Goodson Drug Company, a pharmacy, was ordered by the Drug Enforcement Administration to show cause why its registration to dispense controlled substances should not be revoked. The DEA alleged that Goodson's practices regarding opioids and other drugs raised red flags for patient abuse and diversion. Goodson filed suit in federal district court, challenging the agency's adjudicative process as unconstitutional. Specifically, Goodson argued that the statutory for-cause tenure protections enjoyed by the agency's administrative law judges, found in 5 U.S.C. § 7521(a), usurp the President's removal power under Article II of the Constitution. Goodson sought a preliminary injunction to stop the show cause proceedings while the case was pending, but the district court denied that request.
The Eleventh Circuit affirmed the district court's decision based on the prior-panel-precedent rule. The court noted that in Walmart, Inc. v. Chief Administrative Law Judge, decided in 2025, the circuit rejected a nearly identical challenge to the for-cause removal protections of administrative law judges under the Department of Justice's Office of the Chief Administrative Hearing Officer. The court explained that under the prior-panel-precedent rule, Walmart is binding on all subsequent panels unless overruled or undermined by the Supreme Court or the court sitting en banc. Goodson did not attempt to distinguish Walmart from its own case; instead, it argued that the Walmart panel was wrong. The court rejected this approach, stating that a panel cannot overrule a prior panel. The court also addressed Goodson's contention that the Supreme Court's decision in Axon Enterprise, Inc. v. Federal Trade Commission contradicted Walmart. The court clarified that Axon Enterprise only addressed whether district courts have jurisdiction to hear such constitutional claims, not the merits of those claims. Since the district court properly exercised jurisdiction, Axon Enterprise does not alter the outcome. Additionally, the court noted that Goodson forfeited its nondelegation and Article III theories by failing to raise them in the district court.
The DEA's administrative proceedings against Goodson Drug Company may continue. The ruling reinforces the binding nature of prior-panel precedent in the Eleventh Circuit, preventing lower panels from reconsidering settled constitutional challenges to agency structures even if they disagree with the prior decision. It also clarifies that while Axon Enterprise allows courts to hear structural challenges, it does not change the substantive legal standards for those challenges.