Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-01256/USCOURTS-caDC-96-01256-0/pdf.json

Parties Involved:
Drug Enforcement Administration
Respondent
MD Pharmaceutical, Inc.
Petitioner
Mallinckrodt Chemical, Inc.
Intervenor for Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 17, 1997 Decided January 16, 1998 

No. 96-1256

MD PHARMACEUTICAL, INC.,

PETITIONER

v.

DRUG ENFORCEMENT ADMINISTRATION,

RESPONDENT

MALLINCKRODT CHEMICAL, INC.,

INTERVENOR FOR RESPONDENT

__________

On Petition for Review of an Order of the 

United States Drug Enforcement Agency

__________

John R. Fleder argued the cause for petitioner, with whom 

Tish E. Pahl was on the briefs.

Lena Watkins, Associate Deputy Chief, United States Department of Justice, argued the cause for respondent, with 

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whom John C. Keeney, Acting Assistant Attorney General, 

was on the brief.

Steven J. Poplawski and Scott M. Badami were on the 

brief for intervenor.

Before: WILLIAMS, SENTELLE and ROGERS, Circuit Judges.

Opinion for the court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge: This case arises out of the Drug 

Enforcement Administration's ("DEA") approval of an application submitted by Mallinckrodt Chemical, Inc. ("Mallinckrodt") for registration as a bulk manufacturer of methylphenidate, a generic form of the drug commonly known by the 

brand name of Ritalin. MD Pharmaceutical, Inc. ("MD"), a 

current producer of methylphenidate, petitions for review of 

three decisions made by DEA, namely: (1) the decision to 

permit withdrawal of Mallinckrodt's two previous applications 

for registration as a bulk manufacturer of methylphenidate; 

(2) the order terminating the hearings on those two applications upon their withdrawal; and (3) the order approving the 

issuance of the certificate of registration to Mallinckrodt. We 

conclude that MD, as a current manufacturer of the drug, has 

standing to seek review of the actions taken by DEA. We 

also conclude that MD's objections to DEA's decisions are 

without merit, and accordingly deny the petition for review.

I.

The Controlled Substance Act ("CSA") establishes a comprehensive regulatory system that controls the manufacture, 

distribution, and use of hazardous drugs. 21 U.S.C. § 801 et 

seq. The level of restriction on any given drug is determined 

by its classification into one of five schedules. The Administrator of DEA, having received authority from the Attorney 

General by delegation, 28 C.F.R. § 0.100(b), is required to 

classify each drug into a schedule, depending upon factors 

such as its potential for abuse and its risk to the public 

health. 21 U.S.C. § 811. Methylphenidate is a Schedule II 

drug, which means that it has a high potential for abuse, that 

it has a currently accepted medical use, and that abuse of the 

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drug may lead to severe psychological or physical dependence. Id. at § 812(b)(2).

A company seeking to become a manufacturer of a Schedule II drug must apply for and obtain a certificate of registration from DEA. 21 U.S.C. § 822(a). The Administrator 

grants a certificate only if he determines that "registration is 

consistent with the public interest" when measured against a 

six-part test created by Congress. 21 U.S.C. § 823(a)(1)-(6). 

When DEA receives such an application for registration, it 

must publish a notice in the Federal Register, and send 

individual notices to other applicants and to currently registered bulk manufacturers of the drug. 21 C.F.R. 

§ 1301.43(a) (1996). The other applicants and registrants are 

free to file comments on the proposed registration within 60 

days. Id. Registered manufacturers had the additional 

right, prior to July 20, 1995, to request and obtain an evidentiary hearing on an applicant's proposed registration. 21 

C.F.R. § 1301.43 (1994). Ultimately, DEA either issues the 

certificate of registration, or issues an order to show cause as 

to why the application should not be denied. 21 U.S.C. 

§ 824(c).

On May 13, 1994, DEA announced that Mallinckrodt had 

applied for registration as a bulk manufacturer of methylphenidate. MD, as a registered manufacturer of the drug, 

received notice of the application and promptly requested an 

evidentiary hearing. On January 30, 1995, Mallinckrodt filed 

a second application for registration, this time for methylphenidate and other drugs. MD once again objected to Mallinckrodt's application with respect to methylphenidate. The 

parties agreed to consolidate the proceedings for the two applications. An Administrative Law Judge ("ALJ") presided 

over the first stage of an evidentiary hearing from May 2-5, 

1995, but did not announce a decision at that time.

On June 20, 1995, DEA issued a final rule altering the 

certification process in two pertinent respects. Under the 

amended regulations, which went into effect on July 20 of 

that year, registered manufacturers retained the right to 

comment on another firm's application, but no longer had the 

right to a hearing on an application other than their own. 60 

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Fed. Reg. 32,099-101 (codified at 21 C.F.R. § 1301.43(a)) 

(1996). The second alteration concerned an applicant's ability 

to withdraw a pending application. Under the old rules, an 

application could be withdrawn without the Administrator's 

permission at any time before the date on which an applicant 

receives an order to show cause, or before the date on which 

a notice of hearing on the application was published, whichever came first. 21 C.F.R. § 1301.37(a) (1994). Because the 

new regulations eliminated the opportunity for third parties 

to obtain a hearing, the new rules stated that an application 

could be withdrawn without the permission of the Administrator at any time before the applicant receives an order to show 

cause. 21 C.F.R. § 1301.37(a) (1996). Under both the old 

and the new regulations, an applicant could also amend or 

withdraw an application "with permission of the Administrator at any time where good cause is shown by the applicant or 

where the amendment or withdrawal is in the public interest." 

21 C.F.R. § 1301.37(a) (1994); 21 C.F.R. § 1301.37(a) (1996).

On July 20, 1995, the date that the new regulations went 

into effect, Mallinckrodt submitted a letter to DEA requesting withdrawal of its 1994 and 1995 applications. On the 

same day, Mallinckrodt submitted a new application for registration as a bulk manufacturer of methylphenidate under the 

newly amended regulations. MD strenuously opposed the 

withdrawal of the applications, arguing that Mallinckrodt was 

simply trying to circumvent the hearing requirement under 

the old rules. DEA nonetheless approved the withdrawal of 

Mallinckrodt's first two applications. The ALJ subsequently 

terminated all proceedings with respect to those two applications. DEA later announced that Mallinckrodt's third application would be considered under the amended rules.

MD filed two petitions for review with this court, challenging DEA's decision to permit withdrawal of the first two 

applications and to terminate the hearings. We dismissed the 

petitions on ripeness grounds, explaining that DEA had not 

yet ruled on Mallinckrodt's third application for registration. 

MD Pharmaceutical, Inc. v. Drug Enforcement Administration, Nos. 95-1474, 95-1475, 1996 WL 135318 (D.C. Cir. Feb. 

2, 1996). We made clear that the dismissal was "without 

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prejudice to any right MD may have to challenge Mallinckrodt's withdrawal of its original application to bulk manufacture methylphenidate by way of a petition for review of the 

DEA's final resolution of Mallinckrodt's pending application." 

Id.

In a subsequent comment arguing against Mallinckrodt's 

third application, MD raised a number of issues, including 

Mallinckrodt's alleged history of noncompliance with DEA 

and FDA regulations. MD also took the position that there 

was no need for an additional manufacturer of this drug 

because the market was sufficiently competitive. On January 

31, 1996, Mallinckrodt filed a fourth application adding other 

drugs to its methylphenidate application. MD filed comments and incorporated by reference its earlier objections. 

On July 16, 1996, DEA granted Mallinckrodt's fourth application to be a bulk manufacturer of methylphenidate. The 

agency published a Notice that briefly explained its decision 

and responded to a number of issues raised by MD. 61 Fed. 

Reg. 37,079-81. The agency declined to take action on the 

third application filed July 20, 1995.

In the present action, MD seeks review of three decisions 

by DEA: first, the decision to permit withdrawal of Mallinckrodt's first two applications; second, the decision to terminate the hearings on those two applications; and third, the 

order approving Mallinckrodt's registration as a producer of 

methylphenidate.

II.

Before reaching the merits, we must address the issue of 

whether MD has standing to challenge the actions taken by 

DEA. The government takes the position that MD has not 

satisfied the requirements of either constitutional or prudential standing. We reject both contentions.

The well-established "irreducible constitutional minimum" 

of standing requires three elements:

First, the plaintiff must have suffered an injury in fact

an invasion of a legally protected interest which is (a) 

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concrete and particularized and (b) actual or imminent, 

not conjectural or hypothetical. Second, there must be a 

causal connection between the injury and the conduct 

complained ofthe injury has to be fairly traceable to 

the challenged action of the defendant.... Third, it 

must be likely, as opposed to merely speculative, that the 

injury will be redressed by a favorable decision.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) 

(internal citations and punctuation omitted). DEA does not 

allege that MD has not suffered an injury in fact, nor that the 

action taken by the government has not caused the alleged 

injury. Indeed, such arguments would be unavailing in this 

case. We have previously held that "increased competition 

represents a cognizable Article III injury," Liquid Carbonic 

Industries Corp. v. FERC, 29 F.3d 697 (D.C. Cir. 1994), and 

MD's competitive injury is fairly traceable to DEA's decision 

to issue a certificate of registration to Mallinckrodt.

DEA, however, claims that MD lacks standing under Article III because its alleged injury is not redressable by the 

relief it seeks in this case. The government's argument is 

based upon 21 U.S.C. § 824(c), which provides that denial, 

revocation, or suspension of registration shall not occur until 

the Administrator "serve[s] upon the applicant or registrant 

an order to show cause why registration should not be denied, 

revoked, or suspended." Id. The statute, in other words, 

precludes the Administrator from denying a registration until 

it has issued an order to show cause. The government 

submits that MD's alleged injury is not redressable because 

we cannot grant relief resulting in the outright denial of 

Mallinckrodt's registration. Whether we remand for further 

review, or vacate the order granting registration, Mallinckrodt's registration cannot be denied without the Administrator taking the additional step of issuing an order to show 

cause. The decision to issue an order to show cause, the 

argument proceeds, is a discretionary act akin to the decision 

to initiate an enforcement proceeding, which courts presumptively lack the authority to mandate. See Heckler v. Cheney,

470 U.S. 821 (1985). Because denial of the registration 

cannot occur without issuance of an order to show cause, and 

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because the decision to issue such an order is presumptively 

unreviewable, a decision from us could not possibly provide a 

remedy that would redress the injury alleged by MD.

The government's argument breaks down at the outset 

because it mischaracterizes the relief sought by petitioner. A 

central premise of the government's argument is that MD is 

seeking the outright denial of the registration of Mallinckrodt. In fact, MD's petition seeks not the denial of Mallinckrodt's registration, but rather the reversal of DEA's decision to approve Mallinckrodt's application. See MD Reply 

Br. at 4 ("Vacating Mallinckrodt's approval is precisely the 

relief MD seeks."). MD is challenging, in other words, an 

affirmative licensing decision already made by DEA. The 

sort of problem encountered by the Court in Heckler thus 

does not arise in this case, both because petitioner is not 

challenging the agency's refusal to act, and because the 

requested relief does not depend upon the exercise of discretion by the executive branch. MD's alleged injury, in sum, is 

redressable because vacating the approval of Mallinckrodt's 

application would secure the "relief from competition to which 

it says it is entitled under the statute." Bristol-Myers 

Squibb Co. v. Shalala, 91 F.3d 1493, 1499 (D.C. Cir. 1996).

The government also takes the position that MD lacks 

prudential standing under the zone of interests test, which 

asks whether "the interest sought to be protected by the 

complainant is arguably within the zone of interests to be 

protected or regulated by the statute ... in question." Association of Data Processing Serv. Orgs., Inc. v. Camp, 397 

U.S. 150, 153 (1970). This test is designed to exclude those 

plaintiffs with interests "so marginally related to or inconsistent with the purposes implicit in the statute that it cannot 

reasonably be assumed that Congress intended to permit the 

suit." Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 399 

(1987). The United States argues that MD does not fall 

within the zone of interests of the statute at hand because 

"there is nothing in the CSA or its legislative history which 

indicates an intent to protect the competitive advantage of a 

single registrant."

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Our decisions have made clear, however, that a competitor 

need not be an intended beneficiary to fall within the zone of 

interests of an entry-restricting statute. We have previously 

said that litigants fall within the zone of interests if they are 

regulated by the particular agency action being challenged, or 

if they are considered to be protected by the statute in 

question. First National Bank and Trust Co. v. National 

Credit Union Admin., 988 F.2d 1272, 1275 (D.C. Cir. 1993). 

Litigants are considered to be "protected" by the statute if 

they are intended beneficiaries of the legislation, or if they 

are suitable challengers of the agency action because their 

interests are sufficiently congruent with the interests of the 

intended beneficiaries. Id.

We hold that MD, as a manufacturer facing potential 

competition from Mallinckrodt, is a suitable challenger and 

thus falls within the zone of interests of the statute. When a 

regulatory system "by its very nature restricts entry into a 

particular field or transaction," firms that are already operating in the regulated industry have an interest in enforcing the 

restrictions on potential market entrants. Panhandle Producers and Royalty Owners Assoc. v. Economic Regulatory 

Admin., 822 F.2d 1105, 1109-10 (D.C. Cir. 1987). Even 

though competitors may be motivated by something other 

than a desire to advance the public interest, they nonetheless 

fall within the zone of interests of an entry-restricting statute 

because their interests "are generally congruent with a statutory purpose to restrict entry." Id. The Controlled Substance Act is a quintessential entry-restricting statute. Every firm that manufacturers a controlled substance must 

obtain a certificate of registration from the Administrator. 

21 U.S.C. § 822(a). When considering an application, the 

Administrator must decide whether registration would be in 

the public interest, taking into account whether effective 

controls against conversion could be achieved by limiting the 

total number of registered manufacturers. Id. at § 823(a)(1). 

The Administrator is also required to set the aggregate 

quantity of drugs that are produced each year, and to establish individual production quotas for each registered manufacturer. Id. at § 826(a) & (b). Even more so than traditional 

licensees, registered manufacturers of controlled substances 

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have an interest in limiting the number of producing firms, 

because each new market entrant will produce a percentage 

of the aggregate production quota that would otherwise be 

produced by existing firms. There is every reason to believe 

that MD's "interest in patrolling a statutory picket line will 

bear some relation to the congressional purpose" of the CSA. 

See First National Bank, 988 F.2d at 1278. We think that 

MD, as a registered manufacturer challenging another firm's 

entry into the market, at least "arguably" falls within the 

zone of interests sought to be protected by the entry barriers 

of the CSA. Association of Data Processing Serv. Orgs., 397 

U.S. at 153.

III.

Turning to the merits, we first consider MD's objections to 

the approval of Mallinckrodt's final application to become a 

registered manufacturer of methylphenidate. MD makes two 

basic arguments against DEA's decision to register Mallinckrodt. First, MD takes issue with the administrative record 

compiled by DEA, claiming that portions of the record were 

improperly withheld from public view, and that the record did 

not contain all relevant evidence. Second, MD asserts that 

DEA failed to issue an adequate explanation for its decision 

to approve Mallinckrodt's application.

A.

MD makes two objections to the Certified List of Record 

submitted by DEA to this court pursuant to Fed. R. App. P. 

17(b). The first objection is that DEA has refused to disclose 

to MD five of fifteen documents included in the Certified 

Lista letter of admonition from DEA to Mallinckrodt, Mallinckrodt's responsive letter, and three internal DEA documents. MD takes the position that it must have complete 

access to all documents considered by DEA, even if they are 

deemed sensitive and contain confidential or trade secret 

information. In MD's view, DEA has a duty to divulge to 

interested persons all documents that were part of the record, 

lest the agency's action be shrouded in administrative secrecy.

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We find nothing in the statute or the regulations that gives 

third parties such sweeping access to sensitive agency materials. The amended regulations do allow registered bulk manufacturers to file comments on or objections to a proposed 

registration, 21 C.F.R. § 1301.43(a) (1996), and MD has repeatedly availed itself of that opportunity. The regulations 

do not, however, give manufacturers the right to a hearing on 

another firm's application, nor the right to discover documents considered by DEA during the application process. 

Id. Indeed, even in those instances in which a hearing is 

required, participants are not entitled to inspect "[a]ny confidential or trade secret information disclosed in conjunction 

with an application," nor "[a]ny material contained in any 

investigatory report, memorandum, or file, or case report 

compiled by the Administration." 21 C.F.R. § 1316.46(b)(3)-

(4). MD has pointed us to no countervailing authority in the 

statute or the regulations that would confer on it an entitlement to view such documents.

Without any support in the statute or regulations, MD 

relies upon three cases that dealt with disclosure of agency 

materials: Louisiana Assoc. of Independent Producers and 

Royalty Owners v. FERC, 958 F.2d 1101 (D.C. Cir. 1992); 

United States Lines, Inc. v. Federal Maritime Comm'n, 584 

F.2d 519 (D.C. Cir. 1978); and Home Box Office, Inc. v. FCC,

567 F.2d 9 (D.C. Cir. 1977). We view such cases as readily 

distinguishable. MD finds principal support in U.S. Lines, in 

which we reviewed an order from the Federal Maritime 

Commission approving an amendment to a joint service 

agreement between two common carriers. The Commission 

addressed a crucial overtonnage issue by stating only that it 

had "examined that problem carefully, in the light of the data 

then available to the Commission," which consisted of "the 

submissions of Protestant and Proponents, the identities of 

Protestant and Proponents, and [t]he reliable data reposing in 

the files of the Commission." U.S. Lines, 584 F.2d at 533. 

Rejecting the agency's decision, we held that we could not 

determine whether the action was arbitrary or capricious 

because the data relied upon by the Commission were neither 

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included in the record nor disclosed to this court. Id. We 

observed that we "simply cannot determine whether the final 

agency decision reflects the rational outcome of the agency's 

consideration of all relevant factors when we have no idea 

what factors or data were in fact considered by the agency." 

Id. Unlike the situation in U.S. Lines, the documents relied 

upon by DEA in this case are not a complete mystery: ten of 

the fifteen documents have been placed in the public file, and 

the remainder have been identified but not disclosed because 

they contain sensitive material. The agency in U.S. Lines did 

not justify its refusal to disclose identified documents because 

they were confidential. That agency issued a substantive 

decision asserting as its operative basis undisclosed and indeed unidentified "reliable data" in its files. U.S. Lines, then, 

is in no way parallel to the present case and offers no support 

for MD's position. It did not in any fashion deal with the 

question of whether a third-party challenger must have complete access to all documents (including those that are sensitive) that contributed to an agency's decision-making process.

MD's reliance on the other two cases is equally misplaced. 

Home Box Office involved a challenge to a final rule that was 

based in part upon information that the Federal Communications Commission gathered from the public through ex parte

communications. Home Box Office, 567 F.2d at 51-59. MD 

latches onto a number of passages from our opinion, including 

the observation that "where, as here, an agency justifies its 

actions by reference only to information in the public file 

while failing to disclose the substance of other relevant information that has been presented to it, a reviewing court cannot 

presume that the agency has acted properly...." Id. at 54. 

Such comments must be understood, however, within the 

context of a discussion of the propriety of ex parte communications when an agency is engaged in notice and comment 

rulemaking governed by Section 553 of the Administrative 

Procedure Act ("APA"), 5 U.S.C. § 553, which makes it quite 

distinct from the case at hand. See Elcon Enterprises, Inc. v. 

Washington Metropolitan Area Transit Authority, 977 F.2d 

1472, 1481 (D.C. Cir. 1992) (reading Home Box Office as 

applying only to rulemaking).

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The last case cited by MD, Louisiana Assoc., did deal with 

the disclosure of materials considered by an agency when 

making a licensing decision. 958 F.2d at 1115. That case 

involved a challenge brought by a group of environmentalists 

to FERC's decision to certify a proposed pipeline. The 

environmentalists argued, among other things, that the Commission's decision was not supported by substantial evidence 

because they "did not have an adequate opportunity to criticize the evidence submitted by Project proponents." Id. We 

rejected the environmentalists' challenge on the grounds that 

they in fact had access to the information they were seeking. 

Id. Louisiana Assoc., however, did not deal with the question of whether a third party has a right to obtain confidential 

information considered by an agency in the course of making 

a licensing decision. MD, in other words, has presented us 

with no support for the proposition that a party challenging 

an agency's decision to issue a license to another firm must 

have unfettered access to all information considered by the 

agency.

Such a proposition, we should note, would be rather remarkable. Even under the Freedom of Information Act 

("FOIA"), 5 U.S.C. § 552 et seq., an agency is not required to 

release materials that are considered "trade secrets and 

commercial or financial information obtained from a person 

and privileged or confidential." 5 U.S.C. § 552(b)(4).

MD's second objection goes to the contents of the administrative record. MD claims that DEA's decision to register 

Mallinckrodt must be set aside as arbitrary and capricious 

because DEA failed to compile a complete administrative 

record. In particular, MD faults DEA for not including the 

record from the hearing that occurred in May of 1995, in 

which MD presented evidence against Mallinckrodt's first two 

applications. MD also suggests that DEA violated Fed. R. 

App. P. 16(a) by omitting the order under review, which is the 

decision to approve Mallinckrodt's fourth application on July 

16, 1996. In MD's view, the failure of DEA to include these 

(and perhaps other) documents in the administrative record 

demonstrates that DEA approved Mallinckrodt's application 

without having considered all relevant evidence.

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The contents of the record provide no basis for vacating the 

registration of Mallinckrodt. MD does not allege that DEA 

failed to include information that it submitted regarding 

Mallinckrodt's fourth application, which is the application that 

DEA ultimately approved. What MD alleges is that DEA did 

not additionally include materials that were compiled with 

respect to Mallinckrodt's first two applications. More specifically, MD is under the impression that DEA was required to 

include in the record information presented at a hearing in 

May of 1995, even though such evidence was offered with 

respect to Mallinckrodt's first two applications, which were 

later withdrawn. If MD believed that such information would 

be material to DEA's consideration of the fourth application, 

MD had every opportunity to include evidence from the 1995 

hearing in the comments subsequently submitted to DEA. 

To the extent that such information was not submitted to 

DEA with respect to Mallinckrodt's fourth application, that 

failure runs to MD, and not to DEA. DEA cannot be faulted 

for omitting evidence from the record that was never submitted in response to Mallinckrodt's fourth application.

The omission of the order under review from the record is 

also not fatal to the registration of Mallinckrodt. The Federal Rules of Appellate Procedure provide that the record shall 

consist of "[t]he order sought to be reviewed or enforced, the 

findings or report on which it is based, and the pleadings, 

evidence and proceedings before the agency." Fed. R. App. 

P. 16(a). In lieu of filing the record with the court, the 

agency may file "a certified list of all documents, transcripts 

of testimony, exhibits and other material comprising the 

record, or a list of such parts thereof as the parties may 

designate, adequately describing each, and the filing of the 

certified list shall constitute filing of the record." Fed. R. 

App. P. 17(b). MD protests that the certified list submitted 

by DEA did not include the order that approved Mallinckrodt's fourth application. As a factual matter, MD is correct 

in pointing out that the certified list does not include the 

agency's decision of July 16, 1996, to register Mallinckrodt. Yet this omission is of little consequence, and cerUSCA Case #96-1256 Document #323844 Filed: 01/16/1998 Page 13 of 16
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tainly does not warrant vacatur of the registration. The 

Rules allow parties to supply materials that were improperly 

omitted from the record. Fed. R. App. P. 16(b). Logically, 

this liberality would encompass materials omitted from the 

certified list; particularly so as the parties did include the 

order in the Joint Appendix, making it available for our 

perusal. We attach no material significance to the fact that 

DEA neglected to include the order under review when it 

certified a list of all documents comprising the record in this 

case.

B.

MD also takes the position that DEA's approval of Mallinckrodt's application was arbitrary and capricious because 

the agency did not provide a reasoned explanation for its 

decision, in violation of the APA, 5 U.S.C. § 706(2)(A). MD 

emphasizes that it submitted detailed comments to DEA 

regarding Mallinckrodt's proposed registration, which received, in MD's estimation, only short-shrift attention from 

the agency. 61 Fed. Reg. 37,079-81 (July 16, 1996). Petitioner reiterates several of the objections that it unsuccessfully raised before DEA, including Mallinckrodt's alleged history 

of noncompliance with DEA and FDA regulations, and evidence suggesting that there is adequate competition in the 

methylphenidate market. MD faults DEA for not dealing 

with these and other objections in greater detail and with 

greater specificity. Petitioner also criticizes the agency for 

failing to identify specific facts to support its conclusion that 

registration of Mallinckrodt would be consistent with the 

public interest.

The judiciary has a responsibility under the APA to set 

aside agency actions that are "arbitrary, capricious, an abuse 

of discretion, or otherwise not in accordance with law." 5 

U.S.C. § 706(2)(A). "The scope of review under the 'arbitrary and capricious' standard is narrow and a court is not to 

substitute its judgment for that of the agency." Motor 

Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 

U.S. 29, 43 (1983). We will not disturb the decision of an 

agency that has "examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a 

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rational connection between the facts found and the choice 

made." Id. (internal quotation marks and citations omitted).

We hold that DEA gave an adequate explanation for its 

decision to register Mallinckrodt. DEA published an explanation that spans almost eight columns in the Federal Register, and is largely devoted to answering the many objections 

raised by MD during the application process. 61 Fed. Reg. 

37,079-81. Regarding the issue of regulatory violations, for 

example, DEA stated that it had investigated Mallinckrodt, 

including "inspection and testing of the company's physical 

security systems, audits of the company's records, verification 

of the company's compliance with state and local laws, and a 

review of the company's background and history," and concluded that registration of Mallinckrodt would be in the public 

interest. Id. at 37,080. DEA explained that Mallinckrodt is 

currently registered to manufacture other Schedule II drugs, 

that its past regulatory problems were not significant, and 

that the company acted expeditiously to address those problems to the satisfaction of DEA. Id. DEA also explained 

that Mallinckrodt has "demonstrated its technical and manufacturing expertise with respect to other controlled substances" over the past twenty-five years, that there is every 

reason to believe that the company will continue this practice 

in the future, and that the registration of Mallinckrodt will 

not undermine the agency's efforts to maintain effective 

controls against diversion. Id. at 37,080-81. Taken as a 

whole, DEA's explanation demonstrates that it examined the 

data, considered the relevant factors, and made a reasonable 

judgment based on the record. We conclude that the explanation offered by DEA passes muster under the APA.

IV.

We now turn to MD's objections to the handling of Mallinckrodt's first two applications to become a registered manufacturer of methylphenidate. MD takes issue with two 

decisions that were made during the application process, 

namely DEA's decision to permit Mallinckrodt to withdraw 

its first two applications, and the subsequent termination of 

the hearings with respect to those applications. MD argues 

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that withdrawal of the applications was improper because 

DEA did not adequately discuss the grounds for withdrawal, 

and because DEA failed to distinguish cases suggesting that 

an applicant cannot unilaterally withdraw an application once 

hearings have begun. MD also argues that termination of 

the hearings was unlawful because it was based upon a 

retroactive application of the amended regulations, which 

stripped third parties of the right to a hearing on another 

firm's application.

We decline to reach the merits of MD's objections, however, because there is no longer any live issue with respect to 

Mallinckrodt's first two applications. MD challenged DEA's 

decision to approve the fourth application submitted by Mallinckrodt, and we have concluded that DEA's registration 

decision was in accordance with law. Mallinckrodt is a registered bulk manufacturer of methylphenidate. All questions 

concerning Mallinckrodt's first two applications are moot. 

The object of those applicationsreceipt of a certificate of 

registrationhas been lawfully achieved via DEA's approval 

of Mallinckrodt's fourth application. If we were to hold that 

DEA acted unlawfully, and thus require the agency to reopen 

the hearings and consider the first two applications, there 

would be nothing at stake with respect to those applications 

because Mallinckrodt has already achieved the status of a 

registered manufacturer. Insofar as MD claims that DEA's 

disposition of the first and second applications somehow 

tainted the grant of the third, such a claim must rest on the 

theory that third parties acquire, at the time an application is 

filed, a vested right in the procedural rules then applicable, 

which somehow is forever attached to later applications on 

the same subject. This is altogether untenable. See Bergerco Canada v. United States Treasury Dep't, 129 F.3d 189, 

194-95 (D.C. Cir. 1997). Accordingly, we will not further 

discuss the issues relating to the first two applications submitted by Mallinckrodt.

V.

For the foregoing reasons, MD's petition for review is 

denied.

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