Judge Granted Standing Based on DEA Embracing Schedule III, Prehearing Statements Upends this Notion

On November 11, 2024, Judge Mulrooney issued the “Order Regarding Standing, Scope, And Prehearing Procedures On Standing” (ORS), informing the Designated Participants (DP) of his process for determining standing, identifying which of the DP had been granted standing, and providing instructions for the Preliminary Hearing Statements (PHS) due on November 26, 2024. In the order, he explained: “[t]he phrase ‘person adversely affected or aggrieved’ is a term of art used in many statutes to designate those who have standing to challenge or appeal an agency decision, within the agency or before the courts.” (ORS pg 5) and made references to the role of the "the Government," Drug Enforcement Administration (DEA), in the proceeding as defending the Notice of Proposed Rulemaking (NPRM) to transfer marijuana from Schedule I to Schedule III: Schedules of Controlled Substances: Rescheduling of Marijuana, 89 Fed. Reg. 44597, 44597 (2024).  

In the order, he reasoned:

“There can be little doubt that the stewards of the Agency, at the time the regulation was promulgated, elected to seek input from a potential rules detractors/critics/opponents; in short, those who could demonstrate that they would be “adversely affected or aggrieved” should the proposed rule become law. Stated differently, the Agency was not keen on producing an echo chamber of supportive comments to reinforce its intended result, but focused on hearing from those who feared the consequences of the proposed rule. A restricted standing interpretation is further buttressed by the highly technical nature of the facts to be adduced and analysis employed at a scheduling hearing. 21 U.S.C. § 811(b)-(f). Further, the NPRM, citing 21 C.F.R. § 1308.42, dictates that “the purpose of a hearing would be to receive factual evidence and expert opinion regarding whether marijuana should be transferred to schedule III of the list of controlled substances.” 89 Fed. Reg. at 44599 (cleaned up) (ORS pg 6).

The Tribunal then put forward a rationale for his determining standing for the DPs:

[T] here are some analytical navigation points, including measures some other federal agencies have taken (with varying levels of success on review in the courts) to assist in shaping the appropriate contours of APA standing in scheduling actions at DEA. To that end, the issue of whether the DPs have alleged sufficient APA standing to participate in this rescheduling hearing should be assessed by balancing the following four considerations (the Standing Considerations or SCs): (1) whether the requestor possesses a substantial interest in the proceedings (to wit, would be adversely affected or aggrieved if the proposed rule were promulgated) and/or otherwise satisfies the requirements of Article III standing; (2) whether the request complies with clear, reasonable procedural agency directives; (3) whether the request exceeds the scope of the NPRM; and (4) whether, in the discretion of the Agency, the participation of a particular requestor would meaningfully assist the decisionmaking and/or whether the interests of multiple requestors are amenable to consolidation or exclusion to accommodate orderly proceedings (ORS pg 8).

After applying this standard to the DPs chosen by DEA Administrator Milgram, Judge Mulrooney decided only 12 would participate in the hearing with standing (all the DPs that are against the NPRM or Schedule III):

However, when the DEA submitted its Prehearing Statement (PHS) it put forth two witnesses: the first will discuss internal processes leading up to the hearing and how they will respond to public comments. The second will address questions the DEA raised regarding the Department of Health and Human Services (HHS) Schedule III recommendation as captured in the NPRM, essentially focusing on seven of the eight factors that determine the scheduling of a substance (the Eight-Factor Analysis).

This approach contrasts sharply with the position Judge Mulrooney described as the "DEA's embracement of the NPRM and rescheduling of marijuana to Schedule III" when applying his first "Standing Consideration": to the DPs—specifically, whether they "would be adversely affected or aggrieved if the proposed rule were promulgated."

The DEA's stance in their Prehearing Statement appears to challenge the assumption that they fully support rescheduling cannabis to Schedule III. This discrepancy raises questions about the application of the Standing Considerations and the true position of the DEA regarding the proposed rescheduling.

Organizations such as Hemp for Victory, Veterans Initiative 22, and The Commonwealth Project—the only DPs representing patients—could arguably qualify for Article III standing due to their representation of patient classes dependent on federal health services like the Veterans Health Administration (VHA) and Medicare. This reasoning aligns with a precedent set by now-Attorney General, then D.C. Circuit Judge Merrick Garland, who granted standing to a veteran member of Americans for Safe Access in a previous challenge to cannabis scheduling. In Americans for Safe Access v. DEA, the court stated:

 “We deny the Government’s jurisdictional challenge because we find that at least one of the named Petitioners, Michael Krawitz, has standing to challenge the agency’s action. Krawitz, who is a disabled veteran, is entitled to medical care through the U.S. Department of Veterans Affairs (“VA”). Krawitz has suffered injury-in-fact because he must shoulder a financial cost for services he could otherwise obtain free of charge from the VA. There is a causal connection between the DEA’s continuing decision to classify marijuana as a Schedule I drug and the VA’s policy of refusing to provide referrals for state medical marijuana programs. And a favorable decision from this court would likely redress Krawitz’s injury because if the DEA rescheduled marijuana, the VA could no longer use the CSA to justify its policy of refusing to complete medical marijuana referral forms. Krawitz thus satisfies the requirements of Article III standing. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).”

The divergence between Judge Mulrooney's perception of the DEA's position and the DEA's actual stance, as presented in their Prehearing Statement, introduces significant complexities in the standing considerations for the rescheduling hearing. An open question as the proceedings continue will be if Judge Mulrooney will address this misalignment.

Why Standing Matters: 

As the hearing progresses, the role of DP with standing vs DP without will become more apparent, but for now, what we can deduce from Judge Mulrooney's orders is that: 

“[T]he applicable CSA regulations were clearly drafted in a manner that the views of those participants who demonstrate APA standing (within the bounds of reasonable discretion) should be afforded a stronger voice or more weight in the ultimate decision.”

He has also stated that those with standing will be allowed to cross-examine the Government in the proceedings. 

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