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United States v. Lane

United States District Court, Ninth Circuit

June 24, 2013

United States of America, Plaintiff,
Michael Rocky Lane, et al., Defendants.


DAVID G. CAMPBELL, District Judge.

Defendant Andrew Scott Freeman has filed a motion, on behalf of himself and Defendants Strunk and Lane, to dismiss the indictment because of issues related to the DEA's temporary scheduling of MDVP. Doc. 302. The government responded to the motion in a consolidated response. Doc. 334 at 18-20. For the reasons that follow, the Court will deny the motion.

I. Background.

On March 28, 2013, the government obtained a Second Superseding Indictment ("the Indictment") charging seven co-defendants, including the three remaining Defendants - Michael Rocky Lane, Clinton Joseph Strunk, and Andrew Scott Freeman - with violations of the federal comprehensive Drug Abuse Prevention and Control Act of 1970 ("CSA") and the federal Controlled Substance Analogue Enforcement Act of 1986 ("Analogue Act"). Doc. 143.

The CSA prohibits the manufacture, distribution and possession of controlled substances, which are drugs or other substances listed in Schedules I and II of the Act. Id., at 2, ¶ 1; see 21 U.S.C. § 841. The Analogue Act prohibits the manufacture, distribution, and possession of controlled substance analogues. Doc. 143, at 2, ¶ 3; 21 U.S.C. § 813. These are substances that have a substantially similar chemical structure to a Schedule I or Schedule II controlled substance and that have or are represented or intended to have a substantially similar effect on the central nervous system. Id., see 21 U.S.C. § 802(32)(A). To the extent that a controlled substance analogue is intended for human consumption, it is treated as a Schedule I controlled substance for purposes of the CSA. Id., see 21 U.S.C. § 813.

The charges in the Indictment stem from allegations that Defendants manufactured and distributed, under false and misleading labels, products such as "Eight Ballz Bath Salts" and "Eight Ballz Premium Glass Cleaner." Doc. 143 at 3-5, passim. The Indictment alleges that these products contained various controlled substance analogues, were sold as powder-like substances in gram and half-gram quantities, and, despite their labels, were actually intended for human consumption. Id. The Indictment alleges that prior to October 2011, Defendants used 3, 4-methylenedioxypyrovalerone (MDPV) in "Eight Ballz Bath Salts" in violation of the Analogue Act, and that upon learning that the Drug Enforcement Administration ("DEA") had issued a final order temporarily scheduling mephedrone, methylone, and MDPV as Schedule I substances under the CSA ("MDPV order"), Defendants began importing and using replacement controlled substance analogues commonly known as a-PVP, a-PBP, pentylone, and pentadone in "Eight Ballz Bath Salts" and other products. Id.

II. Discussion.

Defendants' motion makes two arguments: (1) Congress's delegation of authority to the Attorney General to temporarily schedule a drug on an emergency basis is unconstitutional, and (2) DEA failed to comply with the CSA in issuing the MDPV order. As part of the second argument, Defendants submit that the DEA did not comply with its obligations under the Regulatory Flexibility Act ("RFA"), 5 U.S.C. §§ 601-611, in issuing the MDPV order.

The CSA delegates to the Attorney General the legislative power to issue temporary scheduling orders. 21 U.S.C. § 811(h). In turn, the Attorney General has delegated his temporary scheduling power to the DEA, as permitted under 21 U.S.C § 871(a). In Touby v. United States, 500 U.S. 160 (1991), the Supreme Court rejected the contention that the temporary scheduling provision, 21 U.S.C. § 811(h), constituted an unconstitutional delegation of legislative power. The Supreme Court held that the provision's "imminent hazard to the public safety" standard was an intelligible principle, and "conclude[d] that [§ 811(h)] passes muster even if greater congressional specificity is required in the criminal context." Id. at 165-66. Defendants argue that Touby is distinguishable because they, unlike the petitioners in Touby, have not conceded that Congress set forth an intelligible principle in § 811(h). Doc. 302 at 3. The Court does not agree. The concession by the petitioners in Touby was not dispositive.[1]

To schedule a drug temporarily under this delegation, the DEA must first find that doing so is "necessary to avoid an imminent hazard to the public safety." 21 U.S.C. § 811(h)(1). In making this determination, the DEA must consider three factors: (1) the drug's history and current pattern of abuse; (2) the scope, duration, and significance of abuse; and (3) what if any risk there is to the public health. 21 U.S.C §§ 811(c)(4)-(6), 811(h)(3). Consideration of these three factors includes "actual abuse, diversion from legitimate channels, and clandestine importation, manufacture, or distribution." 21 U.S.C. § 811(h)(3). Additionally, the DEA must publish a 30-day notice of the proposed scheduling in the Federal Register, transmit notice to the Secretary of Health and Human Services ("HHS"), and take into consideration any comments submitted by the Secretary in response. 21 U.S.C. §§ 811(h)(1), 811(h)(4).

Defendants argue that the DEA only looked at three of the eight factors outlined in the CSA to schedule a drug (Doc. 302 at 4), but "only three of the eight factors required for permanent scheduling" must be considered for temporary scheduling. See Touby, 500 U.S. at 163. The MDPV order demonstrates that the DEA considered the relevant factors. See 76 Fed. Reg. 65, 371 (Oct. 21, 2011). Defendants also submit that the DEA was required to, and did not, "request a scientific and medical evaluation of the substance from the Secretary of Health and Human Services, together with a recommendation as to whether the substance should be controlled." Doc. 302 at 3. Defendants' assertion fails to understand that the temporary scheduling process is not identical to the permanent scheduling process. The MDPV order demonstrates that the DEA transmitted to the Secretary of HHS notice of the proposed order and considered HHS's "no objection" comment in issuing the final order. 76 Fed. Reg. 65, 371, 65, 372. Defendants have not demonstrated that the DEA failed to comply with the procedures to schedule a drug temporarily.

Defendants also argue that the DEA failed to comply with the RFA. "The RFA requires a federal agency to prepare a regulatory flexibility analysis and an assessment of the economic impact of a proposed rule on small business entities, 5 U.S.C. § 604, unless the agency certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities' and provides a factual basis for that certification, id. at § 605." Envtl. Def. Ctr., Inc. v. EPA, 344 F.3d 832, 879-79 (9th Cir. 2003). Defendants note that the MDPV order does not reference the RFA, but that other temporary scheduling orders reference the RFA and articulate the manner in which DEA complied with the RFA.

Assuming for purposes of this order that the DEA violated the RFA in issuing the MDPV order and that review of that order is properly before the Court, the Court must determine an appropriate remedy.[2] Section 611(a)(4)(B) provides that "[i]n granting any relief in an action under this section, the court shall order the agency to take corrective action... including but not limited to... deferring enforcement of the rule against small entities unless the court finds that continued enforcement of the rule is in the public interest. " (Emphasis added.) For three reasons, the Court finds that continued enforcement of the MDPV order is in the public interest. First, Congress provided for temporary scheduling for a distinct public interest - "[t]o combat the designer drug' problem[.] Touby, 500 U.S. at 163; id. at 168 (noting that "Congress' express desire [was] to permit the Government to respond quickly to the appearance in the market of dangerous new drugs."). Second, the MDPV order states that scheduling "is necessary to avoid an imminent hazard to the public safety." 76 Fed. Reg. 65, 371. The DEA elaborates on this finding, noting that "there has been a rapid and significant increase in abuse of these substances in the United States, " id. at 65, 372, that "[t]here are no currently accepted medical uses in treatment in the United States for mephedrone, methylone, or MDPV, " id., and that "[t]hese synthetic cathinones have become a serious drug abuse threat as there have been reports of emergency room admissions and deaths associated with the abuse of these substances, " id. at 65, 373. Third, scheduling of ...

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