NewsThe Importance of Coding and Charting: How to Avoid Violating the False Claims Act
Last week, in Washington v. Barr, the Second Circuit addressed a case seeking to strike down the federal government’s classification of marijuana as a Schedule I drug under the Controlled Substances Act (CSA). The Court held that plaintiffs had failed to exhaust their administrative remedies before the Drug Enforcement Administration (DEA). Rather than dismissing the case, however, the Court took the unusual step of holding the case in abeyance and retaining jurisdiction to take “whatever action might become appropriate if the DEA does not act with adequate dispatch.”
The Court majority determined that the case was unusual because the plaintiffs were individuals plausibly alleging a life-or-death threat to their health. Plaintiffs included a businessman seeking to expand his medical marijuana business into whole-plant cannabis products; two children with dreadful medical problems asserting that they had exhausted traditional medical options and marijuana had saved their lives; an Iraq War veteran who had managed his PTSD through medical marijuana; and the Cannabis Cultural Association, an organization focused on the way marijuana convictions have disproportionately affected people of color and prevented minorities from participating in the new state-legal marijuana industry.
Plaintiffs did not first bring their challenge to the Schedule I classification of marijuana to the DEA, the agency that has the authority to reschedule marijuana. Although the CSA does not mandate exhaustion of administrative remedies, the Second Circuit agreed that exhaustion is appropriate and consistent with Congressional intent. Congress intended to implement scheduling decisions under the CSA through an administrative process, and requiring exhaustion is consistent with that intent. The Court determined that the question raised by plaintiffs’ suit—whether developments in medical research and government practice should lead to a reclassification of marijuana—is precisely the sort of question that calls for the application of an agency’s special knowledge. Also, the Court held that none of the recognized exceptions to exhaustion, such as futility, inability to grant adequate relief, or undue prejudice, applied.
The Second Circuit gave credence, however, to plaintiffs’ argument that the administrative process might delay their ordeal intolerably.
But in light of the allegedly precarious situation of several of the Plaintiffs, which at this stage of the proceedings we must accept as true, and their argument that the administrative process may not move quickly enough to afford them adequate relief, we retain jurisdiction of the case in this panel, for the sole purpose of taking whatever action might become appropriate should the DEA not act with adequate dispatch.
Thus, if the plaintiffs seek agency review, and “the agency fails to act with alacrity,” plaintiffs can return to the Court under its retained jurisdiction.
Judge Dennis Jacobs agreed that plaintiffs had failed to exhaust administrative remedies, but dissented from the majority’s decision to hold the case in abeyance in case the DEA failed to act with “adequate dispatch.” He viewed DEA as unlikely to discern the majority’s view of “adequate dispatch” or “alacrity,” and did not anticipate a swift ruling given the need for an assessment of countervailing risks, the pendency of legislation, and the eliciting of opinions on issues of medicine and public health. Judge Jacobs also dismissed the cases the majority had cited in supporting its abeyance determination: “None of these cases supports the idea that a court is permitted to hold a case in abeyance because the court may on contingency gain jurisdiction to hear it, and can bully the agency in the meantime.”
As the New York legislature and other states address the issue of legalization of marijuana, the DEA’s assessment of the scheduling issue-and the speed with which DEA makes or does not make that decision-may come before the Second Circuit again.
