Amile A. Korangy, M.d.; Korangy Radiology Associates, P.a. v.  United States Food and Drug Administration

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 AMILE A. KORANGY, M.D.; KORANGY
RADIOLOGY ASSOCIATES, P.A.,
Petitioners,
v. No. 05-2300 
UNITED STATES FOOD AND DRUG
ADMINISTRATION,
Respondent. 
 AMILE A. KORANGY, M.D.; KORANGY
RADIOLOGY ASSOCIATES, P.A.,
Petitioners,
v. No. 06-1860 
UNITED STATES FOOD AND DRUG
ADMINISTRATION,
Respondent. 
On Petition for Review of an Order
of the Food and Drug Administration.
(A-05-35)
Argued: May 24, 2007
Decided: August 17, 2007
Before WILKINSON, MOTZ, and TRAXLER, Circuit Judges.
Petition for review denied by published opinion. Judge Traxler wrote
the opinion, in which Judge Wilkinson and Judge Motz joined.

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COUNSEL
ARGUED: Timothy Cronin Lynch, OFFIT & KURMAN, Maple
Lawn, Maryland, for Petitioners. Anne Lobell Murphy, UNITED
STATES DEPARTMENT OF JUSTICE, Appellate Staff, Civil Divi-
sion, Washington, D.C., for Respondent. ON BRIEF: Alex M. All-
man, OFFIT & KURMAN, Maple Lawn, Maryland, for Petitioners.
Daniel Meron, General Counsel, Sheldon T. Bradshaw, Chief Coun-
sel, Food and Drug Division, Eric M. Blumberg, Deputy Chief Coun-
sel, Litigation, Marci B. Norton, Associate Chief Counsel for
Enforcement, UNITED STATES DEPARTMENT OF HEALTH
AND HUMAN SERVICES, Washington, D.C.; Peter D. Keisler,
Assistant Attorney General, Douglas N. Letter, Appellate Staff, Civil
Division, UNITED STATES DEPARTMENT OF JUSTICE, Wash-
ington, D.C., for Respondent.
OPINION
TRAXLER, Circuit Judge:
Dr. Amile Korangy and Korangy Radiology Associates ("KRA")
petition this court for review of an order of the Food and Drug
Administration imposing monetary sanctions on Korangy and KRA
for allowing a statutorily-required certification to lapse and for per-
forming mammograms after the certification expired. For the reasons
that follow, we deny the petition for review.
I.
Under the Mammography Quality Standards Act ("MQSA"), facili-
ties that provide mammographies must be certified by the FDA. See
42 U.S.C.A. § 263b(b) (West Supp. 2007). In accordance with the
MQSA, the FDA in 1999 issued a certificate for the operation of a
mammography facility, known as "Baltimore Imaging Center," in
Catonsville, Maryland. The 1999 certificate issued by the FDA was
set to expire on May 6, 2002, and the expiration date was noted on
the certificate itself. By 1999, Baltimore Imaging Center was operated
by KRA, which is wholly owned by Korangy.
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The American College of Radiology ("ACR") is an FDA-approved
accreditation body that inspects mammography equipment to deter-
mine compliance with the MQSA. ACR inspected Korangy’s equip-
ment and informed Korangy by letter in April 2002 that his
mammography equipment failed the quality standards for clinical
image and that he should immediately stop using the equipment.
ACR’s letter explained to Korangy that the failure would be reported
to the FDA and that the FDA would "officially notify" Korangy to
stop using the equipment. See J.A. 32.
Notwithstanding his knowledge that his mammography produced
images of unacceptable quality, Korangy continued to use the
machine. He bought a new mammography unit that was provisionally
certified for use on July 25, 2002. From May 7 (the day after his orig-
inal certificate expired) until July 25 (the day before the new unit was
certified), Korangy was operating without the required certification.
During that uncertified period, he performed 192 mammograms at the
Catonsville facility.
The FDA learned that Korangy was performing mammograms
without the proper certification, and it filed a complaint in September
2003 seeking civil penalties against Korangy and KRA. An adminis-
trative law judge granted partial summary judgment in favor of the
FDA, concluding that KRA and Korangy were each liable for one
penalty for failing to obtain the required certificate. See 42 U.S.C.A.
§ 263b(h)(3)(A) (West Supp. 2007). Because the Act prohibits con-
ducting an examination or procedure without a certificate, the ALJ
also concluded that Korangy and KRA each had committed an addi-
tional 192 separate violations by performing mammograms during the
certification lapse. In a separate proceeding, the ALJ determined the
appropriate amount of the sanctions. The FDA initially sought
$10,000 (the statutory maximum) for each violation by Korangy and
KRA. Korangy contended, however, that he lacked the ability to pay
sanctions in that amount. Although the FDA could not verify
Korangy’s claim because he did not come forward with all of the rele-
vant financial information, the FDA nonetheless reduced its sanctions
request from $10,000 per violation to $3,000 per violation. The ALJ
assessed penalties in the amount sought by the FDA. The total amount
of sanctions imposed was more than one million dollars—$579,000
separately assessed against both KRA and Korangy.
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Korangy and KRA appealed to the Departmental Appeals Board of
the Department of Health and Human Services, and the Board
affirmed the ALJ’s decision. Korangy and KRA then filed this peti-
tion for review.
II.
As noted above, the MQSA requires mammography facilities to be
certified by the FDA, see 42 U.S.C.A. § 263b(b), and authorizes the
imposition of civil monetary penalties for the "failure to obtain a cer-
tificate as required by subsection (b) of this section." 42 U.S.C.A.
§ 263b(h)(3)(A). A $3,000 penalty was imposed on KRA and on
Korangy for violation of this requirement. Neither KRA nor Korangy
challenge that penalty on appeal. KRA (but not Korangy), however,
does challenge the imposition of separate penalties for each of the 192
mammograms performed during the certification lapse.
The penalties for each of the mammograms performed were
imposed under § 263b(h)(3)(D), which authorizes penalties for "each
violation, or for each aiding and abetting in a violation of, any provi-
sion of, or regulation promulgated under, this section by an owner,
operator, or any employee of a facility required to have a certificate."
28 U.S.C.A. § 263b(h)(3)(D). KRA contends that it is the facility,1
and not the owner or operator of the facility, and that the penalties
were therefore not authorized under § 263b(h)(3)(D).
We agree with KRA’s construction of the statute. Section
263b(h)(3)(D) unambiguously authorizes penalties to be imposed on
owners, operators, and employees of the mammography facility, but
it does not authorize penalties to be imposed on the facility itself.
KRA’s argument falters at the next step, however, because KRA’s
claim that it is the facility, as opposed to the owner or operator of the
facility, is foreclosed, both as a matter of fact and of procedure.
1The MQSA defines "facility" as the physical place where mammo-
grams are performed. See 42 U.S.C.A. 263b(a)(3)(A) (West Supp. 2007)
("The term ‘facility’ means a hospital, outpatient department, clinic, radi-
ology practice, or mobile unit, an office of a physician, or other facility
as determined by the Secretary, that conducts breast cancer screening or
diagnosis through mammography activities. . . .").
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The issue is foreclosed to KRA as a factual matter because it
admitted in the proceedings below that it was the owner of the mam-
mography facility. KRA’s status as the owner of mammogram facility
is a question of fact, and KRA cannot now be heard to challenge the
ownership that it previously admitted. See, e.g., Lucas v. Burnley, 879
F.2d 1240, 1242 (4th Cir. 1989) ("The general rule is that a party is
bound by the admissions of his pleadings." (internal quotation marks
omitted)); cf. Zinkand v. Brown, 478 F.3d 634, 638 (4th Cir. 2007)
("Judicial estoppel is a principle developed to prevent a party from
taking a position in a judicial proceeding that is inconsistent with a
stance previously taken in court.").
The argument KRA seeks to raise on appeal is also barred as a pro-
cedural matter because KRA never argued below that penalties could
not be imposed on it under § 263b(h)(3)(D) because it was the facility
and not the owner of the facility. "[I]ssues raised for the first time on
appeal are generally not considered absent exceptional circumstances.
The underlying rationales for this rule are respect for the lower court,
an avoidance of unfair surprise to the other party, and the need for
finality in litigation and conservation of judicial resources." Holly Hill
Farm Corp. v. United States, 447 F.3d 258, 267 (4th Cir. 2006) (inter-
nal quotation marks and alterations omitted). There are no exceptional
circumstances in this case that would warrant our departure from this
general rule. The language of § 263b(h)(3)(D) is abundantly clear and
should have put KRA on notice from the beginning of these proceed-
ings that the FDA was seeking to impose penalties on it in its capacity
as the owner of the mammography facility. If there were doubt about
KRA’s ownership, it was incumbent upon KRA to raise the issue in
a timely manner, when it could have been resolved by the agency
charged with enforcing the MQSA. See Lane Hollow Coal Co. v.
Director, Office of Workers’ Comp. Programs, 137 F.3d 799, 806
(4th Cir. 1998) ("Simple fairness to those who are engaged in the
tasks of administration, and to litigants, requires as a general rule that
courts should not topple over administrative decisions unless the
administrative body not only has erred but has erred against objection
made at the time appropriate under its practice." (internal quotation
marks omitted)). Accordingly, we reject KRA’s contention that the
civil penalties assessed against it for the 192 mammograms performed
during the certification lapse were not authorized under
§ 263b(h)(3)(D).
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III.
Korangy argues that an FDA guidance manual requires the FDA to
give a facility, after a certification lapse, specific notice that perform-
ing mammograms could result in the imposition of civil penalties.
Korangy contends that there is a factual dispute about whether he
actually received the required notice. Because the ALJ expressly did
not resolve the dispute, Korangy contends that the order must be
vacated and the case remanded to the ALJ for resolution of the factual
dispute.
The factual dispute identified by Korangy involves two letters sent
by the FDA. On April 1, 2002, the FDA sent Korangy a letter inform-
ing him that his certificate was about to expire and that it would vio-
late the statute to perform mammograms after its expiration. On May
1, 2002, the FDA sent a second letter to Korangy directing him to
stop performing mammograms and stating that he would be subject
to civil penalties if he continued to perform them. Korangy denied
having received either letter. The ALJ did not decide whether
Korangy in fact received these letters, concluding that even without
them Korangy had all the notice that he needed. We agree with the
ALJ’s analysis on this point.
The manual upon which Korangy’s argument hinges states that:
The decision as to whether a facility should receive a Warn-
ing Letter or Civil Money Penalties would depend on the
severity of the situation found. Prior notice should be estab-
lished before considering Civil Money Penalties. Factors
affecting severity could include the number of patients that
were examined while uncertified, whether the facility knew
that it was performing mammography uncertified (i.e., was
it clear from correspondence that the facility received that
they were no longer certified). . . .
J.A. 81 (emphasis added). Assuming for purposes of this case that the
guidance manual establishes binding standards with which the FDA
must comply, we simply cannot conclude that the agency’s actions
were in any way inconsistent with the requirements of the manual.
While the manual requires that prior notice be given, nothing in the
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manual mandates that notice must come in any particular form, or that
the notice must come from the FDA itself. In this case, the 1999 cer-
tificate itself shows on its face that it expires on May 6, 2002. The
ACR, the entity that performed the inspection of the equipment, sent
Korangy a letter on April 29, 2002, stating that the equipment had
failed the accreditation examination, that he should immediately stop
performing mammograms, and that continuing to perform mammo-
grams "may result in official sanction and fines from the FDA." J.A.
32. Because Korangy acknowledges that he received this letter, the
record clearly supports the ALJ’s determination that Korangy
received sufficient notice. See Knox v. United States Dep’t of labor,
434 F.3d 721, 723 (4th Cir. 2006) ("Under the Administrative Proce-
dure Act. . . , federal courts can overturn an administrative agency’s
decision only if it is arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with the law, or unsupported by substan-
tial evidence." (internal quotation marks omitted)). The ALJ thus
properly resolved the issues before it, and there is no need to remand
for resolution of the factual dispute surrounding the April and May
letters from the FDA.
IV.
Finally, Korangy and KRA contend that the penalty imposed is
excessive and violates the Eighth Amendment. We disagree.
The Excessive Fines Clause of the Eighth Amendment prohibits
the government from imposing excessive fines as punishment. While
Eighth Amendment claims often arise in the criminal context, civil
sanctions may fall within the scope of the amendment. See Austin v.
United States, 509 U.S. 602, 610 (1993); Thomas v. Commissioner,
62 F.3d 97, 99 (4th Cir. 1995). Civil fines serving remedial purposes
do not fall within the reach of the Eighth Amendment. However, if
a civil sanction "can only be explained as serving in part to punish,"
then the fine is subject to the Eighth Amendment. Austin, 509 U.S.
at 610. If the civil penalty is punitive and thus subject to the Eighth
Amendment, it will be found constitutionally excessive only if it is
"grossly disproportional to the gravity of [the] offense." United States
v. Bajakajian, 524 U.S. 321, 334 (1998); see United States v. Ahmad,
213 F.3d 805, 813 (4th Cir. 2000).
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The FDA argues that the penalties authorized by the MQSA are
wholly remedial and thus not subject to the Eighth Amendment.
While we harbor some doubt about that characterization, see Bajaka-
jian, 524 U.S. at 329 (suggesting that remedial actions are brought to
obtain compensation or indemnification for lost revenues), we need
not resolve that issue. Assuming that the penalties are at least partially
punitive and thus subject to the Eighth Amendment, we cannot con-
clude that penalties imposed are grossly disproportionate to the grav-
ity of the offense.
Preliminarily, we note that Congress authorized up to $10,000 for
each violation of the MQSA. The $3,000 per violation penalty
imposed by the FDA thus represents a substantial reduction of the
penalty authorized by Congress. See id. at 336 (noting that "judg-
ments about the appropriate punishment for an offense belong in the
first instance to the legislature"). Moreover, KRA lost its certification
not because of a failure to comply with a reporting requirement or
some similar "technicality," cf. id. at 337 (finding forfeiture of more
than $350,000 to be constitutionally excessive where the defendant’s
crime was "solely a reporting offense"), but because its equipment did
not produce an image of adequate quality. The seriousness of that
deficiency cannot be over-emphasized. Breast cancer is most curable
at its earliest stages. If mammography equipment does not produce an
image of acceptable quality, early-stage breast cancer may not be
detected, thus depriving the patient of the best chance for cure. Under
these circumstances, it would be impossible to conclude that a single
$3,000 penalty would be grossly disproportionate to the gravity of a
single offense.
This case, of course, does not involve a single violation of the
MQSA. It involves 193 violations committed by Korangy and 193
violations committed by KRA, resulting in a combined penalty of
more than $1,000,000. While we recognize that this is a substantial
penalty, the amount of the penalty is the direct result of the number
of individual offenses committed by Korangy and KRA. Contrary to
the suggestion of the petitioners, the gravity of their offenses does not
diminish because they repeatedly committed the same offense. To the
contrary, the repeat offenses mean that more early cancers may have
been missed and more patients may have missed their best chance for
a cure. Because the petitioners committed very grave violations of the
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MQSA, a substantial penalty was warranted.2 Under these circum-
stances, we cannot conclude that the penalties assessed against
Korangy and KRA were grossly disproportional to the gravity of the
offenses they committed, and we therefore reject the petitioners’
Eighth Amendment claims.
V.
Accordingly, for the foregoing reasons, we hereby deny the peti-
tion for review.
PETITION FOR REVIEW DENIED
2Moreover, if the FDA could not impose separate penalties for
repeated violations, that would serve as perverse encouragement for out-
of-compliance clinics to perform as many mammograms as possible.
Clinics could put off for as long as possible purchasing expensive new
equipment and continue to profit from each mammography performed,
secure in the knowledge that their profits would exceed any sanctions
that might ultimately be imposed.
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