Ottesen v. Hi-Tech Pharmaceuticals, Inc.

Background

The case concerns allegations about the use of DMHA in dietary supplements manufactured, distributed, and sold by Hi-Tech Pharmaceuticals, Inc. The court had stayed the case in 2020 under the primary jurisdiction doctrine, which permits a court to pause litigation while an administrative agency considers an issue within the agency’s expertise. The stay was pending a determination by the Food and Drug Administration about DMHA’s classification.

After the Food and Drug Administration updated its website in March 2023, stating that it had concluded DMHA was an unsafe food additive and that dietary supplements containing DMHA were adulterated under the Federal Food, Drug, and Cosmetic Act, the plaintiffs moved to lift the stay. On October 17, 2023, the court lifted it. The court reasoned that the website language did not appear tentative and that the record no longer indicated that the agency’s decision-making was ongoing. The court also noted that the agency had not published a notice in the Federal Register, a step discussed in legislative history concerning declarations that dietary supplements are adulterated.

Hi-Tech then moved under 28 U.S.C. § 1292(b) to certify the October 17 order for interlocutory appeal, meaning an appeal before final judgment. Hi-Tech also moved to stay the case while that appeal was considered.

Certification for Interlocutory Appeal

The court found that all three requirements for certification under § 1292(b) were met.

First, the court identified a controlling question of law: whether statements on an agency’s website can constitute “final agency action” sufficient to justify lifting a stay imposed under the primary jurisdiction doctrine. The court found that the answer could materially affect the litigation. If the stay remained lifted, the case could proceed; if the Ninth Circuit disagreed with the district court, the case would likely remain stayed and potentially avoid extended and expensive litigation.

Second, the court found a substantial ground for difference of opinion. The Ninth Circuit had not directly addressed whether statements on the Food and Drug Administration’s website could constitute final agency action for this purpose, and the court knew of no federal court that had directly addressed that issue concerning the Food and Drug Administration. The court also concluded that reasonable minds could differ about whether publication in the Federal Register was required to declare a substance adulterated or was only one possible method.

Third, the court found that an immediate appeal could materially advance the litigation by providing guidance that could determine whether the case should proceed or remain stayed.

Stay Pending Appeal

The court separately considered whether to stay the proceedings while the interlocutory appeal was reviewed. It considered potential harm from a stay, hardship or unfairness if the case proceeded, and the orderly administration of the case, including whether a stay would simplify or complicate the issues and evidence.

Although the case had already been stayed for three years, the court concluded that another stay was warranted. Proceeding during Ninth Circuit review could cause both sides to spend significant resources that might become unnecessary if the appellate court disagreed with the order lifting the stay. The court therefore stayed the proceedings while the Ninth Circuit reviewed the certification.

Disposition

The court granted Hi-Tech’s motion to certify the October 17, 2023 order for interlocutory appeal and granted Hi-Tech’s motion to stay the proceedings pending appeal. The parties were ordered to notify the court within 10 days after receiving a decision from the Ninth Circuit Court of Appeals.