Cardinal Health, Inc. v. Holder
846 F. Supp. 2d 203
D.D.C.2012Background
- Cardinal challenges DEA's February 2, 2012 order to show cause and immediate suspension of Lakeland facility under the APA.
- CSA/DEA registration regime requires registration for entities handling controlled substances and allows immediate suspension for imminent danger under § 824(d).
- Cardinal Lakeland previously faced DEA actions, including 2007 ISOs and a 2008 MOA to improve anti-diversion controls.
- DEA investigation allegedly showed high and increasing oxycodone distribution to Cardinal Lakeland's top four Florida retail customers, implying weak due diligence.
- Court remanded in February 2012 to the DEA for an administrative record and fuller explanation of the ISO basis.
- On remand, the government provided a certified record and Administrator Leonhart’s declaration; court denied Cardinal’s preliminary injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the ISO arbitrary and capricious under the APA? | Cardinal argues the ISO rests on insufficient or late grounds. | DEA asserts reasoned grounds and agency expertise support imminent danger finding. | No; ISO upheld as not arbitrary and capricious. |
| Does the ISO facially comply with 21 C.F.R. § 1301.36(e)? | ISO lacks adequate factual findings per § 1301.36(e). | DEA's interpretation allows a summary of findings; combined with post-remand explanation. | Yes; ISO's findings deemed adequate under deference. |
| Does Cardinal have due process protection against pre-hearing suspension? | Constitutional right to pre-deprivation process requires de novo imminent danger. | Statute grants pre-hearing suspension for imminent danger; post-deprivation hearing available. | Not likely to succeed; statutory scheme permits pre-hearing suspension. |
Key Cases Cited
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (arbitrary and capricious standard requires rational basis and data consideration)
- Wisconsin Gas Co. v. FERC, 758 F.2d 669 (D.C. Cir. 1985) (irreparable harm standard and pre-hearing considerations)
- Overton Park, 401 U.S. 402 (U.S. 1971) (full record review and cannot rely on post hoc rationalizations)
- Alpharma, Inc. v. Leavitt, 460 F.3d 1 (D.C. Cir. 2006) (remand for further articulation of agency reasoning; post-remand explanations permissible)
- Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir. 2001) (remand without vacating when agency grounds are unclear)