Blunt Forces: A Case Study of Administrative Exhaustion Under the Controlled Substances Act.

• Author: Dickson, Kennedy

CONTENTS INTRODUCTION I. MARIJUANA BACKGROUND A. DEA's Regulatory Power B. History of DEA Petitions for Marijuana Rescheduling C. Judicial Review of Marijuana Petitions II. THE LAW OF EXHAUSTION OF ADMINISTRATIVE REMEDIES A. Exhaustion Generally B. Statutory and Judicial Exhaustion C. Rulemaking, Adjudication, and Remedies D. Common Law Exhaustion Exceptions 1. Futility 2. Agency Competency 3. Undue Prejudice III. EXHAUSTION UNDER THE CSA: MARIJUANA CASE STUDY A. Flawed Interpretation of the CSA B. Flawed Application of an Exhaustion Requirement Under the CSA 1. Sisley-Type Exhaustion Requirement 2. Washington-Type Exhaustion Requirement C. The Big Picture CONCLUSION INTRODUCTION

Mother Jane is potentially subject to criminal prosecution for obtaining and transporting an organic substance to treat her child's severe autism. That substance is marijuana. Here, the problem she faces is that marijuana is legal in some states, but not all. The substance is also federally outlawed. While the problem of marijuana legalization is multifaceted, one major issue is the lack of judicial review of Drug Enforcement Agency (DEA) action. After over fifty years since the enactment of the Controlled Substances Act (CSA), (1) the DEA refuses to reschedule marijuana out of the restrictive class of Schedule I. A Schedule I drug is a substance with no recognized medical use, a high potential for abuse, and inadequate scientific research on its effects. (2) Recently, federal courts have declined to review the DEA's refusal to reschedule marijuana on the mistaken application of the administrative exhaustion doctrine.

In general, judicial review of agency action is constrained by constitutional, statutory, and prudential considerations. Constitutional considerations arise from the Article III mandate that federal courts only hear "Cases" and "Controversies." (3) Statutory considerations reflect an agency's own enabling statute, which may entirely preclude judicial review. (4) Or an agency's action could be insulated from judicial review because a decision is legally committed to the agency's discretion. (5) This means that the agency's enabling "statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion." (6)

Less well defined are the prudential considerations, like exhaustion, which may limit the availability of judicial review. (7) While important, "[a]dherence to these prudential standards has been variable, giving rise to occasional suspicions that they are simply manipulated ... [for obtaining] review on essentially political grounds." (8)

Exhaustion of administrative remedies is a "long-settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." (9) Exhaustion operates to limit the exercise of federal jurisdiction by delaying a plaintiff's day in court until after all administrative proceedings have concluded. A statutorily created exhaustion requirement is mandatory. There are "modest" duties to exhaust administrative remedies in the Administrative Procedure Act (APA) (10) and much more elaborate duties to exhaust in some agency enabling statutes. (11) In contrast, common law, also known as judicially created exhaustion, is applied at a judge's discretion and subject to flexibility. (12) The remainder of this Note will focus exclusively on exhaustion and its application injudicial review of challenges to federal marijuana regulation.

The convoluted and complex state of marijuana laws in the United States is partly due to a lack of judicial review of DEA action following improper application of the exhaustion doctrine. Marijuana is "the most commonly cultivated, trafficked, and abused drug worldwide." (13) Just over a quarter of a century ago, marijuana was illegal throughout the entire United States. (14) But as of October 2022, nineteen states and the District of Columbia permit recreational use of marijuana. (15) Additionally, all fifty states allow for the therapeutic usage of marijuana in some form. (16)

Despite sweeping changes in marijuana legality on the state level, the drug remains a Schedule I substance under the CSA. (17) The DEA is an executive agency charged with the administration, enforcement, and interpretation of the CSA. The DEA has kept marijuana in the most highly regulated and restricted schedule since the CSA was passed in 1970. (18) Since the passage of the CSA, many advocates have unsuccessfully petitioned the DEA to reschedule marijuana. (19) After an unsuccessful petition, advocates move to the judiciary for review of the DEA's denial. In the courts, advocates are met with additional obstacles that prevent serious review on the merits of DEA actions. Recently, circuit courts have held that petitioners must return to the DEA to fully exhaust their administrative remedies before seeking judicial review. (20)

This Note explores the current exhaustion doctrine through the lens of a timely case study. Part I describes the background of marijuana regulation by the DEA under the CSA and recent attempts at judicial review. Part II discusses the legal foundation of the exhaustion doctrine and recent applications of both statutory and common law rules. Finally, Part III provides an analysis of erroneous exhaustion requirements applied by federal courts in the DEA and marijuana context.

This Note argues that there are two critical and related issues in this context. First, the DEA's interpretation of the CSA is flawed and creates a Catch-22. To reschedule a Schedule I substance, there needs to be rigorous clinical research showing the drug's medical efficacy. (21) But because marijuana is regulated by the most restrictive standards, the necessary research to reschedule is prevented. (22) Second, because of the restrictions put on Schedule I substances, petitioners seek review of the DEA's regulation of marijuana in federal courts. But judicial review is limited as federal courts incorrectly require exhaustion. Exhaustion should not act as a barrier to judicial review of marijuana petitions. Neither the APA nor Supreme Court precedent requires exhaustion in this context. (23)

1. MARIJUANA BACKGROUND

   Federal drug policy in the United States is a complex structure of statutory and administrative rules centered around the CSA. This Part will first provide an overview of the DEA's regulatory authority under the CSA. Second, this Part will describe how marijuana is currently regulated. Finally, this Part will describe past attempts at rescheduling or descheduling marijuana and the most recent circuit court decisions applying exhaustion requirements.

   1. DEA's Regulatory Power

      The CSA creates a classification system by placing different substances into "schedules" based on their "currently accepted medical use," their "potential for abuse," and the likelihood of causing dependence when abused. (24) The CSA was not initially intended as purely "punitive" legislation, but "most of the bill's administrative teeth comes by way of enforcement actions brought by the [Department of Justice (DOJ)] and the DEA." (25) Though the CSA creates a method to differentiate and control potentially dangerous substances, "the individuals making those scheduling determinations are often law enforcement officials and government bureaucrats applying multiple, multi-level factor tests." (26) Multi-level factor tests may suggest that officials making scheduling decisions are sensitive to nuance. However, the main issue is that the DEA officials who make final scheduling determinations based on scientific nuance do not have any scientific expertise. (27)

      The DEA and the Department of Health and Human Services (HHS) consider an eight-factor test for each "substance proposed to be controlled or removed from the schedules." (28) Once the agencies determine that scheduling is proper for the substance, they use the CSA's three-factor guideline to place that substance in an appropriate schedule. (29) For example, a Schedule I drug under the CSA has a "high potential for abuse," "no currently accepted medical use in treatment in the United States," and "a lack of accepted safety for use of the drug ... under medical supervision." (30) The DEA believes that all substances without a "currently accepted medical use" must be placed in Schedule I. (31)

      In 1992, the DEA created a five-factor test to interpret the statutory language of "currently accepted medical use." (32) The five factors are "(1) the drug's chemistry is known and reproducible; (2) adequate safety studies have been conducted; (3) adequate and well-controlled studies proving efficacy have been conducted; (4) the drug is accepted by qualified experts; (5) the scientific evidence is widely available." (33) Schedule I drugs, like marijuana, may be rescheduled or descheduled if the DEA makes a finding that the substance has a currently accepted medical use. (34)

   2. History of DEA Petitions for Marijuana Rescheduling

      Rescheduling or descheduling a drug operates through an administrative rulemaking process. (35) Any interested person can petition the DEA to change the schedule of a drug. (36) The interested person files a petition with the Attorney General, who requests that HHS conduct a scientific and medical evaluation and provide recommendations about whether the substance should remain under or be removed from control. (37) Then, the DEA conducts its own independent review of the evidence and makes a final scheduling decision that it publishes in the Federal Register. (38) Publishing in the Federal Register triggers the rulemaking procedure for controlling, rescheduling, or removing a drug from the CSA. (39)

      For the last fifty years, the DEA has denied petitions to reschedule or deschedule marijuana on an almost constant basis. (40) denial, the DEA recounts the HHS scientific evaluation and...