_________________________________________________________________
_________________________________________________________________
              CASE BEING CONSIDERED FOR TREATMENT
          PURSUANT TO RULE 34(j) OF THE GENERAL RULES

             IN THE UNITED STATES COURT OF APPEALS
              FOR THE DISTRICT OF COLUMBIA CIRCUIT
                     ______________________

                          No. 94-1605
                     ______________________

                        CARL ERIC OLSEN,

                           Petitioner,

                                v.

                 DRUG ENFORCEMENT ADMINISTRATION,

                           Respondent.
                     ______________________

              PETITION FOR REVIEW OF AN ORDER OF THE
                 DRUG ENFORCEMENT ADMINISTRATION
                     ______________________

                    BRIEF FOR THE RESPONDENT
                     ______________________

                         JOHN C. KEENEY
                           Acting Assistant Attorney General
                         THERESA M.B. VAN VLIET
                           Chief
                         LENA WATKINS
                         JOHN J. FARLEY
                           Trial Attorneys
                           Narcotic and Dangerous Drug Section
                           Criminal Division
                           U.S. Department of Justice
                           P.O. Box 27312, Central Station
                           Washington, D.C. 20038
                           (202) 514-0917

OF COUNSEL:

DENNIS F. HOFFMAN
Drug Enforcement Administration

_________________________________________________________________
_________________________________________________________________


TABLE OF CONTENTS

                                                             PAGE

TABLE OF AUTHORITIES  . . . . . . . . . . . . . . . . . . . .  ii

CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES . . . .   v

GLOSSARY  . . . . . . . . . . . . . . . . . . . . . . . . . .  vi

STATEMENT OF THE ISSUE  . . . . . . . . . . . . . . . . . . .   1

STATUTES AND REGULATIONS  . . . . . . . . . . . . . . . . . .   1

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . .   2
     I.   STATUTORY AND REGULATORY BACKGROUND . . . . . . . .   2
     II.  THE CURRENT PROCEEDINGS . . . . . . . . . . . . . .   5

SUMMARY OF THE ARGUMENT . . . . . . . . . . . . . . . . . . .   8

ARGUMENT  . . . . . . . . . . . . . . . . . . . . . . . . . .   9
     I.   STANDARD OF REVIEW  . . . . . . . . . . . . . . . .   9

     II.  CONGRESS, DEA, AND THE COURTS HAVE ALL FOUND THAT
          MARIHUANA IS PROPERLY IN SCHEDULE I OF THE CSA AND
          MUST REMAIN THERE UNTIL IT SATISFIES THE CRITERIA
          IN 21 U.S.C. 812(b).  . . . . . . . . . . . . . . .  10

     III. DEA PROPERLY FOUND THAT THE PETITION WAS NOT
          SUFFICIENT TO JUSTIFY ADDITIONAL RESCHEDULING
          PROCEEDINGS BECAUSE THE PETITION WAS PREMISED ON
          THE INCORRECT BELIEF THAT A SCHEDULE I DRUG MUST
          BE RESCHEDULED IF IT IS THE SOURCE OF AN ACCEPTED
          AND USEFUL MEDICATION.  . . . . . . . . . . . . . .  13

          A.   THE PETITIONER'S ARGUMENT  . . . . . . . . . .  13

          B.   THE CSA DOES NOT MANDATE THAT A SCHEDULE I
               DRUG MUST BE RESCHEDULED IF IT IS THE SOURCE
               OF AN ACCEPTED AND USEFUL MEDICATION BUT
               REQUIRES DEA TO MAKE INDIVIDUAL FINDINGS
               ABOUT A PARTICULAR DRUG PRIOR TO RESCHEDULING
               IT.  . . . . . . . . . . . . . . . . . . . . .  14

     IV.  THE ADMINISTRATOR PROPERLY DENIED THE PETITION
          BECAUSE IT RELIED ON THE INCORRECT ASSUMPTION THAT
          DRONABINOL HAS BEEN MOVED TO SCHEDULE II WHEN IN
          FACT ONLY A SINGLE PHARMACEUTICAL PRODUCT HAS BEEN
          MOVED TO SCHEDULE II. . . . . . . . . . . . . . . .  19

CONCLUSION  . . . . . . . . . . . . . . . . . . . . . . . . .  23


                                ii

TABLE OF AUTHORITIES

CASES                                                        PAGE

Alliance for Cannabis Therapeutics v. Drug Enforcement
     Administration, 15 F.3d 1131 (D.C. Cir. 1994)  . 3,16,18,19*

Alliance for Cannabis Therapeutics v. Drug Enforcement
   Administration, 930 F.2d 936 (D.C. Cir. 1991)  . . . . 2,3,16*

Chevron U.S.A., Inc. v. Natural Resources Defense Council,
     Inc., 467 U.S. 837 (1984)  . . . . . . . . . . . .  10,16,17

Cutler v. Hayes, 818 F.2d 879 (D.C. Cir. 1987)  . . . . . . 21,22

Fertilizer Institute v. United States Environmental
   Protection Agency, 935 F.2d 1303 (D.C. Cir. 1991)  . . . .  22

Grinspoon v. Drug Enforcement Admin., 828 F.2d 881
     (lst Cir. 1987)  . . . . . . . . . . . . . . . . . . . .  21

Independent Insurance Agents of America, Inc. v. Ludwig,
     997 F.2d 958 (D.C. Cir. 1993)  . . . . . . . . . . . . .  18

National Organization for the Reform of Marijuana Laws v.
     Bell, 488 F. Supp. 123 (D.D.C. 1980) . . . . .  12,14,16,19*

National organization for the Reform of Marijuana Laws v.
   Drug Enforcement Admin., 559 F.2d 735 (D.C. Cir. 1977) .  3,16

National Organization for the Reform of Marijuana Laws v.
     Ingersoll, 497 F.2d 654 (D.C. Cir. 1974) . . . . . . . . . 3

Olsen v. Drug Enforcement Admin., 776 F.2d 267 (llth Cir.
     1985), cert. denied, 475 U.S. 1030 (1986)  . . . . . . . . 7

Olsen v. Iowa, 808 F.2d 652 (8th Cir. 1986) . . . . . . . . . . 6

Olsen v. State, Civ. No. 83-301-E, 1986 WL 4045 (S.D. Iowa
     March 19, 1986)  . . . . . . . . . . . . . . . . . . . . . 6

Randolph-Sheppard Vendors of America v. Weinberger, 795 F.2d
     90 (D.C. Cir. 1986)  . . . . . . . . . . . . . . . . . 21-22

State v. Olsen, 315 N.W.2d 1 (Iowa 1982)  . . . . . . . . . . . 6

USAA Federal Savings Bank v. McLaughlin, 849 F.2d 1505
     (D.C. Cir. 1988) . . . . . . . . . . . . . . . . . . . .  18

____________________

     *  Authorities chiefly relied upon.

                               iii

United States v. Fogarty, 692 F.2d 542 (8th Cir. 1982),
     cert. denied, 460 U.S. 1040 (1983) . . . . . . . . . . 12,16

United States v. Greene, 892 F.2d 453 (6th Cir. 1989), cert.
     denied, 495 U.S. 935 (1990)  . . . . . . . . . . . . . .  12

United States v. Middleton, 690 F.2d 820 (11th Cir. 1982),
     cert. denied, 460 U.S. 1051 (1983) . . . . . . . . . . .  12

United States v. Rush, 738 F.2d 497 (lst Cir. 1984), cert.
     denied, 470 U.S. 1004 (1985) . . . . . . . . . . . . . . . 6

United States v. Walton, 514 F.2d 201 (D.C. Cir. 1975)  . . .  15

United States v. Whitley, 734 F.2d 1129 (6th Cir. 1984) . . .  18

REGULATIONS

21 C.F.R.:
     1307.03  . . . . . . . . . . . . . . . . . . . . . . . . . 6
     1308.11  . . . . . . . . . . . . . . . . . . . . .  16-17,20
     1308.12  . . . . . . . . . . . . . . . . . . . . . . . .  20
     1308.44  . . . . . . . . . . . . . . . . . . . . . . .  9-10

28 C.F.R.:
     0.100(b) . . . . . . . . . . . . . . . . . . . . . . . . . 3
     0.104  . . . . . . . . . . . . . . . . . . . . . . . . . . 3

50 Fed. Reg. 42,186 . . . . . . . . . . . . . . . . . . . . 19,21

51 Fed. Reg. 17,476 . . . . . . . . . . . . . . . . . . .  20,21*

51 Fed. Reg. 22,946 . . . . . . . . . . . . . . . . . . . . . . 3

54 Fed. Reg. 53,767 . . . . . . . . . . . . . . . . . . . 3,6,16*

57 Fed. Reg. 10,499 . . . . . . . . . . . . . . . . .  3,4,16,20*

58 Fed. Reg. 25,790 . . . . . . . . . . . . . . . . . . . . .  16

STATUTES

5 U.S.C.:
     706  . . . . . . . . . . . . . . . . . . . . . . . . . 10,26

21 U.S.C.:
     811  . . . . . . . . . . . . . . . . . . . . 2,6,9,10,12,15*
     812  . . . . . . . . . . . . . . . . . . .  2,4,10,14-17,21*
     877  . . . . . . . . . . . . . . . . . . . . . . . . .  8,10
____________________

     *  Authorities chiefly relied upon.

                                iv

MISCELLANEOUS

H. Rep. No. 1444, 81st Cong., 2nd Sess., reprinted in 1970
  U.S.C.C.A.N. 4566 . . . . . . . . . . . . . . . . . . . . 11-12

                                     v
  
     CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES


A.   Parties and Amici

     All parties, intervenors, and amici appearing before the

agency and in this court are listed in the Petitioner's Brief.


B.   Rulings Under Review

     References to the ruling at issue appear in the Petitioner's

Brief.  The ruling is reproduced on pages 17-25 of the

Petitioner's Appendix.


C.   Related Cases

     This matter was previously before this court in Olsen v.

Drug Enforcement Admin., No. 93-1109 (D.C. Cir. Dec. 9, 1993).

In that case, the court granted DEA's motion for remand.

     References to related cases in the Petitioner's Brief

accurately identify cases before this court that previously

addressed the scheduling of marihuana.  Another case addressing

the scheduling of marihuana is National Org. for the Reform of

Marijuana Laws v. Bell, 488 F. Supp. 123 (D.D.C. 1980) (three

judge court).

                                vi

GLOSSARY

CSA - Controlled Substances Act, 21 U.S.C. 801 et seq.

DEA - U.S. Drug Enforcement Administration

FDA - U.S. Food and Drug Administration

HEW - U.S. Department of Health, Education, and Welfare

THC - tetrahydrocannabinol

                               vii

CASE BEING CONSIDERED FOR TREATMENT
          PURSUANT TO RULE 34(j) OF THE GENERAL RULES

             IN THE UNITED STATES COURT OF APPEALS
              FOR THE DISTRICT OF COLUMBIA CIRCUIT
                     ______________________

                          No. 94-1605
                     ______________________

                        CARL ERIC OLSEN,

                           Petitioner,

                                v.

                 DRUG ENFORCEMENT ADMINISTRATION,

                           Respondent.
                     ______________________

              PETITION FOR REVIEW OF AN ORDER OF THE
                 DRUG ENFORCEMENT ADMINISTRATION
                     ______________________

                    BRIEF FOR THE RESPONDENT
                     ______________________
   
                     STATEMENT OF THE ISSUE

     Whether the Drug Enforcement Administration properly

rejected the petitioner's theory that marihuana plants should be

moved from Schedule I to Schedule II of the Controlled Substances

Act because marihuana plants are a source of an accepted and

useful medication when the petitioner's theory was based solely

upon language in an informal letter and was contradicted directly

by the plain language of the Controlled Substances Act.

                     STATUTES AND REGULATIONS

     Except for those already included in the Addendum to the

Petitioner's Brief, the pertinent statutes and regulations are

set forth in an addendum bound with this brief.

                                1

STATEMENT OF THE CASE

I.   STATUTORY AND REGULATORY BACKGROUND

     In response to the growing drug problem in the United

States, Congress in 1970 passed the Controlled Substances Act, 21

U.S.C. 801 et seq. ("CSA").  The CSA classifies various hazardous

drugs into five schedules.  Id. 812.  Restrictions upon use and

access to a particular drug vary based upon the drug's schedule

status in the CSA.  Drugs in Schedule I are subject to more

severe restrictions than drugs in the other schedules.  See

Alliance for Cannabis Therapeutics v. Drug Enforcement Admin.,

930 F.2d 936, 937 (D.C. Cir. 1991).  Congress placed marihuana in

Schedule I of the CSA.1  21 U.S.C. 812(c), Schedule I(c)(10).

     Although Congress made the initial scheduling decisions, the

CSA specifically permits the Attorney General to add a substance

to a schedule, transfer a substance from one schedule to another

or remove a substance from the schedules entirely.  Id. 811(a).

The Attorney General may only transfer a substance to a different

schedule if she "finds that such drug or other substance has a

potential for abuse" and makes findings that the drug or

substance meets the requirements for the new schedule.  Id.  The

findings required for placing a substance in a particular

schedule are listed in 21 U.S.C. 812(b).  The Attorney General

has delegated the authority to reschedule controlled substances

____________________

     1    The substance is called "marihuana" in the CSA and the
respondent will use that spelling throughout this brief.
However, where the spelling "marijuana" is used in a quoted
passage, the spelling has not been changed.

                                2

to the Administrator of the Drug Enforcement Administration

("DEA").  28 C.F.R. 0.100(b).  The Drug Enforcement Administrator

("Administrator") has further delegated this authority to the

Deputy Administrator.  28 C.F.R. 0.104.

     For over 20 years, various groups and individuals have asked

DEA to exercise its authority to move marihuana from Schedule I

to a less restrictive schedule or to remove marihuana from the

CSA schedules entirely.  See Alliance for Cannabis Therapeutics

v. Drug Enforcement Admin., 15 F.3d 1131 (D.C. Cir. 1994);

Alliance for Cannabis Therapeutics, 930 F.2d at 937; National

Org. for the Reform of Marijuana Laws v. Drug Enforcement Admin.,

559 F.2d 735 (D.C. Cir. 1977); National Org. for the Reform of

Marijuana Laws v. Ingersoll, 497 F.2d 654 (D.C. Cir. 1974).

Despite these efforts, in March of 1992, the Administrator issued

a final order denying a petition to reschedule marihuana from

Schedule I to Schedule II of the CSA.  See 57 Fed. Reg. 10,499

(1992).2

     The Administrator relied upon the language of the CSA in

____________________

     2    DEA's review of the rescheduling petition was quite
extensive.  DEA issued a notice of a hearing on the rescheduling
petition in 1986.  See 51 Fed. Reg. 22,946 (1986).  After
hearings before an administrative law judge, the Administrator
issued findings of fact and conclusions of law that determined
that marihuana should not be moved from Schedule I because the
marihuana plant has no currently accepted medical use and because
it is not safe for use, even under medical supervision.  See 54
Fed. Reg. 53,767, 53,784 (1989).  On appeal, this court generally
upheld the Administrator's decision but remanded the matter for
clarification.  See Alliance for Cannabis Therapeutics, 930 F.2d
at 940-941.  On remand, the Administrator again found that
marihuana plants should remain in Schedule I.  See 57 Fed. Reg.
at 10,507-10,508.  The latter decision was affirmed by this Court
in Alliance for Cannabis Therapeutics, 15 F.3d at 1137.

                                3

making his determination.  Under the CSA, a drug or substance may

not be placed in Schedule II absent findings that:

     (A)  The drug or other substance has a high
          potential for abuse.

     (B)  The drug or other substance has a currently
          accepted medical use in treatment in the
          United States or a currently accepted medical
          use with severe restrictions.

     (C)  Abuse of the drug or other substances may
          lead to severe psychological or physical
          dependence.

21 U.S.C. 812(b)(2)(A)-(C).

     In the Administrator's final order, he concluded that the

marihuana plant had no currently accepted medical use and thus

could not be placed in schedule II.  57 Fed. Reg. at 10,499.

The Administrator applied a five-part test for determining

whether a substance had a currently accepted medical use:

     (1)  the drug's chemistry must be known and reproducible;

     (2)  there must be adequate safety studies;

     (3)  there must be adequate and well-controlled
          studies proving efficacy;

     (4)  the drug must be accepted by qualified experts; and

     (5)  the scientific evidence must be widely available.

57 Fed. Reg. at 10,504-10,507.  After reviewing the evidence in

the record, the Administrator found that marihuana could not

satisfy a single one of these criteria.  Id. at 10,507.  These

findings, as well as other findings of fact and conclusions of

law, resulted in the denial of the marihuana rescheduling

petition.

                                4

II.  THE CURRENT PROCEEDINGS

     On July 21, 1992, the petitioner sent a letter to then-

Administrator Robert C. Bonner in which he raised several 

questions about the Administrator's final order.  In the letter, 

the petitioner appeared to agree with the Administrator's finding

that marihuana, as a plant, failed to satisfy the first part of

the test for determining a currently accepted medical use because

a plant such as marihuana is not a scientifically established

compound capable of reproduction in standard dosages.  A. 1.3

The petitioner's letter then asked why coca and opium plants (the

sources of cocaine, morphine, and heroin) were placed in Schedule

II.  Id.  If, the petitioner reasoned, coca and opium plants are

subject to the same scientific variances as marihuana plants,

then DEA is "treating marijuana unfairly."  Id.  The petitioner

suggested either removing all plants from the CSA schedules

because they "will never fit into your definition of drugs" or

changing the definition to account for the inconsistency in the

treatment of the different plants.  Id.

     On August 17, 1992, Administrator Bonner sent the petitioner

a response to his letter.  A. 5.  In the response, the

Administrator rejected the petitioner's attempt to analogize

marihuana plants to coca and opium plants.  Id.  The

Administrator explained that when Congress placed coca leaves and

opium plant materials in Schedule II, it was aware that these

____________________

     3    "A." references are to the bound appendix submitted by
the petitioner with his brief.

                                5

plants had been recognized historically as the source for a

variety of accepted and useful medications.  Id.  The plants

contain medically active alkaloids that can be extracted and used

to produce pharmaceutical compounds capable of reproduction in

standardized doses.  Id.  In contrast, the Administrator pointed

out that the recent attempts to reschedule marihuana were not

grounded on claims that medically useful compounds could be

extracted from marihuana, but rather that smoking marihuana

itself produced medical benefits.  Id.  Thus, the Administrator

found the scheduling decisions to be reconcilable.  Id. at 5-6.

     The petitioner, proceeding t)ro se, then filed a formal

request for the rescheduling of marihuana pursuant to 21 U.S.C.

811 and 21 C.F.R. 1307.03.4  A. 2-4.  In his petition, he drew

an analogy from language in the Administrator's letter of August

17, 1992.  He reasoned that if coca leaves and opium plants could

be placed in Schedule II because they are sources of accepted and

____________________

     4    The petitioner has frequently litigated issues related
to the legal treatment of marihana.  He challenged several
criminal convictions by arguing that marihuana smoking was
protected by the free exercise clause of the First Amendment and
the equal protection clause of the Fourteenth Amendment.  See
Olsen v. Iowa, 808 F.2d 652, 653 (8th Cir. 1986); United States
v. Rush, 738 F.2d 497, 511-513 (lst Cir. 1984), cert. denied, 470
U.S. 1004 (1985); State v. Olsen, 315 N.W.2d 1, 7-9 (Iowa 1982).
Additionally, the petitioner has brought numerous civil actions
seeking to obtain judicial authorization to use marihuana.  See
Olsen v. Drug Enforcement Admin., 878 F.2d 1458, 1461-1465 (D.C.
Cir. 1989), cert. denied, 495 U.S. 906 (1990); Olsen v. Drug
Enforcement Admin., 776 F.2d 267, 268 (llth Cir. 1985), cert.
denied, 475 U.S. 1030 (1986); Olsen v. State, Civ.  No. 83-301-E,
1986 WL 4045, at *1 (S.D. Iowa March 19, 1986).  The petitioner
also participated in the administrative proceedings where the DEA
considered a petition to reschedule marihuana from Schedule I to
Schedule II of the CSA.  See 54 Fed. Reg. at 53,767.

                                6

useful medications, then marihuana plants could be placed in

schedule II if marihuana is shown to be "a source for an accepted

and useful medication."  A. 3.  The petitioner then noted that

dronabinol, a synthetic equivalent of the isomer which is the

principle psychoactive substance in marihuana, has been

rescheduled to Schedule II.  Id.  Because marihuana is the source

of an accepted and useful medication, dronabinol, the petitioner

reasoned that marihuana must be moved to Schedule II of the CSA.

Id. at 4.  The petitioner then requested that the Administrator

reschedule marihuana from Schedule I to Schedule II of the CSA.

Id. at 2.5

     The Administrator initially refused to accept the

rescheduling petition because dronabinol is a wholly synthetic

substance and is not obtained from marihuana.  A. 7.  However,

after the petitioner appealed, DEA voluntarily asked this court

to remand the petition for a ruling.  This court remanded the

petition in an Order dated December 9, 1993.  See Olsen v. Drug

Enforcement Admin., No. 93-1109 (D.C. Cir. Dec. 9, 1993).

     On May 16, 1994, Deputy Administrator Stephen H. Greene

issued a nine-page final order denying the petition.  A. 17.  The

final order explained that Congress placed marihuana in Schedule

I.  A. 19-20.  It rejected the petitioner's analogy, finding that

marihuana can only be moved from Schedule I if there is a finding

that marihuana has a "currently accepted medical use in treatment

____________________

      5    The petitioner did not ask DEA to reschedule any other
substances.

                                7

in the United States."  A. 22.  The order acknowledged that (-)

delta-9-trans-THC isomer, the principal psychoactive ingredient

in marihuana, is also the ingredient in a pharmaceutical product

that has proven to be a safe and effective anti-emetic for

patients receiving cancer chemotherapy.  Id.  However, the order

noted that only a very specific synthetic dronabinol product was

rescheduled to Schedule II -- "dronabinol ("synthetic) in sesame

oil and encapsulated in a soft gelatin capsule" in a drug product

approved by the Food and Drug Administration ("FDA").  A. 23.

The order further stated that the regulation of plants and

chemicals under the CSA is distinct and that the CSA requires the

independent evaluation of each individual controlled substance.

A. 24.  The final order reaffirmed that marihuana plants have no

currently accepted medical use in treatment and found that the

rescheduling of one pharmaceutical product did not require DEA to

transfer marihuana plants or any other substance to Schedule II.

A. 24-25.

     The petitioner has appealed the final order to this court

pursuant to 21 U.S.C. 877.

                     SUMMARY OF THE ARGUMENT

     Congress placed marihuana in Schedule I of the CSA and this

decision has been consistently approved by the courts.  The

petitioner is incorrect in asserting that marihuana must be moved

from Schedule I to Schedule II if it is a source of an accepted

and useful medication.  The plain language of the CSA requires

that a substance itself must have a currently accepted medical

                                8

use before it may be moved from Schedule I to Schedule II.  The

petitioner has failed to provide any evidence to suggest that the

marihuana plant itself has a currently accepted medical use.

Under the CSA, the rescheduling of synthetic dronabinol in a

pharmaceutical product has no effect on the scheduling of the

marihuana plant.  Thus, the petitioner's request for rescheduling

failed to raise any issue that justified the initiation of

rescheduling proceedings.

     The petitioner is also incorrect in asserting that

dronabinol was moved from Schedule I to Schedule II.  Only one

specific pharmaceutical product containing synthetic dronabinol

has been moved to Schedule II: synthetic dronabinol in sesame oil

and encapsulated in a soft gelatin capsule in a FDA-approved drug

product.  Although the petitioner now seeks to challenge the

legality of the rule rescheduling this pharmaceutical product and

argues that dronabinol should have been rescheduled in its

entirety, he did not raise these issues before DEA.  These

issues should not be considered for the first time by this court.

                            ARGUMENT

I.   STANDARD OF REVIEW

     Any interested person may submit a petition to DEA

requesting that DEA reschedule a controlled substance. 21 U.S.C.

811(a); 21 C.F.R. 1308.44(a).  However, a petition that is

accepted for filing "may be denied by the Administrator within a

reasonable time thereafter if he finds the grounds upon which the

petitioner relies are not sufficient to justify the initiation of

                                9

proceedings."  21 C.F.R. 1308.44(c).  The Administrator relied

upon this provision in denying the petition in the instant case.

A. 18-19.

     In reviewing the Administrator's decision, findings of fact,

"if supported by substantial evidence, shall be conclusive."  21

U.S.C. 877.  Additionally, DEA's action may be set aside if it

was arbitrary, capricious, an abuse of discretion or contrary to

law.  5 U.S.C. 706.  However, when reviewing an administrative

agency's interpretation of a statute, the court must give effect

to the unambiguously expressed intent of Congress.  Chevron

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.

837, 842-843 (1984).  If the statute is silent or ambiguous, the

court is to determine whether the agency's interpretation is

based upon a permissible construction of the statute.  Id. at

843.  The court may not substitute its own judgment for a

reasonable interpretation made by the administrator of an agency.

Id. at 844.

II.  CONGRESS, DEA, AND THE COURTS HAVE ALL FOUND THAT
     MARIHUANA IS PROPERLY IN SCHEDULE I OF THE CSA AND MUST
     REMAIN THERE UNTIL IT SATISFIES THE CRITERIA IN 21
     U.S.C. 812(b).

     Congress made the initial decision to place marihuana in

Schedule I.  21 U.S.C. 811(c).  This decision was made after

careful consideration.  The legislative history of the CSA

demonstrates that Congress was sensitive to the arguments of

                                10

those who advocated the deregulation of marihuana.6  See H. Rep.

No. 1444, 81st Cong., 2d Sess. 12-13, reprinted in 1970

U.S.C.C.A.N. 4566, 4577-4578.  Congress also sought the advice of

the Department of Health, Education, and Welfare ("HEW") before

making a scheduling determination for marihuana.7  After

considering this information, Congress placed marihuana in

Schedule I so that the drug would be subject to the CSA's "most

stringent controls."  Id. at 14, reprinted in 1970 U.S.C.C.A.N.

____________________

     6    The House Report on the CSA contains several pages of
discussion about the proper treatment of marihuana under the CSA.
The House Report noted that:

     The extent to which marihuana should be controlled is a
     subject upon which opinions diverge widely.  There are
     some who not only advocate its legalization but would
     encourage its use; at the other extreme there are some
     States which have established the death penalty for
     distribution of marihuana to minors.

H. Rep. No. 1444, 81st Cong., 2d Sess. 12, reprinted in 1970
U.S.C.C.A.N. 4566, 4577.

     7    The Assistant Secretary for Health and scientific
Affairs wrote to Chairman Harley 0. Staggers that:

     Some question has been raised whether the use of the
     plant itself produces "severe psychological or physical
     dependence" as required by a schedule I or even
     schedule II criterion.  Since there is still a
     considerable void in our knowledge of the plant and
     effects of the active drug contained in it, our
     recommendation is that marihuana be retained within
     schedule I at least until the completion of certain
     studies now underway to resolve this issue.  If those
     studies make it appropriate for the Attorney General to
     change the placement of marihuana to a different
     schedule, he may do so in accordance with the authority
     provided under section 201 of the bill.

Letter from Dr. Roger 0. Egeberg, Assistant Secretary for Health
and Scientific Affairs, Dep't of HEW, to Hon. Harley 0. Staggers,
Chairman, House Comm. on Interstate and Foreign Commerce,
reprinted in id. at 61, reprinted in 1970 U.S.C.C.A.N. at 4629.

                                11

at 4579.

     Since the passage of the CSA, numerous individuals have

attempted to challenge the decision of Congress to place

marihuana in Schedule I as being irrational or unconstitutional.

These challenges have been uniformly rejected by the federal

courts.  See, e.g., United States v. Greene, 892 F.2d 453, 455-

456 (6th Cir. 1989), cert. denied, 495 U.S. 935 (1990); United

States v. Fogarty, 692 F.2d 542, 547 (8th Cir. 1982), cert.

denied, 460 U.S. 1040 (1983); United States v. Middleton, 690

F.2d 820, 823 (11th Cir. 1982), cert. denied, 460 U.S. 1051

(1983); National Org. for the Reform of Mariiuana Laws v. Bell,

488 F. Supp. 123, 139-141 (D.D.C. 1980) (three judge court).

     In rejecting constitutional challenges to the initial

classification of marihuana, courts frequently have pointed out

that 21 U.S.C. 811(a) provides the Attorney General with the

authority to reclassify marihuana if scientific information later

demonstrates that Schedule I is not the appropriate schedule.

See, e.g., Greene, 892 F.2d at 456; Fogarty, 692 F.2d at 548;

Middleton, 690 F.2d at 823; National Org. for the Reform of

Mariiuana Laws, 488 F. Supp. at 141.  DEA, on behalf of the

Attorney General, recently conducted lengthy proceedings pursuant

to 811(a) and found that marihuana should not be moved from

Schedule I because the plant has no currently accepted medical

use and because it is not safe for use, even under medical

supervision.  These decisions were approved by this court.  See

footnote 2, supra.

                                12

III. DEA PROPERLY FOUND THAT THE PETITION WAS NOT SUFFICIENT
     TO JUSTIFY ADDITIONAL RESCHEDULING PROCEEDINGS BECAUSE THE
     PETITION WAS PREMISED ON THE INCORRECT BELIEF THAT A
     SCHEDULE I DRUG MUST BE RESCHEDULED IF IT IS THE SOURCE OF
     AN ACCEPTED AND USEFUL MEDICATION.

     In seeking to reschedule marihuana from Schedule I to

Schedule II, the petitioner made a rather creative argument based

upon several flawed premises.  DEA properly detected the flaws in

the petitioner's logic and found that the petition raised no

credible issue that would justify additional proceedings to

reschedule marihuana.

     A.   THE PETITIONER'S ARGUMENT

     The petitioner's argument was based entirely upon his

construction of language contained in then-Administrator Bonner's

response to an earlier letter sent by the petitioner.  In

response to the petitioner's query about why marihuana plants are

in Schedule I while coca leaves and opium plants are in Schedule

II, the Administrator stated that:

     In placing coca leaves and opium plant material in
     Schedule II, Congress was very much aware that these
     plant materials have historically been recognized as
     the source for a variety of accepted and useful
     medications.

A. 5.  The petitioner then seized upon the Administrator's

language as "general rules of statutory construction."  Pet. Br.

9.  Using the newly created rules of statutory construction as

his springboard, the petitioner took an additional logical leap

by inferring that if marihuana were found to be a "source for an

accepted and useful medication," it must be moved from Schedule I

to Schedule II.  A. 3-4.

                                13

Having created a new theory of statutory construction, the

petitioner proceeded to apply it with apparently successful

results.  He noted that a synthetic equivalent of the principal

psychoactive ingredient in marihuana recently had been moved from

Schedule I to Schedule II.  Since marihuana was the source of

this "accepted and useful medication," the petitioner concluded

that marihuana "must now be moved from Schedule I to Schedule II

of the CSA."  A. 4.

     B.   THE CSA DOES NOT MANDATE THAT A SCHEDULE I
          DRUG MUST BE RESCHEDULED IF IT IS THE SOURCE
          OF AN ACCEPTED AND USEFUL MEDICATION BUT
          REQUIRES DEA TO MAKE INDIVIDUAL FINDINGS
          ABOUT A PARTICULAR DRUG PRIOR TO RESCHEDULING
          IT.

     The premise of the petitioner's argument is that if a

Schedule I controlled substance is the source of an accepted and

useful medication, the Schedule I substance must be placed into

the schedule that contains the accepted and usef ul medication.

This premise is in direct conflict with the language of the CSA.

     As discussed previously, Congress itself decided to place

marihuana in Schedule I.  See National Org. for the Reform of

Mariiuana Laws, 488 F. Supp. at 141.  Although marihuana may be

rescheduled:

     [t]he clear meaning of section 812(c) is that Congress
     intended marijuana to remain in Schedule I until such
     time as it might be reclassified by the Attorney
     General on the basis of more complete scientific
     information about the drug.  In such a reclassification
     hearing, the statutory criteria would be the guides to
     determining the most appropriate schedule for
     marijuana.

Id.  Thus, under the CSA, marihuana plants should remain in

                                14

Schedule I unless and until more complete information indicates

that placement in a different schedule is more appropriate.

     The CSA's language concerning the rescheduling of a

controlled substance does not suggest that a substance should be

rescheduled merely because it is the source for an accepted and

useful medication.  The CSA states that in order to transfer a

controlled substance from one schedule to another, the Attorney

General must make "with respect to such druct or other substance

the findings prescribed by" 21 U.S.C. 812(b) "for the schedule in

which such drug is to be placed." 21 U.S.C. 811(a)(1)(B)

(emphasis added).  Under 812(b), "a drug or other substance may

not be placed in any schedule unless the findings required for

such schedule are made with respect to such drug or other

substance."  21 U.S.C. 812(b) (emphasis added).  Thus, contrary

to the petitioner's representations, the plain language of the

CSA states that in order for DEA to reschedule marihuana plants

from Schedule I to Schedule II, DEA must make the appropriate

findings with respect to marihuana plants.8

     The CSA states that DEA cannot move a drug from Schedule I

to Schedule II unless it finds, inter alia, that the "drug or

other substance" to be rescheduled has a currently accepted

____________________

     8Thus, the Deputy Administrator was correct in stating that
"[w]hether or not marijuana is a source of delta-9-THC is
irrelevant to the status of marijuana under the CSA."  A. 20.
Despite the petitioner's assertions, this statement is not
inconsistent with United States v. Walton, 514 F.2d 201 (D.C.
Cir. 1975).  The statement simply indicates that each drug is
evaluated under 21 U.S.C. 812(b) based upon an independent
assessment of its features, not based upon other possible uses of
the chemicals contained within the drug.

                                15

medical use.9  21 U.S.C. 812(b)(2)(B).  The CSA's language does

not state or imply that this criterion can be satisfied by a

substance that is the source of a drug with a currently accepted

medical use.  Additionally, the petitioner has produced no

authority to indicate that any controlled substance being

considered for rescheduling ever has been found to have a

currently accepted medical use merely because it was the source

of an "accepted and useful medication."10  Thus, marihuana

____________________

     9    There are some instances in which courts have suggested
that the statutory criteria in 21 U.S.C. 812 are not mandatory,
but are factors to be used in a balancing process.  See, e.g.,
Fogarty, 692 F.2d at 548 ("the three statutory criteria for
Schedule I classification set out in S 812(b)(1) - high potential
for abuse, no medically accepted use, and no safe use even under
medical supervision - should not be read as being either
cumulative or exclusive"); National Org. for the Reform of
Mariiuana Laws, 559 F.2d at 748 ("placement in Schedule I does
not appear to flow inevitably from lack of a currently accepted
medical use"); National Org. for the Reform of Mariiuana Laws,
488 F. Supp. at 140 ("statutory criteria of section 812(b)(1) are
guides in determining the schedule to which a drug belongs, but
are not dispositive").  Although the meaning of these dicta is
somewhat unclear, DEA has interpreted the CSA to require that a
controlled substance placed by Congress in Schedule I may not be
rescheduled into Schedule II unless it has a currently accepted
medical use.  See 54 Fed. Reg. at 53,773; 57 Fed. Reg. at 10,499.
Nothing in this court's recent marihuana rescheduling cases
suggests that DEA's interpretation is incorrect.  See Alliance
for Cannabis Therapeutics, 15 F.3d at 1133; Alliance for Cannabis
Therapeutics, 930 F.2d at 938-940.  If there is a tension between
some language in older cases and DEA's interpretation of the CSA,
DEA's reasonable interpretation of the CSA is entitled to
deference under Chevron, 467 U.S. at 843-845.

     10   In fact, there is authority to the contrary.  In 1993,
the DEA proposed to reschedule the levo isomer of
alphacetylmethadol while leaving all other isomers of
alphacetylmethadol in Schedule I because the levo isomer had been
approved by the FDA for treatment of narcotic addiction.  See 58
Fed. Reg. 25,790 (1993).  Levo-alphacetylmethadol was
subsequently placed in Schedule II.  See 21 C.F.R.
1308.12(c)(11).  Despite the petitioner's "rules of statutory
construction," alphacetylmethadol (the source of this accepted

                                16

plants themselves must have a "currently accepted medical use" in

order to satisfy the rescheduling criterion in 21 U.S.C.

812(b)(2)(B).  Because the petitioner's request raised no doubts

about DEA's recent findings that marihuana plants have no

currently accepted medical use, DEA acted properly when it

declined to initiate proceedings to reschedule marihuana

plants.11

     The petitioner's novel theory that a source of an accepted

and useful medication must be moved out of Schedule I is rooted

in a misinterpretation of the then-Administrator's letter.

Although the letter attempted to explain why Congress may have

chosen to place coca leaves and opium plants in Schedule II,

nothing in the letter states or even suggests that Congress, the

Attorney General, DEA or the courts have adopted a general rule

of statutory construction that whenever a plant is the source of

an accepted and useful medication, it must be rescheduled.

Further, nothing in the letter suggests that its text was

intended to serve as some type of binding administrative

interpretation of the CSA.  The letter was simply an informal

response to a citizen's question about DEA's recent refusal to

____________________

and useful medication) remains in Schedule I.  See 21 C.F.R.
1308.11(b)(4).

     11   Even if the statutory language were not clear, DEA's
interpretation of the CSA certainly would be permissible.  The
petitioner can point to nothing in the statute, the legislative
history or elsewhere that would suggest that the interpretation
is not reasonable.  Accordingly, even if the CSA is ambiguous,
this court should affirm DEA's interpretation.  See Chevron, 467
U.S. at 843-844.

                                17

reschedule marihuana.  Such an informal unpublished letter that

does not even purport to be a final agency action cannot have a

binding effect on DEA.  See Independent Ins, Agents of Am., Inc.

v. Ludwig, 997 F.2d 958, 962 (D.C. Cir. 1993) (finding that six

unpublished letters of Comptroller of the Currency provided no

reliable evidence of Comptroller policy); USAA Fed. Sav. Bank v.

McLaughlin, 849 F.2d 1505, 1508-1509 (D.C. Cir. 1988) (finding

that informal unpublished letter in response to individuals

specific inquiry did not constitute definitive statement of

Department of Labor policy).

     Although there may be some arguable inconsistency between

the scheduling of marihuana plants and the scheduling of coca

leaves and opium plant material, such would not be irrational or

contrary to the CSA.  Congress placed all of these substances in

their CSA schedules.  These scheduling decisions have been upheld

as rational and constitutional.  See, e.g., United States v.

Whitley, 734 F.2d 1129, 1141 (6th Cir. 1984) (not irrational or

unreasonable for Congress to classify cocaine as narcotic

substance under Schedule II of CSA even though cocaine is non-

narcotic central nervous system stimulant); National Org. for the

Reform of Mariluana Laws, 488 F. Supp. at 140 (even if marihuana

does not fall within literal reading of Schedule I,

classification in Schedule I is rational and furthers regulatory

purposes of Congress).  DEA and the courts have conducted reviews

of the scheduling decision and have determined that marihuana

should remain in Schedule I. See Alliance for Cannabis

                                18

Therapeutics, 15 F.3d at 1137.  Since the petitioner presented no

new medical, scientific or other information to suggest that

circumstances have changed since DEA's last review, DEA acted

properly when it refused to conduct additional hearings in

response to the petitioner's request to move marihuana from

Schedule I to Schedule II.

IV.  THE ADMINISTRATOR PROPERLY DENIED THE PETITION BECAUSE
     IT RELIED ON THE INCORRECT ASSUMPTION THAT DRONABINOL
     HAS BEEN MOVED TO SCHEDULE II WHEN IN FACT ONLY A
     SINGLE PHARMACEUTICAL PRODUCT HAS BEEN MOVED TO
     SCHEDULE II.

     In addition to relying on a mistaken interpretation of the

CSA, the petitioner also appeared to rely incorrectly upon the

premise that all forms of dronabinol have been rescheduled from

Schedule I to Schedule II.  DEA did not promulgate such a

sweeping rule.  Rather, DEA has merely rescheduled one particular

pharmaceutical product that has been approved by the FDA.

     In May of 1985, the FDA approved a new drug application for

Marinol Capsules, which was submitted by Unimed Incorporated.

Marinol Capsules contain specified quantities of synthetic

dronabinol in sesame oil and encapsulated in round soft gelatin

capsules.  See 50 Fed. Reg. 42,186 (1985).  DEA then issued a

notice of proposed rulemaking seeking to move this pharmaceutical

product (and no other Schedule I substance) to Schedule II.  Id.

After following appropriate rulemaking procedures, on May 13,

1986, the Administrator issued a rule:

     to transfer U.S. Food and Drug Administration (FDA)
     approved drug products that consist of synthetic
     dronabinol in sesame oil encapsulated in soft gelatin
     capsules from Schedule I into Schedule II of the

                                19

Controlled Substances Act (CSA).  Dronabinol is the
     synthetic equivalent of the isomer of delta-9-
     tetrahydrocannabinol (THC) which is the principal
     psychoactive substance in Cannabis sativa L.,
     marijuana.  This action is based on a finding that U.S.
     Food and Drug Administration approved drug products
     which contain dronabinol fit the statutory criteria for
     inclusion in Schedule II of the CSA. . . .  This rule
     does not affect the Schedule I status of any other
     substance, mixture or preparation which is currently
     included in 21-CFR 1308-11(d)(21),
     Tetrahydrocannabinols.

51 Fed. Reg. 17,476 (1986) (emphasis added).

     This rule clearly indicates that only a very specific

substance ("Marinol") was moved from Schedule I to Schedule II.

See 21 C.F.R. 1308.12(f)(1).  DEA did not transfer any other

dronabinol products to Schedule II nor did it transfer all

tetrahydrocannabinols or all cannabis products to Schedule II.

See 51 Fed. Reg. at 17,476 ("Dronabinol and all mixtures,

compounds and preparations thereof, except dronabinol in sesame

oil and encapsulated in soft gelatin capsules in a FDA approved

product, remain in Schedule I").  Thus, marihuana plants and

tetrahydrocannabinols remain listed in Schedule I.  See 21 C.F.R.

1308.11(d)(18) and 1308.11(d)(26).12

     In rejecting the petitioner's request in this case, DEA's

final order correctly explained that dronabinol remains in

Schedule I of the CSA and that only Marinol was placed in

Schedule II in 1986.  A. 23.  Faced with this explanation and the

____________________

     12   Unlike Marinol, marijuana plants contain varying
quantities of over 400 chemicals, including THC, that cannot be
reproduced in standardized dosages.  57 Fed. Reg. at 10,507.
Additionally, no currently approved medicine is administered by
smoking.  Id. at 10,499.

                                20

clear language of DEA's final rule of 1986, the petitioner has

changed his argument.  He now claims that dronabinol should have

been placed in Schedule II when the pharmaceutical product

Marinol was rescheduled in 1986.  Thus, for the first time on

appeal, the petitioner appears to be challenging the propriety of

the DEA rule that rescheduled Marinol from Schedule I to Schedule

II.13  See 51 Fed. Reg. at 17,476.

     The petitioner did not seek this relief below.  Nothing in

his petition to DEA suggested that he was challenging the

validity of the rescheduling of Marinol.  Similarly, nothing in

the petition suggested that he was petitioning DEA to reschedule

dronabinol or some other substance to Schedule II.  The petition

only asked DEA to reschedule marihuana.  See A. 2-4.  To the

extent that petitioner seeks relief that he did not request in

the proceedings before DEA or challenges the validity of a rule

he did not previously challenge, he should be precluded from

raising these issues for the first time on appeal because he has

failed to exhaust his administrative remedies.  See Cutler v.

Hayes, 818 F.2d 879, 890-891 (D.C. Cir. 1987); Randolph-Sheppard

____________________

     13   Contrary to the petitioner's assertions, DEA's actions
in rescheduling Marinol were not in conflict with the holding of
Grinspoon v. Drug Enforcement Admin., 828 F.2d 881, 891-892 (lst
Cir. 1987).  In Grinspoon, the court specifically found that FDA
approval was sufficient to establish an accepted medical use for
rescheduling determinations under the CSA.  Id. at 890.  Thus,
DEA properly initiated rescheduling proceedings for Marinol after
it received FDA approval.  See 50 Fed. Reg. at 42,186.  Although
the Grinspoon court found that the lack of FDA approval did not
preclude a finding of accepted medical use, DEA was not faced
with such a case; the 1985 petition only sought to reschedule
Marinol, a substance that had been approved by the FDA.

                                21

Vendors of America v. Weinberger, 795 F.2d 90, 104-105 (D.C. Cir.

1986).  The court should require the petitioner to exhaust his

administrative remedies on these additional issues because (1) it

is necessary to discourage this prolific petitioner from

frequently and deliberately flouting the administrative process

by raising new issues for the first time on appeal; (2) DEA

should have the first opportunity to consider these issues and

apply its technical expertise in order to protect its autonomy

from judicial intrusion; (3) the record before this court on

these issues is incomplete because the issues were not discussed

in the administrative proceeding; and (4) judicial economy will

be enhanced if the administrative proceedings obviate the need

for judicial involvement.  See Fertilizer Institute v. United

States Envtl. Protection Agency, 935 F.2d 1303, 1312-1313 (D.C.

Cir. 1991); Cutler, 818 F.2d at 890-891.

     The petitioner is free to bring a separate challenge to the

validity of the rulemaking that rescheduled Marinol or to

petition DEA to reschedule dronabinol or some other substance.

However, no purpose would be served by remanding the instant case

to address either challenge.  Even assuming arguendo that the

petitioner could prevail on either challenge, he could not

achieve the ultimate relief he sought in this proceeding --

rescheduling of marihuana plants -- because the language of the

CSA clearly indicates that the scheduling of other substances has

no bearing on the proper scheduling of marihuana plants.

                                22

CONCLUSION

     For the foregoing reasons, this court should affirm DEA's

final order denying the petitioner's request.

                         Respectfully submitted,


                         JOHN C. KEENEY
                           Acting Assistant Attorney General
                         THERESA M.B. VAN VLIET
                           Chief
                         LENA WATKINS
                         JOHN J. FARLEY
                           Trial Attorneys
                           Narcotic and Dangerous Drug Section
                           Criminal Division
                           U.S. Department of Justice
                           P.O. Box 27312, Central Station
                           Washington, D.C. 20038
                           (202) 514-0917


Of Counsel:

DENNIS F. HOFFMAN
Drug Enforcement Administration

                                23

CERTIFICATE OF SERVICE

     It is hereby certified that service of this BRIEF FOR THE
RESPONDENT was made on the petitioner on this 6th day of
November, 1995, by mailing two copies, postage prepaid, addressed
as follows.

               Carl Eric Olsen
               Post Office Box 4091
               Des Moines, Iowa 50333



                                       Lena Watkins
                                       Trial Attorney
                                       Narcotic and Dangerous
                                            Drug Section



       CERTIFICATION PURSUANT TO D.C. CIRCUIT RULE 28(d)(1)

     It is hereby certified that this brief contains no more than
12,500 words in accordance with D.C. Circuit Rule 28(d)(1).



                                       Lena Watkins
                                       Trial Attorney
                                       Narcotic and Dangerous
                                            Drug Section