1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-21-1995

United States v Oncology

Precedential or Non-Precedential:

Docket 94-7741

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Recommended Citation

"United States v Oncology" (1995). 1995 Decisions. Paper 190.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

___________ 

No. 94-7741 

___________ 

 UNITED STATES OF AMERICA, 

 Appellant

 v. 

 ONCOLOGY SERVICES CORPORATION 

___________ 

Appeal from the United States District Court 

for the Middle District of Pennsylvania 

(D.C. Civ. No. 93-cv-00207) 

___________ 

Submitted Under Third Circuit LAR 34.1(a) 

June 26, 1995 

Before: MANSMANN, GREENBERG and SAROKIN, Circuit Judges. 

(Filed July 21, 1995) 

___________ 

Frank W. Hunger, Esquire 

David M. Barasch, Esquire 

Barbara C. Biddle, Esquire 

Katherine S. Gruenheck, Esquire 

United States Department of Justice 

Civil Division 

10th & Pennsylvania Avenue, N.W. 

Washington, DC 20530-0001 

Charles E. Mullins, Esquire 

United States Nuclear Regulatory Commission 

Office of General Counsel 

1717 H Street, N.W. 

Washington, DC 20530 

 COUNSEL FOR APPELLANT 

Jonathan P. Phillips, Esquire 

10 Westwood Road 

P.O. Box 1190 

Pottsville, Pennsylvania 17901 
2 

 COUNSEL FOR APPELLEE 
3 

_________ 

OPINION OF THE COURT 

__________ 

MANSMANN, Circuit Judge. 

 The Nuclear Regulatory Commission appeals from the 

dismissal of a petition for enforcement of its subpoena. The 

district court held that the action was rendered moot for lack of 

a justiciable case or controversy when the NRC closed its formal 

investigation of Oncology Services Corporation, a nuclear 

medicine licensee. Because an agency may seek information on 

mere suspicion that there is a violation of the law, we will 

vacate the order of the district court dismissing the petition 

and remand for a determination of the enforceability of the 

subpoena. 

 We are compelled to further comment on the standards 

for enforcing the subpoena given the district court's intention 

to conduct an in camera review of documents produced by Oncology 

Services in redacted form to determine the reasonableness of the 

redactions. The district court must enforce the subpoena so long 

as the requested information is reasonably related to a 

legitimate NRC inquiry or investigation. Thus, the purpose of 

any in camera review, if one need be conducted, is to determine 

whether the information sought is reasonably related to an 

inquiry that the NRC is authorized to conduct, not whether the 

redactions were reasonable. 
4 

 I. 

 In December of 1992, the Office of Investigation of the 

Nuclear Regulatory Commission1 conducted an incident 

investigation regarding the November 21, 1992 death of a nursing 

home patient who had received radiation therapy at an Oncology 

Services' cancer treatment center. During that therapy, a 

radioactive source was placed in the patient's abdominal catheter 

but was not removed. The source of the radioactivity was 

discovered nearly one week later after it was removed from the 

patient and disposed of at a waste dump. The NRC's incident 

investigation team concluded that weaknesses in the Oncology 

Services radiation program were a contributing cause of the 

patient's death and caused subsequent radiation exposure to 

employees and the general public. 

 The NRC initiated a second investigation to determine 

whether Oncology Services intentionally violated NRC regulations 

during the period from June of 1990 to February 15, 1993. On 

February 25 and 26, 1993, the NRC served seven identical 

subpoenas, one to Oncology Services' headquarters in State 

College, Pennsylvania and the remainder to Oncology Services' 

treatment facilities located throughout Pennsylvania. The 

subpoenas requested information regarding Oncology Services' 

application to the NRC for its license, radiation safety training 

procedures and policies, purchase and repair records for 

radiation detection devices, training-related expense and travel 

 

1

 The Office of Investigation of the Nuclear Regulatory 

Commission is referred to as the NRC. 
5 

vouchers, employment applications of certain personnel, and 

business records related to Oncology Services' license. Oncology 

Services provided documents responsive to the subpoenas but 

objected to the production of other documents on grounds that 

they were not relevant to the NRC investigation. Despite its 

objections, Oncology Services produced additional documents in 

late July of 1993. 

 On August 24, 1993, the NRC served a second subpoena to 

Oncology Services' headquarters requesting the production of the 

balance of the documents sought in the first subpoena. The NRC 

sought information relating to Oncology Services' licensed 

activities, training policies and radiation equipment. The 

compliance date for the subpoena was September 13, 1993. By 

letter dated September 16, 1993, Oncology Services objected to 

requests for various categories of documents on grounds that the 

information was irrelevant to the NRC investigation, outside of 

the NRC's jurisdiction, unduly burdensome or had previously been 

responded to by Oncology Services. Oncology Services, however, 

never sought to quash the subpoena prior to the compliance date 

although the procedure for doing so was noted on the subpoena. 

Oncology Services produced redacted copies of the weekly activity 

reports, and notes and minutes of regional administrator meetings 

and medical director meetings. Oncology Services asserted that 

the redacted information related to non-licensed matters and 

therefore was not relevant to the NRC's investigation. 

 Oncology Services did not produce the balance of the 
6 

documents, causing the NRC to file a petition for summary 

enforcement of its administrative subpoena, pursuant to 42 U.S.C. 

§ 2281, on November 15, 1993. The district court initially 

granted enforcement but subsequently vacated that order to give 

Oncology Services time to brief the issue. On March 9, 1994, the 

district court conducted an off-the-record hearing regarding the 

disputed materials to determine the reasonableness of the 

redactions. The court identified the disputed materials on the 

record as: (1) weekly activity reports and minutes of regional 

administrator and medical director meetings, (2) payroll 

information, and (3) resumes and employment applications received 

by Oncology Services. The district court ordered that the first 

category of disputed materials be provided to the court for an in

camera review to determine the reasonableness of the redactions. 

By letter dated May 11, 1994, the NRC informed the district court 

that the parties had agreed to the production of the second and 

third categories of documents and that the only remaining issue 

pertained to the in camera review of the weekly activity reports 

and the notes and minutes of regional administrator and medical 

director meetings. 

The NRC issued a Report of Investigation dated May 25, 

1994 based on the documentary evidence then in its possession. 

The Report indicated that the NRC "closed" its formal 

investigation of Oncology Services subject to reopening upon the 

district court's disposition as to disputed documents relating to 

the investigation. By letter dated August 2, 1994 directed to 

the district court, the NRC inquired as to the status of the in 
7 

camera review. By letter dated August 16, 1994, Oncology 

Services notified the district court that the NRC's May 25 Report 

of Investigation rendered the subpoena enforcement action moot 

because there was no justiciable case or controversy. 

 The NRC responded by letter dated September 22, 1994, 

asserting that the subpoena enforcement action was not moot 

merely because the NRC had issued the Report based on the 

documentary evidence then in its possession. Rather, the NRC 

closed the investigation with the report "so as not to further 

impede other administrative actions involving the same licensee." 

2

The NRC noted that the Report left open the potential for 

further inquiry stemming from the documents pending before the 

district court at the time the Report was issued. In this regard 

the NRC highlighted the testimony of Gerard F. Kenna, the NRC 

investigator whose deposition was taken in connection with the 

license suspension hearing, who testified: 

Q: How long was the ... investigation? 

A: From December of '92 ... until May of '94. 

Q: Is it now closed? 

A: Status is closed. 

 Q: Does that mean its closed? 

A: There are some open matters that are listed in the 

report. 

 Q: Okay, what are the open matters? 

 A: There's some... matters before a District Court to 

be resolved, and the judge, to my knowledge has 

not ruled on those matters. 

 

2

 The report was prepared in anticipation of the 

administrative hearing on Oncology Services' license suspension 

before the NRC's Atomic Safety and Licensing Board. Additionally, 

there were two relevant related administrative actions involving 

the same Oncology Services' materials license: In the Matter of 

Oncology Services Corp., No. 030-31765-EA and In the Matter of 

Indiana Regional Cancer Center, No. 030-30485-EA, both of which 

were subsequently settled. 
8 

(June 28, 1994 Deposition of Gerard F. Kenna at 57-58). The NRC 

still sought to review the disputed documents to assess their 

relevancy to the allegations supporting the investigation. If 

the NRC discovered new information from the review that bore on 

those allegations, the NRC was authorized to reopen the 

investigation. 

 The district court treated the August 16, 1994 letter 

from Oncology Services as a motion to dismiss the subpoena 

enforcement action as moot and the September 22, 1994 letter from 

the NRC as the NRC's opposition to the motion. The district 

court determined that the subpoena enforcement action was 

rendered moot given that there was no current controversy between 

the parties as a result of the NRC's May 25, 1994 Report of 

Investigation, which closed the formal investigation of Oncology 

Services. Despite the NRC's contention that it may reopen its 

investigation if such action is warranted after reviewing the 

documents at issue in the subpoena enforcement action, the 

district court concluded that its resolution of the enforcement 

action would serve to incite or initiate litigation rather than 

bring closure. Thus, the district court concluded there was no 

controversy remaining between the parties and dismissed the NRC's 

petition as moot. 

 The NRC appeals the district court's dismissal of the 

petition for enforcement as moot and its failure to grant summary 

enforcement of the subpoena absent a claim of privilege or a 

showing that the documents were irrelevant to any NRC 

investigation. The district court had jurisdiction pursuant to 
9 

42 U.S.C. § 2281 and 28 U.S.C. §§ 1331 and 1345. We have 

jurisdiction over this appeal based on 28 U.S.C. § 1291. Our 

standard of review in this matter is plenary. Dole v. Trinity 

Industries, Inc., 904 F.2d 867, 870 (3d Cir.), cert. denied, 498 

U.S. 998 (1990). 

II. 

 It is not necessary for the NRC to establish liability 

in order to seek to enforce a subpoena. See Federal Deposit Ins. 

Corp. v. Wentz, No. 94-5556, 1995 WL 329921 at *3 (3d Cir. June 

5, 1995). The mere possibility of a new or continued 

investigation from the NRC's review of the disputed documents 

provided a sufficient basis to seek judicial enforcement of the 

NRC's subpoena. The Supreme Court characterized the 

investigative power of administrative agencies as follows: 

The only power that is involved here is the 

power to get information from those who best 

can give it and who are most interested in 

not doing so. Because judicial power is 

reluctant if not unable to summon evidence 

until it is shown to be relevant to issues in 

litigation, it does not follow that an 

administrative agency charged with seeing 

that the laws are enforced may not have and 

exercise powers of original inquiry. It has 

a power of inquisition, if one chooses to 

call it that, which is not derived from the 

judicial function. It is more analogous to 

the Grand Jury, which does not depend on a 

case or controversy for power to get evidence 

but can investigate merely on suspicion that 

the law is being violated, or even just 

because it wants assurance that it is not.

When investigative and accusatory duties are 

delegated by statute to an administrative 

body, it, too, may take steps to inform 
10 

itself as to whether there is probable 

violation of the law. 

(Emphasis Added). United States v. Morton Salt Co., 338 U.S. 

632, 642-43 (1950). See also United States v. Powell, 379 U.S. 

48, 57 (1964). 

 The NRC is authorized to make such studies and 

investigations and obtain such information as necessary to assist 

it in exercising its statutory authority and any regulations 

thereunder. 42 U.S.C.A. § 2201(c) (West 1994). This includes 

the authority to issue subpoenas to require any person to appear 

and produce documents at any designated place. Id. The NRC 

delegated its investigative authority to the Office of 

Investigations, which is authorized to conduct investigations of 

licensees; to maintain current awareness of inquiries and 

inspections by other NRC offices; to identify the need for formal 

investigations; and to issue subpoenas where necessary or 

appropriate for the conduct of investigations. 10 C.F.R. § 1.36. 

The NRC broadly interprets its investigative authority, pursuant 

to 10 C.F.R. § 1.36, to include a continuum of activities from 

simple inquiries to formal investigations. (Reply Brief of 

Appellant at 4). This interpretation is entitled to deference. 

United States v. Westinghouse Electric Corp., 638 F.2d 570, 575 

(3d Cir. 1980); United States v. Westinghouse Electric Corp., 788 

F.2d 164, 171 (3d Cir. 1986). 

 In Morton Salt, the Supreme Court established that 

"[w]hen investigative . . . duties are delegated by statute to an 

. . . [agency], it . . . may take steps to inform itself as to 
11 

whether there is a probable violation of the law." Dole, 904 

F.2d at 872 (quoting Morton Salt, 338 U.S. at 643). The NRC's 

pursuit of the disputed information after the Report was issued 

is consistent with its investigative authority. See 10 C.F.R. 

§1.36 (authorizing the Office of Investigation to conduct both 

investigations of licensees and identify the need for formal 

investigations); see generally Morton Salt, 338 U.S. 632 (1950); 

Dole, 904 F.2d at 872. Although the cover of the Report 

patently indicates that the formal investigation of Oncology 

Services was "closed", the body of the 80-page Report 

characterizes the district court's review of the disputed 

documents as an open matter. The NRC thereafter affirmed its 

interest in the disputed documents by inquiring in its August 2, 

1994 letter to the district court as to the status of its in

camera review. Contrary to the district court's conclusion, the 

NRC's investigative authority was not restricted to the formal 

investigation that was closed by the issuance of the May 25 

Report of Investigation especially given that the Report was 

issued so as not to impede the progress of concurrent NRC 

proceedings involving Oncology Services' license. Thus, the 

district court had jurisdiction to consider the petition for 

enforcement of the subpoena based on the NRC's authority to 

conduct investigations of licensees to assure that there were no 

violations of NRC regulations pertaining to the use and handling 

of radioactive material. 

III. 
12 

 The requirements for judicial enforcement of an 

administrative subpoena duces tecum are that: (1) the inquiry 

must be within the authority of the agency, (2) the demand for 

production must not be too indefinite, and (3) the information 

sought must be reasonably relevant to the authorized inquiry. 

United States v. Westinghouse Electric Corp., 638 F.2d 570, 574 

(3d Cir. 1980) (citing Morton Salt, 338 U.S. at 652). "Reasonably 

relevant" means merely "that the information must be relevant to 

some (any) inquiry that the [agency] is authorized to undertake", 

not that it must be reasonably relevant to the particular 

authorized inquiry. Dole, 904 F.2d at 872. 

 The district court must enforce the subpoena unless the 

information is "plainly incompetent or irrelevant to any lawful 

purpose of the [NRC] . . . ." Dole, 904 F.2d at 872 (quoting 

Endicott Johnson Corp. v. Perkins, 317 U.S. 501 (1943)). In 

Dole, although the employer safety records sought by the 

Occupational Safety and Health Administration were not relevant 

to OSHA's investigation of an employee complaint which authorized 

inspection of the workplace, the records were relevant to OSHA's 

general review of employer health and safety records to determine 

if a broader inspection was required. Here it was within the 

NRC's authority to continue a general investigation of Oncology 

Services subsequent to the issuance of the Report of 

Investigation. The NRC is best able to determine what is 

relevant to its investigation of Oncology Services' compliance 

with regulations for the safe handling and use of radioactive 

material. Indeed, Oncology Services acknowledged the relevance 
13 

of the disputed documents to the NRC investigation by producing 

them in redacted form in response to the NRC subpoena. It only 

disputes the relevance of specific information contained in those 

documents on grounds that certain information does not pertain to 

the NRC license at issue in the investigation. Oncology Services 

does not, however, raise any privacy interest or privilege that 

would preclude its compliance with the subpoena. See

Westinghouse, 638 F.2d at 578 (agency request for medical records 

implicated privacy rights). Oncology Services bears a heavy 

burden to establish that enforcement of the subpoena will result 

in an abuse of judicial process. FDIC, 1995 WL 329921 at *3. 

 The district court intended to conduct an in camera

review of the redacted portions of the weekly activity reports 

and notes and minutes of administrative and medical meetings to 

determine the reasonableness of Oncology Services' redactions. 

The proper inquiry in a subpoena enforcement action, however, is 

whether the request was reasonably relevant to the NRC's 

authorized investigation. The basis of Oncology Services' 

objections to complying with the subpoena, however, have no 

bearing on the enforceability of the subpoena. As such, the in

camera review was not necessary for the district court's 

disposition of the petition for enforcement. 

IV. 

 We conclude that the district court erred in dismissing 

the petition for enforcement of subpoena for lack of a case or 

controversy. Accordingly, we will remand this matter for 
14 

consideration of the merits of the petition. The district court 

need not undertake an in camera review of the redactions to 

determine their "reasonableness" as Oncology Services asserts 

since their reasonableness has no bearing on the enforceability 

of the subpoena.