Case: 20-71433, 07/27/2020, ID: 11767302, DktEntry: 14, Page 1 of 117
`
`No. 20-71433
`
`In the United States Court of Appeals
`for the Ninth Circuit
`
`SUZANNE SISLEY, M.D.; SCOTTSDALE RESEARCH INSTITUTE, LLC; BATTLEFIELD
`FOUNDATION, DBA FIELD TO HEALED; LORENZO SULLIVAN; KENDRICK SPEAGLE;
`GARY HESS,
`
`Petitioners,
`
`
`
`
`
`
`
`
`
`v.
`
`U.S. DRUG ENFORCEMENT ADMINISTRATION; WILLIAM BARR, ATTORNEY
`GENERAL; TIMOTHY SHEA, ACTING ADMINISTRATOR, DRUG ENFORCEMENT
`ADMINISTRATION,
`
`Respondents
`
`
`RESPONSE IN OPPOSITION TO GOVERNMENT’S MOTION TO
`DISMISS PETITION FOR REVIEW
`
`
`
`
`
`
`
`Matthew C. Zorn
`Shane Pennington
`YETTER COLEMAN LLP
`811 Main Street, Suite 4100
`Houston, Texas 77002
`(713) 632-8000
`(713) 632-8002
`mzorn@yettercoleman.com
`spennington@yettercoleman.com
`
`ATTORNEYS FOR PETITIONERS SUZANNE SISLEY, M.D.; SCOTTSDALE RESEARCH
`INSTITUTE, LLC; BATTLEFIELD FOUNDATION D/B/A FIELD TO HEALED; LORENZO
`SULLIVAN; KENDRIC SPEAGLE; AND GARY HESS
`
`
`
`
`
`No. 20-71433
`
`In the United States Court of Appeals
`for the Ninth Circuit
`
`SUZANNE SISLEY, M.D.; SCOTTSDALE RESEARCH INSTITUTE, LLC; BATTLEFIELD
`FOUNDATION, DBA FIELD TO HEALED; LORENZO SULLIVAN; KENDRICK SPEAGLE;
`GARY HESS,
`
`Petitioners,
`
`
`
`
`
`
`
`
`
`v.
`
`U.S. DRUG ENFORCEMENT ADMINISTRATION; WILLIAM BARR, ATTORNEY
`GENERAL; TIMOTHY SHEA, ACTING ADMINISTRATOR, DRUG ENFORCEMENT
`ADMINISTRATION,
`
`Respondents
`
`
`RESPONSE IN OPPOSITION TO GOVERNMENT’S MOTION TO
`DISMISS PETITION FOR REVIEW
`
`
`
`
`
`
`
`Matthew C. Zorn
`Shane Pennington
`YETTER COLEMAN LLP
`811 Main Street, Suite 4100
`Houston, Texas 77002
`(713) 632-8000
`(713) 632-8002
`mzorn@yettercoleman.com
`spennington@yettercoleman.com
`
`ATTORNEYS FOR PETITIONERS SUZANNE SISLEY, M.D.; SCOTTSDALE RESEARCH
`INSTITUTE, LLC; BATTLEFIELD FOUNDATION D/B/A FIELD TO HEALED; LORENZO
`SULLIVAN; KENDRIC SPEAGLE; AND GARY HESS
`
`
`
`
`
`Case: 20-71433, 07/27/2020, ID: 11767302, DktEntry: 14, Page 2 of 117
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`INTRODUCTION
`Seeking dismissal before the merits, the Motion argues that Petitioners cannot
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`challenge DEA’s decision to deny a petition to institute rulemaking because these
`
`Petitioners have not exhausted available administrative remedies. In so doing, the
`
`government does not cite, let alone address, on-point controlling precedent that
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`refutes the entire basis of its Motion. In Darby v. Cisneros, 509 U.S. 137, 146-47
`
`(1993), the Court spoke clearly: In APA cases, courts cannot require exhaustion of
`
`available administrative remedies unless the relevant statute or agency rules “clearly
`
`mandat[e]” it.
`
`This case arises under the APA, and neither the Controlled Substances Act
`
`nor agency rules require further exhaustion. Instead, § 877 of the Act makes judicial
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`review broadly available to “any person aggrieved by a final decision”—not just the
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`party that submitted a petition. Under Darby, the Motion must be denied.
`
`Petitioners challenge DEA’s final determination denying the Zyszkiewicz
`
`Petition (the “Petition”) because an untenable situation persists in this country that
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`impedes research and jeopardizes public health. More than two-thirds of states
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`permit medical marijuana use in treatment; millions of Americans, including scores
`
`of veterans, use marijuana to treat symptoms ranging from breakthrough pain to
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`PTSD; but US scientists cannot do safety and efficacy studies using real-world,
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`dispensary-quality medicinal marijuana because DEA maintains that marijuana has
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`“no currently accepted medical use in treatment in the United States” and should
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`remain in Schedule I. And it all stems from the reason the agency denied the Petition
`
`and many rescheduling petitions before it: a longstanding, misinterpretation of law.
`
`The Petition is one-page, handwritten, and fundamentally correct. Because
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`physicians in most parts of this country, following state law and accepted state
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`medical practices, can prescribe (or recommend) marijuana in treatment to patients,
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`marijuana has a “currently accepted medical use in treatment in the United States.”
`
`But DEA says otherwise, pointing to a misinterpretation of this statutory phrase, a
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`five-part test from 1992 that requires, among other things, a demonstration of
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`adequate evidence showing efficacy. By invoking the test to deny the Petition, DEA
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`squarely puts the core legal issue before this Court: properly construing the statute
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`using the traditional tools of construction and in light more recent precedents, does
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`marijuana have a “currently accepted medical use in treatment in the United States”?
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`The answer, as we will explain in merits briefing, is “yes.” See Pet. 10-12.
`
`Rather than address Darby, the Motion—under the guise of remedies
`
`exhaustion—mixes up other issues like standing, issue exhaustion, and the quality
`
`of the Petition. Because the government fails to raise these as grounds for dismissal,
`
`it may not assert them for the first time on Reply. See Fed. R. App. P. 27(a)(2)(A).
`
`In any case, these points also all lack merit. First, as “persons aggrieved”
`
`under § 877 of the CSA, Petitioners have standing and a right to seek review of
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`DEA’s denial of the Petition. Second, issue exhaustion doesn’t apply for several
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`reasons: the Petition raised the core issue; Petitioners raise pure legal challenges; the
`
`agency proceedings are non-adversarial; and most important, the agency injected the
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`issue into the agency proceedings by relying on its longstanding 1992 Rule and the
`
`2016 Denial as the sole basis for denying the Petition. Third, the brevity of the
`
`administrative record is no reason to require more agency proceedings before
`
`deciding the pure legal issues presented. On the contrary, it is ideal.
`
`Finally, notwithstanding Darby, even if prudential exhaustion could apply to
`
`a petition for review under § 877, it should be excused. Requiring Petitioners to
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`submit a petition before resolving the pure legal questions presented would serve
`
`none of exhaustion’s underlying goals, especially when the public health is at stake.
`
`BACKGROUND
`Petitioner Suzanne Sisley is an Arizona-based psychiatrist and a
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`1.
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`pioneer in the field of medical marijuana research. For the past decade, in addition
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`to maintaining a full-time private telemedicine practice, she has dedicated her life to
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`conducting rigorous clinical studies with marijuana, educating the public about the
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`difficulties in conducting rigorous scientific research with real-world marijuana in
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`the United States. She also advocates for American scientists seeking to do clinical
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`research with medical marijuana. See Sisley Decl. ¶¶ 1-22, 29.
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`Petitioners L. Lorenzo Sullivan, Kendric Speagle, and Gary Hess are disabled
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`former service members. Though they live in states with laws permitting the use of
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`medical marijuana, marijuana’s status under federal law makes it impossible for
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`them to obtain medical marijuana through the Department of Veterans Affairs. VA
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`doctors will not even discuss marijuana with them because it is a Schedule I
`
`substance. See Sullivan Decl. ¶¶ 1-5.
`
`2.
`
`Like many, long ago Dr. Sisley did not believe marijuana had potential
`
`as medicine. The shift came from her private practice. Repeatedly, veteran patients
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`told her marijuana treated symptoms of PTSD better than FDA-approved medicines.
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`While skeptical at first, Dr. Sisley found these anecdotes impossible to ignore once
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`she began losing patients to suicide. See Sisley Decl. ¶¶ 6-8.
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`In 2009, seeking rigorous proof of efficacy, Dr. Sisley put together a protocol
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`to do FDA-approved trials with smoked marijuana. It took her seven years to amass
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`the necessary licenses, including a DEA Schedule I license in 2016, because unlike
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`other controlled substances, clinical research with marijuana requires approval from
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`four federal agencies and an Institutional Review Board. See id. ¶¶ 9-16.
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`3.
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`In January 2017, Dr. Sisley and SRI began FDA-approved clinical trials
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`of smoked whole-plant marijuana for treatment-resistant PTSD in veterans, funded
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`by a $2.1 million grant from the Colorado Department of Public Health and
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`Environment. See id. ¶ 16.
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`Federal law requires all researchers who do safety/efficacy trials with
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`marijuana to use marijuana from a 12-acre farm at the University of Mississippi. See
`
`Ex. 3, Britt Erickson, “Cannabis research stalled by federal inaction,” 98 Chem. &
`
`Eng. News 25 (June 29, 2020) (“Erickson”) (explaining that “no clinical studies have
`
`been conducted on cannabis products purchased
`
`from state-authorized
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`dispensaries”). See also 81 Fed. Reg. 53,846 (Aug. 12, 2016) (explaining researchers
`
`must use NIDA marijuana). The quality of this marijuana is poor and unlike the
`
`marijuana widely available at medical dispensaries around the country:
`
`
`This is, supposedly, by design. See Erickson (quoting supervisor as saying, “our
`
`charge is not to make material similar to what is out there on the illicit market or in
`
`the state-authorized medical marijuana programs”). Research suggests it is
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`genetically closer to hemp than medical marijuana. Ex. 4.
`
`4.
`
`This situation results from a regulatory Catch-22. In 1992, DEA
`
`interpreted the statutory phrase “no currently accepted medical use in treatment in
`
`the United States,” 21 U.S.C. § 812(b)(1)(B), to require “adequate and well-
`
`controlled studies proving efficacy.” Pet., Ex. 4 (57 Fed. Reg. 10,499, “1992 Rule”)
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`at 503-08. But more than twenty-five years later, the clinical research remains thin
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`because the only marijuana researchers can legally use for efficacy trials is the
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`inadequate varietal shown above. So, marijuana remains in Schedule I.
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`Next, 21 U.S.C. § 823(a), which governs registration to manufacture Schedule
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`I and II substances, states that DEA can only register applicants if registration is
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`consistent with the public interest “and with United States obligations under
`
`international treaties.” Until 2016, DEA understood the statute to require a
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`government-supervised monopoly run by NIDA. See 74 Fed. Reg. 2,101 at 2,102-
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`2,104 (Jan. 14, 2009). DEA has only ever licensed one cultivator to supply
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`researchers with marijuana: the University of Mississippi. See 81 Fed. Reg. at 53,846.
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`5.
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`The legalization of medical marijuana in the states dramatically
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`increased the need for more suppliers of research-grade marijuana. In August 2016,
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`after consulting with NIDA and the FDA, DEA no longer viewed international
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`obligations as precluding the registration of more manufacturers of marijuana for
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`research. See id. at 53,848 (explaining how licensing additional cultivators would be
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`consistent with the Single Convention). Following this announcement, SRI applied
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`to be registered as a cultivator to support its clinical trials. See Sisley Decl. ¶ 23.
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`But nearly four years later, the number of additional cultivators DEA has
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`approved to support marijuana clinical research is zero. See generally Erickson. A
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`June 6, 2018 memo from DOJ’s Office of Legal Counsel explains why. Ex. 5 (OLC
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`Memo). In brief, it explains that DEA can register additional cultivators, but only if
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`it develops a comprehensive regulatory framework that complies with the Single
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`Convention on Narcotics of 1961. According to OLC, the government has been
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`violating the Single Convention for more than fifty years, and it must bring the
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`licensing framework into compliance before registering additional manufacturers.
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`Hence, DEA’s own failure to implement a satisfactory regulatory framework has
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`prevented it from approving additional cultivators.
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`6.
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`Petitioners request relief that would loosen restrictions on research,
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`allowing DEA-licensed scientists to study the medical marijuana millions around the
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`country already use. Relevant here, the parallel registration provision for lower
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`scheduled substances is less restrictive and does not require conformity with treaty
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`obligations. See 21 U.S.C. § 823(d). So, rescheduling marijuana, as the Petition
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`urges, could take marijuana out of § 823(a)’s ambit, dramatically improving the
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`supply of real-world medical marijuana for efficacy research. See Pet. at 4-7.1
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`ARGUMENT
`I.
`Under Darby, exhaustion doesn’t apply.
`In Darby v. Cisneros, 509 U.S. 137, 146-47 (1993), the Supreme Court held
`
`that § 704 of the APA bars federal courts from imposing exhaustion requirements
`
`not “clearly mandate[d] … by the statute or agency rules.” See also Young v. Reno,
`
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`1 Petitioners no longer seek review on grounds (2) and (3) stated at Pet. at 13-15.
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`114 F.3d 879, 882 (9th Cir. 1997) (Darby “limits the discretion of courts to impose
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`exhaustion requirements” above and beyond the statute or agency rules). The CSA
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`doesn’t mandate (and certainly doesn’t “clearly mandate[]”) the exhaustion
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`requirement the government would have the Court impose.2 Section 877 broadly
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`permits “any person aggrieved” by a final DEA decision to obtain judicial review.
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`See 21 U.S.C. § 877. There is nothing more to exhaust.
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`This straightforward application of Darby—controlling precedent not cited,
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`much less addressed, by the government—dooms the Motion. The government asks
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`this Court to impose non-statutory exhaustion “as a rule of judicial administration
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`where the agency action has already become ‘final’ under § [704].” Darby, 509 U.S.
`
`at 154. But because the government doesn’t identify any provision of the CSA or
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`DEA’s rules “clearly mandating” the exhaustion requirement it attempts to impose
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`here (there is none), that ask must be denied.
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`None of the government’s cases has the posture of this case where Darby
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`applies. Agua Caliente Tribe of Cupeno Indians of Pala Reservation v. Sweeney, 932
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`F.3d 1207, 1209 (9th Cir. 2019) is an appeal from a mandamus-based APA action
`
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`2 The APA applies to §§ 811(a) and 877. See 21 U.S.C. § 811(a) (“Rules … shall
`be made on the record after opportunity for a hearing pursuant to the [APA]
`rulemaking procedures.”); John Doe, Inc. v. DEA, 484 F.3d 561, 566 n.4 (D.C.
`Cir. 2007) (“[T]he cases applying the final aspect of the APA guide us in
`construing finality under 21 U.S.C.§ 877.”).
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`to compel agency action unlawfully withheld. There was an unused agency process,
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`no final agency action, and no statute like § 877 where Congress provided for
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`judicial review of a final determination. See id. at 1216-18. See also 5 U.S.C. § 704
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`(“Agency action made reviewable by statute …”). None of that is true here.
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`In Cabaccang v. U.S. Citizenship & Immigration Servs., 627 F.3d 1313, 1315
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`(9th Cir. 2010), removal proceedings were pending so there was no final agency
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`action, and unlike here, there was a right to renew the application before an
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`immigration judge. See id. at 1316 (“[A] motion for reconsideration, an appeal to a
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`superior agency authority, or an intra-agency appeal to an administrative law judge”
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`render a decision non-final). Here, there is no pending agency process and notably,
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`the right to request a hearing attaches only after DEA grants a petition to institute
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`rulemaking. 21 U.S.C. § 812(a)(2). That is part of the problem: there is no hearing
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`when DEA denies a petition based on the five-part test. See Pet. at 13 (requesting
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`instruction to initiate rulemaking under § 811(a), which then permits hearing).
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`Paul G. by and through Steve G. v. Monterey Peninsula Unified School Dist.,
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`933 F.3d 1096, 1098-1102 (9th Cir. 2019), is far afield. See Mot. at 7 (citing page
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`1098 and page 1102). The issue there was whether plaintiff could file a case in
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`district court under one statute, without first exhausting a second statute. The second
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`statute required exhaustion of the second statute’s administrative procedures before
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`bringing a lawsuit under the first. Paul G., 933 F.3d at 1099-1100 (citing 20 U.S.C.
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`§ 1415(l)). Because of the statute’s precise exhaustion command, the “crucial issue”
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`was whether the relief sought was “available under the [second statute].” Id. at 1101.
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`The identification of Washington v. Barr, 925 F.3d 109 (2d Cir. 2019) as a
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`case arising under “similar circumstances” is telling. Mot. 8. Procedurally, it
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`couldn’t be more different. There, plaintiffs raised a constitutional challenge to
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`marijuana’s Schedule I status in district court. Washington, 925 F.3d at 114. The
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`constitutional claims were dismissed for failure to exhaust administrative remedies.
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`Id. Because the case didn’t arise under § 877 and the APA, Darby didn’t apply. Here,
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`by contrast, Petitioners bring APA-based claims under § 877 challenging DEA’s
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`denial of a petition to institute rulemaking. Darby applies. The very (maybe only)
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`reason the Washington court affirmed dismissal is because that case, unlike this one,
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`didn’t arise under § 877 and the APA.
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`II. The government’s other points lack merit.
`Remedies exhaustion aside, the Motion suggests three other avenues for
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`dismissal. None has merit.
`
`i. Petitioners’ ability to file their own § 811(a) petition under
`§ 811(a) has no bearing on exhaustion.
`The government acknowledges the relief Petitioners seek in this case is an
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`order holding unlawful and setting aside DEA’s final decision denying the Petition.
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`See Pet. 2; see also Mot. 1 (“Stephen Zyszkiewicz and Jeramy Bowers petitioned
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`[DEA] to initiate rulemaking, and DEA denied that request. Petitioners … have filed
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`this action seeking judicial review of that decision.”) (emph. added)). According to
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`the government, however, before Petitioners can obtain that relief, they must file
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`their own petition “as Zyszkiewicz and Bowers did.” Mot. 5 (cites omitted).
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`Submitting a different petition to embark on a separate administrative track,
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`whatever the result, could not possibly assist Petitioners in remedying DEA’s
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`unlawful denial of the Petition. The question isn’t whether remedies have been
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`exhausted on a petition that hasn’t been submitted, but whether they’re exhausted
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`with respect to the Petition and if, under § 877, Petitioners can challenge DEA’s final
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`determination denying the Petition.
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`The government’s real grievance is the last point: Petitioners are challenging
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`a decision denying another’s rescheduling petition. See Mot. 1. But neither the CSA
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`nor any DEA rule limits the class of persons who can seek judicial review to the
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`parties of administrative proceedings underlying those decisions. On the contrary,
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`the statute affirmatively says “any person aggrieved by a final decision” can seek
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`judicial review. 21 U.S.C. § 877 (emph. added). This language invokes traditional
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`standing principles. The government cannot deny Petitioners qualify as “person[s]
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`aggrieved” by the unlawful denial of the Petition—a decision it concedes is final and
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`appealable. Mot. 3-4. This should be the end of the matter.
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`The government’s position requires rewriting § 877, changing the “any person
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`aggrieved” standard to the more restrictive “any party aggrieved.” But courts,
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`including this one, have recognized the difference. In Pacific Maritime Ass’n v.
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`NLRB, 827 F.3d 1203, 1211 (9th Cir. 2016), for example, this Court explained that
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`the “person aggrieved” standard in § 10(f) of the National Labor Relations Act
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`meant a non-party could seek judicial review of a final NLRB order:
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`While, in the typical case, a “person aggrieved” usually will have been
`a party to the Board proceeding, party status is not necessary. Courts
`have recognized entities as “aggrieved persons” even though they were
`not parties in the underlying administrative proceedings.
`“Party aggrieved” limits those who can seek review to those who participated in
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`agency proceedings. Am. Civil Liberties Union v. F.C.C., 774 F.2d 24, 25 (D.C. Cir.
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`1985). “Person aggrieved,” by contrast, carries the same meaning it does under § 702
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`of the APA: that the petitioner be injured and arguably within the relevant statute’s
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`zone of interests. See Clarke v. Sec. Indus. Ass’n, 479 U.S. 388, 396 (1987).
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`Consistent with this approach, both circuits that have looked at the issue have
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`construed “any person aggrieved” in § 877 to require a litigant to meet the injury-in-
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`fact and zone-of-interests requirements. Bonds v. Tandy, 457 F.3d 409, 412 (5th Cir.
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`2006); PDK Labs. Inc. v. DEA, 362 F.3d 786, 793 (D.C. Cir. 2004). In PDK Labs,
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`for example, the court explained that a pharmaceutical manufacturer had standing
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`under § 877 to petition for review of an order requiring importers to suspend
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`shipments of ephedrine to that manufacturer. 362 F.3d at 792-93. Noting that “[v]ery
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`rarely has Congress withheld judicial review from those who have suffered an
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`Article III injury at the hands of an administrative agency” and “[t]ime and again the
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`Supreme Court has emphasized that there is a ‘strong presumption’ in favor of
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`judicial review,” id. at 792 (citation omitted), the court concluded that no language
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`in § 877 supported limiting judicial review beyond its express language, id. at 793.
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`The scheme confirms this conclusion. Unlike § 877’s broad “any person
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`aggrieved” language, § 811(a) permits “any interested party” to petition the agency.
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`Compare 21 U.S.C. § 811(a) (emph. added) with § 877 (emph. added). Congress’s
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`use of “interested party” in § 811(a) and “person aggrieved” in § 877 was not
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`accidental. Section 811(a)’s use of “interested party” allows anyone interested to
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`petition the agency, while § 877 uses “person aggrieved” to ensure that anyone with
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`standing may obtain judicial review of a final agency determination, regardless of
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`whether they were a party to the underlying agency proceedings.
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`Thus, the government’s assertion that “a person who petitions the DEA
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`Administrator to reschedule a substance may seek judicial review if the
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`Administrator denies that petition,” Mot. 4, is incorrect. An “interested party” can
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`submit a petition under § 811(a) but not have standing to seek judicial review. See
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`Gettman v. DEA, 290 F.3d 430, 433 (D.C. Cir. 2002) (§ 811(a) doesn’t provide
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`“‘automatic standing’ to appeal the DEA’s denial of [a] petition”). Likewise, a non-
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`party to a denied petition may have standing to challenge the denial.
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`Boiled down, the Motion’s core flaw is that it conflates the concepts of
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`standing and exhaustion. See, e.g., Mot. 1 (“Because these petitioners have not
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`exhausted their administrative remedies …”) (emph. added). Exhaustion isn’t
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`something a litigant must do, but rather something that must be done. Remedies can
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`be exhausted by a party other than the one appearing before the court.
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`The judicial review provision of the Communications Act offers a useful point
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`in contrast. Like § 877 of the CSA, § 405 of the Communications Act allows
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`“person[s] aggrieved,” including non-parties to agency proceedings, to obtain
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`judicial review. 47 U.S.C. § 405. But unlike § 877, it clearly mandates that non-
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`parties must first file a petition for reconsideration before seeking judicial review.
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`See Coal. for Pres. of Hispanic Broad. v. F.C.C., 931 F.2d 73, 76 (D.C. Cir. 1991).
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`Thus, under Darby, non-parties would need to exhaust that step before coming to
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`court. Here, such a requirement is plainly absent, so Darby bars imposing further
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`exhaustion. See Reno, 114 F.3d at 882.
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`In sum, because Petitioners are “person[s] aggrieved” by DEA’s final decision
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`denying the Petition, judicial review is available under § 877. Given Darby and that
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`further administrative exhaustion with respect to that decision is impossible, the
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`suggestion that Petitioners must file a new petition or take additional steps before
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`seeking judicial review must be rejected.
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`ii. Issue exhaustion doesn’t apply.
`At times, the government suggests dismissal is appropriate because the issues
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`Petitioners raise weren’t raised in the Petition. Mot. 7. This argument sounds not in
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`remedies exhaustion—the basis of the Motion—but issue exhaustion. The
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`Case: 20-71433, 07/27/2020, ID: 11767302, DktEntry: 14, Page 16 of 117
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`distinction is important because the separate doctrines demand different legal
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`standards. E.g., Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620,
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`622 (9th Cir. 2008) (applying each doctrine separately).
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`“The requirement that a claimant obtain a final decision on his claim is a
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`remedy-exhaustion requirement, while the requirement that a claimant must also
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`specify that issue in his request for review by the agency is an issue-exhaustion
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`requirement.” Id. at 630 (quot. omitted). Issue exhaustion is typically a creature of
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`statute or regulation. In Sims v. Apfel, 530 U.S. 103, 107-08 (2000), the Court held
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`it isn’t generally required in non-adversarial or inquisitorial settings. Id. Just so here.
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`First, the Petition squarely raises the issue. It contends maintaining marijuana
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`as a Schedule I drug is untenable because “[h]alf the states allow for medical use.”
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`Pet., Ex. 1. That is the issue. To reject this argument, the agency applied its unlawful
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`five-part test. Pet., Ex. 2. If the Petition didn’t implicate the validity of DEA’s five-
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`part test, one wonders why DEA made it the centerpiece of its final determination
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`denying that Petition.
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`Second, even if the Petition didn’t squarely raise the issue, DEA’s denial did,
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`by relying on the 1992 Rule and 2016 Denial as the authority for refusing to initiate
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`a rulemaking. Wind River Min. Corp. v. United States, 946 F.2d 710 (9th Cir. 1991)
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`is instructive on this point. There, this Court held that a challenger may call into
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`- 15 -
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`Case: 20-71433, 07/27/2020, ID: 11767302, DktEntry: 14, Page 17 of 117
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`question the substance of an earlier agency decision even outside the limitations
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`period if a later agency action applies the earlier decision. Id. at 715-16.
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`As in Wind River, Petitioners challenge recent final agency action applying an
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`unlawful test the agency developed years earlier. Petitioners contend that the earlier
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`rule exceeded the agency’s statutory and constitutional authority, so the agency
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`lacked authority to take the recent action. In denying the Petition, the agency plainly
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`applied the 2016 Denial and the 1992 Rule. Under this Court’s precedents,
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`Petitioners may therefore challenge their renewed application here. See also
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`California Sea Urchin Comm’n v. Bean, 828 F.3d 1046, 1051 (9th Cir. 2016).
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`Third, notwithstanding Wind River, review of the statute’s meaning and the
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`constitutional issue is proper if not required under the APA’s plain text. The meaning
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`and constitutionality of the statutory provisions raised by review of the denial are
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`“necessary to decision” and “presented” to the Court to review. 5 U.S.C. § 706.
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`Fourth, the § 811(a) petition process isn’t adversarial. It lacks any of the
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`hallmarks of adversarial-ness: no cross examination, no representation by counsel,
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`no trial-like proceedings, etc. Nor is there notice-and-comment. See Krumm v. Drug
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`Enforcement Admin., 739 F. App’x 655 (D.C. Cir. 2018).3 As a result, under Sims,
`
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`3 The Krumm petitioner directly challenged the five-part test. The agency rejected
`that challenge and stated it would be “an extremely inefficient use of the
`agencies’ resources” to conduct analysis based on a petition that puts forward “a
`cursory claim for rescheduling” and “plainly fails to materially alter the prior
`agencies’ determination” under the test. Ex. 7. Non-statutory exhaustion is not
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`- 16 -
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`Case: 20-71433, 07/27/2020, ID: 11767302, DktEntry: 14, Page 18 of 117
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`issue exhaustion doesn’t apply. 530 U.S. at 107; see also Alaska Survival v. Surface
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`Transp. Bd., 705 F.3d 1073, 1080 (9th Cir. 2013) (no issue exhaustion with
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`“informal” and “inquisitorial rather than adversarial” proceedings).
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`iii. The record is complete and squarely presents the issues.
`The government also suggests that a slim administrative record is a reason to
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`dismiss this case. Not so.
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`“Concern over the lack of a comprehensive administrative record is not
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`sufficient cause to narrow the scope of 21 U.S.C. § 877.” John Doe, Inc. v. Drug
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`Enforcement Admin., 484 F.3d 561, 569 (D.C. Cir. 2007). In John Doe, for example,
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`the “meager” administrative record consisted of a permit denial. That allowed review
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`in the Court of Appeals because “[t]he limited administrative record … establishe[d]
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`sufficient facts to squarely present the critical legal issue.” Id. at 570.
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`So too here. While the government implies this case would benefit from a
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`more fulsome petition, e.g., Mot. 4, in fact, the opposite is true. Petitioners raise
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`matters of statutory interpretation and a separation of powers based facial challenge
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`to § 811(d). No facts are disputed. The government does not and cannot explain how
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`another petition supplemented with “evidence regarding marijuana’s efficacy [or]
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`safety,” see Mot. 5, would assist this Court in deciding pure issues of law.
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`required where the agency has not only predetermined the issue before it, but
`recently stated it would be an inefficient use of resources for it to analyze
`Petitioners’ core claims. See McCarthy v. Madigan, 503 U.S. 140, 148 (1992).
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`- 17 -
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`Case: 20-71433, 07/27/2020, ID: 11767302, DktEntry: 14, Page 19 of 117
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`The facts necessary to answer the legal questions presented are in the record:
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`the Petition, the 2020 Denial, and the 2016 Denial. This is the ideal record for review.
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`III. Even if exhaustion were required, it should be excused.
`While numerous exceptions to exhaustion arguably apply, see, e.g., supra n.
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`3 (futility), Petitioners focus on two: the lack of special expertise to apply, and the
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`undue prejudice that would result from foreclosing timely judicial review.4
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`i. The agency has no special expertise to apply.
`The questions presented don’t involve factual issues that implicate the
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`agency’s “special expertise.” This is not a situation, for example, where the science
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`is being challenged. Rather, the purely legal questions here concern the statutory
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`requirements of the CSA. Accordingly, they are suited to judicial determination.
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`First, Petitioners raise a plausible, facial constitutional challenge to § 811(d)
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`based on separation of powers. Pet. 15-16. Not once does the government address
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`this claim, but it is important. Section 811(d) is part of the core logic underlying the
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`2016 Denial. This issue is in the administrative record and ripe for review.
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`“[E]xhaustion is generally inappropriate where a claim serves to vindicate
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`structural constitutional claims … which implicate both individual constitutional
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`rights and the structural imperative of separation of powers.” Cirko v. Comm’r of
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`Soc. Sec., 948 F.3d 148, 153 (3d Cir. 2020) (citing Glidden Co. v. Zdanok, 370 U.S.
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`4
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`If the Court has doubt, Petitioners request deferring ruling on the Motion until
`the merits, where a more fulsome background will provide more support.
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`- 18 -
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`Case: 20-71433, 07/27/2020, ID: 11767302, DktEntry: 14, Page 20 of 117
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`530 (1962)). Of course, neither DEA nor the Attorney General can declare a statute
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`they administer as facially violating separation of powers. See Johnson v. Robison,
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`415 U.S. 361, 368 (1974). The government not only has no expertise to apply to this
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`claim, it is powerless to grant the relief Petitioners seek, making exhaustion
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`inapplicable. See McCarthy, 503 U.S. at 147.
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`The statutory issues are also “purely legal” and thus do not require exhaustion.
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`Meridian Land & Mineral Co. v. Hodel, 843 F.2d 340, 342 (9th Cir. 1988). To be
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`sure, after Chevron, the pure statutory interpretation exception may, as a general
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`matter, carry less force. But not here, because in Gonzales v. Oregon, 546 U.S. 243,
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`266 (2006), the Court held that Congress delegated authority to determine medical
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`matters under the CSA away from Respondents. That includes the key question
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`presented here: the meaning of “no currently accepted medical use in treatment in
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`the United States.” 21 U.S.C. § 812(b)(1)(B). Any authority or special expertise
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`Respondents may claim in interpreting the statute is “incongruous with the statutory
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`purposes and design.” Oregon, 546 U.S. at 267.
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`ii. Requiring Petitioners to submit a rescheduling petition would
`cause undue prejudice.
`Courts also excuse prudential exhaustion where pursuing agency review
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`would subject a party to undue prejudice. See Washington, 925 F.3d at 119. “Such
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`prejudice may result,
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