General may order the suspension of any importation or exportation of a listed chemical . . . or may disqualify any regular customer or regular supplier on the ground that the chemical may be diverted to the clandestine manufacture of a controlled substance." Moreover, section 971(c) provides that "the Attorney General must provide written notice of the order (including a statement of the legal and factual basis for the order)" and must provide "an agency hearing on the record in accordance with [the Administrative Procedures Act]" if such a hearing is requested. 21 U.S.C. § 971(c). The Court believes that if Congress had intended for section 830(b) to authorize the interdiction of domestic sales of listed chemicals, it probably would have used the same language as it did in section 971(c) and provided for the same procedural safeguards as it did in section 971(c).
Finally, the Court has grave concerns as to whether section 830(b) is constitutional as it is being interpreted and applied by defendants. As discussed in section III.B.2. below, defendants' interpretation of section 830(b) probably runs afoul of the due process clause of the fifth amendment. If the Court is forced to choose between an interpretation of a statute that is constitutional and an interpretation of the same statute that is unconstitutional, the constitutional interpretation is favored. Ellis v. Brotherhood of Railway, Airline & Steamship Clerks, 466 U.S. 435, 444, 80 L. Ed. 2d 428, 104 S. Ct. 1883 (1984). Plaintiff's interpretation -- that the statute authorizes the attorney general to cause a brief delay in a transaction while a "sting" is prepared -- is far more likely to be constitutional than defendant's interpretation -- that the statute authorizes an across the board interdiction without a hearing. Accordingly, plaintiff's interpretation is favored.
In sum, section 830(b) does not appear to authorize the actions that defendants have taken. Defendants, to date, have not argued that the authority for their actions lies anywhere other than in section 830(b). While defendants' actions may be based on a good faith concern for the public interest, legal authority for executive action is an essential tenet of our form of government which is predicated on the rule of law rather than rule by fiat. Accordingly, the Court finds it probable that plaintiff will prevail with respect to its argument that defendants' actions are not authorized.
2. Procedural Due Process
It also appears unlikely that defendants' interpretation and application of 21 U.S.C. section 830(b) passes fifth amendment due process review. The Court finds the case of Wisconsin v. Constantineau, 400 U.S. 433, 27 L. Ed. 2d 515, 91 S. Ct. 507 (1971), quite persuasive. In Constantineau, the Supreme Court considered the constitutionality of a Wisconsin statute that made it illegal to sell alcohol to those individuals who local officials considered to be "dangerous to the peace of [the] community" or otherwise unworthy of purchasing alcohol. Id. at 434-35 n. 2. The Court held that those so stigmatized were entitled to notice and a hearing. Id. at 436. Since the statute did not provide for notice and hearing, the Supreme Court struck the statute. Id. at 439.
The Court finds that plaintiff's situation is probably analogous to that in Constantineau. One who is labeled not worthy of being trusted with common chemicals that have both legitimate and illegitimate uses is severely stigmatized and, under the holding of Constantineau, would appear to be entitled to some sort of notice and hearing.
Defendants respond by arguing that even if plaintiff was entitled to a hearing, plaintiff in fact received a hearing. Specifically, defendants argue that a meeting between plaintiff and defendants' agents that took place on January 10, 1991, constituted sufficient due process. Defendants contend that at the meeting, defendants' agents fully explained to plaintiff's agents why defendants had acted as they had and that plaintiff's agents had an opportunity to represent plaintiff's position. Plaintiff characterizes the meeting somewhat differently.
While the Court agrees with defendants that procedural due process is a flexible concept, see Morrissey v. Brewer, 408 U.S. 471, 481, 33 L. Ed. 2d 484, 92 S. Ct. 2593 (1972), the Court is not likely to find that this meeting, even if the Court accepts defendants' characterization of the meeting, constitutes sufficient due process. The stigma that has attached to plaintiff is extreme -- arguably tantamount to the stigma of being criminally prosecuted. The Court believes that a formal hearing before an independent tribunal such as an administrative law judge is probably required when such stigma attaches.
The issue is not whether defendants acted in good faith. Rather the issue is whether plaintiff has been afforded procedural due process as guaranteed by the fifth amendment of the Constitution. The Court today holds that plaintiff has probably not received constitutionally sufficient due process. Accordingly, the Court finds that plaintiff will probably succeed in arguing that defendants' interpretation and application of section 830(b) violates the fifth amendment.
The Court finds that plaintiff has demonstrated a possibility of irreparable injury and a probability of success on the merits.
Accordingly, IT IS ORDERED that:
Defendants shall rescind the "Notices Prohibiting Completion of Certain Regulated Transactions" that to date have been issued to plaintiff's domestic suppliers of chemicals. Furthermore, defendants shall refrain from issuing further such notices to plaintiff's domestic suppliers of chemicals until further order of the Court. Today's order does not prevent defendants from delaying domestic transactions involving plaintiff until such reasonable time as a "sting" operation can be prepared.
The Court shall hold a telephonic status conference on Tuesday, May 21, 1991, at 9:15 A.M. at which time the Court will inquire of the parties whether they believe that the submission of additional briefs, evidence and/or a trial is necessary in order to reach a final disposition with respect to this action.
IT IS SO ORDERED.