MD Pharmaceutical, Inc. v. Drug Enforcement Administration

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 17, 1997 Decided January 16, 1998

No. 96-1256

MD Pharmaceutical, Inc.,

Petitioner

v.

Drug Enforcement Administration,

Respondent

Mallinckrodt Chemical, Inc.,

Intervenor for Respondent

__________

On Petition for Review of an Order of the

United States Drug Enforcement Agency

__________

John R. Fleder argued the cause for petitioner, with whom
Tish E. Pahl was on the briefs.

Lena Watkins, Associate Deputy Chief, United States De-
partment of Justice, argued the cause for respondent, with

whom John C. Keeney, Acting Assistant Attorney General,
was on the brief.

Steven J. Poplawski and Scott M. Badami were on the
brief for intervenor.

Before: Williams, Sentelle and Rogers, Circuit Judges.

Opinion for the court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: This case arises out of the Drug
Enforcement Administration's ("DEA") approval of an appli-
cation submitted by Mallinckrodt Chemical, Inc. ("Mallinck-
rodt") for registration as a bulk manufacturer of methylpheni-
date, a generic form of the drug commonly known by the
brand name of Ritalin. MD Pharmaceutical, Inc. ("MD"), a
current producer of methylphenidate, petitions for review of
three decisions made by DEA, namely: (1) the decision to
permit withdrawal of Mallinckrodt's two previous applications
for registration as a bulk manufacturer of methylphenidate;
(2) the order terminating the hearings on those two applica-
tions upon their withdrawal; and (3) the order approving the
issuance of the certificate of registration to Mallinckrodt. We
conclude that MD, as a current manufacturer of the drug, has
standing to seek review of the actions taken by DEA. We
also conclude that MD's objections to DEA's decisions are
without merit, and accordingly deny the petition for review.

I.

The Controlled Substance Act ("CSA") establishes a com-
prehensive regulatory system that controls the manufacture,
distribution, and use of hazardous drugs. 21 U.S.C. s 801 et
seq. The level of restriction on any given drug is determined
by its classification into one of five schedules. The Adminis-
trator of DEA, having received authority from the Attorney
General by delegation, 28 C.F.R. s 0.100(b), is required to
classify each drug into a schedule, depending upon factors
such as its potential for abuse and its risk to the public
health. 21 U.S.C. s 811. Methylphenidate is a Schedule II
drug, which means that it has a high potential for abuse, that
it has a currently accepted medical use, and that abuse of the

drug may lead to severe psychological or physical depen-
dence. Id. at s 812(b)(2).

A company seeking to become a manufacturer of a Sched-
ule II drug must apply for and obtain a certificate of registra-
tion from DEA. 21 U.S.C. s 822(a). The Administrator
grants a certificate only if he determines that "registration is
consistent with the public interest" when measured against a
six-part test created by Congress. 21 U.S.C. s 823(a)(1)-(6).
When DEA receives such an application for registration, it
must publish a notice in the Federal Register, and send
individual notices to other applicants and to currently regis-
tered bulk manufacturers of the drug. 21 C.F.R.
s 1301.43(a) (1996). The other applicants and registrants are
free to file comments on the proposed registration within 60
days. Id. Registered manufacturers had the additional
right, prior to July 20, 1995, to request and obtain an eviden-
tiary hearing on an applicant's proposed registration. 21
C.F.R. s 1301.43 (1994). Ultimately, DEA either issues the
certificate of registration, or issues an order to show cause as
to why the application should not be denied. 21 U.S.C.
s 824(c).

On May 13, 1994, DEA announced that Mallinckrodt had
applied for registration as a bulk manufacturer of methylphe-
nidate. MD, as a registered manufacturer of the drug,
received notice of the application and promptly requested an
evidentiary hearing. On January 30, 1995, Mallinckrodt filed
a second application for registration, this time for methylphe-
nidate and other drugs. MD once again objected to Mal-
linckrodt's application with respect to methylphenidate. The
parties agreed to consolidate the proceedings for the two ap-
plications. An Administrative Law Judge ("ALJ") presided
over the first stage of an evidentiary hearing from May 2-5,
1995, but did not announce a decision at that time.

On June 20, 1995, DEA issued a final rule altering the
certification process in two pertinent respects. Under the
amended regulations, which went into effect on July 20 of
that year, registered manufacturers retained the right to
comment on another firm's application, but no longer had the
right to a hearing on an application other than their own. 60

Fed. Reg. 32,099-101 (codified at 21 C.F.R. s 1301.43(a))
(1996). The second alteration concerned an applicant's ability
to withdraw a pending application. Under the old rules, an
application could be withdrawn without the Administrator's
permission at any time before the date on which an applicant
receives an order to show cause, or before the date on which
a notice of hearing on the application was published, whichev-
er came first. 21 C.F.R. s 1301.37(a) (1994). Because the
new regulations eliminated the opportunity for third parties
to obtain a hearing, the new rules stated that an application
could be withdrawn without the permission of the Administra-
tor at any time before the applicant receives an order to show
cause. 21 C.F.R. s 1301.37(a) (1996). Under both the old
and the new regulations, an applicant could also amend or
withdraw an application "with permission of the Administra-
tor at any time where good cause is shown by the applicant or
where the amendment or withdrawal is in the public interest."
21 C.F.R. s 1301.37(a) (1994); 21 C.F.R. s 1301.37(a) (1996).

On July 20, 1995, the date that the new regulations went
into effect, Mallinckrodt submitted a letter to DEA request-
ing withdrawal of its 1994 and 1995 applications. On the
same day, Mallinckrodt submitted a new application for regis-
tration as a bulk manufacturer of methylphenidate under the
newly amended regulations. MD strenuously opposed the
withdrawal of the applications, arguing that Mallinckrodt was
simply trying to circumvent the hearing requirement under
the old rules. DEA nonetheless approved the withdrawal of
Mallinckrodt's first two applications. The ALJ subsequently
terminated all proceedings with respect to those two applica-
tions. DEA later announced that Mallinckrodt's third appli-
cation would be considered under the amended rules.

MD filed two petitions for review with this court, challeng-
ing DEA's decision to permit withdrawal of the first two
applications and to terminate the hearings. We dismissed the
petitions on ripeness grounds, explaining that DEA had not
yet ruled on Mallinckrodt's third application for registration.
MD Pharmaceutical, Inc. v. Drug Enforcement Administra-
tion, Nos. 95-1474, 95-1475, 1996 WL 135318 (D.C. Cir. Feb.
2, 1996). We made clear that the dismissal was "without

prejudice to any right MD may have to challenge Mallin-
ckrodt's withdrawal of its original application to bulk manu-
facture methylphenidate by way of a petition for review of the
DEA's final resolution of Mallinckrodt's pending application."
Id.

In a subsequent comment arguing against Mallinckrodt's
third application, MD raised a number of issues, including
Mallinckrodt's alleged history of noncompliance with DEA
and FDA regulations. MD also took the position that there
was no need for an additional manufacturer of this drug
because the market was sufficiently competitive. On January
31, 1996, Mallinckrodt filed a fourth application adding other
drugs to its methylphenidate application. MD filed com-
ments and incorporated by reference its earlier objections.
On July 16, 1996, DEA granted Mallinckrodt's fourth applica-
tion to be a bulk manufacturer of methylphenidate. The
agency published a Notice that briefly explained its decision
and responded to a number of issues raised by MD. 61 Fed.
Reg. 37,079-81. The agency declined to take action on the
third application filed July 20, 1995.

In the present action, MD seeks review of three decisions
by DEA: first, the decision to permit withdrawal of Mallin-
ckrodt's first two applications; second, the decision to termi-
nate the hearings on those two applications; and third, the
order approving Mallinckrodt's registration as a producer of
methylphenidate.

II.

Before reaching the merits, we must address the issue of
whether MD has standing to challenge the actions taken by
DEA. The government takes the position that MD has not
satisfied the requirements of either constitutional or pruden-
tial standing. We reject both contentions.

The well-established "irreducible constitutional minimum"
of standing requires three elements:

First, the plaintiff must have suffered an injury in fact--
an invasion of a legally protected interest which is (a)

concrete and particularized and (b) actual or imminent,
not conjectural or hypothetical. Second, there must be a
causal connection between the injury and the conduct
complained of--the injury has to be fairly traceable to
the challenged action of the defendant.... Third, it
must be likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)
(internal citations and punctuation omitted). DEA does not
allege that MD has not suffered an injury in fact, nor that the
action taken by the government has not caused the alleged
injury. Indeed, such arguments would be unavailing in this
case. We have previously held that "increased competition
represents a cognizable Article III injury," Liquid Carbonic
Industries Corp. v. FERC, 29 F.3d 697 (D.C. Cir. 1994), and
MD's competitive injury is fairly traceable to DEA's decision
to issue a certificate of registration to Mallinckrodt.

DEA, however, claims that MD lacks standing under Arti-
cle III because its alleged injury is not redressable by the
relief it seeks in this case. The government's argument is
based upon 21 U.S.C. s 824(c), which provides that denial,
revocation, or suspension of registration shall not occur until
the Administrator "serve[s] upon the applicant or registrant
an order to show cause why registration should not be denied,
revoked, or suspended." Id. The statute, in other words,
precludes the Administrator from denying a registration until
it has issued an order to show cause. The government
submits that MD's alleged injury is not redressable because
we cannot grant relief resulting in the outright denial of
Mallinckrodt's registration. Whether we remand for further
review, or vacate the order granting registration, Mallin-
ckrodt's registration cannot be denied without the Adminis-
trator taking the additional step of issuing an order to show
cause. The decision to issue an order to show cause, the
argument proceeds, is a discretionary act akin to the decision
to initiate an enforcement proceeding, which courts presump-
tively lack the authority to mandate. See Heckler v. Cheney,
470 U.S. 821 (1985). Because denial of the registration
cannot occur without issuance of an order to show cause, and

because the decision to issue such an order is presumptively
unreviewable, a decision from us could not possibly provide a
remedy that would redress the injury alleged by MD.

The government's argument breaks down at the outset
because it mischaracterizes the relief sought by petitioner. A
central premise of the government's argument is that MD is
seeking the outright denial of the registration of Mallin-
ckrodt. In fact, MD's petition seeks not the denial of Mallin-
ckrodt's registration, but rather the reversal of DEA's deci-
sion to approve Mallinckrodt's application. See MD Reply
Br. at 4 ("Vacating Mallinckrodt's approval is precisely the
relief MD seeks."). MD is challenging, in other words, an
affirmative licensing decision already made by DEA. The
sort of problem encountered by the Court in Heckler thus
does not arise in this case, both because petitioner is not
challenging the agency's refusal to act, and because the
requested relief does not depend upon the exercise of discre-
tion by the executive branch. MD's alleged injury, in sum, is
redressable because vacating the approval of Mallinckrodt's
application would secure the "relief from competition to which
it says it is entitled under the statute." Bristol-Myers
Squibb Co. v. Shalala, 91 F.3d 1493, 1499 (D.C. Cir. 1996).

The government also takes the position that MD lacks
prudential standing under the zone of interests test, which
asks whether "the interest sought to be protected by the
complainant is arguably within the zone of interests to be
protected or regulated by the statute ... in question." Asso-
ciation of Data Processing Serv. Orgs., Inc. v. Camp, 397
U.S. 150, 153 (1970). This test is designed to exclude those
plaintiffs with interests "so marginally related to or inconsis-
tent with the purposes implicit in the statute that it cannot
reasonably be assumed that Congress intended to permit the
suit." Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 399
(1987). The United States argues that MD does not fall
within the zone of interests of the statute at hand because
"there is nothing in the CSA or its legislative history which
indicates an intent to protect the competitive advantage of a
single registrant."

Our decisions have made clear, however, that a competitor
need not be an intended beneficiary to fall within the zone of
interests of an entry-restricting statute. We have previously
said that litigants fall within the zone of interests if they are
regulated by the particular agency action being challenged, or
if they are considered to be protected by the statute in
question. First National Bank and Trust Co. v. National
Credit Union Admin., 988 F.2d 1272, 1275 (D.C. Cir. 1993).
Litigants are considered to be "protected" by the statute if
they are intended beneficiaries of the legislation, or if they
are suitable challengers of the agency action because their
interests are sufficiently congruent with the interests of the
intended beneficiaries. Id.

We hold that MD, as a manufacturer facing potential
competition from Mallinckrodt, is a suitable challenger and
thus falls within the zone of interests of the statute. When a
regulatory system "by its very nature restricts entry into a
particular field or transaction," firms that are already operat-
ing in the regulated industry have an interest in enforcing the
restrictions on potential market entrants. Panhandle Pro-
ducers and Royalty Owners Assoc. v. Economic Regulatory
Admin., 822 F.2d 1105, 1109-10 (D.C. Cir. 1987). Even
though competitors may be motivated by something other
than a desire to advance the public interest, they nonetheless
fall within the zone of interests of an entry-restricting statute
because their interests "are generally congruent with a statu-
tory purpose to restrict entry." Id. The Controlled Sub-
stance Act is a quintessential entry-restricting statute. Ev-
ery firm that manufacturers a controlled substance must
obtain a certificate of registration from the Administrator.
21 U.S.C. s 822(a). When considering an application, the
Administrator must decide whether registration would be in
the public interest, taking into account whether effective
controls against conversion could be achieved by limiting the
total number of registered manufacturers. Id. at s 823(a)(1).
The Administrator is also required to set the aggregate
quantity of drugs that are produced each year, and to estab-
lish individual production quotas for each registered manufac-
turer. Id. at s 826(a) & (b). Even more so than traditional
licensees, registered manufacturers of controlled substances

have an interest in limiting the number of producing firms,
because each new market entrant will produce a percentage
of the aggregate production quota that would otherwise be
produced by existing firms. There is every reason to believe
that MD's "interest in patrolling a statutory picket line will
bear some relation to the congressional purpose" of the CSA.
See First National Bank, 988 F.2d at 1278. We think that
MD, as a registered manufacturer challenging another firm's
entry into the market, at least "arguably" falls within the
zone of interests sought to be protected by the entry barriers
of the CSA. Association of Data Processing Serv. Orgs., 397
U.S. at 153.

III.

Turning to the merits, we first consider MD's objections to
the approval of Mallinckrodt's final application to become a
registered manufacturer of methylphenidate. MD makes two
basic arguments against DEA's decision to register Mallin-
ckrodt. First, MD takes issue with the administrative record
compiled by DEA, claiming that portions of the record were
improperly withheld from public view, and that the record did
not contain all relevant evidence. Second, MD asserts that
DEA failed to issue an adequate explanation for its decision
to approve Mallinckrodt's application.

A.

MD makes two objections to the Certified List of Record
submitted by DEA to this court pursuant to Fed. R. App. P.
17(b). The first objection is that DEA has refused to disclose
to MD five of fifteen documents included in the Certified
List--a letter of admonition from DEA to Mallinckrodt, Mal-
linckrodt's responsive letter, and three internal DEA docu-
ments. MD takes the position that it must have complete
access to all documents considered by DEA, even if they are
deemed sensitive and contain confidential or trade secret
information. In MD's view, DEA has a duty to divulge to
interested persons all documents that were part of the record,
lest the agency's action be shrouded in administrative secre-
cy.

We find nothing in the statute or the regulations that gives
third parties such sweeping access to sensitive agency materi-
als. The amended regulations do allow registered bulk manu-
facturers to file comments on or objections to a proposed
registration, 21 C.F.R. s 1301.43(a) (1996), and MD has re-
peatedly availed itself of that opportunity. The regulations
do not, however, give manufacturers the right to a hearing on
another firm's application, nor the right to discover docu-
ments considered by DEA during the application process.
Id. Indeed, even in those instances in which a hearing is
required, participants are not entitled to inspect "[a]ny confi-
dential or trade secret information disclosed in conjunction
with an application," nor "[a]ny material contained in any
investigatory report, memorandum, or file, or case report
compiled by the Administration." 21 C.F.R. s 1316.46(b)(3)-
(4). MD has pointed us to no countervailing authority in the
statute or the regulations that would confer on it an entitle-
ment to view such documents.

Without any support in the statute or regulations, MD
relies upon three cases that dealt with disclosure of agency
materials: Louisiana Assoc. of Independent Producers and
Royalty Owners v. FERC, 958 F.2d 1101 (D.C. Cir. 1992);
United States Lines, Inc. v. Federal Maritime Comm'n, 584
F.2d 519 (D.C. Cir. 1978); and Home Box Office, Inc. v. FCC,
567 F.2d 9 (D.C. Cir. 1977). We view such cases as readily
distinguishable. MD finds principal support in U.S. Lines, in
which we reviewed an order from the Federal Maritime
Commission approving an amendment to a joint service
agreement between two common carriers. The Commission
addressed a crucial overtonnage issue by stating only that it
had "examined that problem carefully, in the light of the data
then available to the Commission," which consisted of "the
submissions of Protestant and Proponents, the identities of
Protestant and Proponents, and [t]he reliable data reposing in
the files of the Commission." U.S. Lines, 584 F.2d at 533.
Rejecting the agency's decision, we held that we could not
determine whether the action was arbitrary or capricious
because the data relied upon by the Commission were neither

included in the record nor disclosed to this court. Id. We
observed that we "simply cannot determine whether the final
agency decision reflects the rational outcome of the agency's
consideration of all relevant factors when we have no idea
what factors or data were in fact considered by the agency."
Id. Unlike the situation in U.S. Lines, the documents relied
upon by DEA in this case are not a complete mystery: ten of
the fifteen documents have been placed in the public file, and
the remainder have been identified but not disclosed because
they contain sensitive material. The agency in U.S. Lines did
not justify its refusal to disclose identified documents because
they were confidential. That agency issued a substantive
decision asserting as its operative basis undisclosed and in-
deed unidentified "reliable data" in its files. U.S. Lines, then,
is in no way parallel to the present case and offers no support
for MD's position. It did not in any fashion deal with the
question of whether a third-party challenger must have com-
plete access to all documents (including those that are sensi-
tive) that contributed to an agency's decision-making process.

MD's reliance on the other two cases is equally misplaced.
Home Box Office involved a challenge to a final rule that was
based in part upon information that the Federal Communica-
tions Commission gathered from the public through ex parte
communications. Home Box Office, 567 F.2d at 51-59. MD
latches onto a number of passages from our opinion, including
the observation that "where, as here, an agency justifies its
actions by reference only to information in the public file
while failing to disclose the substance of other relevant infor-
mation that has been presented to it, a reviewing court cannot
presume that the agency has acted properly...." Id. at 54.
Such comments must be understood, however, within the
context of a discussion of the propriety of ex parte communi-
cations when an agency is engaged in notice and comment
rulemaking governed by Section 553 of the Administrative
Procedure Act ("APA"), 5 U.S.C. s 553, which makes it quite
distinct from the case at hand. See Elcon Enterprises, Inc. v.
Washington Metropolitan Area Transit Authority, 977 F.2d
1472, 1481 (D.C. Cir. 1992) (reading Home Box Office as
applying only to rulemaking).

The last case cited by MD, Louisiana Assoc., did deal with
the disclosure of materials considered by an agency when
making a licensing decision. 958 F.2d at 1115. That case
involved a challenge brought by a group of environmentalists
to FERC's decision to certify a proposed pipeline. The
environmentalists argued, among other things, that the Com-
mission's decision was not supported by substantial evidence
because they "did not have an adequate opportunity to criti-
cize the evidence submitted by Project proponents." Id. We
rejected the environmentalists' challenge on the grounds that
they in fact had access to the information they were seeking.
Id. Louisiana Assoc., however, did not deal with the ques-
tion of whether a third party has a right to obtain confidential
information considered by an agency in the course of making
a licensing decision. MD, in other words, has presented us
with no support for the proposition that a party challenging
an agency's decision to issue a license to another firm must
have unfettered access to all information considered by the
agency.

Such a proposition, we should note, would be rather re-
markable. Even under the Freedom of Information Act
("FOIA"), 5 U.S.C. s 552 et seq., an agency is not required to
release materials that are considered "trade secrets and
commercial or financial information obtained from a person
and privileged or confidential." 5 U.S.C. s 552(b)(4).

MD's second objection goes to the contents of the adminis-
trative record. MD claims that DEA's decision to register
Mallinckrodt must be set aside as arbitrary and capricious
because DEA failed to compile a complete administrative
record. In particular, MD faults DEA for not including the
record from the hearing that occurred in May of 1995, in
which MD presented evidence against Mallinckrodt's first two
applications. MD also suggests that DEA violated Fed. R.
App. P. 16(a) by omitting the order under review, which is the
decision to approve Mallinckrodt's fourth application on July
16, 1996. In MD's view, the failure of DEA to include these
(and perhaps other) documents in the administrative record
demonstrates that DEA approved Mallinckrodt's application
without having considered all relevant evidence.

The contents of the record provide no basis for vacating the
registration of Mallinckrodt. MD does not allege that DEA
failed to include information that it submitted regarding
Mallinckrodt's fourth application, which is the application that
DEA ultimately approved. What MD alleges is that DEA did
not additionally include materials that were compiled with
respect to Mallinckrodt's first two applications. More specifi-
cally, MD is under the impression that DEA was required to
include in the record information presented at a hearing in
May of 1995, even though such evidence was offered with
respect to Mallinckrodt's first two applications, which were
later withdrawn. If MD believed that such information would
be material to DEA's consideration of the fourth application,
MD had every opportunity to include evidence from the 1995
hearing in the comments subsequently submitted to DEA.
To the extent that such information was not submitted to
DEA with respect to Mallinckrodt's fourth application, that
failure runs to MD, and not to DEA. DEA cannot be faulted
for omitting evidence from the record that was never submit-
ted in response to Mallinckrodt's fourth application.

The omission of the order under review from the record is
also not fatal to the registration of Mallinckrodt. The Feder-
al Rules of Appellate Procedure provide that the record shall
consist of "[t]he order sought to be reviewed or enforced, the
findings or report on which it is based, and the pleadings,
evidence and proceedings before the agency." Fed. R. App.
P. 16(a). In lieu of filing the record with the court, the
agency may file "a certified list of all documents, transcripts
of testimony, exhibits and other material comprising the
record, or a list of such parts thereof as the parties may
designate, adequately describing each, and the filing of the
certified list shall constitute filing of the record." Fed. R.
App. P. 17(b). MD protests that the certified list submitted
by DEA did not include the order that approved Mallinck-
rodt's fourth application. As a factual matter, MD is correct
in pointing out that the certified list does not include the
agency's decision of July 16, 1996, to register Mallin-
ckrodt. Yet this omission is of little consequence, and cer-

tainly does not warrant vacatur of the registration. The
Rules allow parties to supply materials that were improperly
omitted from the record. Fed. R. App. P. 16(b). Logically,
this liberality would encompass materials omitted from the
certified list; particularly so as the parties did include the
order in the Joint Appendix, making it available for our
perusal. We attach no material significance to the fact that
DEA neglected to include the order under review when it
certified a list of all documents comprising the record in this
case.

B.

MD also takes the position that DEA's approval of Mal-
linckrodt's application was arbitrary and capricious because
the agency did not provide a reasoned explanation for its
decision, in violation of the APA, 5 U.S.C. s 706(2)(A). MD
emphasizes that it submitted detailed comments to DEA
regarding Mallinckrodt's proposed registration, which re-
ceived, in MD's estimation, only short-shrift attention from
the agency. 61 Fed. Reg. 37,079-81 (July 16, 1996). Peti-
tioner reiterates several of the objections that it unsuccessful-
ly raised before DEA, including Mallinckrodt's alleged history
of noncompliance with DEA and FDA regulations, and evi-
dence suggesting that there is adequate competition in the
methylphenidate market. MD faults DEA for not dealing
with these and other objections in greater detail and with
greater specificity. Petitioner also criticizes the agency for
failing to identify specific facts to support its conclusion that
registration of Mallinckrodt would be consistent with the
public interest.

The judiciary has a responsibility under the APA to set
aside agency actions that are "arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law." 5
U.S.C. s 706(2)(A). "The scope of review under the 'arbi-
trary and capricious' standard is narrow and a court is not to
substitute its judgment for that of the agency." Motor
Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983). We will not disturb the decision of an
agency that has "examine[d] the relevant data and articu-
late[d] a satisfactory explanation for its action including a

rational connection between the facts found and the choice
made." Id. (internal quotation marks and citations omitted).

We hold that DEA gave an adequate explanation for its
decision to register Mallinckrodt. DEA published an expla-
nation that spans almost eight columns in the Federal Regis-
ter, and is largely devoted to answering the many objections
raised by MD during the application process. 61 Fed. Reg.
37,079-81. Regarding the issue of regulatory violations, for
example, DEA stated that it had investigated Mallinckrodt,
including "inspection and testing of the company's physical
security systems, audits of the company's records, verification
of the company's compliance with state and local laws, and a
review of the company's background and history," and con-
cluded that registration of Mallinckrodt would be in the public
interest. Id. at 37,080. DEA explained that Mallinckrodt is
currently registered to manufacture other Schedule II drugs,
that its past regulatory problems were not significant, and
that the company acted expeditiously to address those prob-
lems to the satisfaction of DEA. Id. DEA also explained
that Mallinckrodt has "demonstrated its technical and manu-
facturing expertise with respect to other controlled sub-
stances" over the past twenty-five years, that there is every
reason to believe that the company will continue this practice
in the future, and that the registration of Mallinckrodt will
not undermine the agency's efforts to maintain effective
controls against diversion. Id. at 37,080-81. Taken as a
whole, DEA's explanation demonstrates that it examined the
data, considered the relevant factors, and made a reasonable
judgment based on the record. We conclude that the expla-
nation offered by DEA passes muster under the APA.

IV.

We now turn to MD's objections to the handling of Mal-
linckrodt's first two applications to become a registered man-
ufacturer of methylphenidate. MD takes issue with two
decisions that were made during the application process,
namely DEA's decision to permit Mallinckrodt to withdraw
its first two applications, and the subsequent termination of
the hearings with respect to those applications. MD argues

that withdrawal of the applications was improper because
DEA did not adequately discuss the grounds for withdrawal,
and because DEA failed to distinguish cases suggesting that
an applicant cannot unilaterally withdraw an application once
hearings have begun. MD also argues that termination of
the hearings was unlawful because it was based upon a
retroactive application of the amended regulations, which
stripped third parties of the right to a hearing on another
firm's application.

We decline to reach the merits of MD's objections, howev-
er, because there is no longer any live issue with respect to
Mallinckrodt's first two applications. MD challenged DEA's
decision to approve the fourth application submitted by Mal-
linckrodt, and we have concluded that DEA's registration
decision was in accordance with law. Mallinckrodt is a regis-
tered bulk manufacturer of methylphenidate. All questions
concerning Mallinckrodt's first two applications are moot.
The object of those applications--receipt of a certificate of
registration--has been lawfully achieved via DEA's approval
of Mallinckrodt's fourth application. If we were to hold that
DEA acted unlawfully, and thus require the agency to reopen
the hearings and consider the first two applications, there
would be nothing at stake with respect to those applications
because Mallinckrodt has already achieved the status of a
registered manufacturer. Insofar as MD claims that DEA's
disposition of the first and second applications somehow
tainted the grant of the third, such a claim must rest on the
theory that third parties acquire, at the time an application is
filed, a vested right in the procedural rules then applicable,
which somehow is forever attached to later applications on
the same subject. This is altogether untenable. See Berger-
co Canada v. United States Treasury Dep't, 129 F.3d 189,
194-95 (D.C. Cir. 1997). Accordingly, we will not further
discuss the issues relating to the first two applications sub-
mitted by Mallinckrodt.

V.

For the foregoing reasons, MD's petition for review is
denied.