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U.S. v. Oncology Services Corp.

filed: July 21, 1995.

UNITED STATES OF AMERICA, APPELLANT
v.
ONCOLOGY SERVICES CORPORATION



Appeal from the United States District Court for the Middle District of Pennsylvania. (D.C. Civ. No. 93-cv-00207).

Before: Mansmann, Greenberg and Sarokin, Circuit Judges.

Author: Mansmann

Opinion OF THE COURT

MANSMANN, Circuit Judge.

The Nuclear Regulatory Commission appeals from the dismissal of a petition for enforcement of its subpoena. The district court held that the action was rendered moot for lack of a justiciable case or controversy when the NRC closed its formal investigation of Oncology Services Corporation, a nuclear medicine licensee. Because an agency may seek information on mere suspicion that there is a violation of the law, we will vacate the order of the district court dismissing the petition and remand for a determination of the enforceability of the subpoena.

We are compelled to further comment on the standards for enforcing the subpoena given the district court's intention to conduct an in camera review of documents produced by Oncology Services in redacted form to determine the reasonableness of the redactions. The district court must enforce the subpoena so long as the requested information is reasonably related to a legitimate NRC inquiry or investigation. Thus, the purpose of any in camera review, if one need be conducted, is to determine whether the information sought is reasonably related to an inquiry that the NRC is authorized to conduct, not whether the redactions were reasonable.

I.

In December of 1992, the Office of Investigation of the Nuclear Regulatory Commission*fn1 conducted an incident investigation regarding the November 21, 1992 death of a nursing home patient who had received radiation therapy at an Oncology Services' cancer treatment center. During that therapy, a radioactive source was placed in the patient's abdominal catheter but was not removed. The source of the radioactivity was discovered nearly one week later after it was removed from the patient and disposed of at a waste dump. The NRC's incident investigation team concluded that weaknesses in the Oncology Services radiation program were a contributing cause of the patient's death and caused subsequent radiation exposure to employees and the general public.

The NRC initiated a second investigation to determine whether Oncology Services intentionally violated NRC regulations during the period from June of 1990 to February 15, 1993. On February 25 and 26, 1993, the NRC served seven identical subpoenas, one to Oncology Services' headquarters in State College, Pennsylvania and the remainder to Oncology Services' treatment facilities located throughout Pennsylvania. The subpoenas requested information regarding Oncology Services' application to the NRC for its license, radiation safety training procedures and policies, purchase and repair records for radiation detection devices, training-related expense and travel vouchers, employment applications of certain personnel, and business records related to Oncology Services' license. Oncology Services provided documents responsive to the subpoenas but objected to the production of other documents on grounds that they were not relevant to the NRC investigation. Despite its objections, Oncology Services produced additional documents in late July of 1993.

On August 24, 1993, the NRC served a second subpoena to Oncology Services' headquarters requesting the production of the balance of the documents sought in the first subpoena. The NRC sought information relating to Oncology Services' licensed activities, training policies and radiation equipment. The compliance date for the subpoena was September 13, 1993. By letter dated September 16, 1993, Oncology Services objected to requests for various categories of documents on grounds that the information was irrelevant to the NRC investigation, outside of the NRC's jurisdiction, unduly burdensome or had previously been responded to by Oncology Services. Oncology Services, however, never sought to quash the subpoena prior to the compliance date although the procedure for doing so was noted on the subpoena. Oncology Services produced redacted copies of the weekly activity reports, and notes and minutes of regional administrator meetings and medical director meetings. Oncology Services asserted that the redacted information related to non-licensed matters and therefore was not relevant to the NRC's investigation.

Oncology Services did not produce the balance of the documents, causing the NRC to file a petition for summary enforcement of its administrative subpoena, pursuant to 42 U.S.C. § 2281, on November 15, 1993. The district court initially granted enforcement but subsequently vacated that order to give Oncology Services time to brief the issue. On March 9, 1994, the district court conducted an off-the-record hearing regarding the disputed materials to determine the reasonableness of the redactions. The court identified the disputed materials on the record as: (1) weekly activity reports and minutes of regional administrator and medical director meetings, (2) payroll information, and (3) resumes and employment applications received by Oncology Services. The district court ordered that the first category of disputed materials be provided to the court for an in camera review to determine the reasonableness of the redactions. By letter dated May 11, 1994, the NRC informed the district court that the parties had agreed to the production of the second and third categories of documents and that the only remaining issue pertained to the in camera review of the weekly activity reports and the notes and minutes of regional administrator and medical director meetings.

The NRC issued a Report of Investigation dated May 25, 1994 based on the documentary evidence then in its possession. The Report indicated that the NRC "closed" its formal investigation of Oncology Services subject to reopening upon the district court's Disposition as to disputed documents relating to the investigation. By letter dated August 2, 1994 directed to the district court, the NRC inquired as to the status of the in camera review. By letter dated August 16, 1994, Oncology Services notified the district court that the NRC's May 25 Report of Investigation rendered the subpoena enforcement action moot because there was no justiciable case or controversy.

The NRC responded by letter dated September 22, 1994, asserting that the subpoena enforcement action was not moot merely because the NRC had issued the Report based on the documentary evidence then in its possession. Rather, the NRC closed the investigation with the report "so as not to further impede other administrative actions involving the same licensee."*fn2 The NRC noted that the Report left open the potential for further inquiry stemming from the documents pending before the district court at the time the Report was issued. In this regard the NRC highlighted ...


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