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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 17, 2005 Decided April 8, 2005
No. 04-5238
JEROME STEVENS PHARMACEUTICALS, INC.,
APPELLANT
v.
FOOD & DRUG ADMINISTRATION, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 02cv01939)
Samuel H. Israel argued the cause for appellant. With him
on the briefs were John P. Halfpenny and Russell J. Gaspar.
Thomas M. Bondy, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief were Peter
D. Keisler, Assistant Attorney General, Kenneth L. Wainstein,
U.S. Attorney, and Mark B. Stern, Attorney.
2
Before: SENTELLE, HENDERSON and ROGERS, Circuit
Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The Food and Drug Administration
(“FDA”) posted on its website trade secrets and confidential
information contained in a New Drug Application (“NDA”) filed
by Jerome Stevens Pharmaceuticals, Inc. (“JSP”) for Unithroid,
a levothyroxine sodium (“LS”) drug used to treat thyroid
diseases. FDA also extended the NDA approval deadline,
allowing JSP’s competitors to continue marketing their
unapproved LS drugs for three years after Unithroid had been
approved. JSP filed a six-count complaint against FDA,
including two counts under the Federal Tort Claims Act
(“FTCA”), 28 U.S.C. §§ 2671-2680 (2000), for misappropriation
of trade secrets and breach of a confidential relationship, and one
count under the Administrative Procedure Act (“APA”), 5 U.S.C.
§ 706 (2000), for the arbitrary and capricious extension of the
NDA deadline. The district court dismissed the complaint for
lack of subject matter jurisdiction under Rule 12(b)(1) of the
Federal Rules of Civil Procedure, and JSP appeals the dismissal
of Counts I, II, and VI. We conclude that the district court
properly dismissed the APA claim in Count VI but erred as a
matter of law in ruling that the tort claims in Counts I and II were
barred by the discretionary function and intentional tort
exceptions to the FTCA. Accordingly, we affirm the dismissal
of Count VI, reverse the dismissal of Counts I and II, and
remand the case to the district court for further proceedings.
I.
The court reviews the district court’s dismissal of the
complaint de novo and “accept[s] all of the factual allegations in
[the] complaint as true.” Sloan v. U.S. Dep’t of Housing &
Urban Dev., 236 F.3d 756, 759 (D.C. Cir. 2001) (second
3
alteration in original) (quoting United States v. Gaubert, 499
U.S. 315, 327 (1991)) (internal quotation marks omitted).
JSP is a small New York company that manufactures
Unithroid, an orally administered LS tablet used to treat thyroid
diseases. On August 14, 1997, FDA announced that, although
doctors had been prescribing LS tablets to millions of patients
since the 1950s, they were considered “new drugs” because “no
currently marketed orally administered levothyroxine sodium
product ha[d] been shown to demonstrate consistent potency and
stability.” 62 Fed. Reg. 43,535, 43,538 (Aug. 14, 1997).
Accordingly, FDA required LS manufacturers to submit NDAs
for FDA approval by August 14, 2000, and allowed the
continued marketing of unapproved LS tablets until that date.
See id. FDA stated that after the NDA deadline, any unapproved
orally administered LS drug would be “subject to regulatory
action.” Id.
On October 19, 1999, JSP filed an NDA for Unithroid.
Pursuant to FDA requirements, the NDA contained JSP’s “trade
secrets and confidential information for the manufacture of safe,
stable, and effective LS,” Compl. ¶ 28, including “[t]he order in
which Unithroid’s ingredients are added together; the steps that
the additions go through in the formation of Unithroid’s tablets;
and the processing of the active ingredient, levothyroxine
sodium,” id. ¶ 19. On April 26, 2000, FDA extended the August
14, 2000 approval deadline by one year to allow manufacturers
additional time to conduct studies and to prepare applications.
65 Fed. Reg. 24,488, 24,489 (Apr. 26, 2000).
On August 21, 2000, FDA approved Unithroid, making it
the first orally administered LS drug to be approved under the
new requirements. The next day, without JSP’s knowledge or
consent, FDA posted on its website JSP’s trade secrets and
confidential information for manufacturing Unithroid. On
4
December 18, 2000, upon discovering FDA’s disclosure of its
trade secrets, JSP demanded that the information be removed
immediately from FDA’s website. After repeated requests, FDA
removed some of the information on January 12, 2001, and the
remaining information on January 23, 2001. Consequently,
JSP’s trade secrets were available to the public on FDA’s
website for five months.
Meanwhile, following FDA approval and anticipating
increased demand for Unithroid, JSP doubled its staff and
invested $2 million in expanding its facilities. On November 17,
2000, JSP filed a petition asking FDA not to extend the NDA
deadline a second time, asserting that it was prepared to supply
the entire market for LS drugs. Nonetheless, on July 13, 2001,
FDA announced that because “it will take time for the millions
of patients taking unapproved [LS] products to switch to
approved products, and for manufacturers of approved products
to scale up their production and to introduce this increased
production into the distribution chain,” manufacturers with
NDAs pending by August 14, 2001, could continue marketing
their unapproved LS tablets for an additional two years. 66 Fed.
Reg. 36,794, 36,794 (July 13, 2001). Following this
announcement, Abbott Laboratories “flooded the retail market”
with Synthroid, its unapproved LS tablet. Compl. ¶ 47. “Having
lost de facto market exclusivity due to FDA’s publication of its
secrets and FDA’s extensions of compliance deadlines,” JSP was
forced to lay off half its workforce and to destroy excess
Unithroid worth up to $30 million. Id. ¶ 48.
On October 2, 2002, JSP filed a six-count complaint against
FDA in the district court. Counts I and II alleged that, by
disclosing JSP’s trade secrets and confidential information, FDA
misappropriated JSP’s trade secrets and breached its confidential
relationship with JSP. Counts III and IV alleged that FDA’s
disclosure of JSP’s trade secrets violated procedural and
5
substantive due process. Counts V and VI alleged that FDA’s
disclosure of JSP’s trade secrets and its extensions of the NDA
deadlines were arbitrary and capricious under the APA. The
complaint sought more than $1.3 billion in compensatory
damages “for [JSP’s] injuries resulting from [FDA’s]
misappropriation of [JSP’s] trade secrets and breach of FDA’s
confidential relationship with [JSP],” Compl. ¶ 118, and
declaratory relief for the remaining claims.
FDA filed a motion to dismiss for lack of subject matter
jurisdiction under Rule 12(b)(1), which the district court granted.
See Jerome Stevens Pharm., Inc. v. FDA, 319 F. Supp. 2d 45, 47
(D.D.C. 2004) (“JSP”). The district court construed Counts I
and II as alleging injuries caused solely by FDA’s extensions of
the NDA deadlines, and ruled that the tort claims in those counts
were barred by federal sovereign immunity because the deadline
extensions fell within both the discretionary function and
intentional tort exceptions to the FTCA. Id. at 50-52. The
district court ruled that Counts III, IV, and V failed to present a
live case or controversy because FDA had already removed
JSP’s trade secrets from its website. Id. at 52-54. Finally, the
district court ruled that Count VI was barred by the APA’s
presumption that agency enforcement actions are not subject to
judicial review. Id. at 54-57. JSP appeals the dismissal of
Counts I, II, and VI.
II.
The FTCA “grants federal district courts jurisdiction over
claims arising from certain torts committed by federal employees
in the scope of their employment, and waives the government’s
sovereign immunity from such claims.” Sloan, 236 F.3d at 759;
see 28 U.S.C. §§ 1346(b), 2674 (2000). The grant of jurisdiction
and waiver of sovereign immunity are subject to several
exceptions, including the discretionary function exception and
the intentional tort exception. See 28 U.S.C. § 2680. The
6
discretionary function exception bars claims “based upon the
exercise or performance or the failure to exercise or perform a
discretionary function or duty on the part of a federal agency or
an employee of the Government, whether or not the discretion
involved be abused.” Id. § 2680(a). The intentional tort
exception bars “[a]ny claim arising out of assault, battery, false
imprisonment, false arrest, malicious prosecution, abuse of
process, libel, slander, misrepresentation, deceit, or interference
with contract rights.” Id. § 2680(h).
To determine whether the discretionary function exception
applies, the court must engage in a two-part inquiry. Gaubert,
499 U.S. at 322-23; Macharia v. United States, 334 F.3d 61, 65
(D.C. Cir. 2003). First, the court must determine whether the
challenged action involves “an element of judgment or choice,”
or whether federal law “specifically prescribes a course of action
for an employee to follow,” leaving the employee “no rightful
option but to adhere to the directive.” Gaubert, 499 U.S. at 322
(quoting Berkovitz v. United States, 486 U.S. 531, 536 (1988))
(internal quotation marks omitted); Macharia, 334 F.3d at 65.
Second, the court must determine whether the challenged action
is “of the kind that the discretionary function exception was
designed to shield” — that is, actions “based on considerations
of public policy.” Gaubert, 499 U.S. at 322-23 (quoting
Berkovitz, 486 U.S. at 536, 537) (internal quotation marks
omitted); Macharia, 334 F.3d at 65.
JSP’s complaint challenges both FDA’s disclosure of JSP’s
trade secrets and FDA’s extensions of the NDA deadlines in
favor of JSP’s competitors. The parties appear to agree that the
disclosure of trade secrets is not a discretionary function because
federal laws prohibit it. See Br. of Appellant at 27 (citing 18
U.S.C. § 1905 (2000); 21 U.S.C. § 331(j) (2000); 5 U.S.C. §
552(b)(4) (2000); 21 C.F.R. § 314.430 (2004)); Br. of Appellee
at 18-23. The parties also appear to agree that the extension of
7
the NDA deadline is a discretionary function because it involves
an element of choice and is based on considerations of public
health. See Br. of Appellant at 31-32; Br. of Appellee at 17-20;
Reply Br. of Appellant at 4-10. Thus, the only issue in dispute
is whether JSP’s tort claims are “based upon” the disclosure of
trade secrets or the extensions of the NDA deadlines.
In dismissing Counts I and II for lack of subject matter
jurisdiction, the district court interpreted those counts as alleging
injuries arising from FDA’s extensions of the NDA deadlines
rather than from FDA’s disclosure of JSP’s trade secrets. See
JSP, 319 F. Supp. 2d at 51. Based on this interpretation, the
district court ruled that JSP’s tort claims were barred by the
discretionary function exception because “extending the
deadlines clearly involves ‘an element of judgment or choice’”
and is based on “public-policy considerations regarding the
health needs of the millions of thyroid patients.” Id. at 52
(quoting Macharia, 334 F.3d at 65). The district court also
stated in a footnote that “[t]he intentional-torts exception also
appears to bar the tort claims, as the claims arguably ‘arise out
of’ [FDA’s] alleged interference with the contract rights and
prospective economic advantage of [JSP] and its partner, Watson
Laboratories.” Id. at 52 n.9; see also id. at 50 (citing 28 U.S.C.
§ 2680(h); Art Metal-U.S.A., Inc. v. United States, 753 F.2d
1151, 1155 (D.C. Cir. 1985)).
The district court based its interpretation of Counts I and II
on the economic loss report that JSP submitted as part of its
administrative claim for damages. See JSP, 319 F. Supp. 2d at
50-51 & n.7. The report explains the basis for JSP’s claim for
$1.3 billion in compensatory damages, relying on the assumption
that JSP and Jones Pharma — the only other LS manufacturer to
meet the August 14, 2001 deadline — “would have split 90% of
the market between them.” Id. at 50-51 (quoting Mem. in
Support of the United States’ Mot. to Dismiss, Attach. 1 at 1).
8
This outcome was possible, the district court noted, “only if FDA
had not extended the August 2001 deadline to allow other LS
manufacturers to remain in the market.” Id. at 51. The district
court thus concluded that “the action causing [JSP’s] injury was
not the disclosure, but rather the deadline extensions (and more
specifically, the July 2001 extension).” Id. JSP points out,
however, that the report was not submitted as part of the
complaint but was instead attached to FDA’s motion to dismiss.
Although the complaint sought the same amount of damages as
the amount analyzed in the economic loss report, JSP maintains
that it is not barred from relying on “other expert reports or
damages evidence at trial to prove the claims in Counts I and II.”
Br. of Appellant at 32 n.8. For the following reasons, we hold
that the district court erred as a matter of law in concluding that
the complaint failed to allege an independent injury caused by
FDA’s disclosure of JSP’s trade secrets.
A.
At the pleading stage, the issue before the district court was
not whether JSP had established sufficient proof of damages
caused by FDA’s disclosure of JSP’s trade secrets, but whether
JSP had sufficiently pled claims for such damages. Cf. Scheuer
v. Rhodes, 416 U.S. 232, 236 (1974). While the district court
may consider materials outside the pleadings in deciding whether
to grant a motion to dismiss for lack of jurisdiction, see Herbert
v. Nat’l Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992),
the court must still “accept all of the factual allegations in [the]
complaint as true,” Gaubert, 499 U.S. at 327 (quoting Berkovitz,
486 U.S. at 540) (internal quotation marks omitted). Count I of
the complaint alleged that JSP’s NDA for Unithroid contained
trade secrets and confidential information; that FDA disclosed
such information on its website; and that “FDA’s disclosure of
[JSP’s] trade secrets and confidences has caused [JSP]
substantial and irreparable injury.” Compl. ¶ 75. Count II
alleged that FDA had a legal duty to maintain the confidentiality
9
of proprietary information contained in JSP’s NDA; that FDA
breached that duty by posting JSP’s information on its website;
and that “FDA’s disclosure of [JSP’s] confidential information
for Unithroid has caused [JSP] to lose protection for its property
interest in the confidences unlawfully disclosed and has thus
caused [JSP] to suffer substantial and irreparable injury.”
Compl. ¶ 85. These allegations sufficiently pled claims for
damages caused by FDA’s disclosure of JSP’s trade secrets and
confidential information.
In treating Counts I and II as claims arising from FDA’s
extensions of the NDA deadlines, the district court relied on
JSP’s statement that it “lost de facto market exclusivity due to
FDA’s publication of its secrets and FDA’s extension of
compliance deadlines.” JSP, 319 F. Supp. 2d at 51 (quoting
Compl. ¶ 48) (emphasis added by the district court). From this
statement the district court concluded that JSP “does not ‘allege
some harm arising from [the disclosure] that was separate from
[the deadline extensions],’ and thus any harm from the disclosure
is not ‘sufficiently separable’ from the deadline extensions to
support suit under FTCA.” Id. at 51-52 (alterations in original)
(quoting Sloan, 236 F.3d at 762). Similarly, FDA contends that
JSP’s challenges to the disclosure of its trade secrets “are
intertwined with its broader challenge to the extension of the
agency’s deadlines.” Br. of Appellee at 14. FDA observes that
it examined the NDAs filed by JSP’s competitors and found that
“none of them used or relied upon [JSP’s] information in any
way.” Id. However, this observation is irrelevant, for the only
question at the pleading stage is whether JSP sufficiently alleged
an injury caused by FDA’s disclosure of its trade secrets. JSP’s
complaint specifically alleged that JSP suffered “substantial and
irreparable injury” arising from FDA’s disclosure of its trade
secrets and confidential information, Compl. ¶¶ 75, 85, and
sought more than $1.3 billion “for [JSP’s] injuries resulting from
[FDA’s] misappropriation of [JSP’s] trade secrets and breach of
10
FDA’s confidential relationship with [JSP],” id. ¶ 118. Indeed,
the complaint sought only declaratory relief, not damages, for
JSP’s injuries resulting from FDA’s extensions of the NDA
deadlines.
In construing JSP’s tort claims as arising from FDA’s
deadline extensions, the district court cited two cases — Sloan
v. U.S. Department of Housing & Urban Development, 236 F.3d
756, 762 (D.C. Cir. 2001), and Fisher Bros. Sales, Inc. v. United
States, 46 F.3d 279, 286 (3d Cir. 1995) (en banc). See JSP, 319
F. Supp. 2d at 51. In Sloan, a contractor sued the Department of
Housing and Urban Development under the FTCA for
negligently conducting an audit of his construction site and for
suspending him from government contract work based on the
erroneous audit. 236 F.3d at 758-59. On appeal from the district
court’s dismissal of the complaint for lack of subject matter
jurisdiction, the contractor contended that while the suspension
of his government contract work was a discretionary function,
the audit was not a discretionary function because it was
governed by standards of professional practice. Id. at 761. The
court rejected that contention, holding that there was “no
meaningful way in which the allegedly negligent investigatory
acts could be considered apart from the totality of the
prosecution.” Id. (quoting Gray v. Bell, 712 F.2d 490, 516 (D.C.
Cir. 1983)) (internal quotation marks omitted). The court noted
that “[t]he complaint does not allege any damages arising from
the investigation itself, but only harm caused by the suspension
to which it assertedly led.” Id. at 762.
Similarly, in Fisher, Chilean fruit growers sued FDA under
the FTCA for banning the importation of Chilean fruit based on
a negligently conducted laboratory test concluding that the fruit
contained cyanide. 46 F.3d at 282-83. Recognizing that the
Commissioner’s decision to ban the fruit was a discretionary
function, the fruit growers alleged injury “based upon” the
11
negligence of the laboratory technicians, who were bound by
FDA’s Regulatory Procedures Manual. Id. at 286. The Third
Circuit rejected this characterization of the claim, reasoning that
“[t]he reality here is that the injuries of which the plaintiffs
complain were caused by the Commissioner’s decisions and, as
a matter of law, their claims are therefore ‘based upon’ those
decisions.” Id. The court concluded that “a claim must be
‘based upon’ the exercise of a discretionary function whenever
the immediate cause of the plaintiff’s injury is a decision which
is susceptible of policy analysis and which is made by an official
legally authorized to make it.” Id. at 282 (emphasis added).
Here, unlike in Sloan and Fisher, the district court could not
conclude properly as a matter of law that none of JSP’s alleged
injuries were caused independently and immediately by FDA’s
disclosure of JSP’s trade secrets. Whereas the contractor in
Sloan did not allege injuries caused by the negligent audit, and
the negligent laboratory test in Fisher could not injure the fruit
growers unless the Commissioner relied on the test to ban the
fruit, JSP did allege injuries caused by the disclosure of its trade
secrets, and such disclosure could injure JSP even if FDA had
not extended the NDA deadlines. Thus, the district court erred
in treating JSP’s tort claims as “based upon” FDA’s deadline
extensions.
B.
The district court also recast Counts I and II as claims of
interference with contract rights. See JSP, 319 F. Supp. 2d at 50,
52 n.9. In so doing, the district court relied on Art Metal-U.S.A.,
Inc. v. United States, 753 F.2d 1151 (D.C. Cir. 1985), which held
that the intentional tort exception to the FTCA includes claims
of interference with prospective economic advantage. Id. at
1155. In Art Metal, the court treated a claim of interference with
prospective economic advantage as a claim of interference with
contract rights, which is barred by the intentional tort exception,
12
because the duty underlying both claims is the same — namely,
the duty not to interfere with the plaintiff’s economic
relationship with a third party, whether or not that relationship is
secured by a contract. Id. at 1154. Here, the district court
treated JSP’s claims of misappropriation of trade secrets and
breach of a confidential relationship as a claim of interference
with contract rights, even though the duties underlying the claims
are different. The duty underlying the first set of claims is the
duty not to disclose trade secrets and confidential information
contained in JSP’s NDA, whereas the duty underlying the second
claim is the duty not to interfere with JSP’s economic
relationship with a third party, namely its business partner
Watson Laboratories. See JSP, 319 F.2d at 52 n.9. Thus, the
district court erred in treating Counts I and II of JSP’s complaint
as claims of interference with contract rights and dismissing
them as barred by the intentional tort exception.
While FDA points to portions of the complaint
characterizing the disclosure of JSP’s trade secrets as
“deliberate,” Br. of Appellee at 25 (citing Compl. ¶ 95), the
complaint also alleges that FDA believed the disclosure to be an
“accident,” Compl. ¶ 46. But whether the disclosure was
intentional or negligent does not determine whether the
intentional tort exception applies, for the FTCA expressly states
the claims that the exception bars, and it does not include
misappropriation of trade secrets or breach of confidentiality.
See 28 U.S.C. § 2680(h). The court’s task is limited to
identifying “‘those circumstances which are within the words
and reason of the exception’ — no less and no more.” Kosak v.
United States, 465 U.S. 848, 853 n.9 (1984) (quoting Dalehite v.
United States, 346 U.S. 15, 31 (1953)).
The Second Circuit’s decision in Kramer v. U.S.
Department of the Army, 653 F.2d 726 (2d Cir. 1980), supports
JSP’s claim of error. In that case, a manufacturer of mortar
13
projectiles sued the Army for wrongfully terminating her
contract, disclosing confidential information about her exclusive
supplier of forging blanks to a competing manufacturer, and then
awarding the contract to the competing manufacturer. 653 F.2d
at 728. While the pro se plaintiff labeled her claim as one of
“conversion,” the district court treated it as a claim of intentional
interference with contract rights, which it dismissed as barred by
the intentional tort exception to the FTCA. Id. at 729. The
Second Circuit reversed, holding that the plaintiff’s “putative
‘conversion’ claim must be viewed as a cause of action for
misappropriation of a trade secret recognized under New York
law and consequently within the district court’s jurisdiction
under the Federal Tort Claims Act.” Id. The court explained
that, “[s]tripped to their essentials, [the plaintiff’s] factual
allegations reduce to this: the Government induced [the plaintiff]
to disclose the identity of her supplier in confidence, and then
divulged that information to others in breach of that confidence.”
Id. The court concluded that the complaint stated a claim for
misappropriation of trade secrets, not a claim for interference
with contract rights. Id.
Counts I and II of JSP’s complaint, “stripped to their
essentials,” reduce to this: FDA induced JSP to disclose its trade
secrets in confidence, and then it divulged that information to
others in breach of that confidence. Thus, JSP’s complaint
sufficiently alleges claims for misappropriation of trade secrets
and breach of a confidential relationship. FDA’s only response
is that “whether the plaintiff’s claims were potentially barred as
arising out of ‘interference with contract rights’ . . . was neither
raised nor addressed in Kramer.” Br. of Appellee at 28. FDA is
mistaken, however, because the Second Circuit reversed the
district court’s dismissal of the complaint on this very basis.
Counts I and II therefore must be reinstated.
III.
14
Under the APA, a reviewing court must set aside an agency
action that is “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).
A court may not review an agency action, however, if the
“agency action is committed to agency discretion by law.” Id. §
701(a)(2). In Heckler v. Chaney, 470 U.S. 821 (1985), the
Supreme Court held that “an agency’s decision not to prosecute
or enforce, whether through civil or criminal process, is a
decision generally committed to an agency’s absolute discretion”
and therefore is presumptively unreviewable. Id. at 831. This
presumption of unreviewability may be overcome “where the
substantive statute has provided guidelines for the agency to
follow in exercising its enforcement powers,” or “where the
agency has conspicuously and expressly adopted a general policy
that is so extreme as to amount to an abdication of its statutory
responsibilities.” Baltimore Gas & Elec. Co. v. FERC, 252 F.3d
456, 460 (D.C. Cir. 2001) (quoting Chaney, 470 U.S. at 833 &
n.4) (internal quotation marks omitted).
In dismissing Count VI of JSP’s complaint, the district court
ruled that FDA’s extensions of the NDA deadlines “qualify as
decisions not to prosecute or enforce, and therefore enjoy a
presumption of unreviewability.” JSP, 319 F. Supp. 2d at 56. It
explained that FDA had announced in its August 14, 1997 notice
that unapproved LS drugs would “be subject to regulatory
action” after August 14, 2000, id. (quoting 62 Fed. Reg. at
43,538), and that FDA’s subsequent deadline extensions
constituted exercises of its enforcement discretion based on “a
balancing of factors that clearly fall within FDA’s expertise, such
as the medical necessity of LS drugs and the period of time
needed to transition millions of patients safely from an
unapproved- to an approved-drug system,” id.; see 65 Fed. Reg.
at 24,489; 66 Fed. Reg. at 36,794. The district court then
examined 21 U.S.C. § 355 and 21 U.S.C. § 393, which JSP
claimed to provide guidance for FDA’s exercise of enforcement
15
discretion, and concluded that neither provision “provides
enforcement guidelines sufficient to overcome the presumption
of unreviewability.” JSP, 319 F. Supp. 2d at 56 (citing Chaney,
470 U.S. at 832-33). The district court noted that the Supreme
Court held in Chaney that 21 U.S.C. § 355, which prohibits the
introduction of unapproved new drugs into the market and
describes the NDA approval process, is “simply irrelevant to the
agency’s discretion to refuse to initiate [enforcement]
proceedings.” Id. (alteration in original) (quoting Chaney, 470
U.S. at 836) (internal quotation marks omitted). The district
court also concluded that 21 U.S.C. § 393, which sets forth
FDA’s mission statement, “does not address enforcement . . . and
if anything only underscores FDA’s authority to determine how
best to ensure the safety and effectiveness of drugs.” Id. at 56-57
(citing Safe Energy Coalition v. Nuclear Regulatory Comm’n,
866 F.2d 1473, 1478 (D.C. Cir. 1989)). Finally, the district court
ruled that FDA’s deadline extensions did not amount to “an
abdication of its statutory responsibilities” because the
extensions did not “constitute a permanent policy for all existing
new drug products . . . but rather were limited to non-approved
manufacturers for a period of three years.” Id. at 57 (citing Shell
Oil Co. v. EPA, 950 F.2d 741, 765 (D.C. Cir. 1991)).
JSP does not dispute any of the district court’s legal
conclusions. Rather, it contends that the district court focused
“too narrowly” on its challenge to FDA’s deadline extensions
and ignored its broader challenge to “FDA’s entire course of
conduct in the LS drug program going back to the August 1997
Notice.” Br. of Appellant at 37. Count VI of the complaint
alleged that FDA “acted arbitrarily, capriciously, and in violation
of 21 U.S.C. §§ 355; 393” when it (1) extended its August 14,
2000 approval deadline to August 14, 2001, Compl. ¶ 112; (2)
changed its August 14, 2001 approval deadline to a filing
deadline and allowed manufacturers with pending NDAs to
continue marketing unapproved LS drugs until August 14, 2003,
16
Compl. ¶ 113; (3) “departed from consistent and longstanding
precedent” by allowing manufacturers to continue marketing
unapproved LS drugs for three years after Unithroid’s approval,
Compl. ¶ 115; and (4) took “inconsistent positions” by finding
unapproved LS drugs to be unstable and unsafe and yet
permitting unapproved LS drugs to be marketed for three years
after Unithroid’s approval, Compl. ¶ 117. These allegations
essentially challenge three FDA actions: (1) extension of the
August 14, 2000 deadline to August 14, 2001; (2) conversion of
the August 14, 2001 approval deadline into a filing deadline; and
(3) authorization of manufacturers with pending NDAs to
continue marketing unapproved LS drugs until August 14, 2003.
Each of these actions is an exercise of FDA’s enforcement
discretion, and JSP fails to demonstrate how 21 U.S.C. § 355 and
21 U.S.C. § 393 provide guidelines for the exercise of such
discretion. To the extent JSP also contends that the district court
should have allowed it to amend its complaint, JSP did not seek
to amend its complaint and thus cannot show error by the district
court for failing to afford unrequested relief. See United States
ex rel. Totten v. Bombardier Corp., 286 F.3d 542, 552-53 (D.C.
Cir. 2002).
Accordingly, we affirm the dismissal of Count VI, reverse
the dismissal of Counts I and II of JSP’s complaint, and remand
the case to the district court for further proceedings.