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U.S. Department of Health and Human Services

Inspections, Compliance, Enforcement, and Criminal Investigations

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01/21/2000

[Federal Register: January 21, 2000 (Volume 65, Number 14)]

[Notices]              

[Page 3454-3461]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr21ja00-62]                        

 

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

Food and Drug Administration

 

[Docket No. 94N-0162]

 

 

Premchand Girdhari; Denial of Hearing; Final Debarment Order

 

AGENCY:  Food and Drug Administration, HHS.

 

ACTION:  Notice.

 

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SUMMARY:  The Food and Drug Administration (FDA) is denying the request

of Premchand Girdhari, 643 Rassbach St., Eau Claire, WI 54701, for a

hearing, and is issuing a final order under the Federal Food, Drug, and

Cosmetic Act (the act) permanently debarring Mr. Girdhari from

providing services in any capacity to a person that has an approved or

pending drug product application. FDA bases this order on a finding

that Mr. Girdhari was convicted of two felonies under Federal law

relating to the regulation of a drug product under the act. Mr.

Girdhari has failed to file with the agency information and analyses

sufficient to create a basis for a hearing concerning this action.

 

EFFECTIVE DATE:  January 21, 2000.

 

ADDRESSES:  Application for termination of debarment to the Dockets

Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers

Lane, Rm. 1061, Rockville, MD 20852.

 

FOR FURTHER INFORMATION CONTACT:  Richard L. Arkin, Center for

Veterinary Medicine (HFV-6), Food and Drug Administration, 7500

Standish Pl. Rockville, MD 20855, 301-827-0141, FAX 301-827-5510, e-

mail ``rarkin@bangate.fda.gov''.

 

SUPPLEMENTARY INFORMATION:

 

I. Background

    

On May 8, 1991, United States District Court for the Western

District of Wisconsin accepted a plea of guilty from Premchand

Girdhari, former President of Radix Laboratories, Inc., to a two count

information, for making false statements and distributing adulterated

drugs with the intent to defraud and mislead in violation of the act,

Federal felony offenses under 18 U.S.C. 1001 and sections 301(a) and

303(b) of the act (21 U.S.C. 331(a) and 333(b)). On July 8, 1991,

judgment against Mr. Girdhari was entered and the court advised him of

his sentence. The court amended its judgment to correct a clerical

error but otherwise affirmed its earlier judgment and sentence on

October 7, 1991.

 

Mr. Girdhari was the president of Radix Laboratories, Inc., a

Wisconsin corporation that manufactured a variety of animal drugs. In

that capacity, he caused to be introduced into commerce adulterated

drugs. Specifically, Mr. Girdhari marketed the drug ``Antihistamine

(2%),'' which drug is adulterated within the meaning of (section

501(a)(5) and (a)(2)(B) of the act (21 U.S.C. 351(a)(5) and (a)(2)(B)),

because the drug was not the subject of the necessary FDA approvals nor

was it manufactured in conformity with good manufacturing practice. He

also knowingly and willfully made a false statement in a matter, within

the jurisdiction of FDA, related to FDA's regulation of the injectable

animal drug, ``Cal-Plex.''

 

Section 306(a)(2) of the act (21 U.S.C. 335a(a)(2)) mandates

debarment of an individual if FDA finds that the individual has been

convicted of a felony under Federal law for conduct relating to the

regulation of any drug product under the act. Under section 306(l)(2)

of the act, mandatory debarment applies when an individual is convicted

within 5 years preceding the initiation of the agency's action to

debar. Section 306(c)(2)(A)(ii) of the act requires that such debarment

be permanent.

 

FDA has made a finding that Mr. Girdhari was convicted of two

felonies under Federal law for conduct relating to the regulation of

Radix drug products. Mr. Girdhari's first felony conviction under 18

U.S.C. 1001 was for making a false statement to FDA about the

manufacture and distribution of the unapproved injectable animal drug,

``Cal-Plex.'' The information he falsified concerns matters that affect

FDA's regulatory decisions about drug products. His second felony

conviction under section 301(a) of the act was for violations of

provisions of the act that prohibit introduction and delivery for

introduction into interstate commerce of any drug that is adulterated,

a felony conviction under Federal law for conduct relating to the

regulation of a drug product under the act.

 

In a certified letter received by Mr. Girdhari on October 17, 1994,

the Interim Deputy Commissioner for Operations of FDA proposed to issue

an order under section 306(a)(2) of the act permanently debarring Mr.

Girdhari

 

[[Page 3455]]

 

from providing services in any capacity to a person that has an

approved or pending drug product application. The letter offered Mr.

Girdhari an opportunity for a hearing on the agency's proposal to issue

such an order. FDA based the proposal to debar Mr. Girdhari on its

finding that he had been convicted of two felonies under Federal law

for conduct relating to the regulation of Radix's drug products.

 

The certified letter also informed Mr. Girdhari that his request

for a hearing could not rest upon mere allegations or denials but must

present specific facts showing that there was a genuine and substantial

issue of fact requiring a hearing. The letter also notified Mr.

Girdhari that if it conclusively appeared from the face of the

information and factual analyses in his request for a hearing that

there was no genuine and substantial issue of fact that precluded the

order of debarment, FDA would enter summary judgment against him and

deny his request for a hearing.

 

In a letter dated November 10, 1994, Mr. Girdhari requested a

hearing on the proposal and indicated that further information would be

submitted. On December 14, 1994, Mr. Girdhari submitted arguments and

information in support of his hearing request.

 

In his request for a hearing, Mr. Girdhari acknowledges that he

pleaded guilty to offenses charged under 18 U.S.C. 1001 and sections

301(a) and 303(b) of the act and that convictions and sentencing for

these offenses were entered pursuant to the guilty pleas on July 8,

1991. However, Mr. Girdhari argues that FDA's findings based on the

conviction are incorrect and that the agency's proposal to debar him is

unconstitutional.

 

The Commissioner of Food and Drugs (the Commissioner) has

considered Mr. Girdhari's arguments and concludes that they are

unpersuasive and fail to raise a genuine and substantial issue of fact

requiring a hearing. Moreover, the legal arguments that Mr. Girdhari

offers do not create a basis for a hearing. (See 21 CFR 12.24(b)(1).)

Mr. Girdhari's arguments are discussed below.

 

II. Mr. Girdhari's Arguments in Support of a Hearing

 

A.  Retroactive Application of Statute Is Improper

    

Mr. Girdhari contends that ``retroactive application'' of the

Generic Drug Enforcement Act (GDEA) of 1992 (Pub. L. 102-282), is

improper and argues that Congress did not intend that the debarment

provisions of the GDEA be applied retroactively.

 

Mr. Girdhari states that the GDEA was not enacted until May 13,

1992, which was subsequent to the date of his conviction on July 8,

1991. He contends that he could not have anticipated the collateral

legal consequences of the GDEA in plea negotiations, and had he known

of the potential for possible future debarment, he either might not

have agreed to plead guilty to violations that could be used as the

foundation for debarment, or he might have pleaded innocent and sought

a trial by jury. Thus, he contends that debarment would mean that he

would suffer an unforeseen and substantial additional penalty of

permanent prohibition from providing services in any capacity to a

person with an approved or pending drug application.

 

Mr. Girdhari argues that under the Supreme Court's holding in

Landgraf v. USI Film Products, et al., 114 S.Ct. 1483 (1994),

legislative enactments will not be presumed to apply retroactively

unless Congress has expressed clear intent to the contrary. Mr.

Girdhari further argues that neither the GDEA's provisions nor its

legislative history constitute a clear expression of retroactive

intent.

 

The Supreme Court in Landgraf v. USI Film Products, 114 S.Ct. 1483

(1994), clarified the standard to be applied in determining whether or

not a statute operates retroactively. Under the analysis established in

Landgraf, a statute applies retroactively if ``Congress has expressly

prescribed'' such application. (Landgraf, 114 S.Ct. 1505.) If the

statute contains ``no such express command,'' then the statute can only

be applied retroactively if the statute would not have a ``retroactive

effect,'' which ``would impair a party's rights which he possessed when

acting, increase a party's liability for past conduct, or impose new

duties with respect to transactions already completed.'' (Id.)

 

Mr. Girdhari's argument that the GDEA cannot be applied

retroactively under the standard set forth in Landgraf is unpersuasive.

Mr. Girdhari's debarment is permissible because his debarment does not

have a ``retroactive effect'' as that term is defined in Landgraf.

Moreover, even if Mr. Girdhari's debarment were viewed as retroactive,

the plain language of the GDEA evinces a clear congressional intent to

debar specified individual felons from future participation in the

pharmaceutical industry, irrespective of whether their violations

predate the enactment of the GDEA. Finally, the remedial goals of the

GDEA demonstrate Congress's intent to apply debarment under the GDEA to

individuals convicted before the statute's amendment.

 

1. Debarment Is Not Retroactive Under Landgraf

 

Contrary to Mr. Girdhari's argument, Landgraf does not bar the

future application of a statute premised upon events predating its

enactment unless the new statute has true ``retroactive effect.''

(Landgraf, 114 S.Ct. 1505.)

 

Statutes authorizing injunctive or other prospective relief do not

have retroactive effect, even if they are predicated upon events

antecedent to the enactment of the statute. (Landgraf, 114 S.Ct. 1501.)

Although the issuance of an injunction is invariably precipitated by

past legal violations or other misconduct, ``the purpose of prospective

relief is to affect the future rather than remedy the past,'' id. at

1525 (Scalia, J., concurring), and the injunction itself operates

solely ``in futuro,'' affecting only conduct that occurs after it has

been issued. (Id. (quoting American Steel Foundries v. Tri-City Central

Trades Council, 257 U.S. 184, 201 (1921)).) Thus, ``(w)hen (an)

intervening statute authorizes or affects the propriety of prospective

relief, application of the new provision is not retroactive.''

(Landgraf, 114 S.Ct. at 1501; see also American Steel Foundries, 257

U.S. at 201 (because relief by injunction operates only in futuro,

right to such relief must be determined by law in effect at time

injunction is entered).)

 

Statutes that operate in futuro are not retroactive within the

meaning of Landgraf, even if their application is triggered by events

antecedent to the enactment of the statute. (See Bell Atlantic

Telephone Companies v. FCC, 79 F.3d 1195, 1207 (D.C. Cir. 1996) (FCC

``add-back order'' was not ``retroactive'' within the meaning of

Landgraf and was purely prospective, because even though the order

required the assessment of past earnings, such an order determined how

much a carrier could charge for future services); Scheidemann v. INS,

83 F.3d 1517, 1523 (3rd Cir. 1995) (an amendment to immigration law,

``[l]ike statutes altering the standards for injunctive relief,'' had

only a ``prospective'' impact and, thus, was not retroactive under

Landgraf).)

 

Debarment under the GDEA, like an injunction, plainly does not have

retroactive effect within the meaning of Landgraf. Unlike the

compensatory damages at issue in Landgraf, which were

``quintessentially backward-looking,''  Landgraf, 114 S.Ct. at 1506,

the purpose of debarment is to restrict future conduct, notwithstanding

the fact that its application is triggered by past

 

[[Page 3456]]

 

events. For purposes of retroactivity analysis, debarment orders are

indistinguishable from injunctions and other forms of prospective

relief. Mr. Girdhari's debarment is, in practical effect, simply a

statutorily-mandated administrative injunction prohibiting him from

engaging in certain conduct in the future.

 

As the Courts of Appeals for the District of Columbia and the

Seventh Circuits have recognized, debarment under the GDEA is a

forward-looking remedial action; it does not impose additional

punishment for past conduct but, rather, reflects a congressional

judgment ``that the integrity of the drug industry, and with it public

confidence in that industry, will suffer if those who manufacture drugs

use the services of someone who has committed a felony subversive of

FDA regulation.'' (DiCola v. FDA, 77 F.3d 504, 507 (D.C. Cir. 1996);

see also Bae v. Shalala, 44 F.3d 489, 493, 496 (7th Cir. 1995)

(debarment under GDEA is solely remedial).)

 

2. The Plain Language of the GDEA Demonstrates That Congress Intended

That FDA Debar Individuals Whose Criminal Activity Predates the

Enactment of the GDEA

 

Even if debarment were viewed as having ``retroactive effect,'' Mr.

Girdhari's debarment is still permissible under Landgraf because the

plain language of the GDEA evinces a clear congressional intent that

the statute be applied to events that occurred prior to its enactment.

 

First, section 306(l)(2) of the act, which sets forth the effective

dates for various provisions of the act, demonstrates that Congress

intended that section 306(a)(2) be applied retroactively. Section

306(l)(2) of the act states that section 306(a) shall not apply to a

conviction which occurred more than 5 years before the initiation of an

agency action. This language indicates that an applicable conviction

may be used as the basis for debarment, so long as it occurred no more

than 5 years prior to the initiation of debarment proceedings. At the

time of the passage of the statute on May 13, 1992, at which point the

agency could initiate a debarment action under section 306(a)(2) of the

act, any applicable conviction up to 5 years before such date could

serve as the basis for the debarment. Thus, the statute addresses

retroactivity, and sets forth the boundaries of its application.

 

Second, the use of limiting language in section 306(a)(1) of the

act with regard to mandatory debarment of corporations and the omission

of such language in section 306(a)(2) with regard to mandatory

debarment of individuals also demonstrates that Congress intended that

the latter section be applied retroactively. Section 306(a)(1) of the

act provides that mandatory debarment of corporations applies only to

convictions ``after the date of enactment of this section.'' However,

section 306(a)(2) of the act, which pertains to mandatory debarment of

individuals, does not contain this limiting language. A commonly used

rule of statutory construction states that where Congress includes

particular language in one section of a statute but omits such language

in another section of the same act, it is generally presumed that

Congress acts intentionally and purposefully in the disparate inclusion

or exclusion. (I.N.S. v. Cardoza-Fonseca, 107 S.Ct. 1207, 1213 (1987)

(citing Russelo v. United States, 104 S.Ct. 296, 300 (1983)).)

Accordingly, here Congress intended that section 306(a)(2) of the act

have retroactive effect because it did not specify in section 306(a)(2)

that it applied only to convictions ``after the date of enactment of

this section'' as specified in section 306(a)(1) of the act.

 

The negative inference drawn from the omission in section 306(a)(2)

of the act of the language in section 306(a)(1), which limits the

latter section's effect to convictions after the date of enactment,

arises directly from the disparate treatment of two provisions within a

subsection which are much more closely related than the diverse

sections of the Civil Rights Act of 1991 cited by appellant in

Landgraf. The debarment provisions at issue involve two types of

mandatory debarment, individual and corporate, while the provisions of

the Civil Rights Act at issue in Landgraf involved the foreign

application of Title VII, punitive and compensatory damages, and the

right to a jury trial. Thus, the related debarment provisions make a

clear showing of retroactive intent.

 

Moreover, even under Landgraf, ``negative inference'' may provide

evidence of congressional intent regarding retroactive application of a

statute. Courts applying the (Landgraf) analysis have found a

sufficient showing of congressional intent based on negative inference

drawn from the statutory language to justify retroactive application of

the statute. (See Scheidemann v. INS, 83 F.3d 1517, 1524 (3rd Cir.

1996); Nevada v. United States, 925 F. Supp. 691, 693 (D. Nev. 1996)

(the ``(Landgraf) Court did not preclude all future use of a negative

inference analysis in support of retroactive intent'').) Similarly, the

negative inference in the debarment provisions of the GDEA demonstrates

the clear congressional intent for retroactive application of the

statute.

 

3. The Remedial Goals of the GDEA Demonstrate That Congress Intended

the GDEA To Be Applied Retroactively

 

The circumstances giving rise to the passage of the GDEA

demonstrate that Congress intended the statute to be applied

retroactively. Congress enacted the GDEA in order to restore the

integrity of the drug approval process and to protect the public

health. (See Generic Drug Enforcement Act of 1992, Pub. L. 102-282,

Section 102, 106 Stat. 149, 149 (1992).) In order to restore consumer

confidence in the drug industry, Congress intended that individuals

convicted of felonies relating to the development or approval, or

otherwise relating to the regulation, of drug products be prohibited

from continuing to work in that industry. (See section 306(a)(2) of the

act.) Construing the GDEA to permit the debarment of individuals whose

felonious conduct occurred prior to the GDEA's enactment serves these

remedial goals of the statute.

 

In Bae v. Shalala, 44 F.3d 489 (7th Cir. 1995), the Seventh Circuit

upheld FDA's debarment under the GDEA of the former president of a

generic drug manufacturing firm, based on his antecedent conviction for

providing an ``unlawful gratuity'' to an FDA official. Although Bae

argued that his debarment was ``retroactive punishment'' in violation

of the Ex Post Facto Clause of the U.S. Constitution, the Seventh

Circuit found that Bae's debarment was remedial, not punitive, and

therefore did not violate the Ex Post Facto Clause. (Bae, 44 F.3d at

493, 495-96.) The Seventh Circuit recognized that, to achieve its

remedial goal of restoring consumer confidence in the generic drug

industry, Congress appropriately determined that it could prohibit

felons such as Bae from future activity in the industry. (Id. at 496.)

 

Likewise, in DiCola v. FDA, 77 F.3d 504 (D.C. Cir. 1996), the Court

of Appeals for the District of Columbia Circuit upheld the debarment of

another former generic drug company executive, rejecting ex post facto,

double jeopardy, and vagueness challenges to his debarment. The D.C.

Circuit, like the Seventh Circuit, found that the GDEA legitimately

achieved its remedial purposes by barring convicted felons from future

contact with the industry. (DiCola, 77 F.3d at 507.)

 

The GDEA is not punitive, but accomplishes remedial goals by

removing convicted felons from the industry they have exploited. The

 

[[Page 3457]]

 

remedial goals would not be achieved, however, if individuals convicted

of felonies prior to the GDEA's enactment continued to work in the drug

industry. Retroactive application of the GDEA is not only permissible,

but necessary, because Congress' aim of restoring consumer confidence

in the drug industry is only served by applying the statute to permit

the debarment of individuals, like Mr. Girdhari, whose violations

predate, and, in some cases, precipitated, the statute's enactment.

(See United States v. The Schooner Peggy, 5 U.S. (1 Cranch) 103 (1801)

(courts to adopt interpretation that serves overall purposes of the

statute); see also Scheidemann v. INS, 83 F.3d 1517, 1521 (3rd Cir.

1996) (Congress's intent to be deduced from statutory scheme as a

whole).) Thus, the remedial goals of the GDEA demonstrate that Congress

intended the statute to be applied retroactively.

 

B. Retroactive Application of the Statute Violates the Ex Post Facto

Clause

    

Mr. Girdhari argues that retroactive application of the debarment

provisions of the GDEA to him violates the Ex Post Facto Clause of the

U.S. Constitution because the debarment provisions, which were not in

effect at the time of his criminal conduct, are punitive in nature.

 

An ex post facto law is one that reaches back to punish acts that

occurred before the enactment of a law or that adds a new punishment to

one that was already in effect when the crime was committed. (Ex Parte

Garland, 4 Wall. 333, 337, 18 L.Ed. 366 (1866); Collins v. Youngblood,

110 S.Ct. 2715 (1990).) Mr. Girdhari claims that the debarment

provisions are punitive in nature for several reasons.

 

First, Mr. Girdhari argues that the debarment provisions are

punitive in nature because the GDEA punishes individuals for past

behavior and deters future misconduct both by the individual who is

debarred and by other individuals in the drug industry. Second, he

argues that the debarment provisions' permanent prohibition on

providing services ``in any capacity'' to a drug company constitutes an

overly broad restriction which is punitive in nature. Third, he argues

that such an overly broad restriction distinguishes his case from

DeVeau v. Braisted, 80 S.Ct. 1146, 1155 (1960), in which the Supreme

Court found the retroactive application of a law which prohibited

convicted felons from union office was remedial in nature because the

restriction was ``a relevant incident to a regulation of a present

situation.'' Finally, he argues that application of the debarment

provisions to individuals convicted of Federal felonies related to the

regulation of animal drugs would not serve any remedial purpose,

because the statute's remedial purpose is limited to ensuring the

integrity of the human generic drug industry, safeguarding human

health, and restoring human consumer confidence.

 

Mr. Girdhari's arguments that application of the debarment

provisions of the act to him is prohibited by the Ex Post Facto Clause

are unpersuasive. In determining whether a statute violates the Ex Post

Facto Clause, the critical consideration is whether the provision is

remedial or punitive in nature. Because the intent underlying debarment

under section 306(a)(2) is remedial rather than punitive, application

of the section to him does not violate the Ex Post Facto Clause. Mr.

Girdhari's arguments are addressed in turn below.

 

1. Remedial Nature of the GDEA

 

Mr. Girdhari contends that the GDEA is punitive because it punishes

past behavior and deters future misconduct. It is clear, however, that

the statute is remedial in nature. Congress created the GDEA in

response to findings of fraud and corruption in the generic drug

industry. Congress made explicit findings regarding the necessity of

the GDEA that were incorporated into section 1 of the statute and also

were made part of the legislative history. (See H.R. Rep. No. 272, 102d

Cong., 1st Sess. 10-11 (1991), reprinted in 1992 U.S.C.C.A.N. 103, 104-

105.) Congress found that ``(1) there is substantial evidence that

significant corruption occurred in FDA's process of approving drugs

under abbreviated drug applications, (2) there is a need to establish

procedures designed to restore and to ensure the integrity of the

abbreviated drug application process and to protect the public health,

and (3) there is a need to establish procedures to bar individuals who

have been convicted of crimes pertaining to the regulation of drug

products from working for companies that manufacture or distribute such

products.'' (Generic Drug Enforcement Act of 1992, Pub. L. 102-282,

Section 102, 106 Stat. 149, 149 (1992).)

 

Moreover, the Courts of Appeals for the District of Columbia

Circuit and Seventh Circuits have held that the debarment provisions do

not violate the Ex Post Facto Clause, because the provisions are

remedial in nature, rather than punitive. (DiCola v. F.D.A., 77 F.3d

504, 507 (D.C. Cir. 1996); Bae v. Shalala, 44 F.3d 489, 493 (7th Cir.

1995).) The court in Bae concluded, ``The clear and unambiguous intent

of Congress in passing the GDEA was to purge the generic drug industry

of corruption and to restore consumer confidence in generic drug

products. The GDEA's civil debarment penalty is solely remedial * * *''

(Bae at 493.) The court in DiCola agreed with this conclusion. (DiCola

at 507.)

 

Furthermore, the Supreme Court has long held that statutes that

deny future privileges to convicted offenders because of their previous

criminal activities in order to ensure against corruption in specified

areas do not punish those offenders for past conduct and, therefore, do

not violate the ex post facto prohibitions. (See, e.g., Hawker v. New

York, 18 S.Ct. 573 (1898) (physician barred from practicing medicine

for a prior felony conviction); DeVeau v. Braisted, 80 S.Ct. 1146

(1960) (convicted felon's exclusion from employment as officer of

waterfront union is not a violation of the Ex Post Facto Clause).)

 

Contrary to Mr. Girdhari's contentions, the remedial nature of the

GDEA is not diminished simply because the GDEA deters debarred

individuals and others from future misconduct. The Supreme Court in

U.S. v. Halper, 109 S.Ct. 1892, 1901, n.7 (1989), noted that ``for the

defendant even remedial sanctions carry the sting of punishment.'' The

Court found that such deterrent effects would not diminish the remedial

nature of a civil sanction. (Halper at 1902.) Furthermore, the Supreme

Court in Hudson v. United States, 118 S.Ct. 488, 494 (1997), stated,

``We have since [the Halper ruling] recognized that all civil penalties

have some deterrent effect'' (emphasis added). (See Department of

Revenue of Mont. v. Kurth Ranch, 114 S.Ct. 1937, 1945, n.14 (1994);

United States v. Ursery, 116 S.Ct. 2135, 2145, n. 2 (1996).) The Court

continued, ``(b)ut the mere presence of this purpose (deterrence) is

insufficient to render a sanction criminal * * *'' (Hudson at 496.) As

the court in Bae stated, ``The punitive effects of the GDEA are merely

incidental to its overriding purpose to safeguard the integrity of the

generic drug industry while protecting public health.'' (Bae at 493;

see also Mannochio v. Kusserow, 961 F.2d 1539, 1542 (11th Cir. 1992).)

Thus, Mr. Girdhari's argument that any incidental deterrent effects

cause the statute to be punitive is without merit.

 

2. Permanent Prohibition on Services in Any Capacity

 

Mr. Girdhari argues that the GDEA's permanent prohibition on

providing services ``in any capacity'' to a company

 

[[Page 3458]]

 

with an approved or pending drug application is an overly broad

restriction which is punitive in nature.

 

a.  Prohibition on services in any capacity. Mr. Girdhari contends

that the prohibition on providing services ``in any capacity'' would

include services that have ``no rational connection'' to the drug

approval process. Mr. Girdhari argues that such a prohibition would not

serve any remedial purpose of the statute and would constitute

punishment for the debarred individual. Mr. Girdhari's arguments are

unpersuasive for the reasons given below.

 

Congress enacted the GDEA in order to restore the integrity of the

drug approval process and to protect the public health. All facets of

the drug industry were implicated in the scandals that led to the

enactment of the GDEA, including generic drug company executives,

scientists at both generic and innovator firms, consultants, research

laboratories, and FDA employees. (See H.R. Rep. No. 102-272, 102d

Cong., 1st Sess., at 14 (1991).) In light of this background, Congress

rationally concluded that in order to ensure the integrity of the drug

approval process and to protect the public health, it was necessary,

among other things, to unequivocally exclude from the drug industry

those individuals, like Mr. Girdhari, who had previously engaged in

fraudulent or corrupt acts with respect to the regulation of drugs. The

D.C. Circuit in DiCola held that the debarment provisions' prohibition

on services ``in any capacity'' serves the statute's remedial purpose.

(DiCola at 507.) As the Seventh Circuit noted in Bae, ``the duration or

severity of any employment restriction will not mark it as punishment

where it is intended to further a legitimate governmental purpose.''

(Bae at 495.)

 

The breadth of the debarment imposed under the GDEA furthers the

statute's remedial goals by promoting efficient administration of the

debarment provisions, ensuring uniform treatment of offenders, and

restoring public confidence in the pharmaceutical industry. Congress

prohibited all services in the GDEA in order to avoid the serious

administrative difficulties involved in distinguishing between those

positions clearly related to drug regulation and those not so related.

(DiCola at 507.) These difficulties would include the problem of

ascertaining the exact nature of an employee's or contractor's

relationship with an employer or the person entering the contract, as

well as defining what constitutes a sufficient nexus with the

regulatory scheme under all circumstances. (DiCola at 507; see also

Siegel v. Lyng, 851 F.2d 412, 416 (D.C. Cir. 1988).)

 

Additionally, the GDEA's prohibition on services ``in any

capacity'' ensures that the purposes underlying the debarment sanction

are not circumvented or undermined. Any attempt to list or define

particular areas of employment that are prohibited to debarred

individuals would be subject to creative exploitation by those

determined to reenter a familiar field. The D.C. Circuit in DiCola

concluded that the agency would be especially concerned about ``any

employment that might create an opportunity for regular and frequent

contact'' between a debarred individual and the management of a drug

company, because ``[t]he agency would find it very difficult, if not

impossible, to assure itself and the public that [the individual] is

not, through that contact, actually selling advice or other services

related to the circumvention of Federal regulation.'' (DiCola at 507;

see also Farlee and Calfee, Inc. v. USDA, 941 F.2d 964, 968 (9th Cir.

1991).)

 

Furthermore, courts have upheld many other types of debarment

provisions that involved employment restrictions that were as broad, or

broader than, the GDEA's prohibition on services ``in any capacity.''

For instance, the United States Supreme Court in Hudson v. United

States, 118 S.Ct. 488 (1997), upheld a broad sanction that debarred

participation in any banking activities. Furthermore, the Seventh

Circuit Court of Appeals in United States v. Furlett, 974 F.2d 839, 844

(7th Cir. 1992), upheld a debarment order that prohibited a commodities

trader from trading on any contract market, even as a retail customer

of another broker. (See also Manocchio v. Kusserow, 961 F.2d 1539,

1541-42 (upholding exclusion from participation in any Medicare

program); United States v. Bizzell, 921 F.2d at 267 (upholding

exclusion from participation in any Housing and Urban Development

program).)

 

Finally, Mr. Girdhari cites Kennedy v. Mendoza-Martinez, 83 S.Ct.

554, 568 (1963), in support of his argument that the prohibition on

services ``in any capacity'' is not related to any remedial purpose of

the GDEA. Specifically, Mr. Girdhari notes that the Supreme Court held

in Kennedy that the excessive effect of a sanction relative to its

remedial purpose is relevant in determining whether the sanction is

civil or criminal. (Kennedy at 568.) The decision in Kennedy, however,

does not support Mr. Girdhari's argument that debarment is a punitive

sanction.

 

The Supreme Court in Kennedy listed the relevant factors, including

whether a sanction's effect is excessive in relation to its nonpunitive

purpose, to determine whether a civil penalty removing an individual's

citizenship was in effect a criminal penalty requiring the procedural

safeguards of the Fifth and Sixth Amendments. (Kennedy at 567-68.) As

shown above, the GDEA's prohibition on providing services ``in any

capacity'' to individuals with pending or approved drug product

applications is necessary to promote the remedial purpose of the

statute and, thus, is not excessive. Furthermore, the Supreme Court in

Hudson v. United States, 118 S.Ct. 488 (1997), held that a debarment

order was not a criminal punishment based, in part, on the factors set

forth in Kennedy. As noted above, the debarment order at issue in

Hudson was as broad as the GDEA's prohibition on providing services

``in any capacity''. Therefore, by the reasoning in Kennedy, the GDEA's

prohibition on providing services ``in any capacity'' is not punitive.

 

b. Permanence of the prohibition. As for the prohibition's

duration, both the District of Columbia and the Seventh Circuits have

held that the permanence of the debarment is rationally related to the

remedial goals of the statute. (DiCola at 507; Bae at 495.) The

District of Columbia Circuit in DiCola stated, ``The permanence of the

debarment can be understood, without reference to punitive intent, as

reflecting a congressional judgment that the integrity of the drug

industry, and with it public confidence in that industry, will suffer

if those who manufacture drugs use the services of someone who has

committed a felony subversive of FDA regulation.'' (DiCola at 507.) The

Seventh Circuit in Bae emphasized that permanent debarment from

providing services in any capacity is ``not disproportionate to the

remedial goals of the GDEA or to the magnitude of (the defendant's)

wrongdoing.'' (Bae at 496.) Additionally, the Supreme Court has upheld

other statutes which, for remedial purposes, permanently bar a class or

group of individuals from certain occupations due to a prior criminal

conviction. (See Hawker v. New York, 18 S.Ct. 573 (1898); DeVeau v.

Braisted, 80 S.Ct. 1146 (1960).) Therefore, Mr. Girdhari's argument

that the permanent nature of the debarment is punitive must fail.

 

3. DeVeau

 

Mr. Girdhari contends that the GDEA can be distinguished from

DeVeau because the permanent prohibition on

 

[[Page 3459]]

 

providing services ``in any capacity'' to an individual with an

approved or pending drug application cannot be justified as ``incident

to a regulation of a present situation'' and thus reveals punitive

intent. However, the debarment provisions' prohibitions are clearly

incident to regulation of a present situation and, as such, the Court's

reasoning in DeVeau applies.

 

In DeVeau, the Court upheld a law that prohibited a convicted felon

from employment as an officer in a waterfront union. The purpose of the

law was to remedy the past corruption and to ensure against future

corruption in the waterfront unions. The Court in DeVeau, 80 S.Ct. at

1155, stated:

 

The question in each case where unpleasant consequences are brought

to bear upon an individual for prior conduct, is whether the

legislative aim was to punish that individual for past activity, or

whether the restriction of the individual comes about as a relevant

incident to a regulation of a present situation * * *.

 

As with DeVeau, the legislative purpose of the relevant statute

here is to ensure that fraud and corruption are eliminated from the

drug industry and, therefore, the public's confidence in that industry

will be restored. The restrictions placed on individuals convicted of a

felony under Federal law are not intended as punishment but are

intended to preserve the integrity of the drug approval process and

protect the public health, purposes which are clearly ``incident to a

regulation of a present situation'' and, as such, consistent with

DeVeau. Therefore, this argument must also fail.

 

4. Applicability of GDEA to Animal Drug Convictions

 

Mr. Girdhari argues that the debarment provisions of section

306(a)(2) of the act cannot be retroactively applied to him because the

remedial purposes of the GDEA are unrelated to the activities upon

which his conviction was based. He contends that Congress intended the

GDEA to apply to convictions involving human drugs, not animal drugs.

Therefore, he concludes that retroactive application of section

306(a)(2) of the act to him would not serve any remedial purpose.

 

Mr. Girdhari's argument that section 306(a)(2) of the act cannot be

retroactively applied to convictions involving animal drugs is

unpersuasive. Congress clearly intended the GDEA to apply to

convictions involving animal drugs. The Supreme Court has held

repeatedly that the starting point for determining the meaning of a

statute is the plain language of the statute. (Norfolk & Western

Railway Company v. American Train Dispatchers Association, 111 S.Ct.

1156, 1163 (1991);  Mallard v.  U.S. District Court for the Southern

District of Iowa, 109 S.Ct. 1814, 1818 (1989).) If the language of the

statute is clear on its face, that language must ordinarily be regarded

as conclusive. (Negonsott v. Samuels, 113 S.Ct. 1119, 1122 (1993).)

 

It is clear from the plain language of the GDEA that it explicitly

includes animal drugs within its scope. Section 306(a)(2) of the act

applies to ``an individual who has been convicted of a felony under

Federal law for conduct relating to the regulation of any drug

product.'' (emphasis added.) Additionally, section 306(a)(2) of the act

debars such individual ``from providing services in any capacity to a

person that has an approved or pending drug product application.''

(emphasis added.) Section 201(dd) of the act (21 U.S.C. 321(dd))

defines drug product specifically for the purpose of section 306 of the

act as a drug subject to regulation under section 505, 507, 512, or 802

of the act (21 U.S.C. 355, 357, 360b, or 382), or section 351 of the

Public Health Service Act. Section 512 of the act regulates both

pioneer and generic animal drugs.

 

The intent of Congress to apply the debarment provisions to animal

drug convictions is clearly shown by the reference to section 512 of

the act in the definition of ``drug product'' in section 201(dd) of the

act. Congress clearly intended the GDEA to ensure the integrity of the

animal drug approval process and thereby protect the public health,

because the plain language of the GDEA applies to convictions related

to animal drugs. Therefore, Mr. Girdhari's argument that application of

the GDEA to convictions related to animal drugs would not serve any

remedial purpose and, as such, retroactive application of section

306(a)(2) of the act to him would be punitive, is without merit.

 

C. Retroactive Application of the Statute Violates the Due Process

Clause

    

Mr. Girdhari argues that retroactive application of the GDEA

violates the Due Process Clause of the U.S. Constitution. First, Mr.

Girdhari relies on Usery v. Turner Elkhorn Mining Co., 96 S.Ct. 2882,

2893 (1976), to argue that retroactive application of the GDEA is not

justified under the Due Process Clause. Second, Mr. Girdhari argues

that the terms of the GDEA as applied to him are overly vague.

 

1. Usery

 

Mr. Girdhari argues that even if the GDEA's main purpose is

remedial, justification sufficient to support the prospective

application of a statute under the Due Process Clause of the

Constitution is not always sufficient to justify retrospective

application of that statute. Mr. Girdhari cites Usery v. Turner Elkhorn

Mining Co., 96 S.Ct. 2882, 2893 (1976), in support of this argument. In

that case the Court held that the retroactive application of a remedial

statute designed to compensate disabled coal miners was not arbitrary

and capricious under the Due Process Clause, although the Court noted

that it would ``hesitate to approve the retrospective imposition of

liability on any theory of deterrence * * * or blameworthiness.'' (Id.

(citations omitted).)

 

Mr. Girdhari's argument is unpersuasive. Mr. Girdhari fails to

demonstrate that his debarment is unrelated to any legitimate purpose,

or that the retroactive application of the GDEA can only be justified

on a theory of deterrence or blameworthiness. As shown above, debarment

guards against future violations by prohibiting individuals ``from

providing services in any capacity to a person that has an approved or

pending drug product application'' in order to meet the legitimate

regulatory purpose of restoring the integrity of the drug approval and

regulatory process and protecting the public health. Additionally, as

shown above, the remedial nature of the GDEA is not diminished simply

because the GDEA deters debarred individuals and others from future

misconduct. (U.S. v. Halper, 109 S.Ct. 1892, 1901, n.7 (1989); Bae v.

Shalala, 44 F.3d 489, 493 (7th Cir. 1995).) Thus, the GDEA satisfies

the requirements of the Due Process Clause for retroactive application.

 

2. Vagueness

 

Mr. Girdhari asserts that the statute's prohibition on providing

services ``in any capacity'' is overly vague. The Supreme Court held in

Roberts v. United States Jaycees, 104 S.Ct. 3244, 3256 (1984) (quoting

Connally v. General Construction Co., 46 S.Ct. 126, 127 (1926)), that

``a statute which either forbids or requires the doing of some act in

terms so vague that [persons] of common intelligence must necessarily

guess at its meaning and differ as to its application, violates the

first essential of due process of law.'' The Roberts Court explained

that the constitutional prohibition against such vague statutes

``enables individuals to conform their conduct to the requirements of

the law.'' (Roberts at 3256.)

 

The terms of the debarment order, drawn from the language of the

statute,

 

[[Page 3460]]

 

are sufficiently clear to allow Mr. Girdhari to conform his conduct to

the requirements of the law. The court in DiCola held that the

debarment order's prohibition on services ``in any capacity'' did not

render the order unconstitutionally vague under the Due Process Clause

of the U.S. Constitution. (DiCola at 509.)

 

The court explained that ``all direct employment by a drug

company'' would be within the remedial scope of the debarment order.

(DiCola at 509.) The court further explained that for employment by

enterprises that provided goods or services to a drug company, a

debarred individual would ``usually have a pretty good idea whether a

position with a firm that is not itself a drug manufacturer runs afoul

of the remedial purpose for which he has been debarred* * *'' (DiCola

at 509.) Finally, the court in DiCola noted that a debarred individual

could seek a prospective ruling about a specific employment opportunity

by filing a citizen petition with the agency. (DiCola at 509.)

Likewise, if Mr. Girdhari is uncertain whether a specific type of

employment would be within the scope of the debarment order, he may

file a citizen petition with the agency regarding his inquiry.

 

D. Application of the Statute Violates the Double Jeopardy Clause

    

Finally, Mr. Girdhari argues that the proposal to debar him under

section 306(a)(2) of the act violates the Double Jeopardy Clause of the

Fifth Amendment to the U.S. Constitution. The Double Jeopardy Clause

states that no person shall ``be subject for the same offense to be

twice put in jeopardy of life or limb.''

 

Mr. Girdhari argues that the proposed debarment constitutes

additional punishment for activities for which he has already been

punished. Furthermore, Mr. Girdhari relies on U.S. v. Halper, 490 U.S.

435 (1989), to argue that permanent debarment is not rationally related

to any remedial purpose because such debarment unnecessarily reaches

activities that are completely unrelated to drug regulation (e.g.,

photocopying documents for a drug company).

 

Mr. Girdhari's arguments are unpersuasive. The Supreme Court in

Hudson v. United States, 118 S.Ct. 488 (1997), in large part disavowed

the method of analysis used in United States v. Halper, 109 S.Ct. 1892

(1989), to determine whether a sanction violates the Double Jeopardy

Clause. The Court in Hudson held that the Double Jeopardy Clause did

not preclude the criminal prosecution for violation of Federal banking

statutes of a defendant who had previously been permanently debarred

from participating in any banking activities for the same conduct.

 

The Double Jeopardy Clause protects only against the imposition of

multiple criminal punishments for the same offense in successive

proceedings. Hudson v. United States, 118 S.Ct. at 493. The Double

Jeopardy Clause does not prohibit the imposition of any additional

sanction that could, ``in common parlance,'' be described as

punishment. (Id. (internal quotation marks and citations omitted).) The

Court in Hudson held that whether a particular punishment is criminal

or civil is first a matter of statutory construction. (Hudson v. United

States, 118 S.Ct. at 493 (quoting Helvering v. Mitchell, 58 S.Ct. 630,

633 (1938)).) That is, a court first must ask whether the legislature,

``in establishing the penalizing mechanism, indicated either expressly

or impliedly a preference for one label or the other.'' (Hudson v.

United States, 118 S.Ct. at 493 (quoting United States v. Ward, 100

S.Ct. at 2641).) Second, where the legislature has indicated an

intention to establish a civil penalty, a court must inquire further

whether the statutory scheme is ``so punitive either in purpose or

effect,'' Hudson v. United States, 118 S.Ct. at 493 (quoting United

States v. Ward, 100 S.Ct. at 2641), as to ``transform what was clearly

intended as a civil remedy into a criminal penalty,'' Hudson v. United

States, 118 S.Ct. at 493 (quoting Rex Trailer Co. v. United States, 76

S.Ct. 219, 222 (1956)).

 

The debarment of Mr. Girdhari is not a criminal penalty under

Hudson. First, the legislature in enacting the GDEA intended clearly

that debarment serve as a civil penalty. In Hudson, the Court found

``it significant that the authority to issue debarment orders is

conferred [by statute] upon the appropriate Federal banking

agencies','' holding ``[t]hat such [debarment] authority was conferred

upon administrative agencies is prima facie evidence that Congress

intended to provide for a civil sanction.'' (Id.) Here, the GDEA

explicitly provides FDA, through the Secretary of Health and Human

Services, with the authority to permanently debar individuals convicted

of certain felonies, such as Mr. Girdhari, from ``providing services in

any capacity to a person that has an approved or pending drug product

application.'' (Section 306(a)(2) of the act.) Thus, under Hudson, the

terms of the GDEA are prima facie evidence that Congress intended the

debarment provisions to be civil in nature.

 

Under the second prong of Hudson, the debarment authorized by the

GDEA is not so punitive either in purpose or effect as to transform

this civil remedy into a criminal penalty. In Hudson, the Court

considered whether a permanent debarment sanction prohibiting

participation in any banking activities had such a punitive purpose or

effect. The Court concluded that there was no evidence to establish

that the debarment sanction at issue was ``so punitive in form and

effect as to render [it] criminal despite Congress' intent to the

contrary.'' (Hudson v. United States, 118 S.Ct. at 495 (quoting United

States v. Ursery, 116 S.Ct. 2135, 2148 (1996)).) The Court in Hudson

applied the analysis of Kennedy v. Mendoza-Martinez, 83 S.Ct. 554, 567-

68 (1963), to reaching this holding.

 

In Hudson, the Court first noted that debarment proceedings have

not historically been viewed as punishment. (Hudson at 495-96.) Second,

the Court found that ``[debarment] sanctions do not involve an

`affirmative disability or restraint,' as that term is normally

understood.'' (Hudson at 496 (quoting Kennedy, 83 S.Ct. at 567).)

Third, the Court found that the debarment sanction in the banking

statute at issue in that case does not ``come into play `only' on a

finding of scienter,'' because willfulness is not a prerequisite to the

imposition of the debarment sanction. (Id. (quoting Kennedy, 83 S.Ct.

at 567).) Likewise, the GDEA does not require a finding of willfulness

as a prerequisite to imposing debarment. Fourth, the Court explained

that the fact that the conduct for which the debarment is imposed may

also be criminal is insufficient to render the debarment sanctions

criminally punitive. (Id.) Finally, and significantly, the Court

explained that the general deterrence of the conduct at issue resulting

from an individual debarment is insufficient to render the debarment

criminal. (Id.) These factors apply as much to debarment under the

GDEA.

 

Furthermore, the GDEA's permanent prohibition on services in any

capacity to a company with an approved or pending drug product

application is not excessive in relation to the statute's remedial

purpose. As shown above, both the District of Columbia and the Seventh

Circuits have upheld the permanence of the debarment provisions as

rationally related to the remedial goals of the statute, (DiCola at

507; Bae at 495.), and the Supreme Court has upheld similar statutes

which, for remedial purposes, impose permanent prohibitions. (See

Hudson v. United States, 118 S.Ct. 488 (1997); Hawker v. New York, 170

U.S. 189, 190

 

[[Page 3461]]

 

(1898); DeVeau v. Braisted, 80 S.Ct. 1146 (1960).)

 

The preclusion of Mr. Girdhari from providing any type of service

to holders of pending or approved drug product applications is not

excessive in relation to the remedial goals of the GDEA. As stated

above, the D.C. Circuit has held that the GDEA's prohibition on

services in any capacity serves the statute's remedial purpose. (DiCola

at 507.) Congress prescribed all services in order to avoid the serious

administrative difficulties involved in distinguishing between those

positions clearly related to drug regulation and those not clearly

related. (DiCola at 507; see also Seigel v. Lyng, 851 F.2d 412, 416

(D.C. Cir. 1988).) Furthermore, the GDEA's prohibition ensures that the

purposes underlying the debarment provisions are not circumvented or

undermined. (DiCola at 507; see also Farlee and Calfee, Inc. v. USDA,

941 F.2d 964, 968 (9th Cir. 1991).) Finally, as noted above, the

Supreme Court in Hudson v. United States, 118 S.Ct. 488 (1997), upheld

a similar statute which, for remedial purposes, imposes a prohibition

on participation in any banking activity.

 

Under Hudson, debarment pursuant to the GDEA is not so punitive

either in purpose or effect as to render the penalty criminal. Thus,

Mr. Girdhari's argument that debarment under the GDEA violates the

Double Jeopardy Clause must fail.

E. Conclusion

    

Mr. Girdhari acknowledges that he was convicted as alleged by FDA

in its proposal to debar him and has raised no genuine and substantial

issue of fact regarding this conviction. In addition, Mr. Girdhari's

legal arguments do not create a basis for a hearing and, in any event,

are unpersuasive. Accordingly, the Commissioner denies Mr. Girdhari's

request for a hearing.

 

III. Findings and Order

    

Therefore, the Commissioner, under section 306(a) of the act, and

under authority delegated to her (21 CFR 5.10), finds that Premchand

Girdhari has been convicted of a felony under Federal law for conduct:

(1) Relating to the development or approval, including the process for

development or approval, of a drug product (section 306(a)(2)(A) of the

act); and (2) relating to the regulation of a drug product (section

306(a)(2)(B) of the act).

 

As a result of the foregoing findings, Premchand Girdhari is

permanently debarred from providing services in any capacity to a

person with an approved or pending drug product application under

section 505, 512, or 802 of the act, or under section 351 of the Public

Health Service Act (42 U.S.C. 262), effective January 21, 2000,

(sections 306(c)(1)(B) and (c)(2)(A)(ii) and 201(ee) of the act). Any

person with an approved or pending drug product application who

knowingly uses the services of Mr. Girdhari in any capacity, during his

period of debarment, will be subject to civil money penalties (section

307(a)(7) of the act (21 U.S.C. 335b(a)(7))). In addition, FDA will not

accept or review any abbreviated drug application submitted by or with

 

Mr. Girdhari's assistance during his period of debarment (section

306(c)(1) of the act).

Mr. Girdhari may file an application to attempt to terminate his

debarment, under section 306(d)(4)(A) of the act. Any such application

would be reviewed under the criteria and processes set forth in section

306(d)(4)(C) and (d)(4)(D) of the act. Such an application should be

identified with Docket No. 94N-0162 and sent to the Dockets Management

Branch (address above). All such submissions are to be filed in four

copies. The public availability of information in these submissions is

governed by 21 CFR 10.20(j). Publicly available submissions may be seen

in the Dockets Management Branch (address above) between 9 a.m. and 4

p.m., Monday through Friday.

    

Dated: January 13, 2000.

Bernard A. Schwetz,

Acting Deputy Commissioner for Food and Drugs.

[FR Doc. 00-1406 Filed 1-20-00; 8:45 am]

BILLING CODE 4160-01-F