No. 99-1034
In the Supreme Court of the United States
CENTURY CLINIC, INC. AND KATRINA TANG, PETITIONERS
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
DAVID W. OGDEN
Acting Assistant Attorney General
ANTHONY J. STEINMEYER
DRAKE CUTINI
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTIONS PRESENTED
1. Whether the definition of clear and convincing evidence adopted by the
Food and Drug Administration (FDA) Hearing Officer rendered his decision
arbitrary or capricious.
2. Whether the FDA Hearing Officer's reliance on a tape recording in finding
that petitioners violated a consent decree rendered his decision arbitrary
or capricious.
In the Supreme Court of the United States
No. 99-1034
CENTURY CLINIC, INC. AND KATRINA TANG, PETITIONERS
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-4a) is unpublished but
the decision is noted at 189 F.3d 475 (Table). The decision of the district
court (Pet. App. 5a-8a) is unreported. The report and recommendation of
the magistrate judge (Pet. App. 9a-28a) is unreported.
JURISDICTION
The judgment of the court of appeals was entered on July 22, 1999. A petition
for rehearing was denied on September 14, 1999 (Pet. App. 58a). The petition
for a writ of certiorari was filed on December 13, 1999. The jurisdiction
of this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
1. Before 1993, petitioners used an unapproved medical device (an ohmmeter)
to diagnose whether patients had various diseases, such as Chernobyl radiation,
Nevada underground radiation, formaldehyde poisoning, Bubonic plague, malnourishment,
and exposure to hepatitis. Pet. App. 10a-11a. After diagnosis, petitioners
would recommend that their patients undergo expensive tests and treatments
for those diseases. Id. at 11a.
In March 1993, the United States filed suit against petitioners alleging
that their use of the medical device violated the Federal Food, Drug, and
Cosmetic Act (FDCA), 21 U.S.C. 301 et seq.. The United States and petitioners
simultaneously entered into a consent decree that was approved by the district
court. Pet. App. 73a-81a. The decree enjoined petitioners from using certain
medical devices unless there was in effect an approved application for premarket
approval pursuant to 21 U.S.C. 360e, or an approved application for an investigational
device exemption (IDE), pursuant to 21 U.S.C. 360j(g). Pet. App. 74a-75a.
The decree further provided that petitioners shall pay the United States
$200,000 per violation of the decree. Id. at 78a-79a.
Under the decree, the Food and Drug Administration (FDA) has authority to
make an initial determination whether the decree has been violated. If FDA
notifies petitioners of a violation, petitioners are permitted to challenge
that determination within the FDA. Pet. App. 79a. If FDA affirms its initial
decision, petitioner may challenge the decision in district court under
the "arbitrary and capricious review standard of 5 U.S.C. § 706(2)(A)."
Ibid. That review must be based on the record that was before FDA at the
time of its decision. Id. at 79a-80a.
The provision in the decree enjoining petitioners from using certain medical
devices without approval from the FDA tracks requirements in the FDCA. Under
the FDCA, a medical device generally may not be introduced into interstate
commerce without premarket approval by the FDA. 21 U.S.C. 360e. The FDCA
contains an exemption from that requirement for devices used for investigative
purposes. 21 U.S.C. 360j(g) (1994 & Supp. IV 1998). Under the exemption,
investigators are required to proceed in strict accordance with FDA regulations
and any conditions imposed by FDA. 21 C.F.R. 812.100, 812.110. If a device
is used in a manner that does not conform to FDA's regulations or the conditions
imposed by FDA, the device is considered adulterated under the FDCA. 21
U.S.C. 351(f)(1)(B) and (i).
2. After entry of the decree between the United States and petitioners,
Biosource Inc., which is not a party to this action, filed an application
to conduct an investigative study of the LISTEN System device- one of the
devices that petitioners had been enjoined from using absent FDA approval.
Pet. App. 12a. FDA approved the Biosource application on the condition that
the device would be used solely to collect data to determine whether the
device could detect diabetes. Ibid. That study was to be done by comparing
data from the LISTEN System with data from a fasting blood test that measured
glucose levels. Id. at 12a-13a. Petitioners obtained two LISTEN System devices
from Biosource for the alleged purpose of participating as clinical investigators
in the study. Id. at 13a.
After an investigation, FDA determined that petitioners were using the two
LISTEN System devices for unapproved purposes. Pet. App. 13a. In particular,
the evidence demonstrated that petitioners were using the two devices to
diagnose serious medical diseases, and to recommend further expensive testing
for those diseases. The evidence also demonstrated that petitioners were
not collecting the data necessary for the Biosource study. Id. at 13a-14a.
Some of the evidence came from a tape recording made by an undercover investigator
who posed as a patient. Id. at 39a-45a. Based on all the evidence, the FDA
found that petitioners had committed two violations of the consent decree
and imposed the $400,000 fine specified by the decree. Id. at 29a.
An FDA Hearing Officer affirmed the FDA's initial decision. Pet. App. 29a-57a.
The district court upheld the Hearing Officer's decision, ruling that it
was "not arbitrary, capricious, contrary to law, or unsupported by
substantial evidence." Id. at 5a-8a.
The court of appeals affirmed. Pet. App. 1a-4a. The court found that there
was "substantial evidence," including evidence from the tape recording
of the undercover investigator, that petitioners "used the LISTEN System
for diagnostic purposes beyond what the diabetes study authorized."
Id. at 3a.
ARGUMENT
1. Petitioners contend (Pet. 9-16) that the Hearing Officer in this case
erred in holding that the clear and convincing evidence standard is satisfied
by proof that the facts alleged are "highly probable." Petitioners,
however, did not challenge the FDA Hearing Officer's decision in the court
of appeals on that ground. Nor did the court of appeals address that issue.
Because petitioners failed to raise the issue below, and the court of appeals
did not address it, that question is not properly presented here. See Delta
Air Lines, Inc. v. August, 450 U.S. 346, 362 (1981).
In any event, petitioners' challenge to the Hearing Officer's definition
of clear and convincing evidence is without merit. Petitioners entered into
a consent decree that gives the FDA authority to determine whether there
is a violation of the decree subject only to review under the arbitrary
or capricious standard. Pet. App. 79a. Nothing in the decree requires the
FDA to apply a particular definition of clear and convincing evidence. Indeed,
nothing in the decree requires the FDA to apply a clear and convincing evidence
standard rather than a preponderance of the evidence standard. As petitioners
concede (Pet. 12), the Hearing Officer defined clear and convincing evidence
in the same way that this Court defined clear and convincing evidence in
Colorado v. New Mexico, 467 U.S. 310, 316 (1984). The Hearing Officer's
definition of clear and convincing evidence therefore did not render its
decision either arbitrary or capricious. Motor Vehicle Mfrs. Ass'n v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (arbitrary and capricious
standard limits judicial review to determining whether the agency has "examin[ed]
the relevant data," and articulated "a satisfactory explanation
for its action including a rational connection between the facts found and
the choices made") (internal quotation marks omitted).
Cruzan v. Director, Missouri Department of Health, 497 U.S. 261 (1990),
relied upon by petitioners, does not call into question the Hearing Officer's
decision. In that case, the Court held that the Due Process Clause does
not prohibit States from requiring clear and convinc- ing evidence that
a patient desires to terminate life-sustaining medical treatment. Id. at
284. The Court recited in a footnote two definitions of clear and convincing
evidence that States had applied in that context. Id. at 285 n.11. The Court
did not suggest, however, that States are required to apply those particular
definitions in the context of deciding a patient's desire for life-sustaining
treatment, much less that those definitions must be applied in a federal
or any other context. Nor did that decision suggest that it would be arbitrary
or capricious for an administrative agency to use the Colorado clear and
convincing evidence standard in enforcing a consent decree like the one
at issue here. Petitioners' reliance on Cruzan is therefore misplaced.
For similar reasons, the asserted conflict in the circuits identified by
petitioners (Pet. 12-14) does not provide any basis for review in this case.
Because petitioners did not raise the issue below and the court of appeals
did not address it, the decision below does not conflict with any of the
decisions cited by petitioners. Moreover, the cases cited by petitioners
cut across a spectrum of state law and federal law contexts. Within the
broad limits of the Due Process Clause, however, States are free to define
clear and convincing evidence in any manner they choose. Addington v. Texas,
441 U.S. 418, 432-433 (1979). Different federal law issues may call for
somewhat different formulations of what constitutes clear and convincing
evidence. And different formulations may be used to convey the same basic
standard. See United States v. Dixon, 185 F.3d 393, 404 (5th Cir. 1999)
(holding that two of the formulations identified by petitioners state the
same basic standard). For those reasons, the cases cited by petitioners
do not necessarily reveal any conflict in the circuits warranting this Court's
review. Whatever the extent of the conflict, however, none of the cases
cited by petitioners suggests that it would be arbitrary or capricious for
an administrative agency to apply the Colorado definition of clear and convincing
evidence in the context of enforcing a consent decree like the one at issue
here. The cases cited by petitioners are therefore inapposite here.
2. Petitioners also contend (Pet. 16-23) that the Hearing Officer erred
in relying on a tape recording as the exclusive basis for finding a violation
of the decree, when portions of the recording were garbled, inaudible, and
silent, and when the agent who made the record- ing was not subjected to
cross-examination. That fact-bound contention is without merit and does
not merit review.
Initially, petitioners' assertion that the tape recording was the exclusive
basis for the Hearing Officer's finding of a violation is incorrect. The
Hearing Officer also relied on petitioners' admission that they failed to
collect any of the data necessary to determine whether the LISTEN System
device could detect diabetes. Pet. App. 38a, 53a. That evidence was sufficient
by itself to establish a violation of the decree.
In any event, petitioners' challenge to the Hearing Officer's reliance on
the recording is without merit. As the Hearing Officer explained, while
the recording was incomplete, it "unmistakably establishe[d] that Dr.
Tang tested [the investigator] for a multitude of diseases and abnormalities
with the device." Pet. App. 53a; see id at 39a-45a. The Hearing Officer's
reliance on the recording therefore was not arbitrary or capricious.
Petitioners' complaint that they did not have an opportunity to cross-examine
the undercover investigator who made the recording is similarly without
merit. The consent decree that petitioners voluntarily signed established
a procedure under which the FDA would provide notice to petitioners of a
violation, and petitioners would then have an opportunity "to submit
written materials on their behalf, and to make an oral presentation."
Pet. App. 79a (emphasis added). The Hearing Officer did not act arbitrarily
or capriciously in adhering to that procedure.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
DAVID W. OGDEN
Acting Assistant Attorney General
ANTHONY J. STEINMEYER
DRAKE CUTINI
Attorneys
FEBRUARY 2000