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AMA v. RENO

July 5, 1994

AMERICAN MEDICAL ASSOCIATION, AMERICAN DENTAL ASSOCIATION, AMERICAN OSTEOPATHIC ASSOCIATION, AMERICAN VETERINARY MEDICAL ASSOCIATION, NATIONAL ASSOCIATION OF RETAIL DRUGGISTS, NATIONAL WHOLESALE DRUGGISTS ASSOCIATION, NATIONAL ASSOCIATION OF CHAIN DRUG STORES, PATRICK E. WHITTEN, M.D., and EDWARD DILLON, R.Ph., Plaintiffs,
v.
JANET RENO, Attorney General, ROBERT C. BONNER, Administrator, Drug Enforcement Administration, and DRUG ENFORCEMENT ADMINISTRATION, Defendants.



The opinion of the court was delivered by: STANLEY S. HARRIS

 Before the Court is defendants' motion for summary judgment. Also before the Court is plaintiffs' motion for summary judgment on Counts I and II of the amended complaint. Plaintiffs challenge a final rule of the Drug Enforcement Administration ("DEA") increasing existing registration fees for all handlers of controlled substances; these fees are used to support the DEA's Diversion Control Program. See 58 Fed. Reg. 15272 (1993) (codified at 21 C.F.R. §§ 1301.11). Specifically, plaintiffs contend that the DEA violated the Administrative Procedure Act ("APA"), 5 U.S.C. § 551, by failing to provide both a reasonable notice of proposed action and a reasoned explanation for its decision. Plaintiffs also allege that the DEA improperly ignored the Independent Offices Appropriation Act ("IOAA"), 31 U.S.C. § 9701, in promulgating the Final Rule. Finally, plaintiffs claim that the revised registration fee schedule violates the takings and due process clauses of the Fifth Amendment. Upon careful consideration of the entire record, the Court grants defendants' motion and denies plaintiffs' motion. Although "findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56," Fed. R. Civ. P. 52(a), the Court nonetheless sets forth its analysis.

 Background

 The Comprehensive Drug Abuse Prevention and Control Act (popularly known as the Controlled Substances Act) (the "CSA") authorizes the Attorney General to "promulgate rules and regulations and to charge reasonable fees relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances." 21 U.S.C. § 821. *fn1" Pursuant to the CSA, the DEA established the first registration fee schedule in 1971. 36 Fed. Reg. 7776 (Apr. 24, 1971). The DEA amended the fee schedule in 1984. 48 Fed. Reg. 56043 (Dec. 19, 1983). This schedule remained in effect until 1993.

 On October 6, 1992, Congress passed the Departments of Commerce, Justice, State, the Judiciary, and Related Agencies Appropriations Act of 1993, Pub. L. No. 102-395, 106 Stat. 1828 (codified at 21 U.S.C. § 886a) ("1993 Appropriations Act."). Section 111(b) of this Act establishes in the Treasury a separate account, the Diversion Control Fee Account, into which "there shall be deposited as offsetting receipts . . . all fees collected by the Drug Enforcement Administration, in excess of $ 15 million, for the operation of its diversion control program." Id. at § 111(b)(1), 106 Stat. at 1843. *fn2" Section 111 further directs that:

 
Notwithstanding Any Other Provision of Law . . . .
 
(b) . . . .
 
(3) Fees charged by the Drug Enforcement Administration under its diversion control program shall be set at a level that ensures the recovery of the full costs of operating the various aspects of that program.
 
(4) The amount required to be refunded from the Diversion Control Fee Account for fiscal year 1994 and thereafter shall be refunded in accordance with estimates made in the budget request of the Attorney General for those fiscal years.

 Id. at § 111, 106 Stat. at 1842-43.

 The DEA published its final rule on March 22, 1993, adopting a fee schedule similar to that presented in the NPRM. 58 Fed. Reg. 15272 (1993) (codified at 21 C.F.R. § 1301.11) (the "Final Rule"). In response to comments that it should recover the costs of the program through other sources, and that the fees proposed were unreasonable and excessive, the DEA responded that "the legislation does not give DEA discretion to set the fees at a lower level than that necessary to recover the full costs of the Diversion Program." Id. at 15273. The DEA also rejected comments that it should have followed the criteria established by the IOAA in setting the revised fees. The DEA explained that because the 1993 Appropriations Act defined the basis for the fee as that established by the budget process, it was required to adhere to this specific legislative directive, rather than the more general command of the IOAA. Id. at 15273. In addition, the DEA rejected comments that the NPRM did not provide adequate information about either the components of the diversion control program or the determination of the fee increases, and that the revised fees were an unconstitutional tax on registrants to support activities unrelated to their registrations. *fn3"

 Discussion

 A court may grant summary judgment when the pleadings and supplemental materials present no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). Because the issues raised by the present motions ...


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