United States v. Oncology

• Court: Court of Appeals for the Third Circuit
• Decided: July 21, 1995
• Docket: 94-7741
• Status: Unknown

Opinion

Opinions of the United 1995 Decisions States Court of Appeals for the Third Circuit

7-21-1995

United States v Oncology Precedential or Non-Precedential:

Docket 94-7741

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1995

Recommended Citation "United States v Oncology" (1995). 1995 Decisions. Paper 190. http://digitalcommons.law.villanova.edu/thirdcircuit_1995/190

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 1995 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. 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

1 COUNSEL FOR APPELLEE

2 _________

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.

3 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.

4 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

5 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

6 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.

7 (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

8 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

9 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

10 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.

11 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

12 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

13 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.