d 760 (1978); United States v. Suquet, 551 F.Supp. 1194, 1198 (N.D.Ill.1982); United States v. Piatti, 416 F.Supp. 1202, 1205 (E.D.N.Y.1976).

Id. at 737-38 (second emphasis added).

The Ninth Circuit held that, although there was general authority in the statute for FDA to condition experimental drug exemptions on regulations intended to protect the public health, that authority was relatively unfettered. According to the Ninth Circuit, such a lack of restraint applied to regulations imposing criminal sanctions violated the nondelegation doctrine. We derive our constitutionally-based interpretation of Smith's holding not only from its language but also from its supportive citation to Davis, Suquet, and Piatti: All three cases involved challenges to Congress's delegation of authority to the Attorney General to create the controlled-drug schedules.

Subsequent to its discussion relating to the nondelegation doctrine in Smith, the Ninth Circuit added:

Moreover, even if Congress had provided standards for extending the recordkeeping requirement to investigators by regulation, the regulatory language falls short of imposing an explicit affirmative duty on the investigators to maintain accurate records.... Absent such a clear articulation of duty, we are not prepared to fasten criminal liability to the investigator who fails to fulfill his or her obligation to the sponsor.

Smith, 740 F.2d at 738 (emphasis added). It is unnecessary for us to decide whether this language is dicta or an alternative holding because, even assuming that the language is an alternative holding, we cannot ignore Smith's initial basis for dismissing the indictment: that Sec. 355(i) lacked sufficient standards for FDA to promulgate regulations imposing criminal penalties upon clinical investigators.

B. Analysis

Whether the district court properly dismissed counts 24 and 25 of Garfinkel's indictment depends upon whether Congress authorized FDA to promulgate recordkeeping regulations applicable to clinical investigators, and, if so, whether Congress imposed sufficient constitutional restraints upon FDA to promulgate those regulations. Initially, we examine the relevant language in Sec. 355(i) ² and address the legal arguments in turn.

Section 355(i) instructs that the Secretary ³ must promulgate regulations for exempting from the operation of the new drug application process "drugs intended solely for investigational use by experts." 21 U.S.C. Sec. 355(i). The statute suggests, but does not require, that FDA promulgate specific types of regulations pertaining to sponsors and manufacturers. See id. Sec. 355(i)(1)-(3). The statute, in fact, does not require that FDA promulgate any recordkeeping regulations at all. FDA, however, is required to promulgate regulations which will allow for exemptions from the new drug application process. Those exemptions may apply only to "drugs intended solely for investigational use," id. Sec. 355(...