MediNatura, Inc. v. FDA ( 2021 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 24, 2021 Decided May 28, 2021
No. 20-5341
MEDINATURA, INC.,
APPELLANT
v.
FOOD & DRUG ADMINISTRATION, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:20-cv-02066)
David B. Salmons argued the cause for appellant. With
him on the briefs were Jason R. Scherr and Douglas A.
Hastings.
Courtney L. Dixon, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Brian M. Boynton, Acting Assistant Attorney General, Scott R.
McIntosh, Attorney, and Annamarie Kempic, Deputy Chief
Counsel for Litigation, U.S. Food and Drug Administration.
Before: HENDERSON, ROGERS and WILKINS, Circuit
Judges.
2
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: The Federal
Food, Drug, and Cosmetic Act (FDCA) regulates homeopathic
drugs. A 1988 Food and Drug Administration (FDA) guidance
document outlined the circumstances in which the FDA
intended to exercise its discretion not to enforce the full force
of the FDCA against homeopathic drugs. In October 2019, the
FDA withdrew the guidance document. Shortly thereafter, the
FDA added six of appellant MediNatura, Inc.’s prescription
injectable homeopathic products to an import alert, notifying
FDA field staff that the products appeared to violate the FDCA.
MediNatura challenged both actions and sought preliminary
injunctive relief to stop the withdrawal of the guidance as well
as the enforcement of the import alert. The district court
dismissed MediNatura’s import alert-based claims, concluding
the import alert was non-final agency action. It also declined to
enjoin the withdrawal of the guidance because MediNatura
failed to establish its entitlement to a preliminary injunction.
As detailed infra, we affirm.
I. BACKGROUND
A. Statutory and Regulatory Background
The FDCA defines “drug” as, inter alia, (1) articles
recognized in the “official Homoeopathic Pharmacopoeia of
the United States”; (2) “articles intended for use in the
diagnosis, cure, mitigation, treatment, or prevention of disease
in man or other animals”; and (3) “articles (other than food)
intended to affect the structure or any function of the body of
man or other animals.” 21 U.S.C. § 321(g)(1). Under the
FDCA, it is unlawful to distribute any “new drug” without
FDA approval. Id. §§ 331(d), 355(a). A drug is a “new drug” if
it is “not generally recognized . . . as safe and effective for use
under the conditions prescribed, recommended, or suggested in
3
the labeling thereof.” Id. § 321(p)(1). Even if a drug is so
recognized it remains a “new drug” unless it has been “used to
a material extent or for a material time under such conditions.”
Id. § 321(p)(2). Therefore, if a drug is widely used or used for
a substantial time and is generally recognized as safe and
effective (“GRAS/E”) it is not a “new drug” needing approval.
To obtain approval for a new drug, a sponsor must submit a
New Drug Application (NDA) to the FDA. Id. § 355(b). The
FDA “implement[s] a structured risk-benefit assessment” in
evaluating an NDA. Id. § 355(d).
Imported drugs are subject to the FDCA. Id. § 381(a). If
an imported drug “appears” to violate the FDCA, it may be
refused admission after FDA detention. Id.; Joint Appendix
(J.A.) 1227 (FDA Regulatory Procedures Manual (RPM)).
Should a drug be detained, the FDA provides the importer
notice and an opportunity to be heard. 21 C.F.R. § 1.94(a); J.A.
1266 (RPM). The importer may introduce testimony to
demonstrate the admissibility of the drug. 21 C.F.R. § 1.94(a);
J.A. 1266 (RPM). The FDA considers the testimony and then
decides whether to release the drug or formally deny
admission. 21 U.S.C. §§ 381(a), (b); J.A. 1266–67 (RPM). An
importer may seek reconsideration from the FDA and
ultimately judicial review. 21 C.F.R. §§ 10.33, 10.45.
B. FDA Regulation of Homeopathic Drugs
Homeopathy is an alternative medical practice “based on
two unconventional theories”: (1) “‘[l]ike cures like’—the
notion that a disease can be cured by a substance that produces
similar symptoms in healthy people”; and (2) the “‘[l]aw of
minimum dose’—the notion that the lower the dose of the
medication, the greater its effectiveness.” Homeopathy, Nat’l
Insts. of Health, https://www.nccih.nih.gov/health/
homeopathy (last updated Apr. 2021) (emphasis in original).
4
Homeopathic drugs are subject to the FDCA requirement that
any “new drug” must be approved. 21 U.S.C. §§ 321(g),
321(p), 331(d), 355(a). The FDA has never approved an NDA
for a homeopathic drug nor found a homeopathic drug to be
GRAS/E and thus not a “new drug” requiring an NDA. Instead,
the FDA has exercised its enforcement discretion regarding the
sale of homeopathic drugs through its 1988 Compliance Policy
Guide 7132.15 § 400.400 “Conditions Under Which
Homeopathic Drugs May be Marketed” (CPG 400.400). J.A.
218 (CPG 400.400). CPG 400.400 “delineate[d] those
conditions under which homeopathic drugs may ordinarily be
marketed in the U.S.” Id. (emphasis added). The FDA
announced its intention to “consider[] for regulatory follow-
up” homeopathic drugs not in compliance with certain FDCA
requirements—including labeling, packaging and
manufacturing requirements. Id. at 223. CPG 400.400 did not
exempt homeopathic drugs from approval requirements and,
while CPG 400.400 was in place, the FDA took enforcement
steps against certain unapproved homeopathic drugs.1
In March 2015, the FDA announced that it was
reevaluating its enforcement policies for homeopathic drugs,
explaining that, since CPG 400.400’s issuance, the
homeopathic drug industry had expanded significantly and it
had received numerous reports of “[n]egative health effects
from drug products labeled as homeopathic.” Homeopathic
Product Regulation: Evaluating the Food and Drug
Administration’s Regulatory Framework After a Quarter-
Century, 80 Fed. Reg. 16,327, 16,328 (Mar. 27, 2015). It then
1
See, e.g., J.A. 1335–36 (warning a company that its
homeopathic remedy linked to adverse health effects was a new drug
marketed without approval and noting that “there may be
circumstances where a product that otherwise may meet the
conditions set forth in [CPG 400.400] may nevertheless be subject to
enforcement action”).
5
sought public input on its “current enforcement policies,”
including whether “the current enforcement policies under the
CPG [are] appropriate to protect and promote public health.”
Id.In December 2017, following its evaluation of CPG
400.400, the FDA announced that “in the best interest of public
health,” it intended to replace CPG 400.400 with a “risk-based”
enforcement approach “consistent with FDA’s risk-based
regulatory approaches generally.” Drug Products Labeled as
Homeopathic; Draft Guidance for Food and Drug
Administration Staff and Industry, 82 Fed. Reg. 60,403, 60,405
(Dec. 20, 2017). The proposed guidance (2017 Draft Guidance)
identified categories of homeopathic products that posed
higher risks and therefore a higher enforcement priority—
including products that had reported safety concerns, that
contained potentially harmful ingredients or that “pose[d] a
greater risk of harm to users due to their routes of
administration.” J.A. 232 (2017 Draft Guidance).
Notwithstanding the categories, the FDA noted that the
guidance will “provide notice that any product labeled as
homeopathic that is being marketed illegally is subject to FDA
enforcement action at any time,” id., and that “[t]he continued
marketing of products that have neither been approved by FDA
nor found to be GRAS/E is a public health concern,” id. at 230–
31. The FDA stated that CPG 400.400 would be withdrawn
once the new guidance issued. Drug Products Labeled as
Homeopathic; Draft Guidance, 82 Fed. Reg. at 60,404.
In July 2018, the FDA received a citizen petition from
Americans for Homeopathy Choice (Citizen Petition). The
petition requested various actions from the FDA and, as
relevant here, asserted that the homeopathic industry and its
consumers had relied on CPG 400.400 for decades and that
replacing it would upset that reliance interest. The FDA
6
responded to the petition on October 24, 2019, stating that the
reliance interest was overcome by the FDA’s need to withdraw
CPG 400.400 and noting reasons why. The next day, the FDA
published notice—effective immediately—that it was
withdrawing CPG 400.400. Compliance Policy Guide Sec.
400.400 Conditions Under Which Homeopathic Drugs May Be
Marketed; Withdrawal of Guidance, 84 Fed. Reg. 57,439,
57,440 (Oct. 25, 2019). Since issuing CPG 400.400, it
explained, the homeopathic industry had grown significantly
and it had recently encountered “situations in which
homeopathic products either caused or could have caused
significant harm.” Id. Because CPG 400.400 was “inconsistent
with [the FDA’s] risk-based approach to enforcement,” it
announced the withdrawal of CPG 400.400 at that time
(notwithstanding the previous notice that the withdrawal would
not occur until the 2017 Draft Guidance was finalized) as well
as its intent to apply a general risk-based approach to
enforcement until new guidance was finalized. Id. Also on
October 25, 2019, the FDA published a new version of its draft
guidance (2019 Draft Guidance) closely mirroring the 2017
Draft Guidance. See Drug Products Labeled as Homeopathic;
Draft Guidance for Food and Drug Administration Staff and
Industry, 84 Fed. Reg. 57,441 (Oct. 25, 2019).
C. Procedural History
MediNatura manufactures, imports and distributes
homeopathic products, including six prescription injectable
products manufactured in Germany (Products), all of which
complied with CPG 400.400’s requirements. In June 2020, the
FDA issued a warning letter to MediNatura, noting the
Products were “especially concerning from a public health
perspective” because “[i]njectable products are delivered
directly into the body . . . bypass[ing] some of the body’s key
defenses” and the Products contained “potentially toxic or
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otherwise harmful ingredients.” J.A. 399 (Warning Letter). The
FDA explained that it considered the Products “unapproved
new drugs” and that they could not be distributed without
approval. Id. Six days later, the FDA added MediNatura’s
Products to Import Alert 66-41 (Import Alert), which lists
products that “appear[] to be” unapproved new drugs in
violation of the FDCA.2 J.A. 405 (Import Alert).
On July 29, 2020, MediNatura filed suit against the FDA,
alleging that the FDA (1) arbitrarily and capriciously withdrew
CPG 400.400 and added the Products to the Import Alert by
failing to consider reliance interests or alternative actions
(Claim I); (2) improperly added the Products to the Import
Alert without undergoing notice-and-comment pursuant to the
Administrative Procedure Act (APA) (Claim II); and
(3) arbitrarily and capriciously added the Products to the
Import Alert with no reasoned explanation (Claim III).
MediNatura, Inc. v. FDA, 496 F. Supp. 3d 416, 433 (D.D.C.
2020).3 MediNatura sought a preliminary injunction to enjoin
the FDA from enforcing the Import Alert against its Products
and to enjoin the FDA from withdrawing CPG 400.400. Id. The
FDA moved to dismiss the suit and separately opposed the
preliminary injunction, arguing that neither action was final
agency action and that the withdrawal of CPG 400.400 was
2
Import alerts inform FDA staff of products that “appear to be
in violation of FDA’s laws and regulations” and thus may be
detained. Import Alerts, U.S. Food & Drug Admin.,
https://www.fda.gov/industry/actions-enforcement/import-alerts
(last updated May 14, 2019).
3
The district court concluded that MediNatura’s purported
fourth claim—the FDA did not consider alternative actions—was not
a separate claim but “a separate reason that the withdrawal of CPG
400.400 (and issuance of the Import Alert) was arbitrary and
capricious” and analyzed it under Claim I. Id. at 454 (emphasis in
original).
8
unreviewable because it was committed to the FDA’s
discretion. Id.While the lawsuit was pending, MediNatura ordered two
shipments of Engystol, one of its Products listed on the Import
Alert, from Germany. Id. One shipment entered the United
States through Los Angeles and the other shipment was
detained in Houston. Id. at 434. The FDA notified MediNatura
that the Houston shipment was detained because it appeared to
be an unapproved new drug and informed MediNatura of its
right to a hearing.
On October 23, 2020, the district court held that the Import
Alert was not final agency action under the APA and dismissed
the Import Alert-based portions of Claims I–III. Id. at 453. It
also held the withdrawal of CPG 400.400 was final agency
action, id. at 444, but was not committed to agency discretion
by law, and thus denied the FDA’s motion to dismiss that
portion of Claim I, id. at 451. The district court then denied
preliminary injunctive relief on MediNatura’s Claim I
challenge to the withdrawal of CPG 400.400, concluding that
MediNatura failed to meet the preliminary injunction
requirements. Id. at 454–62.
During the litigation, MediNatura attempted eight more
shipments of its Products, all of which were detained.
MediNatura participated in the FDA’s hearing process,
providing “written testimony” to the FDA “to support release
of each of the shipments subject to detention.” J.A. 206
(Declaration of MediNatura CEO). On February 22, 2021, the
FDA notified MediNatura that it denied admission to the
detained shipments. In a separate letter,4 the FDA stated that
4
On February 19, 2021, the FDA replied to MediNatura’s
challenge to the June 2020 warning letter. The FDA treated its reply
as a response to the evidence MediNatura presented in its challenges
9
MediNatura’s Products are “not ‘generally recognized . . . as
safe and effective’ . . . . [and] [a]s a result, the products are
unapproved new drugs.” Supp. A. 53 (quoting 21 U.S.C. §
321(p)). In that letter, the FDA set out its reasoning for its
conclusion that the Products do not meet the GRAS/E standard.
II. ANALYSIS
A. Finality of the Import Alert
Our review of the district court’s dismissal of the Import
Alert claims is de novo. Reliable Automatic Sprinkler Co. v.
Consumer Prod. Safety Comm’n, 324 F.3d 726, 731 (D.C. Cir.
2003).
Under the APA, we review only agency action that is
“final.” 5 U.S.C. § 704. To qualify as “final,” agency action
must (1) “mark the consummation of the agency’s
decisionmaking process—it must not be of a merely tentative
or interlocutory nature” and (2) constitute action “by which
rights or obligations have been determined, or from which legal
consequences will flow.” Bennett v. Spear, 520 U.S. 154, 178
(1997) (internal citations and quotations omitted). Both
Bennett prongs must be met to make agency action final.
Soundboard Ass’n v. FTC, 888 F.3d 1261, 1267 (D.C. Cir.
2018). The law surrounding the APA’s finality requirement is
“hardly crisp” and our precedent “lacks many ‘self-
implementing, bright-line rule[s],’ given the ‘pragmatic’ and
‘flexible’ nature of the inquiry as a whole.” Rhea Lana, Inc. v.
Dep’t of Lab., 824 F.3d 1023, 1027 (D.C. Cir. 2016) (alteration
in original) (quoting Nat’l Ass’n of Home Builders v. U.S. Army
Corps of Eng’rs, 417 F.3d 1272, 1279 (D.C. Cir. 2005)). Under
this pragmatic inquiry, we find the FDA’s addition of
MediNatura’s Products to the Import Alert fails Bennett’s first
both to the warning letter and to the FDA’s administrative
proceedings. See Supplemental Appendix (Supp. A.) 53, 54 n.1.
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prong. The action does not mark the consummation of the
agency’s decisionmaking process because it is interlocutory
and, accordingly, not reviewable under the APA. See
Soundboard, 888 F.3d at 1267.5
As earlier discussed, see Part I.A., supra, when a product
is detained pursuant to an import alert, the importer is given
notice and is afforded an opportunity to be heard. The importer
may submit evidence to establish the drug’s admissibility.
After reviewing the evidence, the FDA determines whether to
refuse admission. Should that determination be adverse to the
importer, the importer may seek judicial review. MediNatura
took advantage of that process. MediNatura received notice of
the reasons its Products were detained and of its right to a
hearing. MediNatura “fully participated in the hearing
process.” J.A. 206 (Declaration of MediNatura CEO). And on
February 22, 2021, the FDA refused admission to each of
MediNatura’s detained shipments, concluding MediNatura had
not established that the Products were not “new drugs.”6
5
The harms MediNatura claims from the listing of its Products
on the Import Alert are evaluated under Bennett’s second prong. See
Soundboard, 888 F.3d at 1272 (considering “impact on industry”
under Bennett’s first prong would “bootstrap[] Bennett’s second
prong into its first”); id. (“The point where an agency’s
decisionmaking process is complete cannot be pulled to and fro by
the gravity of any particular decision.”).
6
A lawsuit may become moot if the challenged agency action
is “super[s]eded in full” by subsequent agency action. See Fund For
Animals, Inc. v. Hogan, 428 F.3d 1059, 1064 (D.C. Cir. 2005). The
parties agreed in supplemental briefing that the February 22 refusals
of admission did not moot MediNatura’s challenge to the addition of
its Products to the Import Alert. We agree. The addition of a product
to an import alert represents the FDA’s determination that the
product appears to violate the FDCA and a subsequent refusal of
admission after administrative proceedings affirms that
11
The procedures following a product’s addition to the
Import Alert manifest the interlocutory nature of that decision,
especially considering the finality requirement’s “several
functions.” DRG Funding Corp. v. Sec’y of Hous. & Urb. Dev.,
76 F.3d 1212, 1214 (D.C. Cir. 1996); cf. Southwest Airlines Co.
v. DOT, 832 F.3d 270, 275 (D.C. Cir. 2016) (“the way in which
the agency subsequently treats the challenged action” relevant
to whether action is final). First, treating a product’s addition
to the Import Alert as final agency action would not allow the
FDA “an opportunity to apply its expertise and correct its
mistakes” as the FDA’s procedures prescribe. DRG Funding,
76 F.3d at 1214. Should the FDA ultimately determine that its
decision to include a product on the Import Alert is incorrect,
it can then apply its expertise and correct the mistake if
challenged by the importer. Judicial review at this stage would
“disrupt[] the agency’s processes.” Id.Indeed, the “completion of [the FDA’s] processes may
obviate the need for judicial review.” Id. at 1215. After the
addition of a product to the Import Alert, an importer “still
enjoys an opportunity to convince the agency to change its
mind.” Ciba-Geigy Corp. v. EPA, 801 F.2d 430, 436 (D.C. Cir.
determination. Yet the addition of a product to an import alert also
has a practical function—it assists FDA field staff by notifying them
of products that appear to violate the FDCA and thus are subject to
detention. Absent listing on an import alert, products that can or
should be detained are more likely to proceed into the United States.
Accordingly, the FDA’s February 22 decisions refusing entry to the
Products do not supersede in full its earlier decision to add the
Products to the Import Alert because relief could still be granted to
MediNatura by enjoining the FDA from listing MediNatura’s
Products on the Import Alert. Notwithstanding the February 22
refusals of admission do not fully supersede the inclusion of
MediNatura’s Products on the Import Alert, the listing remains non-
final agency action, as discussed infra.
12
1986). Should it succeed in convincing the FDA that its
products are GRAS/E and thus not “new drugs” requiring an
NDA, nothing would remain for the importer to appeal because
products listed on the Import Alert are only those that “appear”
to be new drugs without an NDA; the agency would then
correct its mistake by removing the products from the Import
Alert. Judicial review of the decision to add a product to the
Import Alert is premature because it may be “rendered
unnecessary” if the importer succeeds. CSX Transp., Inc. v.
Surface Transp. Bd., 774 F.3d 25, 31 (D.C. Cir. 2014); see also
Automatic Sprinkler, 324 F.3d at 733 (“It conserves both
judicial and administrative resources to allow the required
agency deliberative process to take place before judicial review
is undertaken.”).
In MediNatura’s view, the FDA’s addition of its Products
to the Import Alert is the consummation of decisionmaking
because the FDA “unambiguously stated” that the Products are
unapproved new drugs. Appellant’s Br. 30 (quoting Reckitt
Benckiser Inc. v. EPA, 613 F.3d 1131, 1138 (D.C. Cir. 2010)).
To support its position that the FDA had reached a “final” view
of MediNatura’s Products’ admissibility, MediNatura directs
us to FDA press releases, the warning letter and the FDA’s
withdrawal of CPG 400.400. Granted, a “series of agency
pronouncements” can establish final agency action. Ciba-
Geigy, 801 F.2d at 435 n.7. But the FDA’s contemporaneous
actions are “insufficient to transform” the Import Alert into
final agency action. Holistic Candlers & Consumers Ass’n v.
FDA, 664 F.3d 940, 945 (D.C. Cir. 2012). As in Holistic
Candlers, the FDA “made clear” that it would consider further
evidence—pursuant to its own procedures—“before taking any
final . . . action.” Id. at 946; cf. Automatic Sprinkler, 324 F.3d
at 734 (series of agency actions non-final as “the agency has
not yet done that which the statutory scheme requires for its
13
conduct to constitute final agency action”—namely, reach a
final decision after an administrative proceeding).
The fact that the FDA’s final decision regarding the
admissibility of MediNatura’s Products is the same as its
interlocutory decision does not retroactively transform the
interlocutory decision into a final decision. Its ultimate
decision demonstrates only that the FDA was unpersuaded by
MediNatura’s evidence. The FDA does not dispute that its
February 22 decisions finding MediNatura’s Products “new
drugs” requiring an NDA and subsequent admission refusal are
final agency actions. Should MediNatura wish to challenge
those decisions, MediNatura may seek to raise them in district
court on remand.
B. Withdrawal of CPG 400.400
MediNatura also sought preliminary injunctive relief from
the FDA’s withdrawal of CPG 400.400 (Withdrawal), claiming
that it failed to consider reliance interests or alternatives. The
district court denied MediNatura’s motion because it failed to
meet the preliminary injunction requirements. We agree. To
obtain a preliminary injunction a plaintiff “must establish
[1] that he is likely to succeed on the merits, [2] that he is likely
to suffer irreparable harm in the absence of preliminary relief,
[3] that the balance of equities tips in his favor, and [4] that an
injunction is in the public interest.” Abdullah v. Obama, 753
F.3d 193, 197 (D.C. Cir. 2014) (alteration in original) (internal
quotations omitted). We “review the district court’s balancing
of the preliminary injunction factors for abuse of discretion”
14
and review any underlying question of law de novo. Id. at 197–
98.
1. Likelihood of Success on the Merits
i. Reliance Interests
When an agency changes policy, it must “be cognizant that
longstanding policies may have ‘engendered serious reliance
interests that must be taken into account.’” Encino Motorcars,
LLC v. Navarro, 136 S. Ct. 2117, 2126 (2016) (quoting FCC v.
Fox Television Stations, Inc., 556 U.S. 502, 515 (2009)).
Accordingly, an agency must “assess whether there were
reliance interests, determine whether they were significant, and
weigh any such interests against competing policy concerns.”
DHS v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 1915
(2020). If an agency changes its policy despite reliance
interests, it must provide a “reasoned explanation” therefor. Id.
at 1916.
The FDA did not explicitly address reliance interests in its
Federal Register notice withdrawing CPG 400.400. See
Withdrawal of Guidance, 84 Fed. Reg. at 57,439–41. It did,
however, address reliance interests in its response to the Citizen
Petition, which response issued one day before the Withdrawal.
See J.A. 1395–96 (Petition Response). Accordingly, to
establish that the FDA failed to consider reliance interests,
MediNatura must show that (1) the FDA cannot rely on its
Petition Response for its discussion of reliance interests or
(2) even if the FDA can so rely, the FDA’s discussion of
reliance interests in the Petition Response is inadequate. The
district court was not persuaded that MediNatura could
establish either requirement and neither are we.
MediNatura argues that the FDA’s reliance on the Petition
Response constitutes a forbidden post hoc rationalization. See
SEC v. Chenery Corp., 318 U.S. 80, 87, 94 (1943) (Chenery I);
15
see also Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983) (court “may not
accept appellate counsel’s post hoc rationalizations for agency
action,” agency action must be upheld “on the basis articulated
by the agency itself”). Granted, precedent suggests that our
review is confined to the specific order that sets out the agency
action. See, e.g., Burlington Truck Lines, Inc. v. United States,
371 U.S. 156, 168–69 (1962) (“Chenery requires that an
agency’s discretionary order be upheld, if at all, on the same
basis articulated in the order by the agency itself”); Williams
Gas Processing–Gulf Coast Co. v. FERC, 373 F.3d 1335, 1345
(D.C. Cir. 2004) (“It is axiomatic that we may uphold agency
orders based only on reasoning that is fairly stated by the
agency in the order under review.”). But other precedent
suggests our review is broader. See, e.g., Michigan v. EPA, 576
U.S. 743, 758 (2015) (“foundational principle of administrative
law that a court may uphold agency action only on the grounds
that the agency invoked when it took the action”); Regents, 140
S. Ct. at 1909 (“An agency must defend its actions based on the
reasons it gave when it acted.”); Council for Urological
Interests v. Burwell, 790 F.3d 212, 222 (D.C. Cir. 2015) (“we
look to what the agency said at the time of the rulemaking—
not to its lawyers’ post-hoc rationalizations”).
Chenery I’s doctrine “rests on several bases.” Population
Inst. v. McPherson, 797 F.2d 1062, 1072 (D.C. Cir. 1986).
Principally, “[w]here Congress or the Executive vouchsafes
part of its authority to an administrative agency, it is for the
agency and the agency alone to exercise that authority.” Id. It
“is incompatible with the orderly functioning of the process of
judicial review” “[f]or the courts to substitute their or counsel’s
discretion for that of [an agency].” Burlington Truck Lines, 371
U.S. at 169. The rule “vindicate[s] the administrative process,
for the purpose of the rule is to avoid propel[ling] the court into
the domain which Congress has set aside exclusively for the
16
administrative agency.” Id. (internal citations and quotations
omitted). Accordingly, “review of the propriety of
administrative action properly encompasses . . . an
examination of the reasoning and rationale actually offered for
the particular action being reviewed.” Population Inst., 797
F.2d at 1072.
Chenery I’s concern, then, is not focused so much on the
specific location of the agency’s rationale as it is on the
agency’s articulation of its rationale at the time it takes its
action so that a court is able to review that rationale. See Grand
Canyon Air Tour Coal. v. FAA, 154 F.3d 455, 469 (D.C. Cir.
1998) (“we may consider only the regulatory rationale actually
offered by the agency during the development of the
regulation”). Accordingly, we have looked to explanations
outside the precise agency action at issue to evaluate whether
to sustain that action. See, e.g., Physicians for Soc. Resp. v.
Wheeler, 956 F.3d 634, 645–46 (D.C. Cir. 2020) (court
evaluated both EPA’s one-page directive announcing new
policy and its supporting memorandum); Grand Canyon, 154
F.3d at 469 (“[f]ortunately for the government,” National Park
Service offered “adequate and reasonable justification” for its
action in separate report and final rule “elaborated on that
explanation”); cf. Animal Legal Def. Fund, Inc. v. Perdue, 872
F.3d 602, 612–13 (D.C. Cir. 2017) (agency did not identify
support for its position in its rulemakings or other proceedings).
We do not attempt today to delineate the bounds of the
“rationale actually offered by the agency during the
development of the [action].” Grand Canyon, 154 F.3d at 469.
We do conclude, however, that MediNatura has not shown that
it is likely to succeed in establishing that the Petition Response
is outside those bounds, wherever they lie. The Petition
Response can be appropriately categorized as the rationale
offered by the FDA during the development of its action. The
17
Citizen Petition responded specifically to the FDA’s ongoing
assessment of its homeopathic drug enforcement policies. The
Petition Response issued only one day before the Withdrawal
and explicitly addressed the FDA’s imminent withdrawal
decision. An October 22, 2019 internal FDA memorandum
regarding safety issues associated with homeopathic products
noted that it received the Citizen Petition as “part of [the]
process” of evaluating its homeopathic drug enforcement
policies, the FDA took “into consideration the [C]itizen
[P]etition” and it “intend[ed] to respond to the Petition
simultaneous with withdrawal of CPG 400.400.” J.A. 1347
(FDA Memorandum). And, as discussed infra, the FDA’s
reasons in its Petition Response for concluding that reliance
interests were outweighed are elaborated on in its next-day
Withdrawal.
In its response to the Citizen Petition, the FDA identified
four considerations that “overc[a]m[e]” the alleged reliance
interests. J.A. 1395–96 (Petition Response). Granted, CPG
400.400’s longevity imposes on the FDA a substantial
explanatory burden. See Encino Motorcars, 136 S. Ct. at 2126(“because of decades of industry reliance on the [agency’s]
prior policy—the [summary discussion of reliance interests]
fell short of the agency’s duty to explain”). But the FDA did
not give a “summary discussion;” its explanation appears
“adequate and reasonable” and the FDA also “elaborated on
that explanation” in its Withdrawal. Grand Canyon, 154 F.3d
at 469.
The FDA first noted “the fact that the [FDCA] . . .
include[s] premarket review and approval requirements from
which homeopathic drug products are not exempt.” J.A. 1395–
96 (Petition Response). In district court, the FDA had
unsuccessfully argued that it was not required to consider
reliance interests because CPG 400.400 never exempted
18
homeopathic drugs from FDCA requirements in the first place
and, accordingly, any reliance interest was not reasonably
recognized. MediNatura, 496 F. Supp. 3d at 455–56. The
district court rejected that line of reasoning and the FDA does
not raise it on appeal. That CPG 400.400 did not exempt
homeopathic drugs from premarket approval processes,
however, does dilute the strength of reliance interests based on
CPG 400.400. See Regents, 140 S. Ct. at 1913 (disclaimer that
program “conferred no substantive rights” was “surely
pertinent in considering the strength of any reliance interests”).
The FDA next noted, “the recent growth of safety concerns
associated with homeopathic drug products.” J.A. 1396
(Petition Response). It elaborated on safety concerns both in
the Petition Response and in the Withdrawal, explaining that,
during CPG 400.400’s existence, the FDA “encountered
multiple situations in which homeopathic drug products posed
a significant risk to patients.” Withdrawal of Guidance, 84 Fed.
Reg. at 57,440; see also J.A. 1384 (Petition Response). In 2016,
homeopathic drug products were associated with adverse
health events based on “belladonna toxicity.” Withdrawal of
Guidance, 84 Fed. Reg. at 57,440. The adverse health events
included “reports of infant deaths and seizures.” Id. And by
2009, the FDA had “received more than 130 reports of anosmia
(loss of the sense of smell)” associated with a certain
homeopathic product. Id. According to the FDA, those were
“two examples among many.” Id.The FDA’s third rationale overriding reliance interests was
“the continued expansion of the homeopathic industry since
issuance of the CPG 400.400, resulting in an increasing number
of consumer exposures.” J.A. 1396 (Petition Response). And
in its Withdrawal, the FDA observed that the use of
homeopathic products increased by 15 per cent in U.S. adults
between 2007 and 2012 and found “the increased population
19
exposure that it apparently represents, has contributed to
FDA’s enhanced focus on the safety of homeopathic drugs in
recent years and the evaluation of the CPG.” Withdrawal of
Guidance, 84 Fed. Reg. at 57,440.
The fourth rationale involved “the agency’s interest in its
general risk-based approach to enforcement.” J.A. 1396
(Petition Response). As the FDA elaborated in the Withdrawal,
CPG 400.400 “does not accurately reflect the Agency’s current
thinking” because “[r]isk-based enforcement best reflects
FDA’s public health priorities.” Withdrawal of Guidance, 84
Fed. Reg. at 57,440. The FDA announced its decision to apply
“its general approach to prioritizing regulatory and
enforcement action, which involves risk-based prioritization in
light of all the facts of a given circumstance” before finalizing
new guidance. Id.This documentation in both the Petition Response and the
Withdrawal manifests that the FDA was “cognizant” of the
reliance interests dependent on CPG 400.400 and explained its
“good reasons” for concluding that those interests were
insufficient to hold off the Withdrawal. Encino Motorcars, 136
S. Ct. at 2126 (internal quotations omitted).
ii. Consideration of Alternatives
When taking action, an agency must consider alternatives
“within the ambit of the existing standard.” State Farm, 463
U.S. at 51. An agency is not required to “consider all policy
alternatives,” id., or “every alternative device and thought
conceivable by the mind of man,” Vermont Yankee Nuclear
Power Corp. v. NRDC, 435 U.S. 519, 551 (1978). An agency
must consider only “‘significant and viable’ and ‘obvious’
alternatives.” Nat’l Shooting Sports Found., Inc. v. Jones, 716
F.3d 200, 215 (D.C. Cir. 2013) (quoting City of Brookings
Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1169 (D.C. Cir. 1987)).
20
MediNatura argues that the FDA did not adequately consider
alternatives to withdrawing CPG 400.400, including
(1) creating a specific process for assessing whether
homeopathic drugs are GRAS/E or a process for assessing
homeopathic NDAs or (2) delaying the Withdrawal to provide
the industry time to adapt and/or providing a grace period. We
disagree.
MediNatura’s first suggestion—creating an NDA or
GRAS/E process specifically for homeopathic drugs—appears
to be neither “within the ambit of the existing standard,” State
Farm, 463 U.S. at 51, nor an “obvious” or “viable” alternative,
Nat’l Shooting Sports, 716 F.3d at 215 (quoting City of
Brookings, 822 F.2d at 1169). The GRAS/E process determines
whether a drug is a “new drug” requiring an NDA and the NDA
process determines whether a new drug is approved. CPG
400.400 outlined the FDA’s enforcement discretion regarding
homeopathic drugs. Alternatives related to the FDA’s
enforcement discretion are of course within “the ambit of”
CPG 400.400. But GRAS/E and NDA processes are not part of
the FDA’s exercise of its enforcement discretion. It is not clear
to us that the FDA must consider changing those distinct and
separate processes when it changes its enforcement discretion
guidelines. Further, the FDA determined that Withdrawal was
necessary at that time due to immediate public health concerns.
Withdrawal of Guidance, 84 Fed. Reg. at 57,440. A time-
intensive promulgation of NDA or GRAS/E regulations
specifically for homeopathic drugs was not a viable alternative
due to the immediate concerns the FDA was facing. And, as the
district court noted, MediNatura’s arguments are based on the
idea that the FDA must leave open an opportunity for legal
marketing of homeopathic drugs; nevertheless, “if it is not
possible for the industry to comply with the requirements of the
[FDCA], that is a problem to take up with Congress.”
MediNatura, 496 F. Supp. 3d at 459.
21
MediNatura’s second suggestion—delaying withdrawal or
providing a grace period—we find similarly unavailing. The
FDA indicated its interest in reevaluating CPG 400.400
beginning in 2015 and its intention to withdraw CPG 400.400
in 2017. As the district court recognized, manufacturers that
wished to protect themselves “could have petitioned for
GRAS/E status or filed an NDA in the years between the
FDA’s initial announcement of its intentions and the eventual
withdrawal.” Id.7 Further, even under CPG 400.400, the FDA
had the authority to enforce FDCA premarket approval
requirements against homeopathic drugs. From the FDA’s
perspective, delaying withdrawal or providing a grace period
would make little sense because it could nonetheless take
enforcement actions against homeopathic drug manufacturers
with CPG 400.400 in place. Moreover, the FDA explicitly
addressed why it withdrew CPG 400.400 “at this time” instead
of waiting for a finalized guidance—in effect, delaying the
Withdrawal. Withdrawal of Guidance, 84 Fed. Reg. at 57,440–
41. The FDA sought to replace “outdated policy” that no longer
reflected its thinking in light of recent public health concerns.
Id. at 57,441. In doing so, the FDA reasonably concluded that
it was more important to subject homeopathic drug
manufacturers to a risk-based regime than to perpetuate a non-
risk-based regime.
2. Irreparable Harm and Public Interest/Balance of
Equities
Finally, we agree with the district court that MediNatura
did not meet the remaining preliminary injunction
requirements. MediNatura did not demonstrate that any harm
7
Because MediNatura submits that the NDA process is
prohibitively expensive and impossible for homeopathic drug
makers to meet, a grace period or delay would most likely have been
of no benefit.
22
it is suffering is directly traceable to the withdrawal of CPG
400.400. See Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674
(D.C. Cir. 1985) (per curiam) (“movant must show that the
alleged harm will directly result from the action which the
movant seeks to enjoin”). During CPG 400.400’s long
existence, the FDA has maintained its discretion to enforce the
FDCA against homeopathic drugs if warranted. And the FDA
in fact enforced the FDCA’s preapproval requirements against
certain homeopathic drugs during that time. The FDA
identified MediNatura’s Products as particularly worrisome
because they are injectable products, labeled as containing
potentially toxic and harmful ingredients. Therefore, even if the
FDA were required to maintain CPG 400.400, the FDA would
not be required to admit MediNatura’s Products or be
prevented from taking similar steps against future shipments of
the Products.
If the government is the party sought to be enjoined, the
public interest and balance of equities factors merge. Nken v.
Holder, 556 U.S. 418, 435 (2009). Here, the merged factors
weigh against equitable relief. The public has a strong interest
in the enforcement of the FDCA to protect public health.
Requiring the FDA to keep in place a guidance document that
no longer reflects its current enforcement thinking, particularly
in light of present public health concerns related to
homeopathic drugs, is not in the public interest. Moving
towards a risk-based approach to enforcement will enable
greater compliance with the FDCA.
For the foregoing reasons, we affirm the district court’s
judgment. Should MediNatura choose to challenge the FDA’s
February 22 final action, it may seek to do so in district court
subject to that court’s discretion.
So ordered.