1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALLISON OTTESEN, et al., Case No. 19-cv-07271-JST
8 Plaintiffs, ORDER GRANTING MOTION TO 9 v. CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND 10 HI-TECH PHARMACEUTICALS, INC., MOTION TO STAY PENDING APPEAL Defendant. 11 Re: ECF No. 75 12 13 Before the Court is Defendant Hi-Tech’s motion to certify the Court’s October 17, 2023 14 order lifting the stay of the case for interlocutory appeal and motion to stay pending appeal. ECF 15 No. 75. The Court will grant the motions. 16 I. BACKGROUND 17 Because the facts are well-known to the parties and the Court has summarized Plaintiffs’ 18 allegations in detail in its prior orders, ECF Nos. 41, 70, the Court will not elaborate them here. 19 In sum, this case concerns the alleged use of DMHA1 in supplements manufactured, 20 distributed, and sold by Defendant Hi-Tech Pharmaceuticals, Inc. On November 20, 2020, the 21 Court stayed the case on primary jurisdiction grounds, “pending a determination by the FDA 22 regarding the classification of DMHA.” ECF No. 56 at 6. Nearly three years later, Plaintiffs 23 moved to lift the stay following an FDA website update that stated, in part, that “[a]fter further 24 research and consideration, [the] FDA concluded that DMHA is an unsafe food additive” and 25 “adulterated under the FD&C Act.”2 ECF No. 66 (quoting FDA, DMHA in Dietary Supplements 26 1 The complaint uses “DMHA” as shorthand for the substance also called, variously, 2- 27 Aminoisehptane HCI, 1,5-DMHA, 2-amino-6-methylheptane, 2-amino-5methylheptane, 1,5- 1 (Mar. 6, 2023), https://www.fda.gov/food/dietary-supplement-ingredient-directory/dmha-dietary- 2 supplements [https://perma.cc/BN87-K7JX]). On October 17, 2023, the Court lifted the stay. 3 ECF No. 70. For ease of reference, the relevant excerpts of the order are the following:
4 Hi-Tech correctly observes that Plaintiffs failed to notify the Court with seven days of the FDA’s March 6, 2023 website update, which 5 indicates either that Plaintiffs did not view the update as a final determination by the FDA or that they violated the Court’s order to 6 “notify the Court within seven days of a final determination by the FDA.” ECF No. 56 at 6. In addition, the legislative history of the 7 Dietary Supplement Health and Education Act, which is one of the bases of Plaintiffs’ claims, indicates that if the FDA seeks “to 8 declare a dietary supplement adulterated,” it “would publish a notice in the Federal Register proposing to [do so] and setting forth the 9 basis for their position that a substantial and unreasonable risk of illness or injury is presented.” S. Rep. No. 103-410, at 35 (1994) 10 (quoted with approval in Rosas v. Hi-Tech Pharms., No. CV 20- 00433- DOC-DFM, 2020 WL 5361878, at *4 (C.D. Cal. July 29, 11 2020)). That process has not occurred in this case.
12 Nonetheless, the FDA website states that the agency has “concluded that DMHA is an unsafe food additive,” and that it “considers 13 dietary supplements containing DMHA to be adulterated.” DMHA in Dietary Supplements. Nothing about this language appears 14 tentative, nor—unlike the last time this question came before the Court—is there any indication in the record that the FDA’s 15 “decision-making is still ongoing.” ECF No. 56 at 5. In the absence of any such evidence, the Court concludes that there no longer is a 16 basis for a stay. 17 ECF No. 70 at 2–3. Following this Court’s order lifting the stay, Hi-Tech filed the present motion 18 requesting that the Court certify its October 17, 2023 order for interlocutory appeal pursuant to 28 19 U.S.C. § 1292(b) and enter a stay of all proceedings pending that appeal. 20 II. LEGAL STANDARD 21 The final judgment rule ordinarily provides that courts of appeal shall have jurisdiction 22 only over “final decisions of the district courts of the United States.” 28 U.S.C. § 1291. However, 23 “[w]hen a district judge, in making in a civil action an order not otherwise appealable under this 24 section, shall be of the opinion that such order involves a controlling question of law as to which 25 there is substantial ground for difference of opinion and that an immediate appeal from the order 26 may materially advance the ultimate termination of the litigation, he shall so state in writing in 27 such order.” 28 U.S.C. § 1292(b). “The Court of Appeals which would have jurisdiction of an 1 order.” Id. 2 “Certification under § 1292(b) requires the district court to expressly find in writing that all 3 three § 1292(b) requirements are met.” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 4 2010). “Section 1292(b) is a departure from the normal rule that only final judgments are 5 appealable, and therefore must be construed narrowly.” James v. Price Stern Sloan, Inc., 283 F.3d 6 1064, 1067 n.6 (9th Cir. 2002). To that end, “section 1292(b) is to be applied sparingly and only 7 in exceptional cases.” In re Cement Antitrust Litig. (MDL No. 296), 673 F.2d 1020, 1027 (9th Cir. 8 1981), aff’d sub nom. Arizona v. Ash Grove Cement Co., 459 U.S. 1190 (1983). 9 III. DISCUSSION 10 A. Motion to Certify Order For Interlocutory Appeal 11 The Court concludes that Hi-Tech has satisfied the requirements of 28 U.S.C. § 1292(b). 12 Accordingly, Hi-Tech’s motion will be granted. 13 1. Controlling Law 14 The first prong regarding the availability of interlocutory appeal requires that a 15 “controlling question of law” be present. 28 U.S.C. § 1292(b). A “controlling” question of law 16 may only be found in “exceptional situations in which allowing an interlocutory appeal would 17 avoid protracted and expensive litigation.” In re Cement Antitrust Litig., 673 F.2d at 1026. A 18 question of law is controlling if “the resolution of the issue on appeal could materially affect the 19 outcome of litigation in the district court.” Id. at 1027. “[A] mixed question of law and fact,” by 20 itself, is not appropriate for permissive interlocutory review. Steering Comm. v. United States, 6 21 F.3d 572, 575 (9th Cir. 1993). 22 Hi-Tech has asked for appellate review of the question “whether statements posted to an 23 agency’s website constitute ‘final agency action’ sufficient to justify lifting a stay previously 24 entered based on the primary jurisdiction doctrine.” ECF No. 75 at 12. Hi-Tech contends that this 25 is a “question of law” that “should be answered by the Ninth Circuit.” Id. at 12–13. 26 Plaintiffs focus much of their opposition arguing that “final agency action is not the 27 appropriate standard under the primary jurisdiction doctrine.” ECF No. 86 at 9. They assert that 1 a need for agency expertise.” Id. True, courts consider these factors in deciding whether the 2 doctrine applies in the first instance. But the question before the Court when it lifted the stay was 3 whether the FDA had made “a final determination” regarding the classification of DMHA. ECF 4 No. 70 at 1. “[T]he finality requirement is concerned with whether the initial decisionmaker has 5 arrived at a definitive position on the issue . . . . ” Darby v. Cisneros, 509 U.S. 137, 144 (1993) 6 (first alteration in original).
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ALLISON OTTESEN, et al., Case No. 19-cv-07271-JST
8 Plaintiffs, ORDER GRANTING MOTION TO 9 v. CERTIFY ORDER FOR INTERLOCUTORY APPEAL AND 10 HI-TECH PHARMACEUTICALS, INC., MOTION TO STAY PENDING APPEAL Defendant. 11 Re: ECF No. 75 12 13 Before the Court is Defendant Hi-Tech’s motion to certify the Court’s October 17, 2023 14 order lifting the stay of the case for interlocutory appeal and motion to stay pending appeal. ECF 15 No. 75. The Court will grant the motions. 16 I. BACKGROUND 17 Because the facts are well-known to the parties and the Court has summarized Plaintiffs’ 18 allegations in detail in its prior orders, ECF Nos. 41, 70, the Court will not elaborate them here. 19 In sum, this case concerns the alleged use of DMHA1 in supplements manufactured, 20 distributed, and sold by Defendant Hi-Tech Pharmaceuticals, Inc. On November 20, 2020, the 21 Court stayed the case on primary jurisdiction grounds, “pending a determination by the FDA 22 regarding the classification of DMHA.” ECF No. 56 at 6. Nearly three years later, Plaintiffs 23 moved to lift the stay following an FDA website update that stated, in part, that “[a]fter further 24 research and consideration, [the] FDA concluded that DMHA is an unsafe food additive” and 25 “adulterated under the FD&C Act.”2 ECF No. 66 (quoting FDA, DMHA in Dietary Supplements 26 1 The complaint uses “DMHA” as shorthand for the substance also called, variously, 2- 27 Aminoisehptane HCI, 1,5-DMHA, 2-amino-6-methylheptane, 2-amino-5methylheptane, 1,5- 1 (Mar. 6, 2023), https://www.fda.gov/food/dietary-supplement-ingredient-directory/dmha-dietary- 2 supplements [https://perma.cc/BN87-K7JX]). On October 17, 2023, the Court lifted the stay. 3 ECF No. 70. For ease of reference, the relevant excerpts of the order are the following:
4 Hi-Tech correctly observes that Plaintiffs failed to notify the Court with seven days of the FDA’s March 6, 2023 website update, which 5 indicates either that Plaintiffs did not view the update as a final determination by the FDA or that they violated the Court’s order to 6 “notify the Court within seven days of a final determination by the FDA.” ECF No. 56 at 6. In addition, the legislative history of the 7 Dietary Supplement Health and Education Act, which is one of the bases of Plaintiffs’ claims, indicates that if the FDA seeks “to 8 declare a dietary supplement adulterated,” it “would publish a notice in the Federal Register proposing to [do so] and setting forth the 9 basis for their position that a substantial and unreasonable risk of illness or injury is presented.” S. Rep. No. 103-410, at 35 (1994) 10 (quoted with approval in Rosas v. Hi-Tech Pharms., No. CV 20- 00433- DOC-DFM, 2020 WL 5361878, at *4 (C.D. Cal. July 29, 11 2020)). That process has not occurred in this case.
12 Nonetheless, the FDA website states that the agency has “concluded that DMHA is an unsafe food additive,” and that it “considers 13 dietary supplements containing DMHA to be adulterated.” DMHA in Dietary Supplements. Nothing about this language appears 14 tentative, nor—unlike the last time this question came before the Court—is there any indication in the record that the FDA’s 15 “decision-making is still ongoing.” ECF No. 56 at 5. In the absence of any such evidence, the Court concludes that there no longer is a 16 basis for a stay. 17 ECF No. 70 at 2–3. Following this Court’s order lifting the stay, Hi-Tech filed the present motion 18 requesting that the Court certify its October 17, 2023 order for interlocutory appeal pursuant to 28 19 U.S.C. § 1292(b) and enter a stay of all proceedings pending that appeal. 20 II. LEGAL STANDARD 21 The final judgment rule ordinarily provides that courts of appeal shall have jurisdiction 22 only over “final decisions of the district courts of the United States.” 28 U.S.C. § 1291. However, 23 “[w]hen a district judge, in making in a civil action an order not otherwise appealable under this 24 section, shall be of the opinion that such order involves a controlling question of law as to which 25 there is substantial ground for difference of opinion and that an immediate appeal from the order 26 may materially advance the ultimate termination of the litigation, he shall so state in writing in 27 such order.” 28 U.S.C. § 1292(b). “The Court of Appeals which would have jurisdiction of an 1 order.” Id. 2 “Certification under § 1292(b) requires the district court to expressly find in writing that all 3 three § 1292(b) requirements are met.” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 4 2010). “Section 1292(b) is a departure from the normal rule that only final judgments are 5 appealable, and therefore must be construed narrowly.” James v. Price Stern Sloan, Inc., 283 F.3d 6 1064, 1067 n.6 (9th Cir. 2002). To that end, “section 1292(b) is to be applied sparingly and only 7 in exceptional cases.” In re Cement Antitrust Litig. (MDL No. 296), 673 F.2d 1020, 1027 (9th Cir. 8 1981), aff’d sub nom. Arizona v. Ash Grove Cement Co., 459 U.S. 1190 (1983). 9 III. DISCUSSION 10 A. Motion to Certify Order For Interlocutory Appeal 11 The Court concludes that Hi-Tech has satisfied the requirements of 28 U.S.C. § 1292(b). 12 Accordingly, Hi-Tech’s motion will be granted. 13 1. Controlling Law 14 The first prong regarding the availability of interlocutory appeal requires that a 15 “controlling question of law” be present. 28 U.S.C. § 1292(b). A “controlling” question of law 16 may only be found in “exceptional situations in which allowing an interlocutory appeal would 17 avoid protracted and expensive litigation.” In re Cement Antitrust Litig., 673 F.2d at 1026. A 18 question of law is controlling if “the resolution of the issue on appeal could materially affect the 19 outcome of litigation in the district court.” Id. at 1027. “[A] mixed question of law and fact,” by 20 itself, is not appropriate for permissive interlocutory review. Steering Comm. v. United States, 6 21 F.3d 572, 575 (9th Cir. 1993). 22 Hi-Tech has asked for appellate review of the question “whether statements posted to an 23 agency’s website constitute ‘final agency action’ sufficient to justify lifting a stay previously 24 entered based on the primary jurisdiction doctrine.” ECF No. 75 at 12. Hi-Tech contends that this 25 is a “question of law” that “should be answered by the Ninth Circuit.” Id. at 12–13. 26 Plaintiffs focus much of their opposition arguing that “final agency action is not the 27 appropriate standard under the primary jurisdiction doctrine.” ECF No. 86 at 9. They assert that 1 a need for agency expertise.” Id. True, courts consider these factors in deciding whether the 2 doctrine applies in the first instance. But the question before the Court when it lifted the stay was 3 whether the FDA had made “a final determination” regarding the classification of DMHA. ECF 4 No. 70 at 1. “[T]he finality requirement is concerned with whether the initial decisionmaker has 5 arrived at a definitive position on the issue . . . . ” Darby v. Cisneros, 509 U.S. 137, 144 (1993) 6 (first alteration in original). For an agency action to be final, (1) there must be a “consummation 7 of the agency’s decision-making process” that is “not tentative or interlocutory in nature” and (2) 8 “the action must be one by which ‘rights or obligations have been determined,’ or from which 9 ‘legal consequences will flow.’” Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (citations 10 omitted). In its prior order lifting the stay, the Court reasoned that “nothing about [the website’s] 11 language appear[ed] tentative, nor—unlike the last time this question came before the Court— 12 [was] there any indication in the record that the FDA’s “decision-making [was] still ongoing.” 13 ECF No. 70 at 3. 14 The Court agrees with Defendant that the answer to “whether statements posted to an 15 agency’s website constitute ‘final agency action’” is controlling to this litigation. ECF No. 75 at 16 12. If the stay remains lifted, litigation may proceed. Should the Ninth Circuit disagree, however, 17 the case would likely remain stayed, possibly avoiding “protracted and expensive litigation” in the 18 interim. Id. at 14 (quoting In re Cement Antitrust Litig., 673 F.2d at 1026). Therefore, this prong 19 is satisfied. 20 2. Substantial Ground for Difference of Opinion 21 The second prong regarding the availability of interlocutory appeal requires that there be 22 “substantial ground for difference of opinion.” 28 U.S.C. § 1292(b). To determine whether there 23 is a “substantial ground for difference of opinion,” courts examine “to what extent the controlling 24 law is unclear.” Couch, 611 F.3d at 633. “[A] party’s strong disagreement with the Court’s ruling 25 is not sufficient for there to be a ‘substantial ground for difference.’” Id. (quotations omitted). A 26 substantial ground for difference of opinion may exist where “the circuits are in dispute on the 27 question and the court of appeals of the circuit has not spoken on the point, if complicated 1 presented.” Id. (quoting 3 Federal Procedure, Lawyers Edition § 3:212 (2010) (footnotes 2 omitted)). That being said, “just because a court is the first to rule on a particular question or just 3 because counsel contends that one precedent rather than another is controlling does not mean there 4 is such a substantial difference of opinion as will support an interlocutory appeal.” Id. 5 The Court acknowledges that the Ninth Circuit has not spoken directly on the issue of 6 whether statements posted to the FDA’s website constitute final agency action sufficient to justify 7 lifting a stay previously entered based on the primary jurisdiction doctrine. Further, to the best of 8 this Court’s knowledge, no federal court has directly confronted this issue with regard to the FDA. 9 Plaintiffs argue that there is not a substantial ground for difference of opinion because 10 “definitive, conclusive statements concerning the FDA’s position with respect to certain 11 products and/or claims is in line with Ninth Circuit precedent [sic].” ECF No. 86 at 13 (citing 12 Reid v. Johnson & Johnson, 780 F.3d 952, 966–67 (9th Cir. 2015)). But the question before the 13 Court now is not whether the FDA’s statements were conclusive on the question of DMHA—the 14 Court previously answered that question in the affirmative. Before the Court now is a separate 15 inquiry: whether statements posted to the FDA’s website may constitute “final agency action” 16 sufficient to justify lifting a stay. Bennett, 520 U.S. at 178. There is substantial ground for 17 difference of opinion as to that question. 18 The Court noted in its prior order that the legislative history of the Dietary Supplement 19 Health and Education Act indicates that if the FDA seeks “to declare a dietary supplement 20 adulterated,” it “would publish a notice in the Federal Register proposing to [do so] and setting 21 forth the basis for their position that a substantial and unreasonable risk of illness or injury is 22 presented.” S. Rep. No. 103-410, at 35 (1994) (quoted with approval in Rosas v. Hi-Tech 23 Pharms., No. CV 20-00433- DOC-DFM, 2020 WL 5361878, at *4 (C.D. Cal. July 29, 2020)). 24 The FDA did not provide such notice in this case. Based on this language, however, reasonable 25 minds could differ on whether notice in the Federal Register is required to declare a substance 26 adulterated, or if it is only one possible avenue the FDA may pursue to declare a substance 27 adulterated. This provides an additional basis for finding the second prong satisfied. 1 3. Materially Advance Litigation 2 The third and final prong in the interlocutory appeal standard requires a showing that the 3 grant of immediate appeal “may materially advance the ultimate termination of the litigation.” 28 4 U.S.C. § 1292(b). “[N]either § 1292(b)’s literal text nor controlling precedent requires that the 5 interlocutory appeal have final, dispositive effect on the litigation, only that it ‘may materially 6 advance’ the litigation.” Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 688 (9th Cir. 7 2011). 8 Of the three factors, this one is the easiest to resolve. This is primarily because “the 9 considerations of this factor overlap significantly with the first one,” whether the issue presents a 10 controlling question of law. Rollins v. Dignity Health, No. 13–CV–01450–TEH, 2014 WL 11 6693891, at *4 (N.D. Cal. Nov. 26, 2014). As discussed above, if the stay remains lifted, 12 litigation may proceed. But if the Ninth Circuit disagrees, it may reinstate the stay for an 13 indeterminate amount of time. Interlocutory appeal would provide the Court with necessary 14 clarity that would materially advance this litigation. Thus, the third prong, too, is satisfied. 15 B. Motion to Stay Pending Interlocutory Appeal 16 Having concluded that it is appropriate to certify the order for interlocutory appeal, the 17 Court now addresses Hi-Tech’s request for a stay pending appeal. When determining if a stay is 18 appropriate, courts consider (1) “the possible damage which may result from the granting of a 19 stay”; (2) “the hardship or inequity which a party may suffer [if the case is allowed] to go 20 forward”; and (3) “the orderly course of justice measured in terms of the simplifying or 21 complicating of issues, proof, and questions of law which could be expected to result from a stay.” 22 Kuang v. United States Dep’t of Def., No. 18-CV-03698-JST, 2019 WL 1597495, at *2 (N.D. Cal. 23 Apr. 15, 2019) (citing Landis v. North American Co., 299 U.S. 248 (1936)). 24 Although the Court recognizes that this case has already been stayed for three years, the 25 Court finds that an additional stay is warranted. If the case were to proceed pending Ninth Circuit 26 review, “significant and potentially unnecessary” resources may be invested by both parties. 27 Gustavson v. Mars, Inc., No. 13-CV-04537-LHK, 2014 WL 6986421, at *3 (N.D. Cal. Dec. 10, 1 as “the Ninth Circuit’s decision is likely to provide substantial guidance” that may “materially 2 alter the Court’s decisions in the instant case.” Id. 3 CONCLUSION 4 In sum, the Court finds it appropriate to stay the proceedings while the order certifying 5 || interlocutory appeal is reviewed by the Ninth Circuit. The parties are ordered to notify the Court 6 || within 10 days of receipt of a decision from the Ninth Circuit Court of Appeals. 7 IT IS SO ORDERED.
8 Dated: February 13, 2024 ? JON S. TIGAR 10 nited States District Judge 11 a 12
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