[Federal Register Volume 65, Number 14 (Friday, January 21, 2000)]
[Notices]
[Pages 3454-3461]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 00-1406]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. 94N-0162]


Premchand Girdhari; Denial of Hearing; Final Debarment Order

AGENCY:  Food and Drug Administration, HHS.

ACTION:  Notice.

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SUMMARY:  The Food and Drug Administration (FDA) is denying the request 
of Premchand Girdhari, 643 Rassbach St., Eau Claire, WI 54701, for a 
hearing, and is issuing a final order under the Federal Food, Drug, and 
Cosmetic Act (the act) permanently debarring Mr. Girdhari from 
providing services in any capacity to a person that has an approved or 
pending drug product application. FDA bases this order on a finding 
that Mr. Girdhari was convicted of two felonies under Federal law 
relating to the regulation of a drug product under the act. Mr. 
Girdhari has failed to file with the agency information and analyses 
sufficient to create a basis for a hearing concerning this action.

EFFECTIVE DATE:  January 21, 2000.

ADDRESSES:  Application for termination of debarment to the Dockets 
Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers 
Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT:  Richard L. Arkin, Center for 
Veterinary Medicine (HFV-6), Food and Drug Administration, 7500 
Standish Pl. Rockville, MD 20855, 301-827-0141, FAX 301-827-5510, e-
mail ``rarkin@bangate.fda.gov''.

SUPPLEMENTARY INFORMATION:

I. Background

    On May 8, 1991, United States District Court for the Western 
District of Wisconsin accepted a plea of guilty from Premchand 
Girdhari, former President of Radix Laboratories, Inc., to a two count 
information, for making false statements and distributing adulterated 
drugs with the intent to defraud and mislead in violation of the act, 
Federal felony offenses under 18 U.S.C. 1001 and sections 301(a) and 
303(b) of the act (21 U.S.C. 331(a) and 333(b)). On July 8, 1991, 
judgment against Mr. Girdhari was entered and the court advised him of 
his sentence. The court amended its judgment to correct a clerical 
error but otherwise affirmed its earlier judgment and sentence on 
October 7, 1991.
    Mr. Girdhari was the president of Radix Laboratories, Inc., a 
Wisconsin corporation that manufactured a variety of animal drugs. In 
that capacity, he caused to be introduced into commerce adulterated 
drugs. Specifically, Mr. Girdhari marketed the drug ``Antihistamine 
(2%),'' which drug is adulterated within the meaning of (section 
501(a)(5) and (a)(2)(B) of the act (21 U.S.C. 351(a)(5) and (a)(2)(B)), 
because the drug was not the subject of the necessary FDA approvals nor 
was it manufactured in conformity with good manufacturing practice. He 
also knowingly and willfully made a false statement in a matter, within 
the jurisdiction of FDA, related to FDA's regulation of the injectable 
animal drug, ``Cal-Plex.''
    Section 306(a)(2) of the act (21 U.S.C. 335a(a)(2)) mandates 
debarment of an individual if FDA finds that the individual has been 
convicted of a felony under Federal law for conduct relating to the 
regulation of any drug product under the act. Under section 306(l)(2) 
of the act, mandatory debarment applies when an individual is convicted 
within 5 years preceding the initiation of the agency's action to 
debar. Section 306(c)(2)(A)(ii) of the act requires that such debarment 
be permanent.
    FDA has made a finding that Mr. Girdhari was convicted of two 
felonies under Federal law for conduct relating to the regulation of 
Radix drug products. Mr. Girdhari's first felony conviction under 18 
U.S.C. 1001 was for making a false statement to FDA about the 
manufacture and distribution of the unapproved injectable animal drug, 
``Cal-Plex.'' The information he falsified concerns matters that affect 
FDA's regulatory decisions about drug products. His second felony 
conviction under section 301(a) of the act was for violations of 
provisions of the act that prohibit introduction and delivery for 
introduction into interstate commerce of any drug that is adulterated, 
a felony conviction under Federal law for conduct relating to the 
regulation of a drug product under the act.
    In a certified letter received by Mr. Girdhari on October 17, 1994, 
the Interim Deputy Commissioner for Operations of FDA proposed to issue 
an order under section 306(a)(2) of the act permanently debarring Mr. 
Girdhari

[[Page 3455]]

from providing services in any capacity to a person that has an 
approved or pending drug product application. The letter offered Mr. 
Girdhari an opportunity for a hearing on the agency's proposal to issue 
such an order. FDA based the proposal to debar Mr. Girdhari on its 
finding that he had been convicted of two felonies under Federal law 
for conduct relating to the regulation of Radix's drug products.
    The certified letter also informed Mr. Girdhari that his request 
for a hearing could not rest upon mere allegations or denials but must 
present specific facts showing that there was a genuine and substantial 
issue of fact requiring a hearing. The letter also notified Mr. 
Girdhari that if it conclusively appeared from the face of the 
information and factual analyses in his request for a hearing that 
there was no genuine and substantial issue of fact that precluded the 
order of debarment, FDA would enter summary judgment against him and 
deny his request for a hearing.
    In a letter dated November 10, 1994, Mr. Girdhari requested a 
hearing on the proposal and indicated that further information would be 
submitted. On December 14, 1994, Mr. Girdhari submitted arguments and 
information in support of his hearing request.
    In his request for a hearing, Mr. Girdhari acknowledges that he 
pleaded guilty to offenses charged under 18 U.S.C. 1001 and sections 
301(a) and 303(b) of the act and that convictions and sentencing for 
these offenses were entered pursuant to the guilty pleas on July 8, 
1991. However, Mr. Girdhari argues that FDA's findings based on the 
conviction are incorrect and that the agency's proposal to debar him is 
unconstitutional.
    The Commissioner of Food and Drugs (the Commissioner) has 
considered Mr. Girdhari's arguments and concludes that they are 
unpersuasive and fail to raise a genuine and substantial issue of fact 
requiring a hearing. Moreover, the legal arguments that Mr. Girdhari 
offers do not create a basis for a hearing. (See 21 CFR 12.24(b)(1).) 
Mr. Girdhari's arguments are discussed below.

II. Mr. Girdhari's Arguments in Support of a Hearing

A.  Retroactive Application of Statute Is Improper

    Mr. Girdhari contends that ``retroactive application'' of the 
Generic Drug Enforcement Act (GDEA) of 1992 (Pub. L. 102-282), is 
improper and argues that Congress did not intend that the debarment 
provisions of the GDEA be applied retroactively.
    Mr. Girdhari states that the GDEA was not enacted until May 13, 
1992, which was subsequent to the date of his conviction on July 8, 
1991. He contends that he could not have anticipated the collateral 
legal consequences of the GDEA in plea negotiations, and had he known 
of the potential for possible future debarment, he either might not 
have agreed to plead guilty to violations that could be used as the 
foundation for debarment, or he might have pleaded innocent and sought 
a trial by jury. Thus, he contends that debarment would mean that he 
would suffer an unforeseen and substantial additional penalty of 
permanent prohibition from providing services in any capacity to a 
person with an approved or pending drug application.
    Mr. Girdhari argues that under the Supreme Court's holding in 
Landgraf v. USI Film Products, et al., 114 S.Ct. 1483 (1994), 
legislative enactments will not be presumed to apply retroactively 
unless Congress has expressed clear intent to the contrary. Mr. 
Girdhari further argues that neither the GDEA's provisions nor its 
legislative history constitute a clear expression of retroactive 
intent.
    The Supreme Court in Landgraf v. USI Film Products, 114 S.Ct. 1483 
(1994), clarified the standard to be applied in determining whether or 
not a statute operates retroactively. Under the analysis established in 
Landgraf, a statute applies retroactively if ``Congress has expressly 
prescribed'' such application. (Landgraf, 114 S.Ct. 1505.) If the 
statute contains ``no such express command,'' then the statute can only 
be applied retroactively if the statute would not have a ``retroactive 
effect,'' which ``would impair a party's rights which he possessed when 
acting, increase a party's liability for past conduct, or impose new 
duties with respect to transactions already completed.'' (Id.)
    Mr. Girdhari's argument that the GDEA cannot be applied 
retroactively under the standard set forth in Landgraf is unpersuasive. 
Mr. Girdhari's debarment is permissible because his debarment does not 
have a ``retroactive effect'' as that term is defined in Landgraf. 
Moreover, even if Mr. Girdhari's debarment were viewed as retroactive, 
the plain language of the GDEA evinces a clear congressional intent to 
debar specified individual felons from future participation in the 
pharmaceutical industry, irrespective of whether their violations 
predate the enactment of the GDEA. Finally, the remedial goals of the 
GDEA demonstrate Congress's intent to apply debarment under the GDEA to 
individuals convicted before the statute's amendment.
1. Debarment Is Not Retroactive Under Landgraf
    Contrary to Mr. Girdhari's argument, Landgraf does not bar the 
future application of a statute premised upon events predating its 
enactment unless the new statute has true ``retroactive effect.'' 
(Landgraf, 114 S.Ct. 1505.)
    Statutes authorizing injunctive or other prospective relief do not 
have retroactive effect, even if they are predicated upon events 
antecedent to the enactment of the statute. (Landgraf, 114 S.Ct. 1501.) 
Although the issuance of an injunction is invariably precipitated by 
past legal violations or other misconduct, ``the purpose of prospective 
relief is to affect the future rather than remedy the past,'' id. at 
1525 (Scalia, J., concurring), and the injunction itself operates 
solely ``in futuro,'' affecting only conduct that occurs after it has 
been issued. (Id. (quoting American Steel Foundries v. Tri-City Central 
Trades Council, 257 U.S. 184, 201 (1921)).) Thus, ``(w)hen (an) 
intervening statute authorizes or affects the propriety of prospective 
relief, application of the new provision is not retroactive.'' 
(Landgraf, 114 S.Ct. at 1501; see also American Steel Foundries, 257 
U.S. at 201 (because relief by injunction operates only in futuro, 
right to such relief must be determined by law in effect at time 
injunction is entered).)
    Statutes that operate in futuro are not retroactive within the 
meaning of Landgraf, even if their application is triggered by events 
antecedent to the enactment of the statute. (See Bell Atlantic 
Telephone Companies v. FCC, 79 F.3d 1195, 1207 (D.C. Cir. 1996) (FCC 
``add-back order'' was not ``retroactive'' within the meaning of 
Landgraf and was purely prospective, because even though the order 
required the assessment of past earnings, such an order determined how 
much a carrier could charge for future services); Scheidemann v. INS, 
83 F.3d 1517, 1523 (3rd Cir. 1995) (an amendment to immigration law, 
``[l]ike statutes altering the standards for injunctive relief,'' had 
only a ``prospective'' impact and, thus, was not retroactive under 
Landgraf).)
    Debarment under the GDEA, like an injunction, plainly does not have 
retroactive effect within the meaning of Landgraf. Unlike the 
compensatory damages at issue in Landgraf, which were 
``quintessentially backward-looking,''  Landgraf, 114 S.Ct. at 1506, 
the purpose of debarment is to restrict future conduct, notwithstanding 
the fact that its application is triggered by past

[[Page 3456]]

events. For purposes of retroactivity analysis, debarment orders are 
indistinguishable from injunctions and other forms of prospective 
relief. Mr. Girdhari's debarment is, in practical effect, simply a 
statutorily-mandated administrative injunction prohibiting him from 
engaging in certain conduct in the future.
    As the Courts of Appeals for the District of Columbia and the 
Seventh Circuits have recognized, debarment under the GDEA is a 
forward-looking remedial action; it does not impose additional 
punishment for past conduct but, rather, reflects a congressional 
judgment ``that the integrity of the drug industry, and with it public 
confidence in that industry, will suffer if those who manufacture drugs 
use the services of someone who has committed a felony subversive of 
FDA regulation.'' (DiCola v. FDA, 77 F.3d 504, 507 (D.C. Cir. 1996); 
see also Bae v. Shalala, 44 F.3d 489, 493, 496 (7th Cir. 1995) 
(debarment under GDEA is solely remedial).)
2. The Plain Language of the GDEA Demonstrates That Congress Intended 
That FDA Debar Individuals Whose Criminal Activity Predates the 
Enactment of the GDEA
    Even if debarment were viewed as having ``retroactive effect,'' Mr. 
Girdhari's debarment is still permissible under Landgraf because the 
plain language of the GDEA evinces a clear congressional intent that 
the statute be applied to events that occurred prior to its enactment.
    First, section 306(l)(2) of the act, which sets forth the effective 
dates for various provisions of the act, demonstrates that Congress 
intended that section 306(a)(2) be applied retroactively. Section 
306(l)(2) of the act states that section 306(a) shall not apply to a 
conviction which occurred more than 5 years before the initiation of an 
agency action. This language indicates that an applicable conviction 
may be used as the basis for debarment, so long as it occurred no more 
than 5 years prior to the initiation of debarment proceedings. At the 
time of the passage of the statute on May 13, 1992, at which point the 
agency could initiate a debarment action under section 306(a)(2) of the 
act, any applicable conviction up to 5 years before such date could 
serve as the basis for the debarment. Thus, the statute addresses 
retroactivity, and sets forth the boundaries of its application.
    Second, the use of limiting language in section 306(a)(1) of the 
act with regard to mandatory debarment of corporations and the omission 
of such language in section 306(a)(2) with regard to mandatory 
debarment of individuals also demonstrates that Congress intended that 
the latter section be applied retroactively. Section 306(a)(1) of the 
act provides that mandatory debarment of corporations applies only to 
convictions ``after the date of enactment of this section.'' However, 
section 306(a)(2) of the act, which pertains to mandatory debarment of 
individuals, does not contain this limiting language. A commonly used 
rule of statutory construction states that where Congress includes 
particular language in one section of a statute but omits such language 
in another section of the same act, it is generally presumed that 
Congress acts intentionally and purposefully in the disparate inclusion 
or exclusion. (I.N.S. v. Cardoza-Fonseca, 107 S.Ct. 1207, 1213 (1987) 
(citing Russelo v. United States, 104 S.Ct. 296, 300 (1983)).) 
Accordingly, here Congress intended that section 306(a)(2) of the act 
have retroactive effect because it did not specify in section 306(a)(2) 
that it applied only to convictions ``after the date of enactment of 
this section'' as specified in section 306(a)(1) of the act.
    The negative inference drawn from the omission in section 306(a)(2) 
of the act of the language in section 306(a)(1), which limits the 
latter section's effect to convictions after the date of enactment, 
arises directly from the disparate treatment of two provisions within a 
subsection which are much more closely related than the diverse 
sections of the Civil Rights Act of 1991 cited by appellant in 
Landgraf. The debarment provisions at issue involve two types of 
mandatory debarment, individual and corporate, while the provisions of 
the Civil Rights Act at issue in Landgraf involved the foreign 
application of Title VII, punitive and compensatory damages, and the 
right to a jury trial. Thus, the related debarment provisions make a 
clear showing of retroactive intent.
    Moreover, even under Landgraf, ``negative inference'' may provide 
evidence of congressional intent regarding retroactive application of a 
statute. Courts applying the (Landgraf) analysis have found a 
sufficient showing of congressional intent based on negative inference 
drawn from the statutory language to justify retroactive application of 
the statute. (See Scheidemann v. INS, 83 F.3d 1517, 1524 (3rd Cir. 
1996); Nevada v. United States, 925 F. Supp. 691, 693 (D. Nev. 1996) 
(the ``(Landgraf) Court did not preclude all future use of a negative 
inference analysis in support of retroactive intent'').) Similarly, the 
negative inference in the debarment provisions of the GDEA demonstrates 
the clear congressional intent for retroactive application of the 
statute.
3. The Remedial Goals of the GDEA Demonstrate That Congress Intended 
the GDEA To Be Applied Retroactively
    The circumstances giving rise to the passage of the GDEA 
demonstrate that Congress intended the statute to be applied 
retroactively. Congress enacted the GDEA in order to restore the 
integrity of the drug approval process and to protect the public 
health. (See Generic Drug Enforcement Act of 1992, Pub. L. 102-282, 
Section 102, 106 Stat. 149, 149 (1992).) In order to restore consumer 
confidence in the drug industry, Congress intended that individuals 
convicted of felonies relating to the development or approval, or 
otherwise relating to the regulation, of drug products be prohibited 
from continuing to work in that industry. (See section 306(a)(2) of the 
act.) Construing the GDEA to permit the debarment of individuals whose 
felonious conduct occurred prior to the GDEA's enactment serves these 
remedial goals of the statute.
    In Bae v. Shalala, 44 F.3d 489 (7th Cir. 1995), the Seventh Circuit 
upheld FDA's debarment under the GDEA of the former president of a 
generic drug manufacturing firm, based on his antecedent conviction for 
providing an ``unlawful gratuity'' to an FDA official. Although Bae 
argued that his debarment was ``retroactive punishment'' in violation 
of the Ex Post Facto Clause of the U.S. Constitution, the Seventh 
Circuit found that Bae's debarment was remedial, not punitive, and 
therefore did not violate the Ex Post Facto Clause. (Bae, 44 F.3d at 
493, 495-96.) The Seventh Circuit recognized that, to achieve its 
remedial goal of restoring consumer confidence in the generic drug 
industry, Congress appropriately determined that it could prohibit 
felons such as Bae from future activity in the industry. (Id. at 496.)
    Likewise, in DiCola v. FDA, 77 F.3d 504 (D.C. Cir. 1996), the Court 
of Appeals for the District of Columbia Circuit upheld the debarment of 
another former generic drug company executive, rejecting ex post facto, 
double jeopardy, and vagueness challenges to his debarment. The D.C. 
Circuit, like the Seventh Circuit, found that the GDEA legitimately 
achieved its remedial purposes by barring convicted felons from future 
contact with the industry. (DiCola, 77 F.3d at 507.)
    The GDEA is not punitive, but accomplishes remedial goals by 
removing convicted felons from the industry they have exploited. The

[[Page 3457]]

remedial goals would not be achieved, however, if individuals convicted 
of felonies prior to the GDEA's enactment continued to work in the drug 
industry. Retroactive application of the GDEA is not only permissible, 
but necessary, because Congress' aim of restoring consumer confidence 
in the drug industry is only served by applying the statute to permit 
the debarment of individuals, like Mr. Girdhari, whose violations 
predate, and, in some cases, precipitated, the statute's enactment. 
(See United States v. The Schooner Peggy, 5 U.S. (1 Cranch) 103 (1801) 
(courts to adopt interpretation that serves overall purposes of the 
statute); see also Scheidemann v. INS, 83 F.3d 1517, 1521 (3rd Cir. 
1996) (Congress's intent to be deduced from statutory scheme as a 
whole).) Thus, the remedial goals of the GDEA demonstrate that Congress 
intended the statute to be applied retroactively.

B. Retroactive Application of the Statute Violates the Ex Post Facto 
Clause

    Mr. Girdhari argues that retroactive application of the debarment 
provisions of the GDEA to him violates the Ex Post Facto Clause of the 
U.S. Constitution because the debarment provisions, which were not in 
effect at the time of his criminal conduct, are punitive in nature.
    An ex post facto law is one that reaches back to punish acts that 
occurred before the enactment of a law or that adds a new punishment to 
one that was already in effect when the crime was committed. (Ex Parte 
Garland, 4 Wall. 333, 337, 18 L.Ed. 366 (1866); Collins v. Youngblood, 
110 S.Ct. 2715 (1990).) Mr. Girdhari claims that the debarment 
provisions are punitive in nature for several reasons.
    First, Mr. Girdhari argues that the debarment provisions are 
punitive in nature because the GDEA punishes individuals for past 
behavior and deters future misconduct both by the individual who is 
debarred and by other individuals in the drug industry. Second, he 
argues that the debarment provisions' permanent prohibition on 
providing services ``in any capacity'' to a drug company constitutes an 
overly broad restriction which is punitive in nature. Third, he argues 
that such an overly broad restriction distinguishes his case from 
DeVeau v. Braisted, 80 S.Ct. 1146, 1155 (1960), in which the Supreme 
Court found the retroactive application of a law which prohibited 
convicted felons from union office was remedial in nature because the 
restriction was ``a relevant incident to a regulation of a present 
situation.'' Finally, he argues that application of the debarment 
provisions to individuals convicted of Federal felonies related to the 
regulation of animal drugs would not serve any remedial purpose, 
because the statute's remedial purpose is limited to ensuring the 
integrity of the human generic drug industry, safeguarding human 
health, and restoring human consumer confidence.
    Mr. Girdhari's arguments that application of the debarment 
provisions of the act to him is prohibited by the Ex Post Facto Clause 
are unpersuasive. In determining whether a statute violates the Ex Post 
Facto Clause, the critical consideration is whether the provision is 
remedial or punitive in nature. Because the intent underlying debarment 
under section 306(a)(2) is remedial rather than punitive, application 
of the section to him does not violate the Ex Post Facto Clause. Mr. 
Girdhari's arguments are addressed in turn below.
1. Remedial Nature of the GDEA
    Mr. Girdhari contends that the GDEA is punitive because it punishes 
past behavior and deters future misconduct. It is clear, however, that 
the statute is remedial in nature. Congress created the GDEA in 
response to findings of fraud and corruption in the generic drug 
industry. Congress made explicit findings regarding the necessity of 
the GDEA that were incorporated into section 1 of the statute and also 
were made part of the legislative history. (See H.R. Rep. No. 272, 102d 
Cong., 1st Sess. 10-11 (1991), reprinted in 1992 U.S.C.C.A.N. 103, 104-
105.) Congress found that ``(1) there is substantial evidence that 
significant corruption occurred in FDA's process of approving drugs 
under abbreviated drug applications, (2) there is a need to establish 
procedures designed to restore and to ensure the integrity of the 
abbreviated drug application process and to protect the public health, 
and (3) there is a need to establish procedures to bar individuals who 
have been convicted of crimes pertaining to the regulation of drug 
products from working for companies that manufacture or distribute such 
products.'' (Generic Drug Enforcement Act of 1992, Pub. L. 102-282, 
Section 102, 106 Stat. 149, 149 (1992).)
    Moreover, the Courts of Appeals for the District of Columbia 
Circuit and Seventh Circuits have held that the debarment provisions do 
not violate the Ex Post Facto Clause, because the provisions are 
remedial in nature, rather than punitive. (DiCola v. F.D.A., 77 F.3d 
504, 507 (D.C. Cir. 1996); Bae v. Shalala, 44 F.3d 489, 493 (7th Cir. 
1995).) The court in Bae concluded, ``The clear and unambiguous intent 
of Congress in passing the GDEA was to purge the generic drug industry 
of corruption and to restore consumer confidence in generic drug 
products. The GDEA's civil debarment penalty is solely remedial * * *'' 
(Bae at 493.) The court in DiCola agreed with this conclusion. (DiCola 
at 507.)
    Furthermore, the Supreme Court has long held that statutes that 
deny future privileges to convicted offenders because of their previous 
criminal activities in order to ensure against corruption in specified 
areas do not punish those offenders for past conduct and, therefore, do 
not violate the ex post facto prohibitions. (See, e.g., Hawker v. New 
York, 18 S.Ct. 573 (1898) (physician barred from practicing medicine 
for a prior felony conviction); DeVeau v. Braisted, 80 S.Ct. 1146 
(1960) (convicted felon's exclusion from employment as officer of 
waterfront union is not a violation of the Ex Post Facto Clause).)
    Contrary to Mr. Girdhari's contentions, the remedial nature of the 
GDEA is not diminished simply because the GDEA deters debarred 
individuals and others from future misconduct. The Supreme Court in 
U.S. v. Halper, 109 S.Ct. 1892, 1901, n.7 (1989), noted that ``for the 
defendant even remedial sanctions carry the sting of punishment.'' The 
Court found that such deterrent effects would not diminish the remedial 
nature of a civil sanction. (Halper at 1902.) Furthermore, the Supreme 
Court in Hudson v. United States, 118 S.Ct. 488, 494 (1997), stated, 
``We have since [the Halper ruling] recognized that all civil penalties 
have some deterrent effect'' (emphasis added). (See Department of 
Revenue of Mont. v. Kurth Ranch, 114 S.Ct. 1937, 1945, n.14 (1994); 
United States v. Ursery, 116 S.Ct. 2135, 2145, n. 2 (1996).) The Court 
continued, ``(b)ut the mere presence of this purpose (deterrence) is 
insufficient to render a sanction criminal * * *'' (Hudson at 496.) As 
the court in Bae stated, ``The punitive effects of the GDEA are merely 
incidental to its overriding purpose to safeguard the integrity of the 
generic drug industry while protecting public health.'' (Bae at 493; 
see also Mannochio v. Kusserow, 961 F.2d 1539, 1542 (11th Cir. 1992).) 
Thus, Mr. Girdhari's argument that any incidental deterrent effects 
cause the statute to be punitive is without merit.
2. Permanent Prohibition on Services in Any Capacity
    Mr. Girdhari argues that the GDEA's permanent prohibition on 
providing services ``in any capacity'' to a company

[[Page 3458]]

with an approved or pending drug application is an overly broad 
restriction which is punitive in nature.
    a.  Prohibition on services in any capacity. Mr. Girdhari contends 
that the prohibition on providing services ``in any capacity'' would 
include services that have ``no rational connection'' to the drug 
approval process. Mr. Girdhari argues that such a prohibition would not 
serve any remedial purpose of the statute and would constitute 
punishment for the debarred individual. Mr. Girdhari's arguments are 
unpersuasive for the reasons given below.
    Congress enacted the GDEA in order to restore the integrity of the 
drug approval process and to protect the public health. All facets of 
the drug industry were implicated in the scandals that led to the 
enactment of the GDEA, including generic drug company executives, 
scientists at both generic and innovator firms, consultants, research 
laboratories, and FDA employees. (See H.R. Rep. No. 102-272, 102d 
Cong., 1st Sess., at 14 (1991).) In light of this background, Congress 
rationally concluded that in order to ensure the integrity of the drug 
approval process and to protect the public health, it was necessary, 
among other things, to unequivocally exclude from the drug industry 
those individuals, like Mr. Girdhari, who had previously engaged in 
fraudulent or corrupt acts with respect to the regulation of drugs. The 
D.C. Circuit in DiCola held that the debarment provisions' prohibition 
on services ``in any capacity'' serves the statute's remedial purpose. 
(DiCola at 507.) As the Seventh Circuit noted in Bae, ``the duration or 
severity of any employment restriction will not mark it as punishment 
where it is intended to further a legitimate governmental purpose.'' 
(Bae at 495.)
    The breadth of the debarment imposed under the GDEA furthers the 
statute's remedial goals by promoting efficient administration of the 
debarment provisions, ensuring uniform treatment of offenders, and 
restoring public confidence in the pharmaceutical industry. Congress 
prohibited all services in the GDEA in order to avoid the serious 
administrative difficulties involved in distinguishing between those 
positions clearly related to drug regulation and those not so related. 
(DiCola at 507.) These difficulties would include the problem of 
ascertaining the exact nature of an employee's or contractor's 
relationship with an employer or the person entering the contract, as 
well as defining what constitutes a sufficient nexus with the 
regulatory scheme under all circumstances. (DiCola at 507; see also 
Siegel v. Lyng, 851 F.2d 412, 416 (D.C. Cir. 1988).)
    Additionally, the GDEA's prohibition on services ``in any 
capacity'' ensures that the purposes underlying the debarment sanction 
are not circumvented or undermined. Any attempt to list or define 
particular areas of employment that are prohibited to debarred 
individuals would be subject to creative exploitation by those 
determined to reenter a familiar field. The D.C. Circuit in DiCola 
concluded that the agency would be especially concerned about ``any 
employment that might create an opportunity for regular and frequent 
contact'' between a debarred individual and the management of a drug 
company, because ``[t]he agency would find it very difficult, if not 
impossible, to assure itself and the public that [the individual] is 
not, through that contact, actually selling advice or other services 
related to the circumvention of Federal regulation.'' (DiCola at 507; 
see also Farlee and Calfee, Inc. v. USDA, 941 F.2d 964, 968 (9th Cir. 
1991).)
    Furthermore, courts have upheld many other types of debarment 
provisions that involved employment restrictions that were as broad, or 
broader than, the GDEA's prohibition on services ``in any capacity.'' 
For instance, the United States Supreme Court in Hudson v. United 
States, 118 S.Ct. 488 (1997), upheld a broad sanction that debarred 
participation in any banking activities. Furthermore, the Seventh 
Circuit Court of Appeals in United States v. Furlett, 974 F.2d 839, 844 
(7th Cir. 1992), upheld a debarment order that prohibited a commodities 
trader from trading on any contract market, even as a retail customer 
of another broker. (See also Manocchio v. Kusserow, 961 F.2d 1539, 
1541-42 (upholding exclusion from participation in any Medicare 
program); United States v. Bizzell, 921 F.2d at 267 (upholding 
exclusion from participation in any Housing and Urban Development 
program).)
    Finally, Mr. Girdhari cites Kennedy v. Mendoza-Martinez, 83 S.Ct. 
554, 568 (1963), in support of his argument that the prohibition on 
services ``in any capacity'' is not related to any remedial purpose of 
the GDEA. Specifically, Mr. Girdhari notes that the Supreme Court held 
in Kennedy that the excessive effect of a sanction relative to its 
remedial purpose is relevant in determining whether the sanction is 
civil or criminal. (Kennedy at 568.) The decision in Kennedy, however, 
does not support Mr. Girdhari's argument that debarment is a punitive 
sanction.
    The Supreme Court in Kennedy listed the relevant factors, including 
whether a sanction's effect is excessive in relation to its nonpunitive 
purpose, to determine whether a civil penalty removing an individual's 
citizenship was in effect a criminal penalty requiring the procedural 
safeguards of the Fifth and Sixth Amendments. (Kennedy at 567-68.) As 
shown above, the GDEA's prohibition on providing services ``in any 
capacity'' to individuals with pending or approved drug product 
applications is necessary to promote the remedial purpose of the 
statute and, thus, is not excessive. Furthermore, the Supreme Court in 
Hudson v. United States, 118 S.Ct. 488 (1997), held that a debarment 
order was not a criminal punishment based, in part, on the factors set 
forth in Kennedy. As noted above, the debarment order at issue in 
Hudson was as broad as the GDEA's prohibition on providing services 
``in any capacity''. Therefore, by the reasoning in Kennedy, the GDEA's 
prohibition on providing services ``in any capacity'' is not punitive.
    b. Permanence of the prohibition. As for the prohibition's 
duration, both the District of Columbia and the Seventh Circuits have 
held that the permanence of the debarment is rationally related to the 
remedial goals of the statute. (DiCola at 507; Bae at 495.) The 
District of Columbia Circuit in DiCola stated, ``The permanence of the 
debarment can be understood, without reference to punitive intent, as 
reflecting a congressional judgment that the integrity of the drug 
industry, and with it public confidence in that industry, will suffer 
if those who manufacture drugs use the services of someone who has 
committed a felony subversive of FDA regulation.'' (DiCola at 507.) The 
Seventh Circuit in Bae emphasized that permanent debarment from 
providing services in any capacity is ``not disproportionate to the 
remedial goals of the GDEA or to the magnitude of (the defendant's) 
wrongdoing.'' (Bae at 496.) Additionally, the Supreme Court has upheld 
other statutes which, for remedial purposes, permanently bar a class or 
group of individuals from certain occupations due to a prior criminal 
conviction. (See Hawker v. New York, 18 S.Ct. 573 (1898); DeVeau v. 
Braisted, 80 S.Ct. 1146 (1960).) Therefore, Mr. Girdhari's argument 
that the permanent nature of the debarment is punitive must fail.
3. DeVeau
    Mr. Girdhari contends that the GDEA can be distinguished from 
DeVeau because the permanent prohibition on

[[Page 3459]]

providing services ``in any capacity'' to an individual with an 
approved or pending drug application cannot be justified as ``incident 
to a regulation of a present situation'' and thus reveals punitive 
intent. However, the debarment provisions' prohibitions are clearly 
incident to regulation of a present situation and, as such, the Court's 
reasoning in DeVeau applies.
    In DeVeau, the Court upheld a law that prohibited a convicted felon 
from employment as an officer in a waterfront union. The purpose of the 
law was to remedy the past corruption and to ensure against future 
corruption in the waterfront unions. The Court in DeVeau, 80 S.Ct. at 
1155, stated:
    The question in each case where unpleasant consequences are brought 
to bear upon an individual for prior conduct, is whether the 
legislative aim was to punish that individual for past activity, or 
whether the restriction of the individual comes about as a relevant 
incident to a regulation of a present situation * * *.
    As with DeVeau, the legislative purpose of the relevant statute 
here is to ensure that fraud and corruption are eliminated from the 
drug industry and, therefore, the public's confidence in that industry 
will be restored. The restrictions placed on individuals convicted of a 
felony under Federal law are not intended as punishment but are 
intended to preserve the integrity of the drug approval process and 
protect the public health, purposes which are clearly ``incident to a 
regulation of a present situation'' and, as such, consistent with 
DeVeau. Therefore, this argument must also fail.
4. Applicability of GDEA to Animal Drug Convictions
    Mr. Girdhari argues that the debarment provisions of section 
306(a)(2) of the act cannot be retroactively applied to him because the 
remedial purposes of the GDEA are unrelated to the activities upon 
which his conviction was based. He contends that Congress intended the 
GDEA to apply to convictions involving human drugs, not animal drugs. 
Therefore, he concludes that retroactive application of section 
306(a)(2) of the act to him would not serve any remedial purpose.
    Mr. Girdhari's argument that section 306(a)(2) of the act cannot be 
retroactively applied to convictions involving animal drugs is 
unpersuasive. Congress clearly intended the GDEA to apply to 
convictions involving animal drugs. The Supreme Court has held 
repeatedly that the starting point for determining the meaning of a 
statute is the plain language of the statute. (Norfolk & Western 
Railway Company v. American Train Dispatchers Association, 111 S.Ct. 
1156, 1163 (1991);  Mallard v.  U.S. District Court for the Southern 
District of Iowa, 109 S.Ct. 1814, 1818 (1989).) If the language of the 
statute is clear on its face, that language must ordinarily be regarded 
as conclusive. (Negonsott v. Samuels, 113 S.Ct. 1119, 1122 (1993).)
    It is clear from the plain language of the GDEA that it explicitly 
includes animal drugs within its scope. Section 306(a)(2) of the act 
applies to ``an individual who has been convicted of a felony under 
Federal law for conduct relating to the regulation of any drug 
product.'' (emphasis added.) Additionally, section 306(a)(2) of the act 
debars such individual ``from providing services in any capacity to a 
person that has an approved or pending drug product application.'' 
(emphasis added.) Section 201(dd) of the act (21 U.S.C. 321(dd)) 
defines drug product specifically for the purpose of section 306 of the 
act as a drug subject to regulation under section 505, 507, 512, or 802 
of the act (21 U.S.C. 355, 357, 360b, or 382), or section 351 of the 
Public Health Service Act. Section 512 of the act regulates both 
pioneer and generic animal drugs.
    The intent of Congress to apply the debarment provisions to animal 
drug convictions is clearly shown by the reference to section 512 of 
the act in the definition of ``drug product'' in section 201(dd) of the 
act. Congress clearly intended the GDEA to ensure the integrity of the 
animal drug approval process and thereby protect the public health, 
because the plain language of the GDEA applies to convictions related 
to animal drugs. Therefore, Mr. Girdhari's argument that application of 
the GDEA to convictions related to animal drugs would not serve any 
remedial purpose and, as such, retroactive application of section 
306(a)(2) of the act to him would be punitive, is without merit.

C. Retroactive Application of the Statute Violates the Due Process 
Clause

    Mr. Girdhari argues that retroactive application of the GDEA 
violates the Due Process Clause of the U.S. Constitution. First, Mr. 
Girdhari relies on Usery v. Turner Elkhorn Mining Co., 96 S.Ct. 2882, 
2893 (1976), to argue that retroactive application of the GDEA is not 
justified under the Due Process Clause. Second, Mr. Girdhari argues 
that the terms of the GDEA as applied to him are overly vague.
1. Usery
    Mr. Girdhari argues that even if the GDEA's main purpose is 
remedial, justification sufficient to support the prospective 
application of a statute under the Due Process Clause of the 
Constitution is not always sufficient to justify retrospective 
application of that statute. Mr. Girdhari cites Usery v. Turner Elkhorn 
Mining Co., 96 S.Ct. 2882, 2893 (1976), in support of this argument. In 
that case the Court held that the retroactive application of a remedial 
statute designed to compensate disabled coal miners was not arbitrary 
and capricious under the Due Process Clause, although the Court noted 
that it would ``hesitate to approve the retrospective imposition of 
liability on any theory of deterrence * * * or blameworthiness.'' (Id. 
(citations omitted).)
    Mr. Girdhari's argument is unpersuasive. Mr. Girdhari fails to 
demonstrate that his debarment is unrelated to any legitimate purpose, 
or that the retroactive application of the GDEA can only be justified 
on a theory of deterrence or blameworthiness. As shown above, debarment 
guards against future violations by prohibiting individuals ``from 
providing services in any capacity to a person that has an approved or 
pending drug product application'' in order to meet the legitimate 
regulatory purpose of restoring the integrity of the drug approval and 
regulatory process and protecting the public health. Additionally, as 
shown above, the remedial nature of the GDEA is not diminished simply 
because the GDEA deters debarred individuals and others from future 
misconduct. (U.S. v. Halper, 109 S.Ct. 1892, 1901, n.7 (1989); Bae v. 
Shalala, 44 F.3d 489, 493 (7th Cir. 1995).) Thus, the GDEA satisfies 
the requirements of the Due Process Clause for retroactive application.
2. Vagueness
    Mr. Girdhari asserts that the statute's prohibition on providing 
services ``in any capacity'' is overly vague. The Supreme Court held in 
Roberts v. United States Jaycees, 104 S.Ct. 3244, 3256 (1984) (quoting 
Connally v. General Construction Co., 46 S.Ct. 126, 127 (1926)), that 
``a statute which either forbids or requires the doing of some act in 
terms so vague that [persons] of common intelligence must necessarily 
guess at its meaning and differ as to its application, violates the 
first essential of due process of law.'' The Roberts Court explained 
that the constitutional prohibition against such vague statutes 
``enables individuals to conform their conduct to the requirements of 
the law.'' (Roberts at 3256.)
    The terms of the debarment order, drawn from the language of the 
statute,

[[Page 3460]]

are sufficiently clear to allow Mr. Girdhari to conform his conduct to 
the requirements of the law. The court in DiCola held that the 
debarment order's prohibition on services ``in any capacity'' did not 
render the order unconstitutionally vague under the Due Process Clause 
of the U.S. Constitution. (DiCola at 509.)
    The court explained that ``all direct employment by a drug 
company'' would be within the remedial scope of the debarment order. 
(DiCola at 509.) The court further explained that for employment by 
enterprises that provided goods or services to a drug company, a 
debarred individual would ``usually have a pretty good idea whether a 
position with a firm that is not itself a drug manufacturer runs afoul 
of the remedial purpose for which he has been debarred* * *'' (DiCola 
at 509.) Finally, the court in DiCola noted that a debarred individual 
could seek a prospective ruling about a specific employment opportunity 
by filing a citizen petition with the agency. (DiCola at 509.) 
Likewise, if Mr. Girdhari is uncertain whether a specific type of 
employment would be within the scope of the debarment order, he may 
file a citizen petition with the agency regarding his inquiry.

D. Application of the Statute Violates the Double Jeopardy Clause

    Finally, Mr. Girdhari argues that the proposal to debar him under 
section 306(a)(2) of the act violates the Double Jeopardy Clause of the 
Fifth Amendment to the U.S. Constitution. The Double Jeopardy Clause 
states that no person shall ``be subject for the same offense to be 
twice put in jeopardy of life or limb.''
    Mr. Girdhari argues that the proposed debarment constitutes 
additional punishment for activities for which he has already been 
punished. Furthermore, Mr. Girdhari relies on U.S. v. Halper, 490 U.S. 
435 (1989), to argue that permanent debarment is not rationally related 
to any remedial purpose because such debarment unnecessarily reaches 
activities that are completely unrelated to drug regulation (e.g., 
photocopying documents for a drug company).
    Mr. Girdhari's arguments are unpersuasive. The Supreme Court in 
Hudson v. United States, 118 S.Ct. 488 (1997), in large part disavowed 
the method of analysis used in United States v. Halper, 109 S.Ct. 1892 
(1989), to determine whether a sanction violates the Double Jeopardy 
Clause. The Court in Hudson held that the Double Jeopardy Clause did 
not preclude the criminal prosecution for violation of Federal banking 
statutes of a defendant who had previously been permanently debarred 
from participating in any banking activities for the same conduct.
    The Double Jeopardy Clause protects only against the imposition of 
multiple criminal punishments for the same offense in successive 
proceedings. Hudson v. United States, 118 S.Ct. at 493. The Double 
Jeopardy Clause does not prohibit the imposition of any additional 
sanction that could, ``in common parlance,'' be described as 
punishment. (Id. (internal quotation marks and citations omitted).) The 
Court in Hudson held that whether a particular punishment is criminal 
or civil is first a matter of statutory construction. (Hudson v. United 
States, 118 S.Ct. at 493 (quoting Helvering v. Mitchell, 58 S.Ct. 630, 
633 (1938)).) That is, a court first must ask whether the legislature, 
``in establishing the penalizing mechanism, indicated either expressly 
or impliedly a preference for one label or the other.'' (Hudson v. 
United States, 118 S.Ct. at 493 (quoting United States v. Ward, 100 
S.Ct. at 2641).) Second, where the legislature has indicated an 
intention to establish a civil penalty, a court must inquire further 
whether the statutory scheme is ``so punitive either in purpose or 
effect,'' Hudson v. United States, 118 S.Ct. at 493 (quoting United 
States v. Ward, 100 S.Ct. at 2641), as to ``transform what was clearly 
intended as a civil remedy into a criminal penalty,'' Hudson v. United 
States, 118 S.Ct. at 493 (quoting Rex Trailer Co. v. United States, 76 
S.Ct. 219, 222 (1956)).
    The debarment of Mr. Girdhari is not a criminal penalty under 
Hudson. First, the legislature in enacting the GDEA intended clearly 
that debarment serve as a civil penalty. In Hudson, the Court found 
``it significant that the authority to issue debarment orders is 
conferred [by statute] upon the appropriate Federal banking 
agencies','' holding ``[t]hat such [debarment] authority was conferred 
upon administrative agencies is prima facie evidence that Congress 
intended to provide for a civil sanction.'' (Id.) Here, the GDEA 
explicitly provides FDA, through the Secretary of Health and Human 
Services, with the authority to permanently debar individuals convicted 
of certain felonies, such as Mr. Girdhari, from ``providing services in 
any capacity to a person that has an approved or pending drug product 
application.'' (Section 306(a)(2) of the act.) Thus, under Hudson, the 
terms of the GDEA are prima facie evidence that Congress intended the 
debarment provisions to be civil in nature.
    Under the second prong of Hudson, the debarment authorized by the 
GDEA is not so punitive either in purpose or effect as to transform 
this civil remedy into a criminal penalty. In Hudson, the Court 
considered whether a permanent debarment sanction prohibiting 
participation in any banking activities had such a punitive purpose or 
effect. The Court concluded that there was no evidence to establish 
that the debarment sanction at issue was ``so punitive in form and 
effect as to render [it] criminal despite Congress' intent to the 
contrary.'' (Hudson v. United States, 118 S.Ct. at 495 (quoting United 
States v. Ursery, 116 S.Ct. 2135, 2148 (1996)).) The Court in Hudson 
applied the analysis of Kennedy v. Mendoza-Martinez, 83 S.Ct. 554, 567-
68 (1963), to reaching this holding.
    In Hudson, the Court first noted that debarment proceedings have 
not historically been viewed as punishment. (Hudson at 495-96.) Second, 
the Court found that ``[debarment] sanctions do not involve an 
`affirmative disability or restraint,' as that term is normally 
understood.'' (Hudson at 496 (quoting Kennedy, 83 S.Ct. at 567).) 
Third, the Court found that the debarment sanction in the banking 
statute at issue in that case does not ``come into play `only' on a 
finding of scienter,'' because willfulness is not a prerequisite to the 
imposition of the debarment sanction. (Id. (quoting Kennedy, 83 S.Ct. 
at 567).) Likewise, the GDEA does not require a finding of willfulness 
as a prerequisite to imposing debarment. Fourth, the Court explained 
that the fact that the conduct for which the debarment is imposed may 
also be criminal is insufficient to render the debarment sanctions 
criminally punitive. (Id.) Finally, and significantly, the Court 
explained that the general deterrence of the conduct at issue resulting 
from an individual debarment is insufficient to render the debarment 
criminal. (Id.) These factors apply as much to debarment under the 
GDEA.
    Furthermore, the GDEA's permanent prohibition on services in any 
capacity to a company with an approved or pending drug product 
application is not excessive in relation to the statute's remedial 
purpose. As shown above, both the District of Columbia and the Seventh 
Circuits have upheld the permanence of the debarment provisions as 
rationally related to the remedial goals of the statute, (DiCola at 
507; Bae at 495.), and the Supreme Court has upheld similar statutes 
which, for remedial purposes, impose permanent prohibitions. (See 
Hudson v. United States, 118 S.Ct. 488 (1997); Hawker v. New York, 170 
U.S. 189, 190

[[Page 3461]]

(1898); DeVeau v. Braisted, 80 S.Ct. 1146 (1960).)
    The preclusion of Mr. Girdhari from providing any type of service 
to holders of pending or approved drug product applications is not 
excessive in relation to the remedial goals of the GDEA. As stated 
above, the D.C. Circuit has held that the GDEA's prohibition on 
services in any capacity serves the statute's remedial purpose. (DiCola 
at 507.) Congress prescribed all services in order to avoid the serious 
administrative difficulties involved in distinguishing between those 
positions clearly related to drug regulation and those not clearly 
related. (DiCola at 507; see also Seigel v. Lyng, 851 F.2d 412, 416 
(D.C. Cir. 1988).) Furthermore, the GDEA's prohibition ensures that the 
purposes underlying the debarment provisions are not circumvented or 
undermined. (DiCola at 507; see also Farlee and Calfee, Inc. v. USDA, 
941 F.2d 964, 968 (9th Cir. 1991).) Finally, as noted above, the 
Supreme Court in Hudson v. United States, 118 S.Ct. 488 (1997), upheld 
a similar statute which, for remedial purposes, imposes a prohibition 
on participation in any banking activity.
    Under Hudson, debarment pursuant to the GDEA is not so punitive 
either in purpose or effect as to render the penalty criminal. Thus, 
Mr. Girdhari's argument that debarment under the GDEA violates the 
Double Jeopardy Clause must fail.

E. Conclusion

    Mr. Girdhari acknowledges that he was convicted as alleged by FDA 
in its proposal to debar him and has raised no genuine and substantial 
issue of fact regarding this conviction. In addition, Mr. Girdhari's 
legal arguments do not create a basis for a hearing and, in any event, 
are unpersuasive. Accordingly, the Commissioner denies Mr. Girdhari's 
request for a hearing.

III. Findings and Order

    Therefore, the Commissioner, under section 306(a) of the act, and 
under authority delegated to her (21 CFR 5.10), finds that Premchand 
Girdhari has been convicted of a felony under Federal law for conduct: 
(1) Relating to the development or approval, including the process for 
development or approval, of a drug product (section 306(a)(2)(A) of the 
act); and (2) relating to the regulation of a drug product (section 
306(a)(2)(B) of the act).
    As a result of the foregoing findings, Premchand Girdhari is 
permanently debarred from providing services in any capacity to a 
person with an approved or pending drug product application under 
section 505, 512, or 802 of the act, or under section 351 of the Public 
Health Service Act (42 U.S.C. 262), effective January 21, 2000, 
(sections 306(c)(1)(B) and (c)(2)(A)(ii) and 201(ee) of the act). Any 
person with an approved or pending drug product application who 
knowingly uses the services of Mr. Girdhari in any capacity, during his 
period of debarment, will be subject to civil money penalties (section 
307(a)(7) of the act (21 U.S.C. 335b(a)(7))). In addition, FDA will not 
accept or review any abbreviated drug application submitted by or with 
Mr. Girdhari's assistance during his period of debarment (section 
306(c)(1) of the act).
    Mr. Girdhari may file an application to attempt to terminate his 
debarment, under section 306(d)(4)(A) of the act. Any such application 
would be reviewed under the criteria and processes set forth in section 
306(d)(4)(C) and (d)(4)(D) of the act. Such an application should be 
identified with Docket No. 94N-0162 and sent to the Dockets Management 
Branch (address above). All such submissions are to be filed in four 
copies. The public availability of information in these submissions is 
governed by 21 CFR 10.20(j). Publicly available submissions may be seen 
in the Dockets Management Branch (address above) between 9 a.m. and 4 
p.m., Monday through Friday.

    Dated: January 13, 2000.
Bernard A. Schwetz,
Acting Deputy Commissioner for Food and Drugs.
[FR Doc. 00-1406 Filed 1-20-00; 8:45 am]
BILLING CODE 4160-01-F