[Federal Register: November 17, 2006 (Volume 71, Number 222)]
[Notices]
[Page 66975-66983]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17no06-80]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 03-12]
Daniel Koller, D.V.M., Denial of Application; Introduction and
Procedural History
On November 22, 2002, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, issued an Order to
Show Cause to Daniel Koller, D.V.M. (Respondent) of San Diego,
California, and Portland, Oregon. The Show Cause Order proposed to
revoke Respondent's DEA Certificate of Registration, BK 5633525, as a
veterinary practitioner, which was issued to him at his San Diego
address, and to deny his pending application for a registration as a
veterinary practitioner at the proposed registered location of 3150 NE
82nd Avenue, Portland, Oregon. As grounds for the action, the Show
Cause Order alleged that Respondent's registration would be
inconsistent with the public interest. See 21 U.S.C. 823(f) and
824(a)(4).
In pertinent part, the Show Cause Order alleged that on December 5,
2001, Respondent submitted an application for a registration as a
veterinary practitioner at 3150 NE 82nd Avenue, Portland, Oregon, and
that on the application, Respondent had indicated that the State of
California had revoked his state license in 1978 for non-drug related
conduct but had re-instated his license in 1982. See Show Cause Order
at 2. The Show Cause Order alleged that on February 13, 2002, DEA
Diversion Investigators (DIs) interviewed Respondent at his proposed
registered location. See id. The Show Cause Order alleged that
Respondent told the DIs that he had started over 30 veterinary clinics
under the name ``Companion Pet Clinic'' in Oregon, Arizona, Washington
and Idaho, and that Respondent obtains a DEA registration for the
particular clinic and operates the clinic until he finds a veterinarian
to purchase the practice. See id. The Show Cause Order also alleged
that Respondent ``retain[s] a financial interest in each new clinic.''
Id.
The Show Cause Order further alleged that during the interview,
Respondent told the DIs that he maintained a law practice in San Diego,
California, and that he anticipated hiring temporary veterinarians at
the Portland location during the periods in which he returned to San
Diego, and that the temporary veterinarians and clinic support staff
would have access to the safe in which the controlled substances were
stored. See id. at 3. The Show Cause Order alleged ``that by affording
such access, [Respondent] would not be providing effective controls and
procedures against diversion.'' Id.
The Show Cause Order alleged that during the on-site inspection,
the DIs observed that a partial bottle of Pentobarbital euthanasia
solution, a Schedule II controlled substance, was stored in a safe. See
id. at 3. The Show Cause Order further alleged that Respondent had a
bottle of Ketamine, a Schedule III controlled substance, in his
laboratory coat pocket. See id. The Show Cause Order alleged that
Respondent told the DIs that he had brought the Ketamine from his
registered location in San Diego, and that he had borrowed the
Pentobarbital from the Companion Pet Clinic in Forest Grove, Oregon.
See id. The Show Cause Order alleged that these acts ``constitute[] a
violation of 21 CFR 1301.12, which requires each separate location to
be registered.'' Id. at 3.
The Show Cause Order next alleged that Respondent had told the DIs
that the California Veterinary Board was going to place him in a
diversion program because Respondent had self-administered Telazol, a
Schedule III controlled substance which is used as a veterinary
anesthetic. See id. The Show Cause Order further alleged that
Respondent explained that he had taken this drug because he had
undergone knee replacement surgery and had trouble sleeping. See id.
The Show Cause Order also alleged that Respondent failed to disclose to
the DIs that on December 20, 2001, the California Veterinary Board had
ordered the interim suspension of his license as a result of his
Telazol abuse and that the order remained in effect on the date of the
interview. See id.
The Show Cause Order alleged that on October 27, 2001, San Diego
police officers and paramedics responded to a 911 call placed by
Respondent's daughter which reported that Respondent's wife had
suddenly lost consciousness and that Respondent was lying on a bed in a
semi-conscious state. See id. The Show Cause Order alleged that upon
arrival at Respondent's residence, paramedics found that Respondent's
wife had fresh puncture wounds with blood oozing from her left arm and
that Respondent had fresh puncture wounds with blood oozing from his
right arm. See id. The Show Cause Order also alleged that the
paramedics found a hypodermic needle with fresh blood on it lying near
Respondent. See id. The Show Cause Order further alleged that
Respondent was under the influence of a controlled substance, that
Respondent was arrested, and that during a search incident to the
arrest, police found a 5 ml. vial of Telazol, a Schedule III controlled
substance, in his right front pants pocket, and that the vial's top had
been punctured. See id.
The Show Cause Order next alleged that the police obtained a
warrant and conducted a search of Respondent's residence. See id. at 5.
The Show Cause Order alleged that during the search, the police did not
find any controlled substance dispensing logs, purchasing records, or
inventory reports in Respondent's residence, even though federal law
requires controlled substance records to be maintained at the
registered location. See id. at 6. The Show Cause Order also alleged
that the police found a variety of controlled substances during the
search most of which were not secured in a safe. See id. at 5.
The Show Cause Order next alleged that in January 2000, Dr.
Parminder Nagra, a friend and business associate of Respondent (who
owned a Companion
[[Page 66976]]
Pet Clinic located at 8483 SW. Canyon Road, Portland, Oregon, and was a
partner in a clinic located at 14292-A SW. Allen Blvd, Beaverton,
Oregon) was killed in an automobile accident. See id. at 7-8. The Show
Cause Order alleged that in March 2000, Respondent contacted DEA's
Portland office seeking an application for a registration at the Canyon
Road clinic that was inherited by Dr. Nagra's widow and told a DEA
investigator that he was seeking to stock the facility with controlled
substances to maintain its operational capacity. See id. at 8. The Show
Cause Order further alleged that Respondent told the DEA investigator
that he resided in, and practiced law in, San Diego, and that he did
not intend ``to move to Oregon to be a veterinarian at the Canyon Road
clinic.'' Id.
The Show Cause Order further alleged that during a telephone
conversation on May 26, 2000, Respondent told a DEA investigator that
he had been ordering controlled substances that were shipped to his San
Diego address, which he then mailed to the Canyon Road facility. See
id. The Show Cause Order alleged that Respondent acknowledged that this
was a violation of Federal law, but ``DEA [was] forcing [Respondent] to
operate like this.'' Id. The Show Cause Order alleged that during the
conversation Respondent again stated that while he lived in San Diego,
he had opened numerous clinics in California, Oregon, Washington, and
Arizona, that Respondent had obtained DEA registrations for the clinics
in order to stock them with controlled substances, and that he
maintained each registration until he either sold the clinic or found a
permanent veterinarian who would work there and obtain his or her own
registration. See id.
The Show Cause Order further alleged that on July 28, 2000, DEA
investigators interviewed Respondent at DEA's San Diego field office to
discuss the nature of Respondent's business practices and whether
Respondent's activities complied with Federal law. See id. at 9. The
Show Cause Order alleged that during the interview, Respondent stated
that he practiced as a relief veterinarian approximately two weeks per
month and also practiced administrative law at his San Diego residence.
See id.
The Show Cause Order alleged that during the interview, Respondent
stated that a potential buyer had been found for the Beaverton, Oregon
clinic, who would run the clinic for a six-month trial period, but if
the arrangement proved unsatisfactory, Respondent could not guarantee
that he would refrain from sending controlled substances to the
Beaverton clinic in order to keep it open. See id. The Show Cause Order
further alleged that Respondent told DEA investigators that during the
period in which he was attempting to find a permanent veterinarian for
the Beaverton clinic, he had ordered controlled substances that were
delivered to his San Diego residence and then shipped them to
Beaverton. See id. at 9-10. The Show Cause Order alleged that because
the Beaverton location was not registered, Respondent's conduct
constituted an unlawful distribution of controlled substances. See id.
Finally, the Show Cause Order alleged that Respondent's existing
registration should be revoked because Respondent lacked authority
under California law to handle controlled substances. Id. at 10. The
Order also alleged that Respondent's conduct in overdosing on
veterinary controlled substances and failing to adequately safeguard
controlled substances at his San Diego location constituted acts which
rendered his registration inconsistent with the public interest. Id. As
for his pending application for a registration, the Show Cause Order
alleged that Respondent ``anticipate[d] permitting temporary
veterinarians and unregistered technicians to have access to controlled
substances at the proposed registered location * * * despite being told
that DEA would not permit such access.'' Id. at 11. The Show Cause
Order concluded by alleging that Respondent's ``past experience
dispensing controlled substances, [his] failure to comply with
pertinent laws and regulations regarding controlled substances, and
[his] failure to maintain effective controls against diversion, renders
[his] registration * * * inconsistent with the public interest.'' Id.
Respondent, through his counsel, requested a hearing. The matter
was assigned to Administrative Law Judge (ALJ) Mary Ellen Bittner, who
conducted a hearing in Portland, Oregon, on November 4-6, 2003, and May
11, 2004. At the hearing, both parties presented testimonial and
documentary evidence; following the hearing, both parties submitted
briefs.
On November 15, 2005, the ALJ submitted her decision. The ALJ held
that because Respondent's registration had expired on December 31,
2003, and Respondent had not filed a renewal application, the
revocation aspect of the proceeding was moot. See ALJ at 11 n.2. With
respect to his pending application, the ALJ held that Respondent ``is
unable or unwilling to accept the responsibilities inherent in a DEA
registration'' and therefore recommended that it ``be denied.'' Id. at
33. Neither party filed exceptions. The record was then transmitted to
me for final agency action.
Having considered the record as a whole, I hereby issue this
decision and final order. I adopt the ALJ's findings of fact and
conclusions of law except as expressly noted herein. For the reasons
set forth below, I concur with the ALJ's recommendation that
Respondent's application be denied.
Findings
Respondent holds a D.V.M. degree which he obtained from the
University of California at Davis School of Veterinary Medicine in
1974. Respondent also holds a J.D. degree which he obtained from the
University of California's Hastings College of Law in 1981. Respondent
has maintained practices in both veterinary medicine and the law. See
id. at 11.
At the time this proceeding commenced, Respondent held a California
Veterinarian's License with an expiration date of January 31, 2003.
Govt. Exh. 10. Respondent also holds a license to practice veterinary
medicine in Oregon.
Respondent also held DEA Registration, BK 5633525, which was issued
to him at the registered location of 12897 Corbett St., San Diego,
California, and which had an expiration date of December 31, 2003. Id.
at n. 11. Respondent did not, however, file a timely renewal
application of his DEA registration, and thus the registration expired.
Id.
In April 1982, Respondent and his partner Bill Barnett opened the
first Companion Pet Clinic in Tigard, Oregon. Sometime thereafter,
Respondent and his partner hired Kevin Knighton, D.V.M., to work as a
veterinarian at the Tigard clinic. In 1983, Dr. Knighton bought out Mr.
Barnett's interest and became Respondent's partner. Between 1983 and
1990, Respondent and Dr. Knighton established about eighteen to twenty
clinics. Under their business plan, Respondent and his partner hired
young veterinarians who desired to eventually own their own practices.
After a period of several years, Respondent and his partner sold the
clinics to the veterinarian for a minimal down payment and financed the
balance at ten to twelve percent interest. Dr. Knighton testified that
while either he or Respondent held a DEA registration for a clinic,
both the full time and relief veterinarians they hired did not have
registrations. See ALJ at 11-12, Tr. 432-38.
[[Page 66977]]
Dr. Knighton testified that at the clinics, controlled substances
were maintained in a locked safe, and that only certain personnel had
access to the key. Tr. 437. Dr. Knighton also testified that the
clinics kept a controlled substances logbook for each controlled
substance and that every cc (a volumetric measure) used was logged. Id.
at 437-38. Dr. Knighton further testified that to his knowledge, no
controlled substances were diverted from any of these clinics. Id. at
437.
Mrs. Baldev Nagra testified that in 1989, she and her husband,
Parminder Nagra, a veterinarian, emigrated to the United States. In
1991, the Nagras purchased the Companion Pet Clinic which was located
in West Slope, Oregon, from Respondent and Dr. Knighton. The Nagras
also became limited partners in the Veterinary Investment Group, an
entity which Respondent established to construct and develop new
clinics. See ALJ at 13.\1\ One of the Veterinary Investment Group's
projects was the construction of a new clinic in Beaverton, Oregon,
which was built for Dr. Nagra, and which Dr. Nagra would take over
after selling his West Slope clinic. Tr. 258-60.
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\1\ Other members of the partnership were John Madigan and his
wife, Sheri Morris, D.V.M., who owned Companion Pet Clinics in West
Linn, Clackamas and Tigard, Oregon.
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In January 2000, Dr. Nagra was killed in an automobile accident.
According to the testimony of Mr. John Madigan, it was essential to
find a full time veterinarian for the Beaverton facility because the
partnership was incurring expenses of ten to fifteen thousand dollars
per month whether it was open or closed. Id. at 261. Mr. Madigan
further testified that Dr. Nagra had been the DEA registrant at the
Beaverton facility, id. at 263, and that it took about six months
before the partnership could hire a full time veterinarian. Id. at 277.
Mrs. Nagra testified that the West Slope clinic was a large
investment for the Nagras, and that following her husband's death, the
clinic could not obtain controlled substances because the clinic did
not have a full time veterinarian with a DEA registration for the
location. Id. at 221-22. Mrs. Nagra further testified that she
contacted Respondent because the clinic needed controlled substances to
remain open and that Respondent subsequently ordered controlled
substances which he sent to the clinic. Id. at 225. Mrs. Nagra
testified that she logged the drugs in and that Respondent supplied her
with drugs from San Diego for ``probably five months,'' at which point
the clinic hired a full time veterinarian who obtained a registration
for the facility. Id. at 226-27.
Mrs. Nagra testified that there were no shortages of controlled
substances during this period. Id. at 225. Mrs. Nagra also testified
that she was looking for veterinarians for the Beaverton clinic and
eventually hired Fredrick Zborowski, D.V.M., who, at some point in the
year 2000, obtained a DEA registration for the Beaverton location. Id.
at 229-30.
With respect to his sending controlled substances to the West Slope
clinic, Respondent testified that while ``it might be a violation * * *
the purpose was honorable'' because he did it ``to help someone in
distress.'' Id. at 390. Respondent also testified that it would be
``unjust and unfair'' if the clinic had been closed down and Mrs. Nagra
had lost her investment. Id. Respondent further testified that he did
not regret violating the law and that he ``would do that again because
[he] wasn't hurting anyone.'' Id.
Pamela Meyer, a DI from the DEA San Diego Field Division testified
that on July 28, 2000, Respondent and his wife Ellen Koller met with
her, another DI and their Group Supervisor, to discuss whether
Respondent's practices complied with DEA regulations and to interview
him regarding an application he had submitted for a registration at the
Beaverton, Oregon clinic. Id. at 68-71. Respondent told the DIs that he
worked as a relief veterinarian in California about two weeks per
month, and that he also practiced law out of his home. Id. at 69.
According to the DI, Respondent admitted that he was receiving drugs at
his San Diego home and sending them to the Beaverton clinic. Id. at 71.
The DI further testified that while Respondent had a registration for
his California home, the Beaverton location was not registered. Id. at
72. One of the DIs then informed Respondent ``that he could only
receive drugs at a registered location,'' and the DIs gave Respondent a
copy of the Code of Federal Regulations. Id. at 73.
The DIs further advised Respondent that if he practiced as a relief
veterinarian and took controlled drugs to another location, he had to
document the use of the drugs. Id. Respondent was cooperative and
admitted to the DIs that he knew what he was doing was wrong and that
was why he was seeking the registration. Id. at 75. The DI also
testified that Respondent said he would comply with the regulations and
that there was no evidence that Respondent subsequently sent controlled
substances to Oregon.\2\ Id. at 74.
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\2\ At the hearing, the government did not pursue any potential
violations arising out of Respondent's sending controlled substances
to the Beaverton clinic.
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Respondent's Arrest and the California Veterinary Board Proceeding
The record establishes that on October 27, 2001, Respondent's
daughter observed her mother, Mrs. Ellen Koller, faint in the doorway
of the bedroom of their San Diego residence. Fearing that her mother
had overdosed, Respondent's daughter called 911 and requested
assistance. When the paramedics arrived, they found Mrs. Koller
unconscious and lying on the floor; her right arm had a fresh puncture
wound from which blood was oozing. When Mrs. Koller did not respond to
first aid, including treatment with Narcan, a drug used to treat opiate
overdoses, the paramedics took her to the hospital.\3\ See ALJ at 15;
Gov. Exh. 4, at 3 & 5.
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\3\ According to the testimony of Mrs. Koller, Respondent ``had
taken some Telazol and gone to sleep, and I decided that I wanted to
try it too, but I had been drinking earlier, and so I didn't know
the dosage. And I took some* * *.'' Tr. 507.
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The paramedics found Respondent lying on a bed in a semi-conscious
state; his left arm also had a fresh puncture wound from which blood
was oozing. The paramedics further observed that there were several
hypodermic needles and syringes next to Respondent. See ALJ at 15; Gov.
Exh. 4, at 5.
While the paramedics were attending Mrs. Koller, Respondent became
belligerent and tried to prevent them from treating her. The paramedics
called for assistance and the police arrived. Upon their arrival, one
of the officers ordered Respondent to place his hands behind himself.
Respondent refused. The officer then grabbed Respondent's hands but
Respondent resisted, prompting the officer to use pepper spray to
restrain him. The officer then arrested Respondent and conducted a
search incident to arrest. Govt. Exh. 4, at 6.
During the search, the officer found a small vial containing a
liquid in one of Respondent's pants pockets. The vial was labeled
Tiletamine. The vial's rubber top had been punctured and three-quarters
of the liquid was missing. Tiletamine (Telazol) is a veterinary
anesthetic and a Schedule III controlled substance. See 21 CFR
1308.13(c). Moreover, the officer found that Respondent displayed
several symptoms that are indicative of a person who is under the
influence of a controlled substance. Gov. Exh. 4, at 6.
[[Page 66978]]
The police subsequently obtained a warrant, and later that night
conducted a search of Respondent's residence. During the search, the
police found four uncapped needles and syringes on the headboard of the
bed in the master bedroom; another needle and syringe was found under
the mattress of this bed. In a bathroom drawer over which Respondent's
wife exercised dominion and control, the police found twenty-one
tablets of controlled substances that were ``mostly veterinarian
narcotics.'' Gov. Exh. 4, at 7. The police also found Dexfenfluramine
(a Schedule IV controlled substance, see 21 CFR 1308.14(d)),
Diphenoxylate (a Schedule V controlled substance, see 21 CFR
1308.15(c)), and Diazepam (a Schedule IV controlled substance, see 21
CFR 1308.14(c)), in a bathroom vanity drawer over which Respondent's
wife exercised dominion and control. Respondent's wife testified,
however, that she had a prescription for the Diazepam and that she had
purchased Phentermine in Mexico for a neighbor. She also testified that
she had obtained the Diphenoxylate in Mexico to treat her dog's
diarrhea. ALJ at 16.
The police also found five vials of Nandrolone, an anabolic steroid
and Schedule III controlled substance, in Respondent's office. See id.
at 8. Moreover, the police did not find any logbooks which recorded the
purchase, use and storage of the controlled substances recovered from
Respondent's residence. Id. at 8.
Respondent testified that at the time of this incident, he had
undergone knee replacement surgery for his left knee in 2000 and his
right knee in 2001, that his recovery from the latter procedure was
painful, and he took the Tiletamine because it helped him sleep and the
drug prescribed by his physician gave him a bad hangover. Tr. 373-74.
Respondent explained that there was ``no excuse for what I did to
myself.'' Id. at 374. Respondent added that: ``I had to have other
reasons. It wasn't just the pain, or it wasn't just the sleep. It had
to be other reasons.'' Id. at 374.
In his testimony, Respondent disputed the accuracy of the police
reports. According to Respondent, when he awoke, he was ``confronted
with about a half dozen people in my bedroom,'' and that as he regained
his senses, the police ``tried to prevent'' him from checking out his
wife and that ``[s]he was doing fine.'' \4\ Tr. 375. Respondent also
testified that while he was arrested, no charges were ever filed
against him. Id.
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\4\ The ALJ did not specifically credit the testimony that
Respondent's wife ``was doing fine.'' As ultimate factfinder, I
decline to credit it based on the record as whole including the
police reports and Respondent's Exh. 8, in which Respondent admitted
that his wife was ``unconscious'' and ``not breathing.'' Id. at 6.
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The police did, however, report the incident to the California
Veterinary Medical Board. ALJ at 17. According to the testimony of
Susan Geranen, the Executive Officer of the California Board, on
December 20, 2001, the California Office of Administrative Hearings
issued an interim order suspending Respondent's veterinary license.
Subsequently, on August 29, 2002, Ms. Geranen filed an Accusation
against Respondent. As relevant here, the Accusation alleged that
Respondent had violated Section 4883 of the California Business and
Professions Code (Veterinary Medical Practice Act) by illegally using
and administering to himself and his wife a controlled substance. See
Gov. Exh. 10, at 6. The Accusation further alleged that Respondent
violated Cal. Health & Safety Code Sec. 11158(a) by ``dispens[ing] a
Schedule III controlled substance to himself and his wife without a
valid prescription.'' Id. at 8. Next, the Accusation alleged that
Respondent violated DEA regulations by failing to store in a securely
locked and substantially constructed cabinet the various controlled
substances that were found in his home by the police on October 27,
2001. Id. 8-9. The Accusation further alleged that during the search of
Respondent's home, the police did not find any medical records or any
of the records required to be maintained under the Controlled
Substances Act's (CSA) implementing regulations. See id. at 9; see also
21 CFR 1304.22(c).
On January 28, 2003, a hearing was held before a state ALJ. The ALJ
subsequently found that on October 27, 2001, Respondent had injected
himself with Telazol, a drug containing Tiletamine and Zolazepam, a
Schedule III controlled substance, and a drug which has been approved
only for use in animals. See Gov. Exh. 16, at 2. The state ALJ further
found that Respondent did not have a prescription for the drug.
Moreover, the state ALJ found that Respondent had ``furnished the drug
to his wife who injected herself with it.'' Id.
The state ALJ found that ``Respondent's daughter knew respondent
used drugs and left drugs lying around the house,'' and that
``Respondent's wife knew respondent used Telazol.'' Id. at 2. The state
ALJ further found that ``Respondent's handling of drugs in his home
endangered the health, safety and welfare of his wife and daughter.''
Id. The state ALJ also made a finding that during the October 27, 2001
incident, the paramedics found Respondent's wife ``unconscious and not
breathing. Her daughter found her in that condition and called
paramedics because she was turning blue.'' Id. The state ALJ thus
concluded that Respondent's conduct violated Cal. Bus. & Prof. Code
Sec. 4883(g)(2)(B), ``because he endangered the lives of himself, his
wife and his daughter,'' as well as Cal. Healthy & Safety Code Sec.
11171, ``by furnishing Telazol to his wife.'' Id. at 2.
The State ALJ further found that Respondent did not have any
medical records in his home and also ``did not have any controlling
logs indicating the purchase of, use of, or storage of the controlled
substances that were recovered in his home.'' Id. at 3. The State ALJ
found that ``[n]one of the controlled substances were locked in a
secure cabinet'' as required by 21 CFR 1301.75(b), that Respondent was
``not authorized to have controlled substances * * * at his home * * *
without meeting federal regulations,'' and that Respondent ``did not
lawfully possess the controlled substances'' that were found by the San
Diego police. Id.
Upon reviewing Respondent's evidence as to his rehabilitation, the
State ALJ also found that Respondent had ``failed to establish that he
no longer represents a threat to the public.'' Gov. Exh. 16, at 5. The
state ALJ thus upheld the interim order and suspended Respondent's
California veterinary license pending a further hearing. See Gov. Exh.
3.
Ms. Geranen testified that a further hearing had been scheduled for
September 2003, but was canceled pending the negotiation of a
settlement agreement. Respondent introduced into evidence a copy of the
agreement. See Resp. Exh. 8. In this document, Respondent admitted that
on October 27, 2001, he ``illegally used and administered to himself a
controlled substance,'' that he ``appeared to be under the influence of
a narcotic drug,'' and that the responding officials found that
Respondent had ``pin point pupils and blood from a fresh injection
site.'' Id. at 7. Respondent further admitted that the authorities
found a used syringe next to him and a vial of Telazol with its top
punctured and \3/4\ of its contents missing in his pant's pocket. Id.
Moreover, ``[t]he vial was clearly labeled `for animal use only' and
`not for human use.' '' Id. Respondent admitted that a blood sample
that was taken from him by the San Diego Police Department
[[Page 66979]]
tested positive for Zolazepam, a Schedule III controlled substance that
is used in Telazol. Id. Respondent also admitted that ``he dispensed a
Schedule III controlled substance to himself without a valid
prescription.'' Id. at 8.
Moreover, Respondent admitted that the paramedics found that his
wife was ``not breathing,'' that she was ``lying unconscious on the
floor in the doorway to the master bedroom'' with ``pin point pupils,''
and that she had a ``fresh injection site in her left arm, which was
bleeding.'' Id. at 6. Respondent also admitted that his wife ``was
under the influence of a narcotic or narcotic type drug and was
experiencing a possible narcotic overdose.'' Id. at 7.
Respondent further admitted that he ``violated federal statutes
regulating controlled substances'' by failing ``to store a controlled
substance [Telazol] at his home in a securely locked, substantially
constructed cabinet.'' Id. at 8. Moreover, Respondent admitted that he
``violated federal statutes regulating controlled substances'' by
``failing to maintain records regarding controlled substances in his
possession'' such as medical records and controlling logs. Id. at 9.
The settlement agreement proposed to revoke Respondent's California
Veterinary License but stay the revocation for a four-year probationary
period. The agreement further proposed the suspension of Respondent's
State license for a period of two years effective from December 20,
2001, the date of the original Interim Suspension Order. See id. at 10.
The agreement also further required that Respondent undergo a
psychological evaluation, that he participate in a drug rehabilitation
program for the length of the probation, that he submit to random drug
testing, that he abstain from the use of controlled substances unless
lawfully prescribed, and that he surrender his DEA registration. See
id. at 13-15. While the agreement was signed by Respondent, as well as
a State Deputy Attorney General and state ALJ, the agreement apparently
was not adopted by the California Board. See ALJ at 19. Moreover, the
ALJ found that Respondent's California veterinary license expired on
January 31, 2005.
Respondent's Application for Registration of the NE 82nd Ave. Clinic
The ALJ found that Respondent opened a new Companion Pet Clinic at
3150 NE 82nd Ave., Portland, Oregon (hereinafter 82nd Avenue), on
January 2, 2002. ALJ at 19. Respondent testified that he went to
Portland in December 2001 to open the clinic and took with him a bottle
of Euthasol, a drug containing pentobarbital which is used to euthanize
animals, and a bottle of ketamine, a drug used as an anesthetic. ALJ at
19-20. These drugs are Schedule III controlled substances. See 21 CFR
1308.13(c).
According to the testimony of Heidi Lang, D.V.M., who started
working at the clinic in August 2002, a controlled substance
(euthanasia solution) was then being stored at the facility. Tr. 495-
96. Dr. Lang further testified that she obtained a DEA registration at
the facility's location shortly after starting work at the clinic. Id.
at 500. The record does not, however, specify on what date this
occurred. Id. at 500.
On December 5, 2001, Respondent applied for a registration at the
82nd Avenue location. ALJ at 20. On his application, Respondent was
asked whether he had ``ever had a state professional license or
controlled substance registration revoked, suspended, denied,
restricted, or placed on probation?'' Gov. Exh. 2, at 2. Respondent
answered ``yes.'' Id.\5\ Respondent explained that his California
veterinary license had been ``revoked in 1978 for non drug related
conduct'' and ``was reinstated in 1982.'' Id.
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\5\ The application asked a similar question of applicants that
are corporations, associations, and partnerships. Respondent also
answered ``yes'' to this question. Gov. Exh. 2, at 2.
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Because Respondent had given an affirmative answer to two of the
liability questions, his application was forwarded to the Portland DEA
office for further investigation. Accordingly, on February 13, 2002,
two DIs went to the 82nd Avenue clinic to interview Respondent and
conduct a pre-registration investigation.
During the meeting, Respondent told the DIs that he was in the
business of opening up new clinics to provide affordable veterinary
care, getting the practice running, and then selling them off. Tr. 107.
Respondent further stated that he worked as a relief veterinarian in
California and also practiced law there. Id. at 111.
The DIs found that the 82nd Avenue facility provided adequate
physical security. Id. at 108. During their inspection, however, the
DIs found that two controlled substances (euthanasia solution and
Ketamine) were being stored on the premises. Id. The facility was not a
registered location under the CSA. Id. See also 21 U.S.C. 822(e).
The DIs discussed with Respondent the issue of who would have
access to the controlled substances while he was in California. Id. at
113. Respondent told the DIs that he would staff the clinic with relief
veterinarians. Id. One of the DIs testified that it was DEA's position
that the relief veterinarians would have to be employees of Respondent
(assuming he obtained a registration) and that if the relief
veterinarians were not employees but rather independent contractors,
they could not act under Respondent's registration for that facility
unless Respondent ``was there to provide adequate security.'' Id. at
114. According to the DI, a relief veterinarian who was an independent
contractor would have to have their own registration for the location
either to dispense or to administer a controlled substance at the
location. Id. at 114-15. The DI further testified that his
investigation did not find any incidents of diversion at other
Companion Pet Clinics. ALJ at 22.
On February 19, 2002, Respondent sent a letter to one of the DIs
contending that they were misinterpreting 21 CFR 1301.12(a) and
1301.22. In the letter, Respondent wrote:
The fact is that veterinarians take off one to two days a week
and have relief veterinarians work in their hospital. Some owner
veterinarians take off for more than a week at a time and either
have their associate veterinarian work the hospital or a number of
relief veterinarians work the hospital or clinic. In all these
situations, there is but one DEA REGISTRATION used, though the other
veterinarians use and log the use of the controlled substances. Your
concept of having each relief veterinarian have their own
registration and their own drugs is not practical nor does it exist
in practice. Even the associate veterinarians generally do not have
a DEA REGISTRATION for the office they work out of full time.
Govt. Exh. 6, at 1.\6\
\6\ The record contains extensive evidence regarding the
practices of veterinary clinics with respect to the handling of
controlled substances, as well as the need of practice owners to
hire relief veterinarians who work under the DEA registration of the
owner. See ALJ at 23-28. The record also contains extensive
testimony on the issue of whether relief veterinarians are properly
considered agents of the facility owner and what procedures are in
place to protect against the diversion of controlled substances. See
id.
---------------------------------------------------------------------------
In the letter, Respondent argued that the DIs were unwarranted in
their ``concerns about tracking the scheduled drugs and having too many
people [with] access to the scheduled drugs.'' Id. Respondent also
maintained that ``the DEA Registrant is responsible for any diversion
of the scheduled drugs in his hospital.'' Id. at 1-2. Respondent
further contended that ``[t]he fact that I am a dual professional, with
a law office in San Diego should not have an effect on the
certification process either. I am a resident of this state while I am
here. I own two homes in this state.'' Id. at 2.
[[Page 66980]]
Finally, Respondent sought to have DEA either give him a registration
for his new facility or transfer his California registration to the
82nd Ave. facility. In the event DEA decided not to grant him a new
registration, Respondent demanded a hearing.\7\
---------------------------------------------------------------------------
\7\ In a subsequent letter dated April 10, 2002, Respondent
complained to one of the DIs that DEA's ``delay is causing me and my
clients a great deal of inconvenience and harm'' and threatened ``to
petition the courts to make [DEA] act one way or the other.'' Gov.
Exh. 7.
---------------------------------------------------------------------------
According to the ALJ's report, Respondent's wife ``testified that
as of October 2001, Respondent was planning on opening the 82nd [Ave.]
clinic and had been trying for two years to obtain a DEA registration
for it.'' ALJ at 22. Moreover, Respondent's wife ``testified that as
part of that effort, she and Respondent had met with DEA personnel at
the agency's office in San Diego, and that DEA personnel had told them
that Respondent could not ship drugs from California to Oregon and that
he could not have registrations in both Oregon and California.'' Id. at
22-23. Respondent's wife further testified that ``the delay could not
be attributed to the October 2001 incident because Respondent's efforts
to change his registered address were `way before that happened.' ''
Id. at 23 (quoting Tr. 513).
The ALJ did not specifically credit this testimony. As ultimate
factfinder, I expressly decline to credit the testimony that asserts
that Respondent had been trying to obtain a registration for the 82nd
Avenue clinic ``for two years,'' and that Respondent had attempted to
obtain a registration at this address ``way before'' the October 27,
2001 incident. While it is clear that the testimony was offered in an
attempt to show that DEA officials dragged their feet with respect to
Respondent's application for the 82nd Avenue clinic and/or to justify
his violations of the CSA, see Tr. at 367,\8\ the record contains
substantial evidence that refutes this claim.
---------------------------------------------------------------------------
\8\ Respondent testified: ``I asked for that way before I abused
drugs. I asked for it a year before.'' I likewise decline to credit
this testimony.
---------------------------------------------------------------------------
Respondent's application for the 82nd Avenue clinic was dated
December 5, 2001, and the date stamp indicates that DEA received the
application on December 14, 2001. See Gov. Exh. 2, at 2. Furthermore,
Respondent submitted a response to the Show Cause Order. In that
document, Respondent asserted that he ``first requested'' a
modification of his registration ``from California to the 82nd Avenue
practice'' on ``December 12, 2001 and again on February 19, 2002.'' ALJ
Exh. 2, at 5.; see also id. at 1 (``Daniel Koller requested this
modification prior to opening this clinic [on] December 12, 2001.'');
id at 2 (``Dr. Koller requested a registration at the 82nd Location on
December 12, 2001.''). Thus, the documentary evidence establishes that
Respondent did not apply for the registration until December 2001,
shortly before he opened the clinic.
With respect to the opening of the 82nd Avenue facility, Respondent
testified that ``I brought up Euthasol * * * because I had a bottle,
and I brought up Ketamine.'' Tr. 378. Respondent also testified that
``you don't close down operations. You don't stop businesses and put 12
people on the unemployment line because of a registration that is being
withheld at that time unreasonably.'' Id. at 379.
Respondent further testified that it was ``an absurdity'' to
``claim that I'm violating the law by taking drugs from California [by]
carrying them to Oregon,'' and that ``I can take those drugs anywhere I
want as long as I have a valid DEA registration, which I did'' when he
transported the drugs to the 82nd Avenue clinic. Id. at 393. Respondent
then maintained that ``the fact that I'm working out of a non-
registered facility with my drugs that I pull from a registered
facility and it's registered to me, there's no violation there. It just
simply is not a violation of any act or any statute or any
regulation.'' Id. at 394.
Respondent's Evidence as to His Rehabilitation
In support of his claim that he was no longer abusing controlled
substances, Respondent introduced documentary evidence and called Dr.
Standish McCleary, his psychologist, to testify. Dr. McCleary testified
that he had been seeing Respondent since February 2002 and that he was
still treating him at the time of the hearing.
Dr. McCleary testified that Respondent did not have a history of
drug and alcohol abuse and had ``conscientiously addressed'' the
problems that led to his abuse of controlled substances. Tr. 349. Dr.
McCleary testified that Respondent had been ``very direct'' in
admitting his abuse of controlled substances, id. at 348, and that he
had ``no reason to believe that the behavior has repeated itself and
will be at all likely to repeat itself.'' Id. at 347. Dr. McCleary
further testified that ``he saw no danger in [Respondent's] full
reinstatement to veterinary practice,'' and that ``there is an
extraordinarily low probability that [Respondent] will ever'' re-abuse
controlled substances. Id. at 349-50. Dr. McCleary further testified
that he thought Respondent had been going to AA meetings but did not
know whether he had received any other treatment. Id. at 352.
Respondent also introduced into evidence a letter from a
psychiatrist, Dr. Mark Kalish, which apparently was prepared for the
State hearing discussed above. The letter reports the result of a
psychiatric examination of Respondent that was performed on January 27,
2003. According to the letter, Respondent reported that he had not used
any controlled substances since a previous examination by Dr. Kalish a
year earlier, ``and that he [had] submitted to random drug tests, which
have confirmed his abstinence.'' Resp. Exh. 2, at 3. Dr. Kalish also
conducted a clinical examination and reviewed available documents
(although the letter does not state what documents were reviewed). See
id. The letter concluded with Dr. Kalish's opinion that Respondent
``does not represent a danger to the public should he be allowed to
practice veterinary medicine.'' Id.
Finally, Respondent submitted a letter documenting a May 7, 2002
examination that was conducted by Dr. Walton E. Byrd, a psychiatrist
who examined him at the request of the Oregon Board of Veterinary
Medicine. See Resp. 4, at 1. The assessment found that Respondent had
``dissociative anesthetic abuse--Telazol, in remission,'' and further
noted that a urinalysis conducted that day was free of illicit
substances. Id. at 4. The letter concluded with Dr. Byrd stating that
he ``would support [Respondent's] continued licensure'' subject to his
continuing therapy with his psychologist, his attendance at weekly
twelve-step meetings, his meeting ``with a monitoring professional
designated by the Veterinary Board,'' and his undergoing random urine
testing ``over a two- to five-year period.'' Id.
Respondent also introduced into evidence ten reports of drug tests
conducted at a Kaiser Permanente Facility in Portland, Oregon. See
Resp. Exh. 5. While all the reports are negative, many of the tests
occurred only days apart and there is no evidence in the record
establishing how the dates were chosen and whether they were bona fide
random tests.\9\
---------------------------------------------------------------------------
\9\ The Government did not, however, introduce any evidence
rebutting Respondent's assertion of rehabilitation.
---------------------------------------------------------------------------
Discussion
Section 303(f) of the Controlled Substances Act provides that an
application for a practitioner's registration may be denied upon a
[[Page 66981]]
determination ``that the issuance of such registration would be
inconsistent with the public interest.'' 21 U.S.C. 823(f). In making
the public interest determination, the Act requires the consideration
of the following factors:
(1) The recommendation of the appropriate State licensing board
or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled
substances.
(3) The applicant's conviction record under Federal or State
laws relating to the manufacture, distribution, or dispensing of
controlled substances.
(4) Compliance with applicable State, Federal, or local laws
relating to controlled substances.
(5) Such other conduct which may threaten the public health and
safety.
Id.
``[T]hese factors are * * * considered in the disjunctive.'' Robert
A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ``may rely on any one or
combination of factors, and may give each factor the weight [I] deem[]
appropriate in determining whether * * * an application for
registration [should be] denied.'' Id. Moreover, case law establishes
that I am ``not required to make findings as to all of the factors.''
Hoxie v. DEA, 419 F.3d 477, 483 (6th Cir. 2005); see also Morall v.
DEA, 412 F.3d 165, 173-74 (DC Cir. 2005).
As an initial matter, I note that the ALJ found that Respondent's
Registration, BK5633525, expired on December 31, 2003, and that
Respondent did not file a renewal application, let alone a timely one,
for this registration. See 21 CFR 1301.36(i). DEA precedents establish
that where ``a registrant has not submitted a timely renewal
application prior to the expiration date, then the registration expires
and there is nothing to revoke.'' Ronald J. Riegel, D.V.M., 63 FR
67132, 67133 (1998); see also Cadiz Thrift-T Drug, Inc., 64 FR 15803,
15805 (1999). Therefore, the revocation portion of this proceeding is
moot and only Respondent's application for a registration at the 82nd
Avenue location remains a live controversy.
With respect to Respondent's application, I have carefully
considered Respondent's evidence concerning his rehabilitation. But as
explained below, even granting that Respondent has proved by a
preponderance of the evidence that he is rehabilitated, the record
establishes that granting his application would be inconsistent with
the public interest. Most significantly, Respondent's record of
compliance with the CSA and his testimony at the hearing regarding his
past violations demonstrate convincingly that he cannot be entrusted
with a new registration. I thus deny his application.
Factor One--The Recommendation of the State Licensing Board
The ALJ found that at the time of the hearing, Respondent's
California veterinary license was suspended. It is undisputed, however,
that Respondent has a valid veterinary license in Oregon. Therefore, I
agree with the ALJ that this factor ``carries little weight,'' ALJ at
32, in the analysis of whether granting Respondent's application would
be consistent with the public interest.
Factor Two--Respondent's Experience in Dispensing Controlled Substances
The record established that Respondent administered to himself,
Tiletamine, (Telazol), a Schedule III controlled substance which is
approved for use only as an anesthetic in animals. Respondent obviously
did not have a prescription, let alone a valid one, for the drug. See
21 CFR 1306.04.
The ALJ found that Respondent misused this controlled substance
because of ``a medical condition that has since ameliorated,'' and that
Respondent had proved by a preponderance of the evidence that he was
not likely to re-abuse the drug. ALJ at 32. I agree and note in
particular the testimony of Respondent's psychologist, Dr. Standish
McCleary, that in his opinion, Respondent was unlikely to re-abuse
controlled substances. The Government's cross-examination of Dr.
McCleary does not lead me to question his conclusion and the Government
offered no evidence to rebut it.
The conduct at issue in this case is not, however, limited to
Respondent's self-abuse of a controlled substance, and involves a
variety of acts which have no nexus to his self-abuse. Therefore, I
conclude that Respondent's rehabilitation is entitled to little weight
in the public interest analysis.
Factor Three--Respondent's Record of Drug-Related Convictions
It is undisputed that Respondent has never been convicted of a
federal or state criminal offense related to the manufacture,
distribution, or dispensing of controlled substances. I therefore agree
with the ALJ's conclusion that this factor weighs against a finding
that granting Respondent application would be inconsistent with the
public interest. As the ALJ further concluded, this factor is not
dispositive. See ALJ at 32.
Factor Four--Respondent's Compliance with Applicable Federal, State and
Local Laws
The record in this case establishes multiple instances of
Respondent's non-compliance with the Controlled Substances Act. As
explained below, Respondent committed serious violations of the Act,
which, if tolerated would undermine the statute's carefully crafted
scheme for regulating the distribution of controlled substances and
preventing the diversion of controlled substances into illegitimate
uses and drug abuse.
As the Supreme Court recently explained, the CSA creates ``a closed
regulatory system making it unlawful to manufacture, distribute,
dispense, or possess any controlled substance except in a manner
authorized by the [Act].'' Gonzales v. Raich, 545 U.S. 1,--(2005)
(citing 21 U.S.C. 841(a)(1) & 844(a)). As relevant here, ``[t]he CSA
and its implementing regulations set forth strict requirements
regarding registration, * * * drug security, and recordkeeping.'' Id.
Under the Act, a veterinarian falls within the definition of a
``practitioner,'' and upon obtaining a registration, a veterinarian has
legal authority to prescribe, administer or distribute a controlled
substance to an ``ultimate user,'' the latter being a person who has
lawfully obtained a controlled substance ``for an animal owned by him
or a member of his household.'' 21 U.S.C. 802(21); id. Sec. 802(27).
The Act provides that ``[p]ersons registered * * * to manufacture,
distribute, or dispense controlled substances * * * are authorized to
possess, manufacture, distribute, or dispense such substances * * * to
the extent authorized by their registration and in conformity with the
other provisions of the [Act].'' Id. Sec. 822(b).
Under the CSA's implementing regulations, the various controlled
substance activities recognized by the Act ``are deemed to be
independent of each other.'' 21 CFR 1301.13(e). Moreover, ``[a]ny
person who engages in more than one group of independent activities
shall obtain a separate registration for each group of activities''
unless the activity is a permitted coincident activity under a
particular category of registration.\10\ Id. Furthermore, the CSA
requires that a registrant obtain ``a separate registration * * * at
each principal place of
[[Page 66982]]
business or professional practice where the applicant, manufactures,
distributes, or dispenses controlled substances.'' Id. Sec. 822(e).
Having provided this background, I next address the various instances
in which Respondent's conduct violated the CSA.
---------------------------------------------------------------------------
\10\ The regulations impose different security requirements
based on the activity. Thus, distributors are subject to more
extensive requirements than practitioners. See generally 21 CFR
1301.71--1301.76.
---------------------------------------------------------------------------
The record establishes that on October 27, 2001, paramedics found
Respondent's wife unconscious and lying on the floor; her right arm had
a fresh puncture wound with blood oozing from it. According to the
police report, Respondent's daughter ``believed that her mother was
dead from a drug overdose,'' Gov. Exh. 4, at 3, and Respondent's wife
did not respond to first aid. At the hearing, Respondent's wife
testified that she had taken Telazol. Tr. 507. Moreover, Respondent's
own evidence (the proposed California stipulation) includes the
admission that his wife ``was under the influence of a narcotic or
narcotic type drug and was experiencing a possible narcotic overdose.''
Resp. Exh. 8, at 6-7.
I do not have to find that Respondent dispensed Telazol to his wife
to conclude that Respondent violated the CSA. Even crediting the
testimony of Respondent's wife that she decided to try the Telazol on
her own initiative, it is clear that she would not have been able to do
so if Respondent had complied with the requirement that the drug be
``stored in a securely locked, substantially constructed cabinet.'' 21
CFR 1301.75(b). Indeed, in the stipulated agreement which Respondent
entered into evidence he admitted as much.
Moreover, notwithstanding that Respondent stored controlled
substances at his San Diego residence/registered location, Respondent
failed to maintain the required records. 21 CFR 1304.22(c).
Specifically, Respondent was required to maintain a record of each
substance received, the date of receipt, the number of units, and the
name, address and registration number of the person that distributed
the substance to him. Id. Respondent was also required to maintain a
record naming the substance, indicating the number of units or volume
dispensed, and the name and address to whom the substance was
dispensed. Id. The record clearly establishes that none of these
records were being maintained and thus Respondent violated these
provisions of the CSA as well.
Respondent also violated the CSA when, at the request of Mrs.
Nagra, he ordered controlled substances on her behalf, had them shipped
to his registered location, and then redistributed them to the Nagras'
clinic. According to Mrs. Nagra's testimony, this activity occurred
over a five month period following her husband's death.
Under the CSA's regulations, Mr. Nagra's registration terminated
with his death. 21 CFR 1301.52(a). Respondent's distribution of
controlled substances to the clinic violated federal law for two
reasons: 1) Respondent was not registered as a distributor, See id.
1301.13(e), and 2) the Nagras' facility was no longer registered. Id.
1307.11(a). (requiring separate registrations for independent
activities). While DEA regulations allow a practitioner to distribute a
limited amount of a controlled substance to another practitioner, the
practitioner who receives the distribution must be ``registered under
the Act to dispense that controlled substance.'' Id.\11\ Respondent
therefore cannot avail himself of this exemption.
The record establishes that Mrs. Nagra contacted Respondent because
the clinic did not have a veterinarian with a registration at its
location and no distributor would sell controlled substances to it. Tr.
221-22. Moreover, it is also clear that Respondent undertook to supply
the clinic to circumvent the law.
To justify his violation of the CSA, Respondent asserted that his
purpose in distributing the drugs was ``honorable,'' and that it would
have been ``unjust and unfair'' if the clinic had closed down and Mrs.
Nagra had lost her investment. Respondent's reasons are not a valid
excuse for his violations of the Act.
Nationwide, there are thousands of solo practitioners who
administer controlled substances in the course of their professional
practices.\12\ Unfortunately, some die while they are still actively
practicing medicine. In enacting the CSA, Congress did not, however,
recognize the prevention of economic loss to the heirs of a registrant
as grounds for an exemption from the Act's requirements. See 21 U.S.C.
822(c); Cf. United States v. Oakland Cannabis Buyers' Cooperative, 532
U.S. 483, 491 (2001) (rejecting medical necessity exception to the CSA
and noting that a defense of legal necessity ``cannot succeed when the
legislature itself had made a determination of values'') (citation
omitted). Excusing Respondent's distribution to an unregistered
location would undermine the closed system of distribution and the
principle that at each registered location, there is an individual
registrant who is accountable for the proper security, record keeping
and use of controlled substances.
---------------------------------------------------------------------------
\11\ The security requirements applicable to non-practitioners
expressly require that ``[b]efore distributing a controlled
substance to any person who the registrant does not know to be
registered to possess the controlled substance, the registrant shall
make a good faith inquiry with [DEA] or with the appropriate State
controlled substances registration agency, if any, to determine that
the person is registered to possess the controlled substance.'' 21
CFR 1301.74(a). A practitioner who distributes under 21 CFR
1307.11(a), must comply with this regulation. See id. 1301.76(c).
\12\ According to testimony in this case, there are 24,000
veterinary clinics in the United States and more than half of them
are run by solo practitioners. See ALJ at 23.
---------------------------------------------------------------------------
Respondent further violated the CSA when he took controlled
substances from California to the 82nd Avenue Portland, Oregon
facility, which was not registered, and stored them there. At the
hearing, Respondent admitted that he brought two controlled substances,
Euthasol and Ketamine, from San Diego to the 82nd Avenue clinic, in
December 2001, prior to his opening of this clinic in January 2002, and
that these substances were being administered to patients. A DI
testified that during the February 13, 2002 on site inspection, both
controlled substances were being stored at the 82nd Avenue clinic.
Moreover, Dr. Heidi Lang testified that in August 2002, when she began
working at the clinic, euthanasia solution was being stored there. The
clinic did not become a registered location until Dr. Lang obtained a
registration for it at some point after commencing her employment.
As to these events, Respondent testified that it was ``an
absurdity'' to claim that he violated the law by taking controlled
substances from California to Oregon, and that because he had a DEA
registration for his San Diego residence he could ``take those drugs
anywhere [he] want[ed].'' Tr. 393. Respondent further contended that
``the fact that I'm working out of a non-registered facility with my
drugs that I pull from a registered facility and it's registered to me,
there's no violation there. It just simply is not a violation of any *
* * statute or regulation.'' Id. at 394.
Contrary to the understanding of Respondent, the CSA expressly
prohibits this conduct. Section 302(e) provides that ``[a] separate
registration shall be required at each principal place of business or
professional practice where the applicant * * * distributes[] or
dispenses controlled substances.'' 21 U.S.C. 822(e); see also 21 CFR
1301.12(a). Respondent's 82nd Avenue clinic was a ``principal place of
business or professional practice'' where he ``dispensed controlled
substances.'' Respondent clearly failed to comply with the Act by
storing controlled substances at the clinic for approximately eight
months without first obtaining a registration for the location. See 21
U.S.C. 841(a)(1).
[[Page 66983]]
Respondent's testimony regarding his various violations is
especially disturbing. With respect to his conduct in distributing
controlled substances to the Nagras' clinic, Respondent testified that
he didn't ``have any regrets'' and that he ``would do that again
because I wasn't hurting anyone.'' Tr. at 390. As for his conduct at
the 82nd Avenue clinic, Respondent explained that ``you don't close
down operations. You don't stop businesses and put 12 people on the
unemployment line because of a registration that is being withheld at
that time unreasonably.'' \13\ Id. at 379.
---------------------------------------------------------------------------
\13\ As I have previously found, the evidence in the record
establishes that Respondent did not apply for a registration for
this location until December 2001, shortly before opening the
clinic. Furthermore, Respondent indicated on his application that
his state license had previously been suspended thus triggering a
more detailed investigation. DEA personnel subsequently determined
that Respondent had previously been investigated for distributing
controlled substances to the Nagras' clinic, that he was storing
controlled substances at the 82nd Ave. clinic, and became aware of
the events surrounding Respondent's abuse of Telazol and the State
of California's suspension of his license. As this proceeding has
established, it was not unreasonable to withhold Respondent's
registration. What was unreasonable was Respondent's commencement of
operations without obtaining a registration in violation of Federal
law.
---------------------------------------------------------------------------
Respondent's statements reflect a stunning disregard for the
requirements of Federal law. The CSA's implementing regulations
expressly provide that ``[n]o person required to be registered shall
engage in any activity for which registration is required until the
application for registration is granted and a Certificate of
Registration is issued * * * to such person.'' 21 CFR 1301.13(a).
Contrary to Respondent's understanding, he was required to comply with
the Act and its regulations even if it interfered with his business
plan or violated his sense of fairness.
In sum, Respondent's repeated violations of the CSA provide ample
grounds to deny his application. Moreover, Respondent's attitude leaves
me with the firm impression that, if given the opportunity, he will
violate the Act again. Moreover, Respondent's rehabilitation from drug
abuse does not mitigate the violations of the Act he committed by
distributing controlled substances to the Nagras' clinic, an
unregistered location, and commencing operations at the 82nd Avenue
clinic without obtaining a registration. I thus conclude that this
factor is dispositive and compels a finding that granting Respondent a
new registration would be inconsistent with the public interest.\14\
---------------------------------------------------------------------------
\14\ In light of Respondent's numerous violations of the CSA
discussed above, it is unnecessary to decide whether Respondent's
practice of employing relief veterinarians to run his clinic in
Oregon while living in San Diego (more than 1,000 miles away)
complied with the CSA. I note, however, that at the hearing, the
Government asserted that if a relief veterinarian is an independent
contractor, the relief vet. cannot act as an agent of the clinic
owner/registrant under 21 CFR 1301.22. According to the Government,
the relief vet. must be an employee of the clinic owner in order to
comply with the regulation.
This position is incorrect. Neither the CSA nor the regulation
precludes a relief veterinarian who is an independent contractor
from acting as the agent of the registrant. In the CSA, Congress
defined the term ``agent'' to mean ``an authorized person who acts
on behalf of or at the direction of a manufacturer, distributor, or
dispenser.'' 21 U.S.C. 802(3). Moreover, the CSA further exempts
from registration ``[a]n agent or employee of any registered
manufacturer, distributor, or dispenser of any controlled substance
* * * if such agent or employee is acting in the usual course of his
business or employment.'' Id. Sec. 822(c). The plain language of
the statute thus demonstrates that Congress did not limit the
exemption to the employees of a practitioner. Furthermore, in
appropriate circumstances, an independent contractor may act as an
agent. See, e.g., I Restatement of the Law (Second) Agency Sec. 14
N, at 80 (1958) (``One who contracts to act on behalf of another and
subject to the other's control except with respect to his physical
conduct is an agent and also an independent contractor.''). The
status of the person acting under the registration as an employee or
independent contractor is thus not determinative of compliance with
the CSA.
What is relevant for purposes of compliance is that the
registrant must exercise effective control of the agent. Doing so
requires that a registrant properly supervise and monitor its agents
to protect against the diversion of controlled substances; reliance
solely on the CSA's existing recordkeeping requirements does not
necessarily establish that a registrant is exercising effective
control of its agents.
---------------------------------------------------------------------------
Order
Accordingly, pursuant to the authority vested in me by 21 U.S.C.
823(f), and 28 CFR 0.100(b) and 0.104, I hereby order that the pending
application of Respondent, Daniel Koller, D.V.M., for a DEA Certificate
of Registration as a practitioner, be, and it hereby is, denied. This
order is effective December 18, 2006.
Dated: November 3, 2006.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E6-19400 Filed 11-16-06; 8:45 am]
BILLING CODE 4410-09-P