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13-3703 

Visels Drug Store, Inc. v. Drug Enforcement Administration

UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT 

SUMMARY ORDER

Rulings by summary order do not have precedential effect. Citation to a summary order filed on or 

after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 

and this court’s Local Rule 32.1.1. When citing a summary order in a document filed with this 

court, a party must cite either the Federal Appendix or an electronic database (with the notation 

“summary order”). A party citing a summary order must serve a copy of it on any party not 

represented by counsel. 

 At a stated Term of the United States Court of Appeals for the Second Circuit, held at the 

Thurgood Marshall United States Courthouse, at 40 Foley Square, in the City of New York, on 

the 7th day of November, two thousand fourteen. 

 

Present: ROBERT A. KATZMANN, 

 Chief Judge, 

 PETER W. HALL, 

 SUSAN L. CARNEY, 

 Circuit Judges. 

____________________________________________________________ 

VISELS DRUG STORE, INC., 

 Petitioner, 

- v - No. 13-3703 

DRUG ENFORCEMENT AGENCY, 

 Respondent.

____________________________________________________________ 

For Petitioner: ALAN J. SOBOL and Michael Alan Kurs, Pullman & 

Comley, LLC, Hartford, CT 

For Respondent: ANITA J. GAY (Lena Watkins, on the brief), Trial 

Attorneys, United States Department of Justice, Criminal 

Division, Washington, D.C. 

 

 
 

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Petition for review of the Drug Enforcement Administration’s denial of an application for 

a waiver pursuant to 21 C.F.R. § 1307.03. 

 ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, 

and DECREED that the petition for review is GRANTED in part, and DENIED in part. 

Petitioner Visels Drug Store, Inc. (“Visels”) petitions for review of a Drug Enforcement 

Administration (“DEA”) decision to deny its application for a waiver of a regulatory provision 

prohibiting a registered pharmacy from “employ[ing], as an agent or employee who has access to 

controlled substances, any person who has been convicted of a felony offense relating to 

controlled substances.” 21 C.F.R. § 1301.76(a). We assume the parties’ familiarity with the facts 

and the record of prior proceedings, which we reference only as necessary to explain our 

decision. 

 Visels petitions this Court for review under 21 U.S.C. § 877, arguing that the DEA’s 

denial of its request was arbitrary and capricious. While § 877 provides for judicial review of 

final DEA decisions, it does not specify a standard to apply in reviewing the DEA’s discretionary 

decisions such as the one at issue in this case. Accordingly, the Administrative Procedure Act 

(“APA”) “provides the appropriate default standard: A court must set aside agency action it finds 

to be ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’” 

Tourus Records, Inc. v. DEA, 259 F.3d 731, 736 (D.C. Cir. 2001) (quoting 5 U.S.C. § 706(2)(A) 

(2000)). Under that standard, we must find the DEA’s decision to be “arbitrary and capricious if 

the agency . . . entirely failed to consider an important aspect of the problem, offered an 

explanation for its decision that runs counter to the evidence before the agency, or is so 

implausible that it could not be ascribed to a difference in view or the product of agency 

expertise.” Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins. 
 

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Co., 463 U.S. 29, 43 (1983). Conversely, to “uphold DEA’s decision, then, we must satisfy 

ourselves ‘that the agency examined the relevant data and articulated a satisfactory explanation 

for its action including a rational connection between the facts found and the choice made.’” 

Morall v. DEA, 412 F.3d 165, 177 (D.C. Cir. 2005) (quoting El Rio Santa Cruz Neighborhood 

Health Ctr. v. United States Dep’t of Health & Human Servs., 396 F.3d 1265, 1276 (D.C. Cir. 

2005) (brackets omitted)). 

 In applying for a waiver of 21 C.F.R. § 1301.76(a), Visels argued that granting such a 

waiver was in the public interest because, inter alia, it would benefit the community in which 

Visels is located. On appeal, Visels contends that the DEA was obligated to consider these 

benefits to the community as part of its inquiry into whether granting the waiver would serve the 

public interest. This argument is based on two assumptions: (1) the DEA was required to grant 

the waiver if doing so would serve the public interest and (2) the “public interest,” within the 

meaning of the Controlled Substance Act’s regulatory regime, includes effects on the local 

community. Both of these assumptions are incorrect.

 The DEA is under no obligation to grant a waiver application even if doing so would 

serve the “public interest.” Under 21 C.F.R. § 1301.76(a), a pharmacy registered to dispense 

controlled substances “shall not employ, as an agent or employee who has access to controlled 

substances, any person who has been convicted of a felony offense relating to controlled substances.” 

However, 

[a]ny person may apply for an exception to the application of [this] provision 

of this chapter by filing a written request with the [DEA], stating the reasons 

for such exception. . . . The Administrator may grant an exception in his 

discretion, but in no case shall he/she be required to grant an exception to any 

person which is otherwise required by law or the regulations cited in this 

section. 
 

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21 C.F.R. § 1307.03 (emphasis added). Thus, the Administrator of the DEA is not required by statute 

or regulation to grant a waiver, but is authorized to do so in its discretion. 

 Relatedly, Visels argues that, in considering such a waiver request, the DEA must consider 

the benefits that Funaro, Jr. and Visels provide to the local community, which, in its view, is “an 

important aspect of the problem.’” Pet. Br. at 15 (quoting State Farm, 463 U.S. at 43). However, 

Visels has not identified any provision, either in the relevant regulations or the DEA’s internal 

standard, that requires the DEA to consider the public interest or the benefit to a pharmacy’s 

local community. In making its discretionary decision on a waiver request, the DEA considers a list 

of seven factors which is set forth in a memorandum from the Chief of the Office of Diversion 

Control to the Diversion Program Manager charged with investigating Visels’s request. See J. App’x 

122; see also J. App’x 118 –19. None of the factors has relates to providing support or services to 

low-income communities. See J. App’x 122. These factors are instead focused on protecting the 

public from the harms that an illicitly-operating pharmacy may create. See id. Accordingly, as 

there is no indication that the benefit to the local community is a factor that the DEA is obligated 

to consider, there is no basis to conclude that the DEA acted arbitrarily and capriciously by 

declining to address the application materials regarding those benefits. See LaFleur v. Whitman, 

300 F.3d 256, 280 (2d Cir. 2002) (finding that the agency did not err by failing to address 

irrelevant evidence).

 In a similar vein, Visels argues that the DEA failed to consider the relevant factors, as 

evidenced by the fact that the DEA’s denial letter does not mention certain application materials. 

Specifically, Visels contends that the DEA failed to consider materials including: the letters and 

other evidence of Funaro Jr.’s good character; Judge Droney’s sentencing decision; Funaro, Jr.’s 

good behavior in the years since his conviction; the fact that Funaro, Jr. was reinstated as a 
 

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Connecticut-licensed pharmacist and federal healthcare program provider; and Funaro, Sr.’s 

commitment to implement any oversight procedure that the DEA requires. 

But there is no basis to conclude that the DEA ignored relevant materials. In the ordinary 

course, we “presume that [the agency] has taken into account all of the evidence before [it], 

unless the record compellingly suggests otherwise.” Xiao Ji Chen v. U.S. Dep’t of Justice, 471 

F.3d 315, 337 n.17 (2d Cir. 2006). In denying Visels’s request, the DEA explicitly acknowledged 

that Funaro, Jr. was reinstated by the Connecticut Commission of Pharmacy and as a provider of 

federal healthcare programs, and described its concerns regarding oversight in the proposed plan. 

Visels has provided no reason to believe that the DEA disregarded this information. The same is 

true of the evidence showing the impact on the local community, which, as explained above, the 

DEA was not required to consider in the first place. Finally, to the extent that Visels argues that 

the DEA was required to explicitly address each individual piece of evidence, it is incorrect as a 

matter of law. See id.; Morall, 412 F.3d at 173–74. Ultimately, because the record makes clear 

that the DEA “examine[d] the relevant data and articulate[d] a satisfactory explanation for its 

action including a rational connection between the facts found and the choice made,” State Farm, 

463 U.S. at 43 (internal citation omitted), we have no trouble concluding that the DEA did not 

act arbitrarily or capriciously in denying Visels’s request for a waiver. 

 Visels also argues that it “has a right to review . . . [of the DEA’s] statement about 

Funaro, Jr.’s possession of keys and building access pursuant to . . . 21 U.S.C. § 877.” Pet. Reply 

Br. at 10. The denial letter states: 

If Mr. Funaro, Jr. is employed at Visel’s Drug Store, Inc. without having 

access to, or influence over, controlled substances, his possession of keys 

or other security access to the building and pharmacy is prohibited. If 

these procedures are not followed, the DEA registration of Visel’s Drug 

Store, Inc. will be placed in jeopardy. 
 

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J. App’x 132. Visels challenges this prohibition as arbitrary and capricious, and the DEA 

responds that the statement was merely “advice . . . relating to the requirement of 21 C.F.R. § 

1301.76(a) that Funaro, Jr. not have access to or influence over controlled substances,” Resp’ts 

Br. 23, and thus does not constitute an agency decision subject to our review. 

 Section 877 grants this Court jurisdiction to review final decisions of the Attorney 

General. 21 U.S.C. § 877.1 “As a general matter, two conditions must be satisfied for agency 

action to be ‘final’: First, the action must mark the consummation of the agency’s 

decisionmaking process—it must not be of a merely tentative or interlocutory nature. And 

second, the action must be one by which rights or obligations have been determined, or from 

which legal consequences will flow.” Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (internal 

citations and quotation marks omitted); see Paskar v. U.S. Dep’t of Transp., 714 F.3d 90, 96 (2d 

Cir. 2013). 

 It is uncontested that the denial letter constitutes the DEA’s final decision as to Visels’s 

waiver and Funaro, Jr.’s corresponding rights with respect to controlled substances. Thus, with 

regard to the explicit prohibition imposed on Funaro, Jr., the DEA’s argument is without merit. 

To begin, the plain language of the prohibitory sentence reads not as advice, but as a mandate, 

and one that limits Funaro, Jr.’s access beyond the existing status quo. In addition, because the 

DEA failed to include in the denial letter itself the clarification it now seeks to advance, and 

since it is uncontested that the letter expressly constitutes a “final decision” on the issue of 

Funaro, Jr.’s ability to dispense controlled substances, the mandate is most appropriately 

construed as part of that final decision. 

 

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 Because the statute does not define “final,” we again look to the APA for guidance. See John Doe, Inc. v. DEA, 

484 F.3d 561, 565-66 (D.C. Cir. 2007); see also Paskar v. U.S. Dep’t of Transp., 714 F.3d 90, 96 (2d Cir. 2013). 
 

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 An agency decision may be deemed arbitrary and capricious if we cannot conclude “from 

the record that the agency examined the relevant data and articulated a satisfactory explanation 

for its action,” or that the decision does not “reveal a rational connection between the facts found 

and the choice made.” Islander East Pipeline Co. v. McCarthy, 525 F.3d 141, 151 (2d Cir. 2008) 

(internal citations and associated punctuation omitted). The DEA fails to provide any such 

explanation or rational connection to support this component of its decision. The denial letter 

acknowledges that Funaro, Jr. does not currently have access to controlled substances and then 

inexplicably imposes an additional limitation. The record contains no indication that Funaro, 

Jr.’s general ability to access the pharmacy creates any risk of his accessing the controlled 

substances in light of existing safeguards. Accordingly, we vacate that portion of the DEA’s 

waiver denial that prohibited Funaro, Jr. from possessing keys or otherwise having security 

access to Visels as arbitrary and capricious and remand for further consideration. See Watson v. 

Geren, 569 F.3d 115, 128 (2d Cir. 2009). 

 We have considered Visels’s remaining arguments and find them to be without merit. For 

the reasons stated herein, we VACATE the DEA’s decision to prohibit Edmund Funaro, Jr. from 

possessing keys and otherwise limiting his access to Visels Pharmacy beyond the existing 

limitations on Funaro, Jr.’s access to controlled substances, and remand the case to the DEA for 

further consideration. We DENY the petition in all other respects. 

 FOR THE COURT: 

 CATHERINE O’HAGAN WOLFE, CLERK