## Facts

- Kun Chae Bae served as president of My-K Laboratories, Inc., a generic drug manufacturer that sought FDA approval through abbreviated new drug applications (ANDAs).
- In 1987, Bae gave an FDA official $10,000 characterized as an unlawful gratuity in exchange for favorable official action connected to My-K’s ANDAs.
- In 1990, Bae pleaded guilty to a federal felony count of aiding and abetting interstate travel in aid of racketeering based on that conduct.
- In 1992, Congress enacted the Generic Drug Enforcement Act of 1992 (GDEA), requiring the Secretary to debar individuals convicted of qualifying felonies from providing services to entities with approved or pending drug applications.
- The FDA initiated debarment proceedings against Bae, offered a hearing conditioned on a proffer of specific factual disputes, and issued a final order permanently debarring him after he failed to make the required proffer.
- Bae petitioned for judicial review, arguing that applying the GDEA to his pre-enactment conduct violated the Ex Post Facto Clause.

## Issues

1. Whether permanent debarment imposed under the GDEA based on a pre-enactment felony conviction constitutes retroactive “punishment” prohibited by the Ex Post Facto Clause.
2. Whether Bae’s felony conviction, though styled as a racketeering-related offense, was for conduct “relating to” the development, approval, or regulation of a drug product under 21 U.S.C. § 335a(a)(2).

## Decision

- The Seventh Circuit denied the petition for review and affirmed the FDA’s permanent debarment order.
- The court held that GDEA debarment is a civil, regulatory measure, not criminal punishment, and therefore does not violate the Ex Post Facto Clause when applied based on a pre-enactment conviction.
- The court held that Bae’s conviction fell within the statute because the underlying conduct—giving an unlawful gratuity to influence FDA action on ANDAs—related to drug approval and regulation.
- The court noted that Bae did not argue that the GDEA was inapplicable as a matter of statutory retroactivity; the court expressed no view on that question.
- The court treated the FDA’s notice-and-opportunity-for-hearing procedure as adequate where Bae failed to identify specific factual disputes warranting a hearing.

## Legal Principles

- The Ex Post Facto Clause applies to retroactive criminal punishment; civil regulatory measures are not barred unless their purpose or effects are so punitive as to override legislative intent.
- In determining whether a sanction labeled civil is punitive, courts consider congressional intent and whether the sanction’s effects resemble traditional punishment or instead serve forward-looking regulatory goals.
- Mandatory exclusion from a regulated industry based on corruption tied to that industry can be characterized as a prospective measure to protect regulatory integrity and public health, even if severe and permanent.
- For GDEA debarment, a felony qualifies if the underlying conduct has a substantial connection to drug development, approval, or regulation; the statutory trigger is not limited to offenses formally codified as drug-law violations.
- A party’s failure to raise statutory-retroactivity arguments limits judicial review to the constitutional issues presented.

## Conclusion

The court upheld the FDA’s permanent debarment of Bae under the GDEA, concluding that the sanction operated as a civil, prospective protection of the drug approval system rather than retroactive punishment, and that bribery-related conduct aimed at influencing FDA action on ANDAs sufficiently “related to” drug approval and regulation to trigger mandatory debarment.


Bae v. Shalala, 44 F.3d 489 (7th Cir. 1995)