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SUPREME COURT RULING MAY FACILITATE COURT CHALLENGES TO FDA WARNING LETTERS

This article was originally published in The Tan Sheet

Executive Summary

SUPREME COURT RULING MAY FACILITATE COURT CHALLENGES TO FDA WARNING LETTERS, according to a July 2 press release by Washington, D.C. lawyer John Fleder (Olsson Frank & Weeda). The statement cites a June 21 Supreme Court decision in the case Darby v. Cisneros ruling that parties adversely affected by government actions may challenge the agency involved in federal court, without first exhausting administrative procedures, unless applicable laws or regulations specifically require administrative appeal. Fleder contended that the high court ruling suggests that when a firm is the subject of an FDA warning letter and subsequent punitive actions, it can proceed directly to federal court to seek a declaratory judgment that conditions described in the warning letter do not violate the FD&C Act. A company can also seek injunctions against any FDA recommendation that other agencies deny federal contracts with the firm. "Under the Darby decision, FDA's warning letters are now likely to be considered as final agency action," Fleder wrote, because they "make at least two definitive statements" -- that the company is in violation of the FD&C Act and that it must take action to correct or prevent violations. The Supreme Court's unanimous decision involved a complaint by R. Gordon Darby and others against Housing & Urban Development Secretary Henry Cisneros after Darby had been debarred from participating in HUD projects and federal nonprocurement transactions. Under department regulations, the initial HUD administrative law judge's decision to debar Darby for 18 months constituted a final decision, unless Darby appealed to the secretary; however, the regs did not require administrative appeal. Darby sought judicial review of his debarment, alleging that he had been illegally sanctioned. HUD argued that Darby could not seek judicial review without first exhausting appeal procedures within the department. The district court denied HUD's motion to dismiss the complaint, but its failure to dismiss was reversed on appeal. The Supreme Court ruled that, because internal appeals were not explicitly mandated, Darby's debarment was effectively final and therefore "subject to judicial review." Fleder noted that FDA regs do not mandate an appeal procedure for warning letters; therefore, "the Darby case appears to allow direct [judicial] challenge in the courts to" warning letters.
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