John Doe, Inc. v. Drug Enforcement Administration

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 12, 2007 Decided April 27, 2007

No. 06-1270

JOHN DOE, INC.,
PETITIONER

v.

DRUG ENFORCEMENT ADMINISTRATION,
RESPONDENT

Consolidated with
06-5201

On Petition for Review of an Order of the
United States Drug Enforcement Agency

Samuel H. Israel argued the cause for petitioner/appellant.
With him on the briefs were Joseph P. Esposito and Terence J.
Lynam.

Alisa B. Klein, Attorney, U.S. Department of Justice, argued
the cause for respondent/appellees. With her on the brief were
Peter D. Keisler, Assistant Attorney General, Jeffrey A. Taylor,
U.S. Attorney, Mark B. Stern, Attorney, and Daniel Dormont,
Senior Attorney, Drug Enforcement Administration.
 2

Before: GINSBURG, Chief Judge, and BROWN and
KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

Brown, Circuit Judge: John Doe, Inc.1 seeks review of the
DEA’s denial of a permit to import for bioequivalency testing a
generic version of an FDA-approved drug. Doe challenges the
permit denial as contrary to law, arbitrary and capricious, and
violative of the Fifth Amendment to the United States Constitu-
tion. Doe further argues the district court erred in dismissing its
complaint for lack of jurisdiction. We conclude the district
court correctly determined exclusive jurisdiction over Doe’s
claims lies in the courts of appeals pursuant to 21 U.S.C. § 877.
We further conclude the DEA acted within its discretion in
denying Doe’s permit application. We accordingly affirm the
district court and deny Doe’s petition.

I

Doe, a drug manufacturer, hopes to market a generic
version of the drug Marinol — an FDA-approved drug contain-
ing the same active ingredient as marijuana and used to treat
nausea and loss of appetite in cancer and AIDS patients. To get
approval to market its generic alternative, Doe must successfully
complete “bioequivalency” studies, demonstrating to the FDA
that its drug is in all relevant aspects equivalent to Marinol. In
order to conduct the necessary bioequivalency testing, Doe
seeks to immediately import over half a million capsules of its
drug from its overseas manufacturing partner.

1
This case was filed under seal pursuant to Petitioner/Appellant’s
request. Accordingly, the Petitioner/Appellant is referred to as “John
Doe, Inc.” or “Doe” throughout this opinion.
 3

Doe’s plans, however, have been stymied by the DEA.
Pursuant to the Controlled Substances Act (“CSA”), the DEA
regulates importation of “controlled substances.” 21 U.S.C.
§ 952.2 Under the CSA, controlled substances are categorized
into five schedules based on their potential for abuse or depend-
ence, their accepted medical use, and their accepted safety for
use under medical supervision. Schedule I is the most strin-
gently controlled, and schedule V the least. Id. § 812. Only
schedules I and III are at issue here. Schedule I substances are
subject to very strict controls because they have “no currently
accepted medical use in treatment in the United States,” have “a
lack of accepted safety for use . . . under medical supervision,”
and have “a high potential for abuse.” Id. § 812(b)(1). Schedule
III substances, in contrast, have “a currently accepted medical
use in treatment in the United States,” and less potential for
abuse. Id. § 812(b)(3). Controlled substances were initially
allocated to the various schedules by Congress when it first
enacted the CSA. Gettman v. DEA, 290 F.3d 430, 432 (D.C.
Cir. 2002). Thereafter, Congress assigned primary responsibil-
ity to the DEA to add or remove substances from the schedules,
or to transfer a drug or substance between schedules. Id. (citing
21 U.S.C. § 811(a)).

Dronabinol, the active ingredient in both Marinol and Doe’s
generic alternative, has been assigned to schedule I since
Congress first enacted the CSA in 1970. See CSA, Pub. L. No.
91-513, § 202, schedule I ¶ (c)(17), 84 Stat. 1236, 1249 (1970).
Dronabinol remains in schedule I today, with one notable
exception. The FDA, after extensive testing and research,
approved the drug Marinol — described as “[d]ronabinol
(synthetic) in sesame oil and encapsulated in a soft gelatin
capsule” — for treatment of nausea associated with cancer

2
The CSA grants regulatory authority to the Attorney General,
21 U.S.C. §§ 821, 871(b), who has in turn delegated that authority to
the Administrator of the DEA, 28 C.F.R. § 0.100(b).
 4

patients and anorexia associated with weight loss in AIDS
patients. 51 Fed. Reg. 17,476, 17,478 (1986). As a result of this
FDA approval, the DEA eventually assigned “Dronabinol
(synthetic) in sesame oil and encapsulated in a soft gelatin
capsule in a U.S. Food and Drug Administration approved
product” to schedule III. 21 C.F.R. § 1308.13(g)(1) (emphasis
added); 64 Fed. Reg. 35,928 (1999). DEA was careful to stress,
however, that it was rescheduling dronabinol only “in a FDA
approved drug product.” 51 Fed. Reg. at 17,477. All other
“mixtures, compounds and preparations” containing dronabinol
“remain[ed] in Schedule I.” Id. In practical effect, only the
brand name drug Marinol was moved to schedule III.

When Doe applied for a permit to import its drug containing
dronabinol, it was registered with the DEA to import schedule
III, but not schedule I, substances. On February 28, 2006, Doe
applied for a permit to import 1,200 capsules of its drug to begin
equivalency testing. On its permit application, instead of using
the general DEA code number for dronabinol, Doe listed the
DEA code number for “Dronabinol (synthetic) in sesame oil and
encapsulated in a soft gelatin capsule in a U.S. Food and Drug
Administration approved product.” The DEA issued the permit,
and Doe imported the 1,200 capsules.

Shortly thereafter, Doe sought another permit to import
525,000 capsules of its drug, again using the DEA code number
for “Dronabinol . . . in a U.S. Food and Drug Administration
approved product.” This time, however, the large quantity
prompted further investigation by the DEA. When the DEA
learned that the substance Doe sought to import was not in fact
Marinol, the DEA denied Doe’s permit application. Because
Doe’s drug containing dronabinol has not been approved for
marketing by the FDA, the DEA classifies the drug as falling
within the general category of “dronabinol” in schedule I, not
schedule III’s narrow description of “[d]ronabinol . . . in a U.S.
 5

Food and Drug Administration approved product.” 21 C.F.R.
§ 1308.13(g)(1) (emphasis added). Thus, Doe found itself in a
catch-22 of sorts: while it sought to import its drug under
schedule III so it could conduct testing necessary to obtain FDA
approval, the DEA’s interpretation of its regulatory provision
effectively prohibits importation of a drug containing dronabinol
under schedule III until the drug is FDA approved.

The DEA provided Doe written notice of its permit denial
on June 12, 2006. The letter advised that Doe could request an
agency hearing within thirty days. Doe opted not to pursue
further agency consideration, but instead sought immediate
redress from the courts.3 Because the law governing such
appeals is unsettled, Doe filed two actions — one in district
court, see John Doe, Inc. v. Gonzalez, No. 06-966, 2006 WL
1805685 (D.D.C. June 29, 2006), and one directly in this court.

On June 29, 2006, the district court dismissed Doe’s case
for lack of subject matter jurisdiction. In a lengthy and well-
reasoned opinion, the court considered whether the DEA’s
denial of Doe’s permit was sufficiently “final” to permit judicial
review under the Administrative Procedure Act (“APA”), see 5
U.S.C. § 704, and, even if sufficiently final, whether 21 U.S.C.
§ 877 nonetheless divests the district court of original jurisdic-
tion over Doe’s claims, see id. (locating original jurisdiction in
the courts of appeals over “[a]ll final determinations, findings,
and conclusions” of the DEA under the CSA). Ultimately, the
district court concluded it lacked jurisdiction. The court
reasoned that, at least insofar as Doe’s claims are concerned,

3
Because Doe chose to forgo its administrative remedies, the
agency’s decision became final thirty days after Doe’s receipt of the
DEA’s June 12, 2006 letter. See Letter from Joseph T. Rannazzisi,
Deputy Assistant Administrator, DEA Office of Diversion Control, to
John Doe, Inc. (June 12, 2006) (Administrative Record at 117)
(hereinafter June 12, 2006 Letter); 21 C.F.R. § 1312.44.
 6

§ 877’s reference to “final determinations, findings, and conclu-
sions” encompasses the APA’s requirement of final agency
action. Thus, either the permit denial wasn’t sufficiently final
to confer jurisdiction under the APA, or, in the event it was
sufficiently final, proper recourse lay in the court of appeals
pursuant to § 877. Either way, the district court concluded it did
not have jurisdiction, and dismissed Doe’s complaint.

Doe appealed the dismissal. That case has been consoli-
dated with Doe’s petition seeking direct review in this court
under 21 U.S.C. § 877, and we address both here. While the
district court found it possible to resolve Doe’s case without
reaching a definitive conclusion on the issues of finality and the
scope of our exclusive direct-review jurisdiction under 21
U.S.C. § 877, we must decide both issues.

II

Doe continues to press the argument that the DEA’s denial
of Doe’s permit was not a “final determination[], finding[], [or]
conclusion[]” sufficient to trigger this court’s original jurisdic-
tion under 21 U.S.C. § 877. But if the permit denial wasn’t a
“final determination[]” under § 877, it may also fail to constitute
“final agency action” sufficient to comprise a claim under the
APA, 5 U.S.C. § 704, effectively denying Doe any judicial
review of its permit denial. Indeed, the district court expressed
serious reservations about this possible lack of finality.

Doe’s briefing addresses the finality question in a single
sentence in a footnote, declaring the district court’s concerns
about finality “now moot” because the DEA concedes its permit
denial constituted final agency action. Pet’r’s Br. 22 n.9.
Finality is not synonymous with jurisdiction. When judicial
review is sought under the APA, for example, the requirement
of “final agency action” is not jurisdictional. See Trudeau v.
 7

Fed. Trade Comm’n, 456 F.3d 178, 183-84 (D.C. Cir. 2006);
Fund for Animals, Inc. v. U.S. Bureau of Land Mgmt., 460 F.3d
13, 18 n.4 (D.C. Cir. 2006). But when, as here, review is sought
under a specific statute prescribing finality as a prerequisite of
judicial review, it is. See, e.g., North Am. Catholic Educ.
Programming Found. v. FCC, 437 F.3d 1206, 1209 (D.C. Cir.
2006); Indep. Equip. Dealers Ass’n v. EPA, 372 F.3d 420, 426
(D.C. Cir. 2004); Molycorp, Inc. v. EPA, 197 F.3d 543, 545
(D.C. Cir. 1999). While a nonjurisdictional requirement may be
waived, Arbaugh v. Y & H Corp., 126 S. Ct. 1235, 1245 (2006),
because § 877’s “final decision” requirement is jurisdictional,
the parties’ agreement here as to finality does not settle the
issue. CTIA – The Wireless Ass’n v. FCC, 466 F.3d 105, 108
(D.C. Cir. 2006) (quoting Midwest Indep. Transmission Sys.
Operator, Inc. v. FERC, 388 F.3d 903, 908 (D.C. Cir. 2004)
(citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,
94–95 (1998))).

To evaluate finality, this court applies a two-part test:

First, the action under review must mark the consummation
of the agency’s decisionmaking process — it must not be of
a merely tentative or interlocutory nature. Second, the
action must be one by which rights or obligations have been
determined, or from which legal consequences will flow.

Nat’l Ass’n of Home Builders v. Norton, 415 F.3d 8, 13 (D.C.
Cir. 2005) (citations and internal quotation marks omitted)
(summarizing the test articulated by the Supreme Court in
Bennett v. Spear, 520 U.S. 154, 177–78 (1997)).4

4
Both Norton and Bennett construe the APA’s requirement of
“final agency action.” 5 U.S.C. § 704 (emphasis added). Here we are
evaluating finality under 21 U.S.C. § 877’s limitation of review to a
“final decision” (emphasis added). We see no reason, however, that
the word “final” in § 877 should be interpreted differently than the
 8

In Ciba-Geigy Corp. v. United States EPA, 801 F.2d 430
(D.C. Cir. 1986), a case pre-dating Bennett, we applied a
complementary analysis in a case presenting a finality question
similar to that presented here. In Ciba-Geigy, the EPA had
advised certain pesticide manufacturers of required labeling
changes in a series of letters. Id. at 432–33. The manufacturers
filed suit seeking a declaration that the EPA had failed to follow
the procedures required by law when changing labeling require-
ments. Id. at 433. The district court dismissed the suit for lack
of subject matter jurisdiction, concluding the agency had
“neither issued a final order . . . nor taken any other final action
which is reviewable by the Court.” Id. at 434 (citation and
internal quotation marks omitted).

Noting the Supreme Court’s instruction to “apply the
finality requirement in a ‘flexible’ and ‘pragmatic’ way,” this
court reversed on appeal. Id. at 435 (quoting Abbott Labs. v.
Gardner, 387 U.S. 136, 149–50 (1967)). In analyzing finality,
the court looked “primarily to whether the agency’s position is
‘definitive’ and whether it has a ‘“direct and immediate effect on
the day-to-day business”’ of the parties challenging the action.”
Id. at 436 (citations and alteration omitted). Explaining that the
EPA’s letters in Ciba-Geigy staked out the agency’s position
clearly and gave no indication the agency’s position was
“subject to further agency consideration or possible modifica-
tion,” id. at 437, the court determined the letters were final
agency action fit for judicial review, id. at 437-38.

Both Bennett and Ciba-Geigy firmly support a finding of
finality here. The DEA’s action in this case was not merely

word “final” in the APA. Cf. Indep. Equip. Dealers Ass’n, 372 F.3d
at 428 (construing the Clean Air Act’s “final action” term as
“synonymous with the term ‘final agency action’ as used in Section
704 of the APA”). Thus, the cases applying the finality aspect of the
APA guide us in construing finality under 21 U.S.C. § 877.
 9

tentative, but rather definitive: the DEA affirmatively denied
Doe’s permit application. Moreover, the DEA candidly
acknowledged before the district court that its position would
not change in further administrative proceedings. See Defs.’
Opp’n at 18 (June 2, 2006) (noting that “[t]hrough [the adminis-
trative] process, Plaintiff would be informed again that [its]
April 18, 2006 application was denied because the product
Plaintiff sought to import is a schedule I controlled substance
that Plaintiff is not registered to handle”) (footnote omitted)
(citing Decl. of Matthew Strait, Chief of the DEA’s Quota and
United Nations Reporting Unit, attached as Ex. B to Defs.’
Opp’n (hereinafter Strait Decl.)). And the permit denial, which
became final thirty days after its issuance, clearly “determined”
Doe’s rights, Bennett, 520 U.S. at 178, establishing “legal
consequences” by prohibiting importation, id. Finally, the
permit denial had a “direct and immediate effect” on Doe’s
business by stopping in its tracks Doe’s plans to establish its
drug’s bioequivalency to Marinol. Ciba-Geigy, 801 F.2d at 436.

Moreover, this court has recognized that “[a]n agency’s past
characterization of its own action, while not decisive, is entitled
to respect in a finality analysis.” Nat’l Ass’n of Home Builders,
415 F.3d at 14. Here, the DEA agrees its decision denying
Doe’s permit is “final.” Resp’t’s Br. 23.

What arguably cuts against finality in this case is the lack
of a comprehensive administrative record to assist judicial
review. Because Doe opted to forgo further administrative
review of its permit denial, the administrative record is — as the
district court correctly observed — “largely devoid of an explicit
analysis by the DEA laying out its reasoning” for the permit
denial.

To allow the meager administrative record in this case to
undercut finality, however, would confuse jurisdictional finality
 10

with prudential concerns over the fitness of issues for judicial
review. Finality, ripeness, and exhaustion of administrative
remedies are related, overlapping doctrines that are analytically
but not categorically distinct. Exhaustion focuses on the process
a litigant must follow; ripeness describes the fitness of issues for
judicial review; finality focuses on the conclusiveness of agency
action. “Ripeness and exhaustion are complementary doctrines
. . . designed to prevent unnecessary or untimely judicial
interference in the administrative process.” Ticor Title Ins. Co.
v. FTC, 814 F.2d 731, 735 (D.C. Cir. 1987) (opinion of Ed-
wards, J.) (internal quotation marks omitted) (quoting E.
GELLHORN & B. BOYER, ADMINISTRATIVE LAW AND PROCESS
316-17 (1981)). Those prudential doctrines respond to prag-
matic concerns about the relationship between courts and
agencies, including “the agency’s interest in crystallizing its
policy before that policy is subjected to judicial review” and
“the court’s interests in avoiding unnecessary adjudication and
in deciding issues in a concrete setting.” Id. (quoting Better
Gov’t Ass’n v. Dep’t of State, 780 F.2d 86, 92 (D.C. Cir. 1986)).

Thus, even if exhaustion, ripeness, and finality may be
difficult to distinguish in some contexts, they must be carefully
delineated when, as here, finality is a statutory jurisdictional
prerequisite rather than merely a precaution related to concrete-
ness and institutional capacity. An administrative order is final
for jurisdictional purposes when it “imposes an obligation,
denies a right or fixes some legal relationship as a consumma-
tion of the administrative process.” Am. Train Dispatchers
Ass’n v. ICC, 949 F.2d 413, 414 (D.C. Cir. 1991) (alterations
and internal quotation marks omitted) (quoting Chi. & S. Air
Lines v. Waterman S.S. Corp., 333 U.S. 103, 113 (1948)). As
this case illustrates, an agency may have reached that point and
generated only a sparse administrative record. Indeed, where
the disagreement is largely a matter of law, an extensive
administrative record may not be necessary for effective judicial
 11

review. Where the record provides inadequate factual informa-
tion to resolve novel legal claims, the court can dismiss those
claims as unripe. But the fact that the administrative record is
not sufficient to resolve all questions does not mean the court is
deprived of jurisdiction to answer any question. The DEA
action here at issue is sufficiently final to confer jurisdiction.

III

Having concluded the DEA’s permit denial was sufficiently
final to permit judicial review, we must still decide where
jurisdiction properly lies — in the district court pursuant to the
APA, 5 U.S.C. § 704, or in this court pursuant to 21 U.S.C.
§ 877.

21 U.S.C. § 877 vests exclusive jurisdiction in the courts of
appeals over “[a]ll final determinations, findings, and conclu-
sions” of the DEA applying the CSA. Doe argues the district
court erred in dismissing its complaint for lack of subject matter
jurisdiction, because § 877 does not apply to the DEA’s permit
denial in this case. Instead, Doe argues, this case is reviewable
under the APA as “final agency action for which there is no
other adequate remedy in a court.” 5 U.S.C. § 704.

If Doe is correct, the permit denial must be “final agency
action” under § 704, but not a “final determination[], finding[],
[or] conclusion[]” under § 877. On the plain terms of the two
provisions, however, that assertion seems implausible. Perhaps
“agency action” encompasses more than “determinations,
findings, and conclusions,” but the permit denial at issue here
falls squarely within the plain meaning of “determination.” See
BLACK’S LAW DICTIONARY 480 (8th ed. 2004) (defining
“determination” as “[a] final decision by a court or administra-
tive agency”). Nonetheless, Doe correctly points out that, in a
few cases, district courts have exercised jurisdiction over some
 12

DEA decisions implementing the CSA, concluding there is a
sphere of DEA activity that falls within the APA’s “final agency
action,” but outside § 877’s “final determinations, findings, and
conclusions.” See, e.g., PDK Labs Inc. v. Reno, 134 F. Supp. 2d
24 (D.D.C. 2001); Oregon v. Ashcroft, 192 F. Supp. 2d 1077 (D.
Or. 2002), vacated for lack of jurisdiction, 368 F.3d 1118, 1121
n.1 (9th Cir. 2004), aff’d, 546 U.S. 243 (2006). Doe argues the
reasoning in these cases, as well as in the Supreme Court’s
decision in McNary v. Haitian Refugee Center, Inc., 498 U.S.
479 (1991), supports the conclusion the permit denial here at
issue falls within that interstitial space.

Before addressing Doe’s argument, it is worth noting, as did
the district court below, that as a matter of practice almost all
cases challenging DEA decisions under the CSA have been filed
directly in the courts of appeals pursuant to 21 U.S.C. § 877.
See, e.g., Noramco of Del., Inc. v. DEA, 375 F.3d 1148, 1152
(D.C. Cir. 2004); Fry v. DEA, 353 F.3d 1041, 1042–44 (9th Cir.
2003); Humphreys v. DEA, 96 F.3d 658, 659–60 (3d Cir. 1996);
Alra Labs., Inc. v. DEA, 54 F.3d 450, 451 (7th Cir. 1995); Nutt
v. DEA, 916 F.2d 202, 203 (5th Cir. 1990); Reckitt & Colman,
Ltd. v. Adm’r, DEA, 788 F.2d 22, 23 (D.C. Cir. 1986). And, in
the one instance where a court of appeals has directly (albeit
summarily) addressed the scope of 21 U.S.C. § 877, it reversed
the district court’s prior assumption of jurisdiction, holding
§ 877 vested exclusive jurisdiction over the dispute in that case
in the court of appeals. See Oregon, 368 F.3d at 1120 & n.1.

And yet a few district courts discern some play in the joints
between “agency action” under the APA and DEA “deter-
minations, findings, and conclusions” under 21 U.S.C. § 877.
Those cases rely heavily on the Supreme Court’s decision in
McNary, which held that a narrow grant of individualized
review, vested exclusively in the courts of appeals, did not
preclude district court jurisdiction over a class action claiming
 13

a pattern or practice of constitutional violations by the Immigra-
tion and Naturalization Service. 498 U.S. at 483-84. This case,
however, is dissimilar from McNary in at least two important
ways. First, 21 U.S.C. § 877’s exclusive jurisdiction provision
is much broader than the exclusive jurisdiction provision at issue
in McNary. See McNary, 498 U.S. at 486. Second, and more
important, the holding in McNary cannot be divorced from the
Court’s obvious concern that, absent district court review of the
McNary plaintiffs’ claims, meaningful judicial review would
have been entirely foreclosed. See McNary, 498 U.S. at 484
(“Were we to hold otherwise and instead require respondents to
avail themselves of the limited judicial review procedures set
forth in § 210(e) of the INA, meaningful judicial review of their
statutory and constitutional claims would be foreclosed.”); see
also id. at 488. That concern is wholly inapplicable here; Doe’s
claims are fully reviewable in this court by way of a § 877
petition.

We do not find the other reasons district courts have given
for exercising jurisdiction any more persuasive. First, the
opinions presume the applicability of 21 U.S.C. § 877 turns on
whether the DEA complied with the procedural requirements for
final agency “determinations, findings, and conclusions.” See,
e.g., PDK Labs, 134 F. Supp. 2d at 29;5 see also Novelty, Inc. v.
5
This court did review a later phase of the PDK Labs litigation,
see 362 F.3d 786, 792 (D.C. Cir. 2004), but did not comment on
whether the district court’s assertion of jurisdiction over the earlier
phase was proper. It appears the issue was not even properly before
this court in the later phase of the litigation. Id. In any event, this
court’s lack of comment cannot be construed as sanctioning the
district court’s earlier assertion of jurisdiction; “it is well settled that
cases in which jurisdiction is assumed sub silentio are not binding
authority for the proposition that jurisdiction exists.” Ticor Title Ins.
Co., 814 F.2d at 749 (opinion of Williams, J.) (citing Pennhurst State
Sch. & Hosp. v. Halderman, 465 U.S. 89, 119 (1984)).
 14

Tandy, No. 1:04-cv-1502, 2006 WL 2375485, at *1 (S.D. Ind.
Aug. 15, 2006) (“Novelty argues that the letters amount in
substance to unilateral rulemaking, without notice and an
opportunity for affected parties to comment. . . . Plaintiff has
not challenged a final ‘determination,’ ‘finding,’ or ‘conclusion’
by the DEA after formal procedures that develop a record
suitable for judicial review, so 21 U.S.C. § 877 does not apply
. . . .” (emphasis added)). But this court’s jurisdiction under a
direct-review statute has never depended on agency compliance
with procedural requirements. To the contrary, we have
repeatedly invoked direct-review jurisdiction even where the
agency’s procedural lapses were blatant. See, e.g., CropLife Am.
v. EPA, 329 F.3d 876, 883–84 (D.C. Cir. 2003) (concluding the
agency had wholly failed “to follow notice and comment
procedures” required by law, yet rejecting the agency’s argu-
ment that the agency action at issue wasn’t a “regulation”
subject to the court’s direct-review jurisdiction); Appalachian
Power Co. v. EPA, 208 F.3d 1015, 1023, 1028 (D.C. Cir. 2000)
(likewise concluding that the agency had failed to comply with
the “rulemaking procedures” required by law, yet rejecting the
agency’s argument that the agency action at issue wasn’t subject
to the court’s direct-review jurisdiction). Thus, concluding 21
U.S.C. § 877’s applicability turns on the DEA’s compliance
with its procedural obligations is incompatible with this court’s
established practice.

Similarly, concern over the lack of a comprehensive
administrative record is not sufficient cause to narrow the scope
of 21 U.S.C. § 877, as some district courts have attempted. See
Oregon, 192 F. Supp. 2d at 1086; Novelty, 2006 WL 2375485,
at *2–9. We agree the possibility of an inadequate administra-
tive record is a troubling aspect of interpreting § 877 in accord
with the plain meaning of its broad terms. But this court
regularly reviews agency action with a limited or even non-
existent administrative record under direct-review statutes
 15

analogous to 21 U.S.C. § 877. See, e.g., CropLife Am., 329 F.3d
at 883; Appalachian Power Co., 208 F.3d at 1020; Alaska Prof’l
Hunters Ass’n v. FAA, 177 F.3d 1030, 1036 (D.C. Cir. 1999).

Moreover, while in some cases an underdeveloped adminis-
trative record might prevent effective consideration of any legal
issue, this is not one of those cases. The limited administrative
record in this case establishes sufficient facts to squarely present
the critical legal issue. And, in future cases where an insuffi-
cient administrative record is crippling, a court of appeals
always has the option of either remanding to the agency for
further factual development or invoking the prudential doctrine
of ripeness. See Fla. Power & Light Co. v. Lorion, 470 U.S.
729, 744 (1985) (“[I]f the reviewing court simply cannot
evaluate the challenged agency action on the basis of the record
before it, the proper course, except in rare circumstances, is to
remand to the agency for additional investigation or explana-
tion.”); Ciba-Geigy, 801 F.2d at 435 (noting that in considering
ripeness a court evaluates, inter alia, “whether consideration of
that issue would benefit from a more concrete setting”).

As the district court here rightly cautioned, adopting Doe’s
narrow interpretation of § 877 encourages forum shopping and
encourages dissatisfied claimants to “jump the gun” by going
directly to the district court to develop their case instead of
exhausting their administrative remedies before the agency.
Moreover, it encourages “duplicative and potentially conflicting
review, and the delay and expense incidental thereto.”
Telecomms. Research & Action Ctr. v. FCC, 750 F.2d 70, 78
(D.C. Cir. 1984) (citation omitted); cf. Fla. Power & Light Co.,
470 U.S. at 745 (“Absent a firm indication that Congress
intended to locate initial APA review of agency action in the
district courts, we will not presume that Congress intended to
depart from the sound policy of placing initial APA review in
the courts of appeals.”).
 16

The DEA’s denial of Doe’s permit is properly reviewable
in this court pursuant to 21 U.S.C. § 877.

IV

This court reviews the DEA’s interpretation of the CSA’s
provisions governing the scheduling of controlled substances
under Chevron’s familiar two-step analysis. See Gonzales v.
Oregon, 126 S. Ct. 904, 916–17 (2006). DEA’s interpretation
of its own scheduling regulations is controlling unless “plainly
erroneous or inconsistent with the regulation.” Universal City
Studios LLLP v. Peters, 402 F.3d 1238, 1242 (D.C. Cir. 2005)
(internal quotation marks omitted) (quoting Thomas Jefferson
Univ. v. Shalala, 512 U.S. 504, 512 (1994)). We review the
DEA’s rationale for denying Doe’s permit under the APA’s
familiar arbitrary and capricious standard. Morall v. DEA, 412
F.3d 165, 177 (D.C. Cir. 2005). In conducting our judicial
review, we focus on the administrative record that formed the
basis for the agency’s decision, unless “there was such a failure
to explain administrative action as to frustrate effective judicial
review.” Tripoli Rocketry Ass’n v. Bureau of Alcohol, Tobacco,
Firearms, & Explosives, 437 F.3d 75, 83 (D.C. Cir. 2006)
(citation and internal quotation marks omitted).

The DEA interprets its schedule III regulatory language —
“Dronabinol (synthetic) in sesame oil and encapsulated in a soft
gelatin capsule in a U.S. Food and Drug Administration ap-
proved product,” 21 C.F.R. § 1308.13(g)(1) — as not encom-
passing Doe’s dronabinol drug, because Doe’s drug is not FDA
“approved” for marketing. Doe argues this interpretation is
contrary to law, arbitrary and capricious, and violates the due
process clause of the Fifth Amendment. Doe’s argument rests
on two supposed parallels: (1) that Doe’s drug is essentially the
same as schedule III Marinol, and (2) that what the DEA did in
this case is essentially the same as what it attempted in
 17

Grinspoon v. DEA, 828 F.2d 881 (1st Cir. 1987). We address
these key aspects of Doe’s argument in reverse order.

In Grinspoon, the DEA took the position that two of the
three findings necessary to place a drug on schedule I — i.e.,
that the drug has “no currently accepted medical use in treatment
in the United States” and “a lack of accepted safety for use . . .
under medical supervision,” 21 U.S.C. § 812(b)(1) — were
conclusively established by the drug’s lack of FDA marketing
approval. Grinspoon, 828 F.2d at 884. The First Circuit
disagreed, explaining that “it is plainly possible that a substance
may fail to obtain interstate marketing approval even if it has an
accepted medical use.” Id. at 887. The court vacated and
remanded the case with instructions that “the Administrator will
not be permitted to treat the absence of FDA interstate market-
ing approval as conclusive evidence that [the substance] has no
currently accepted medical use and lacks accepted safety for use
under medical supervision.” Id. at 891.

Doe contends the DEA has done effectively the same thing
here; that is, defined schedule III dronabinol so as “to exclude
any product that does not yet have specific FDA marketing
approval.” Pet’r’s Br. 15. But that is not what the DEA has
done. Quite the opposite, the regulation simply includes a
certain form of FDA “approved” dronabinol under schedule III;
it does not affirmatively “exclude” any drug from schedule III.
There is nothing in 21 C.F.R. § 1308.13(g)(1) that would pose
an obstacle to Doe petitioning to have its dronabinol drug placed
on schedule III.

Doe’s comparison to Grinspoon, therefore, is inapt. In
Grinspoon, the DEA equated the absence of FDA marketing
approval with a lack of currently accepted medical use for
purposes of placing a substance on schedule I and refusing to
schedule it less restrictively. Grinspoon, 828 F.2d at 884. Here
 18

the DEA, in less restrictively scheduling a specific dronabinol
drug that is FDA-approved for marketing, has relied on FDA
approval in determining the specific drug has “a currently
accepted medical use in treatment in the United States.” 21
U.S.C. § 812(b)(3)(B). Whereas the absence of FDA marketing
approval may not be a reasonable proxy for a lack of currently
accepted medical use, the presence of FDA marketing approval
obviously is powerful evidence that a drug has currently
accepted medical use and accepted safety for use under medical
supervision. See Alliance for Cannabis Therapeutics v. DEA,
930 F.2d 936, 939–40 (D.C. Cir. 1991) (recognizing that
Grinspoon “never suggested the DEA Administrator was
foreclosed from incorporating and relying on those standards
employed by the FDA that are relevant to the pharmaceutical
qualities of the drug”). The fact that the DEA has apparently
accepted FDA marketing approval as one way to demonstrate
currently accepted medical use is not the equivalent of a broad
declaration saying FDA approval is the only way. As the DEA’s
counsel reiterated during oral argument, the DEA has not taken
the position that Doe is barred by 21 C.F.R. § 1308(g)(1) from
petitioning to have its dronabinol drug placed on schedule III,
nor has it taken the position that such rescheduling would be
contingent on FDA marketing approval. Rather, the DEA has
simply taken the position that for a dronabinol drug to qualify
for schedule III treatment under 21 C.F.R. § 1308.13(g)(1), the
drug must have FDA marketing approval.

The DEA’s interpretation of FDA “approval” in 21 C.F.R.
§ 1308.13(g)(1) therefore bars consideration of Doe’s drug
under that specific provision, but it does not bar Doe’s drug
from schedule III altogether. If Doe wishes to have schedule III
revised to include its drug, it can petition the DEA and offer
evidence that its drug meets the requirements for being placed
in that schedule. See 21 U.S.C. § 811(a); 21 C.F.R.
§ 1308.43(a). Instead, Doe invites this court to eliminate a
 19

limitation on an already existing schedule III category, effec-
tively rescheduling Doe’s drug without it making the statutorily
required showing. We decline. See 21 U.S.C. § 812(b) (“[A]
drug or other substance may not be placed in any schedule
unless the findings required for such schedule are made with
respect to such drug or other substance.”).

Doe’s failed analogy to Grinspoon is not its only argument,
however. Doe also argues the DEA’s differential treatment of
its drug and Marinol under 21 C.F.R. § 1308.13(g)(1) is
arbitrary and capricious because its drug is “indisputably an
identical formulation to Marinol.” Pet’r’s Br. 17. Not surpris-
ingly, however, the DEA disputes the indisputable, calling
Doe’s claim “wishful thinking at best.” Resp’t’s Br. 18. More
important, we have scoured the record in vain, searching for
evidence Doe’s drug is in fact functionally equivalent to
Marinol. While the record is replete with Doe’s repeated and
forceful assertions that its drug is the same thing as Marinol,
Doe has not provided any evidence its drug is in all relevant
respects identical. Doe therefore hasn’t established — indeed,
hasn’t even attempted to establish — the factual predicate
necessary for this court to resolve the legal question Doe asks us
to resolve.

In one sense this is unsurprising. The whole reason Doe
seeks to import its drug is to perform bioequivalency testing
comparing its drug and Marinol. If equivalency was as
“undisput[ed]” as Doe asserts, it is unclear why this testing
would be necessary. Our best guess from the record, therefore,
is that functional equivalency is a factual issue that remains to
be determined. What that means for this case is that Doe has
asked this court to decide an abstract legal question, unrelated to
the actual established facts in this case. That we cannot do. Doe
simply has not “present[ed] the court with the concrete facts that
are necessary to an informed decision” on its equivalency claim,
 20

and therefore that claim is not “ripe for adjudication.” Buckley
v. Valeo, 519 F.2d 821, 893 (D.C. Cir. 1975) (en banc) (per
curiam), rev’d in part on other grounds, 424 U.S. 1 (1976);
Ciba-Geigy, 801 F.2d at 434.

At oral argument, Doe’s counsel protested that it was never
asked to demonstrate its drug’s equivalency to Marinol. But
when the DEA first notified Doe of the permit denial, the DEA
specifically invited Doe to “submit a letter explaining the
Company’s plans in exact and precise detail . . . .” Strait Decl.
¶ 18. Doe opted not to respond. Id. ¶ 22. Shortly thereafter, the
DEA also advised Doe of its right to request a hearing challeng-
ing the permit denial. See June 12, 2006 Letter. Doe opted not
to exhaust its administrative remedies, seeking instead immedi-
ate redress in the courts. Doe was given ample opportunity to
demonstrate to the DEA that its drug was effectively the same
thing as Marinol, and thereby build a record that would present
this court with a ripe controversy.

In sum, we see nothing in 21 C.F.R. § 1308.13(g)(1) that is
contrary to the Controlled Substances Act. Nor is the DEA’s
interpretation limiting that specific provision to drugs with FDA
marketing approval plainly erroneous.6 It is inappropriately
restrictive for the DEA to say, as it did in Grinspoon, that FDA
approval is the only way to demonstrate a drug is safe and has
currently accepted medical use. But it is completely different
(and eminently reasonable) for the DEA to require an importer,
relying on functional equivalency as the basis for a drug’s safety
and current acceptance for medical use, to demonstrate that its
drug is actually equivalent.

6
Doe’s Fifth Amendment claim likewise fails. Doe has not
shown that the permit denial has changed its “formal legal status,” or
had the “broad effect of largely precluding” it from pursuing a
business. Kartseva v. Dep’t of State, 37 F.3d 1524, 1528 (D.C. Cir.
1994) (emphasis omitted).
 21

***

Contrary to Doe’s assertion that the DEA’s interpretation of
21 C.F.R. § 1308.13(g)(1) leaves Doe with “requirements [that]
are impossible to satisfy,” Pet’r’s Reply Br. 7, Doe does have
options: (1) petitioning to have its dronabinol drug rescheduled,
or (2) obtaining schedule I registration. We are not, however,
unsympathetic to Doe’s predicament. The DEA’s interpretation
obviously does make it harder (and costlier) for Doe to obtain
final FDA approval to market its generic drug. As Doe has
pointed out, this result runs counter to Congress’s purpose
manifested in the so-called Hatch-Waxman Amendments, Pub.
L. No. 98-417, 98 Stat. 1585 (1984), “to make available more
low cost generic drugs.” Serono Labs., Inc. v. Shalala, 158 F.3d
1313, 1316 (D.C. Cir. 1998) (internal quotation marks omitted)
(quoting H.R. REP. NO. 98-857, pt. 1, at 14 (1984), as reprinted
in 1984 U.S.C.C.A.N. 2647, 2647). Imperfect or even unwise
regulations are not necessarily illegal, however. To the extent
the DEA’s interpretation is bad policy, that must be addressed
by the agency or Congress.

V

The petition for review is denied, and the judgment of the
district court is affirmed.

So ordered.