The opinion in Novelty, Inc. v. DEA is dated June 22, but it seems to have been released just a couple of days ago. There's a particularly interesting dissent by Judge Janice Rogers Brown, which begins:
Tellingly called poor man’s crack (especially telling, as crack is already poor man’s cocaine), methamphetamine -- meth -- is a national scourge....
But we don’t toss the law aside in our zeal to eradicate even an obvious menace. The Deputy Administrator (DA) here has done just that,[fn1] in the process crippling a successful enterprise and costing many employees their jobs. In rejecting the ALJ’s recommendation that Novelty be allowed to retain its registration, the DA transforms a trivial violation of Novelty’s own rules into an imminent danger to the public health and shifts the burden to Novelty to explain why some of the thousands of convenience stores it services are busier than others. Subject to this perverse alchemy, ordinary business practices somehow provide proof of rampant lawlessness. Thus, the DA (1) misreads a statute so any place used for distribution is a “principal place of business,” even a padlocked storage shed; (2) uses the average sales of every convenience store serviced by Novelty as a proxy for legitimate demand at each location without regard to any individual characteristics; and (3) finds Novelty’s efforts to stay in business after its registration was suspended to be proof of villainy. Because “[t]he war on drugs is not an excuse to violate the norms of fair play and evenhandedness,” United States v. Cuellar, 478 F.3d 282, 307 (5th Cir. 2007) (en banc) (Smith, J., dissenting), rev’d 128 S. Ct. 1994 (2008), I respectfully dissent....
[Footnote 1:] As the Administrative Law Judge (ALJ) perceptively observed, no party “dispute[s] that illegal methamphetamine is a major drug problem in the United States,” but the agency “seems to be trying to remedy this problem by restricting or eliminating the availability of such over-the-counter products by removing the distributors of [these] products to convenience stores from the market place” altogether, despite lacking sufficient record evidence. In re Novelty Distrib., No. 08-33, slip op. at 93 (May 21, 2008) (Recommended Ruling of the Administrative Law Judge) (“ALJ Ruling”).
An interesting issue that the court didn't squarely deal with (Judge Henderson rejects it out of hand, but Judge Tatel simply concludes that it's irrelevant to the license revocation dispute, and Judge Brown doesn't address it) is whether the DEA investigators violated the First Amendment by restraining "Novelty’s video and audio recording of DEA investigators while they conducted their investigation."
The whole crackdown on meth has been horrible. So many allergy and cold victims suffer so a few hillbillies have to use oxy instead of cooking meth.
Is Tatel always this amusing and sarcastic?
It's also interesting that all three judges issued separate opinions. There is no opinion for the court except the conclusion that the petition for review must be denied.
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That "hogwash" line is Brown's. I enjoyed her accounting for the 60,000 missing doses. Amazing that this sort of crap makes it to the Circuit Court.
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The last sentence of dissent is hyperbolic only in that such travesty is uncommon except in firearms and drug law.
You must have missed the part where the drugs were shipped from CT to IN, huh?
She is pro-Lochner, but I think it was her rhetoric and non-legal comments that got her into the most trouble. Her statement that the New Deal being passed and upheld constituted "our own socialist revolution" is more controversial than her actual legal positions on New Deal jurisprudence, which if expressed more reservedly would probably have been hard to get the public worked up about.
I met her in summer 2008 and told her that I hoped she made it to the supreme court. She said she didn't think Obama would nominate her. LOL.
Next up.... Travellers who spend any time in Utah or elsewhere in the Southwest will be questioned by DEA agents to ensure no Ephedra viridi was transported (the plant contains both ephedrine and pseudoephedrine, which are the chemicals at issue here).... Honestly, what makes folks think that Ephedra species couldn't be used in the production of meth?
Oh, and the Mormons will be especially under the microscope, since presumably they are quite familiar with Mormon Tea ;-)
It does sound like the firm was not allowed to revamp its procedures after their license was suspended, and that suggests to me that the DEA was not interested in better procedures so much as getting Sudafed, etc. off the shelves entirely, or that the DEA was convinced of bad-faith neglect by the firm leading up the suspension, or both. I don't trust the DEA to be reasonable any more than I trust firms to err on the side of public safety.
JRB writes: " If every place is “principal,” no place is." Fair enough. But the inverse is also true: if there is no actual principal place, then every place is. Had there been major warehouses as well as minor depots, the statute's distinction of "principal" would be more operative, as at least one of the concurrences suggests.
In regards to the storage locations, JRB writes "if records
are kept at these hypothetical warehouses, if employees work there full-time, if they are listed in the phone book, if drugs are kept there for an indefinite duration, and so on, then there may be an argument that these warehouses are “principal places of business.” Let's turn that around: if you wanted to operate a large scale, legitimate enterprise but for whatever reason decided that meth makers and users were not your concern, how might you finesse things to keep the DEA off your back? By storing the product in places without records, full-time employees, etc. JRB expresses concerns about some of Novelty's practices but does not fully explore their potential for abuse. See Tatel, pps 4-6.
I didn't pore over every page of the decision but it seems that Novelty's distribution system was very spread out. That may be more efficient, but it doesn't lend itself to near-perfect control of a substance that had become a public health problem. That Novelty's management didn't realize by 2000 that "ordinary business practices" (JRB) were no longer appropriate then they were either amazingly foolish or looking the other way as total demand for these precursor chemicals had been steadily rising for years. JRB laments the loss of jobs, yet many of those jobs were created indirectly by demand for meth. Full stop. Does anyone believe that management was blissfully unaware of where the new demand was coming from? I suppose with libertarians like John Tierney arguing in the NYT that meth addiction was not much different from alcoholism (preposterous nonsense based on zero research), a lay person's confusion might be understandable. The management of a firm in this market does not get that benefit of the doubt. A smart and ethical business would have taken proactive steps to tighten controls as the extent of the meth trade became the most logical explanation for spiking demand.
Also missing from JRBs dissent is the volume involved in the .2% error rate in self-enforcing a 1 case limit as she estimates. Selling 2 cases instead of 1 could easily be employee error and unlikely to part of a criminal conspiracy (on the part of the employee). Was it 2 cases? Or 200? JRB complains that "...no one knows for sure the exact rate because the DA did not even attempt to discern it using any methodology whatsoever." Did Novelty, in its own defense, provide data and analysis to show that its procedures were tight and that the risk of diversion was miniscule? One might expect JRB to cite such analysis instead of relying on the DAs apparently shabby conclusions. And Tatel shows that the .2% estimate counts instances when 1 case was ordered and 1 delivered as enforcement of the 1 case limit. As JRB would say, HOGWASH.
All told, my best guess is that Novelty didn't want to proactively spend a dime when it thought it was in compliance with the law even though their system had some potential for abuse, and that's just another example of the amorality of capital. Did the DEA overstep here? Probably. Was it outrageous? Hmmm, the decision doesn't have enough facts about the details of the accounting and neither side shows all that much analysis about the liklihood of diversion (in the decision -- I would hope the case file had plenty more). Was justice served? Maybe. But I'm not going to get upset at the DEA because it suspended this firm's license. Novelty could have behaved more conservatively, and should have. Gun stores near the border that don't choose to try harder to avoid selling to gangs ought to have the law enforced in a most stringent manner as well. When your market explodes because of illegal activity, that is no time to negotiating exactly where the textual line is. It is time to take some responsibility and use some common sense.
At least ELIZA could change around the response into the form of a question.
And, as JRB points out, the evidence that any of Novelty's product was diverted -- which one would think would be the starting point for examining the risk of diversion -- is somewhere between zero and none.
Ignorant understatement of the century. A million or more families living in crisis for years is flat out bad. Full stop. It's not just about "people hurting themselves." There are huge externalities to a drug that is 1) cheap 2) available / not hard to make at home 3) extremely addictive and 4) has an extremely toxic production process. Those externalities to families and communities contribute to a large public health problem, if you have dehumanized all users from being part of the public in the first place.
Not a theory, an absolute reality. Responsible pharmacists realized that people buying a shelf's worth of Sudafed were up to no good. There have been several good stories in Rolling Stone over the years if you'd like to get educated about meth labs. Production methods have everything to do with the historical geography of this particular epidemic as well.
Well actually the meth epidemic is fading. I suspect that is mostly because addicts either died/burned out their brains or got off the treadmill for good and people realized that there is no "recreational" use of meth possible and that it was just too dangerous to try. Still, extra hassle with supply is another disincentive for someone in a cycle of addiction to be proactive in breaking the cycle during a down phase.
Supply is now less likely to come from small labs and home cookers and more likely to come from drug gangs operating bigger labs, so I'm not sure the laws restricting Sudafed, etc. were actually good policy. But the case was not about the wisdom or constitutionality of such laws, but about statutory interpretation and enforcement. JRB concedes, briefly, that Novelty's distribution practices raised legitimate questions. If you don't understand the production process then you won't understand why the other judges found those practices to be sketchy enough to warrant the sanction applied. And if you don't understand the cycle of stimulant addiction then you won't understand the relationship between supply and demand.
This strikes me as another failure of classical economics, pretending that people's preferences aren't shaped by norm reference points. Demand for meth is obviously inelastic, but not infinitely so. It is much simpler if you pretend there are no externalities and that supply is driven by demand and never the other way around, but the reality is more complicated than that. Please.
Yep. Let's throw out the Constitution so the govt can be our full time nanny.
But then...
...so I'm not sure the laws restricting Sudafed, etc. were actually good policy.
That may be the fastest backpedal I've seen in a long time.
I mean which is it - we need the govt to fully protect us from ourselves, or do we actually examine whether the policy is ineffective and quite possibly counter-productive? Zero tolerance or rational cost/benefit analysis? So far the War on Drugs has only sustained itself by the former and most advocates for ending it have been based on the latter.
No backpedal at all. Whether the appeals court decided this case properly is an entirely different question than whether the law at issue achieves its goals. This particular case did not present any Constitutional arguments. Mr. Nieporent made a number of ignorant assertions. If you guys want to argue that public health measures are ipso facto unconstitutional, go ahead, but that is a subject that neither Eugene nor I brought up. Besides, you have to deal with the externalities. The government has a compelling interest in protecting me from the crackheads down the street, as well as their children. I also believe that protecting people from themselves is sometimes worth it, as with meth and opiates. The "nanny state" isn't an all or nothing proposition. The more dangerous the vice, the more compelling a case for government involvement. Truly victimless crimes, like an adult growing and smoking their own weed, is different from regulating the distribution of chemicals used by dealers in a production process that creates a toxic waste site. Duh.
The War on Drugs is a disaster, but throwing out every attempt to control supply would also be a disaster, as I believe a rational cost/benefit analysis would clearly show. This is true even if you don't think you should have to count the costs to people who make dumb mistakes because they deserve it. I hope you don't think that way, but it isn't uncommon to have that kind of smug disregard for humanity amongst the puritanical libertarians here at VC.
I have a particular burr under my saddle with any policy that is fundamentally a police power issue masquerading as commerce - which IS the underlying power at issue here, not public health (though the federal govt is not empowered by the Constitution to act on that either).
I also believe that protecting people from themselves is sometimes worth it
I don't, and for my money the Constitution does not authorize such. Of course, that a buck and a quarter will get me a [small] cup of coffee.
Truly victimless crimes, like an adult growing and smoking their own weed, is different from regulating the distribution of chemicals used by dealers in a production process that creates a toxic waste site.
Talk about mixing apples and oranges.
I hope you don't think that way, but it isn't uncommon to have that kind of smug disregard for humanity amongst the puritanical libertarians here at VC.
I find letting people live their own lives, for better and for worse, is far from the normal usage of "puritan", but nice shot at inverting the meaning for a meaningless ad hom. You are truly your brother's keeper.
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