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Hoffmann-La Roche Inc. v. Kleindienst

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


decided: June 26, 1972.

HOFFMANN-LA ROCHE, INC., PETITIONER,
v.
RICHARD G. KLEINDIENST, ATTORNEY GENERAL OF THE UNITED STATES AND JOHN E. INGERSOLL, DIRECTOR, BUREAU OF NARCOTICS AND DANGEROUS DRUGS, UNITED STATES DEPARTMENT OF JUSTICE, RESPONDENTS

Biggs and Rosenn, Circuit Judges, and Kraft, District Judge.

Author: Per Curiam

Opinion ON STATEMENT OF RESPONDENTS IN ANSWER TO RULE TO SHOW CAUSE AND THE REPLY OF PETITIONER HOFFMANN-LA ROCHE, INC., THERETO

To the end that the record might clearly demonstrate the operative facts in this case, the court issued an order to show cause on March 17, 1972 as follows: "It appearing that the original order of the Acting Commissioner, 31 Fed.Reg. 565, that Librium and Valium be listed as depressant drugs having a potential for abuse, stated that the proposal [for listing Librium and Valium as depressant drugs having a potential for abuse] was made 'on the basis of his investigations and the recommendations of an advisory committee appointed pursuant to Section 511(g) (1)' of the Federal Food, Drug and Cosmetic Act, and that at a prehearing conference counsel for the petitioner formally moved for the production of the report, recommendations and underlying data, and reasons certified to the Secretary by the advisory committee as to why Librium and Valium should be so listed, and Section 706(d)(2) of the Act provides 'any report, recommendations, underlying data, and reasons certified to the Secretary by an advisory committee . . . shall be made a part of the record of any hearing if relevant and material, subject to the provisions of section 7(c) of the Administrative Procedure Act,' and that the request of the petitioner was refused, it is

"ORDERED that the Honorable Richard G. Kleindienst, Acting Attorney General vice the former respondent, former Attorney General, the Honorable John N. Mitchell, and the Honorable John E. Ingersoll, Director of the Bureau of Narcotics and Dangerous Drugs, United States Department of Justice, shall, on or before April 10, 1972, show cause, if any there be, why '. . . [the] report, recommendations, underlying data and reasons certified to the Secretary by the advisory committee,' referred to in the first paragraph of this order to show cause, should not be made available to the petitioner for examination by it; and it is

"FURTHER ORDERED that the respondents may reply to this order by filing a typewritten answer or brief, or both, on or before April 10, 1972; and it is

"FURTHER ORDERED that the petitioner may reply or file a brief, or both, typewritten, to the respondents' answer and brief on or before April 26, 1972."

The respondents filed a statement in answer to this rule on April 10, 1972 and Hoffmann-La Roche, Inc. ("Hoffmann") on April 26, 1972 filed a reply to the statement of the respondents in answer to the order to show cause. Respondents adhered to the position that the report of the Advisory Committee, its recommendations and underlying data and reasons certified to the Secretary should not be discovered and Hoffmann has taken the contrary position. This opinion is directed toward the issues thus presented.

Sections 511(g) (1) and 706(d) (2) of the Federal Food, Drug, and Cosmetic Act are cited on page 1 of the Statement of Respondents in Answer to Order to Show Cause as 21 U.S.C.A. § 360a(g) (1) and § 376(d) (2) respectively. The former has been superseded by 21 U.S.C.A. § 874 (1972 Supp.) at 391. Section 376(d) (2) remains unchanged in its wording and is found at 21 U.S.C.A. as indicated and the citation for this is correct. It states: "Any report, recommendations, underlying data, and reasons certified to the Secretary by an advisory committee appointed pursuant to subparagraph (D) of subsection (b) (5) of this section, shall be made a part of the record of any hearing if relevant and material, subject to the provisions of section 1006(c) of Title 5.*fn1 The advisory committee shall designate a member to appear and testify at any such hearing with respect to the report and recommendations of such committee upon request of the Secretary, the petitioner, or the officer conducting the hearing, but this shall not preclude any other member of the advisory committee from appearing and testifying at such hearing."*fn2 (Emphasis added).

Hoffman's counsel moved twice at prehearing conference on August 1, 1966 that the report, recommendations, underlying data, and reasons certified to the Secretary by his Advisory Committee on the subject of depressant drugs should be produced. See Section 201(v) of the Act.*fn3 The motion for production, twice made, was twice opposed vigorously by counsel for the Commissioner and twice refused by Hearing Examiner Buttle without any adequate reason being stated for the refusal and without regard to the statute cited above and to the Public Information Act. See 5 U.S.C. § 552. The Government takes the position that this matter was not referred to again until some five years later and that Hoffman has in effect waived its right under the statute. We cannot agree. See Texaco, Inc. v. Federal Power Commission, 117 U.S.App.D.C. 268, 329 F.2d 223 (1963), cert. den. 375 U.S. 941, 84 S. Ct. 346, 11 L. Ed. 2d 272 (1963). The opinion in Texaco, written by Circuit Judge (now Chief Justice) Burger, is strongly suggestive of the result which we should reach here. The Court of Appeals for the District of Columbia Circuit was construing the Natural Gas Act, Section 19(b), 15 U.S.C. § 717r(b). Texaco and others sought an order to adduce additional evidence in a hearing pending before the Federal Power Commission. The court held that an interlocutory appeal from a refusal of the Commission to permit that evidence to be adduced was not appropriate and that the failure to apply for an interlocutory order was not a waiver of the ultimate right of Texaco to put the evidence in the record. Judge Burger went on to say, ". . . The appropriate time to petition this court for leave to adduce additional evidence under Section 19(b) of the Natural Gas Act is after this court has jurisdiction over a final order of the Commission on the merits, pursuant to sentences [1] and [3] of Section 19(b)."

It is true that in the instant case no motion was made by Hoffmann to put the Advisory Committee report in the record in 1966, but there is small point in any proceeding to move material into the record when its production is refused. We cannot tell whether the failure to produce the Advisory Committee's report and its supporting documents was or was not prejudicial to Hoffmann until we examine them. We believe that we have the jurisdiction, the power, to require such evidence to be put in the record unless it be privileged.*fn4 Privilege is asserted by the respondents in the language set out below,*fn5 but no cognizable basis is asserted for the exercise of privilege, and it was admitted by counsel for the Government by the words quoted in note 5 that the Commissioner did review the Advisory Committee's report and did make his "finding" " based on recommendations given to him " (emphasis added), that finding being that a hearing should be held in respect to Valium and Librium as to whether they should be subject to control under the Drug Abuse Control Act Amendments of 1965, Federal Food, Drug and Cosmetic Act, P.L. 89-74, July 15, 1965, 21 U.S.C. § 301, et seq.

This blanket argument does not convince us of the correctness of the administrative proceedings. The Commissioner was indeed required to exercise his independent judgment, but that judgment rested on material which was before him concerning which Hoffmann surely had a right to be informed. The objection of Hoffman goes to the fairness of the hearing, and it should be noted that the denial of somewhat analogous reports have been treated as a lack of procedural due process even where the reports have not been mandatorily required by statute.*fn6

Typical of the Government's arguments is that the ". . . petitioner's application for the material at the prehearing conference was 'merely a "request for . . . information"' so that the plaintiff was plainly seeking discovery addressed to the discretion of the Examiner. . . ." This contention is incompatible with the statute, with the regulations, and with the actions of the parties. There was no mention of "discretion" by the parties or by the Examiner. There is no suggestion of the exercise of discretion in the statute or its applicable regulation. We cannot accept this argument.

Another contention advanced by the Government is that Dr. Frederick E. Shideman, Chairman of the Advisory Committee on Abuse of Depressant and Stimulant Drugs, testified respecting the drug Librium and that Hoffmann could have elicited from him the substance of the Advisory Committee report. What Hoffmann desired was the report of the Advisory Committee for examination, not a statement of its contents by its Chairman. We do not know, of course, the length of the report of the Advisory Committee or the amount of data upon which it was based, but we think we can safely assume that it was not inconsiderable. We can hardly believe that the Examiner would have permitted its contents to be brought out as upon cross examination. This argument seems to us to be specious.

The Government urges that "the fact that the reason underlying the [Advisory] committee[']s recommendation may have been ill-founded or that procedures which it utilized may not have been according to prescribed rules or regulations cannot and did not affect Petitioner's right to a fair and impartial hearing[; that] the Commissioner was not required to ask the advice of an advisory committee[; and that] he was certainly not required to second guess its recommendation. What transpired before the advisory committee or the form in which its report was delivered has no meaningful bearing on the validity of the Commissioner's order[; and that] that order[']s validity was the subject of the hearings which ensued and is dependent upon the existence or nonexistence of substantial evidence of record supporting the Findings of the Director contained in the final order."*fn7

It is interesting to observe that "by a notice published March 24, 1972 (37 Fed.Reg. 6107), the Commissioner of Food and Drugs has proposed a rule requiring 'strict separation of functions' in adjudicatory proceedings and prohibiting any officer who acts as an advocate in a hearing from participating in the Commissioner's decision or order. The notice recites: 'The Administrative Conference of the United States and other authorities have recommended that new, more specific regulations be promulgated to establish . . . a clear separation of the litigation and decision functions of FDA officials, employees and attorneys. . . .'"*fn8 We note also that the FDA has itself acted in large part to end the policy of secrecy and to open its files.*fn9 This is a desirable change. We can perceive no reason why it should not apply here unless confidential information which would be damaging to the welfare of the United States would be disclosed. No such assertion is made by the respondents. In fact, the respondents do not refuse to make the information available; in effect they simply state they do not desire to do so.

The attitude of the respondents toward Hoffmann has bearing we think on the delicate issue as to whether or not the proceedings before us are regulatory or adjudicatory.

We will order the respondents to produce the report of the Advisory Committee and its accompanying documentation.


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