539 F.Supp.3d 120
D.D.C.2021Background
- The Agriculture Improvement Act of 2018 (AIA) redefined "hemp" as Cannabis sativa L. (including derivatives) with delta-9 THC ≤ 0.3% and removed such hemp from CSA Schedule I.
- DEA issued an Interim Final Rule (IFR) on Aug. 21, 2020 declaring that cannabis derivatives, extracts, or products that exceed 0.3% delta-9 THC are Schedule I controlled substances even if derived from hemp plants that met the 0.3% threshold.
- Hemp processing produces intermediate hemp material (IHM) and waste hemp material (WHM) that, during processing, inevitably exceed 0.3% delta-9 THC; IHM is later refined into compliant extracts used in consumer products.
- Plaintiffs (Hemp Industries Association and RE Botanicals) seek a declaratory judgment and injunction that IHM and WHM are not controlled substances and that DEA may not enforce CSA registration requirements against them; they also filed a petition for review of the IFR in the D.C. Circuit.
- The district court held that 21 U.S.C. § 877 vests exclusive jurisdiction over final DEA determinations in the courts of appeals, that Plaintiffs’ district-court suit is, in substance, a challenge to the IFR, and therefore dismissed for lack of subject-matter jurisdiction.
- The court also rejected Plaintiffs’ fallback invoking Leedom v. Kyne jurisdiction, finding the narrow Leedom criteria unmet.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court has jurisdiction over claims that challenge DEA's IFR under the CSA | Plaintiffs: may seek declaratory/injunctive relief in district court (they do not formally invalidate the IFR) | Govt: 21 U.S.C. § 877 gives exclusive review of final DEA decisions to the courts of appeals | Held: Dismissed for lack of subject-matter jurisdiction; §877 bars district-court review |
| Whether Plaintiffs’ claims are "in substance" a challenge to the IFR | Plaintiffs: complaint avoids directly attacking the IFR; seeks relief narrowly about IHM/WHM | Govt: complaint seeks relief that would nullify the IFR’s asserted authority; it is a functional challenge | Held: Court finds the suit is substantively a challenge to the IFR and thus falls within §877 |
| Whether Leedom v. Kyne provides district-court jurisdiction despite statutory preclusion | Plaintiffs: Leedom exception permits review where agency exceeded statutory authority and no other remedy exists | Govt: Leedom inapplicable; plaintiffs have an appellate remedy and cannot show the requisite extreme, clear statutory violation | Held: Leedom not available — plaintiffs fail the narrow three-part test |
| Whether Monson v. DEA supports district-court jurisdiction here | Plaintiffs: Monson allowed district-court review of hemp claims | Govt: Monson turned on absence of any final DEA decision; here an IFR is final | Held: Monson is distinguishable; presence of a final DEA rule means §877 controls |
Key Cases Cited
- John Doe, Inc. v. DEA, 484 F.3d 561 (D.C. Cir. 2007) (§877 vests exclusive jurisdiction in courts of appeals for final DEA determinations)
- FCC v. ITT World Commc’ns, Inc., 466 U.S. 463 (1984) (district court may not enjoin agency action that is reviewable only in court of appeals)
- Monson v. DEA, 589 F.3d 952 (8th Cir. 2009) (district-court jurisdiction permissible where no final DEA decision existed)
- Leedom v. Kyne, 358 U.S. 184 (1958) (limited doctrine permitting review despite statutory preclusion where agency plainly exceeds statutory power)
- DCH Regional Medical Center v. Azar, 925 F.3d 503 (D.C. Cir. 2019) (discussing the narrow scope and viability of Leedom review)