Hemp Industries Ass'n v. Drug Enforcement Administration

333 F.3d 1082
CourtCourt of Appeals for the Ninth Circuit
DecidedJune 30, 2003
DocketNo. 01-71662
StatusPublished
Cited by59 cases

This text of 333 F.3d 1082 (Hemp Industries Ass'n v. Drug Enforcement Administration) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hemp Industries Ass'n v. Drug Enforcement Administration, 333 F.3d 1082 (9th Cir. 2003).

Opinions

Opinion by Judge BETTY B. FLETCHER; Dissent by Judge KOZINSKI.

OPINION

BETTY B. FLETCHER, Circuit Judge:

INTRODUCTION

Petitioners challenge the validity of the rule issued by the respondent that bans the sale of consumable products containing hemp oil, cake, or seed. They contend that the rule is a legislative rule that is subject to the notice and comment procedure required by the Administrative Procedures Act (APA). Respondent contends that the rule is an interpretive rule,1 and need not undergo such procedures. We hold that because the rule would force plaintiffs either to risk sanction or to fore-go the theretofore legal activity of selling products containing trace amounts of naturally occurring THC, it is a legislative rule, and should have been subjected to notice and comment procedures.

I. JURISDICTION

As a threshold matter, we must ask whether we have jurisdiction to hear this case under the administrative appeal provision of the Controlled Substances Act, 21 U.S.C. § 877 (“CSA”). This section provides that:

All final determinations, findings, and conclusions of the Attorney General under this title shall be final and conclusive decisions of the matters involved, except that any person aggrieved by a final decision of the Attorney General may obtain review of the decision in the United States Court of Appeals for the District of Columbia or for the circuit in which his principal place of business is located upon petition filed with the court and delivered to the Attorney General within thirty days after notice of the decision. Findings of fact by the Attorney General, if supported by substantial evidence, shall be conclusive.

The rule under challenge was published on October 9, 2001. 66 Fed.Reg. 51530. Petitioners filed a timely petition for review [1085]*1085on October 19. The question of whether we have jurisdiction thus depends on whether this is a final determination of the Attorney General. Petitioners, arguing that the rule is a final determination, urge this court to accept jurisdiction. Respondent agrees that, although there is no precedent as to whether an interpretive rule is final within the meaning of § 877, this court has jurisdiction.

Since we conclude that the rule is legislative, in that it is final agency action imposing obligations and sanctions in the event of violation, we have jurisdiction on the facts of this case. We need not decide whether we would have original jurisdiction over an interpretive rule or whether our assumption of jurisdiction would oust district court jurisdiction under the APA.

II. FACTUAL AND PROCEDURAL BACKGROUND

The petitioners describe themselves as companies that manufacture, distribute, and/or sell processed hemp seed or oil, or food and beverages that contain nutritionally-valuable hemp seed or oil in the United States. Since 1937, the statute controlling marijuana has excluded the oil and sterilized seed of the plant Cannabis sativa L., commonly known as hemp, from the definition of marijuana. 21 U.S.C. § 802(16). Relying on this exemption, U.S. individuals and businesses, including the petitioners, have purchased and sold consumable products containing sterilized hemp seeds and oil, which generally are imported from Canada or Europe.2

Tetrahydrocannabinols (“THC”) is the active ingredient in marijuana. Hemp seeds and oil typically contain minuscule trace amounts of THC, less than 2 parts per million in the seed and 5 parts per million in the oil. Enhanced analytical testing indicates that “a ‘THC Free’ status is not achievable in terms of a true zero.” Petitioner’s Reply on Emergency Motion for Stay, Exh. 2 Crew Dec. at 2. Nonetheless, the amount of trace THC present in hemp seed and oil is sufficiently low to prevent confirmed positives in urine drug-testing for marijuana even from extended and extensive consumption of hemp foods. Leson, Pless, Grotenhermen, Kalant and ElSohly, “Evaluating the Impact of Hemp Food Consumption on Workplace Drug Tests,” 25 Journal of Analytical Toxicology 691 (Nov./Dec.2001).

On October 9, 2001, the DEA issued three rules. The first is what the DEA denominates an “Interpretive Rule,” purporting to interpret both the CSA and the DEA regulations to ban all naturally-occurring THC, including that found in hemp seed and oil, on Schedule I. 66 Fed. Reg. 51,530 (October 9, 2001). The DEA did not provide notice or solicit comments ■with regard to this rule. The second is an “Interim Rule,” exempting industrial hemp products not intended for human consumption from the application of the CSA and providing a 120-day grace period for persons to dispose of existing inventories of consumable products containing naturally occurring THC. 66 Fed.Reg. 51,539 (October 9, 2001). The third rule is a proposed amendment to the DEA regulations to add natural THC to the listing of THC in Schedule I. 66 Fed.Reg. 51,535 (October 9, 2001).3

[1086]*1086The petitioners bring this appeal to challenge the putative interpretive rule, arguing that it is in reality an invalid legislative rule that was promulgated without observance of the procedures required by the APA.4

III. DISCUSSION

A. Standard of review

Whether an agency rule is interpretive or legislative is a question of law reviewed de novo. Chief Probation Officers of Cal. v. Shalala, 118 F.3d 1327 (9th Cir.1997).

B. Standing

The DEA argues that the petitioners lack standing to challenge the putative interpretive rule. To establish standing, the petitioners must demonstrate three elements:

First, plaintiffs must clearly demonstrate that they have suffered an “injury in fact” — an invasion of a legally protected interest which is (a) 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 of — the 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, 559, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The DEA claims that the petitioners cannot demonstrate an injury in fact because they have not shown that the DEA or any other agency has seized their products or commenced criminal proceedings against them as a result of the putative interpretive rule. This fact does not prevent them from having standing.

In City of Auburn v. Qwest,

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Bluebook (online)
333 F.3d 1082, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hemp-industries-assn-v-drug-enforcement-administration-ca9-2003.