[Federal Register Volume 76, Number 69 (Monday, April 11, 2011)]
[Notices]
[Pages 20011-20020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8536]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 07-20]
Mark De La Lama, P.A.; Denial of Application
On January 16, 2007, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, issued an Order to
Show Cause to Mark De La Lama (Respondent), of Phoenix, Arizona. The
Show Cause Order proposed the denial of Respondent's application for a
DEA Certificate of Registration as a mid-level practitioner (i.e.,
physician assistant) on various grounds.
Specifically, the Show Cause Order made four major allegations
against Respondent. First, the Order alleged that Respondent's former
DEA registration had expired on June 30, 2003, but that Respondent had
continued writing prescriptions for controlled substances after that
date. ALJ Ex. 1, at 1 & 3. Next, noting that as a condition of his
initial registration Respondent had entered into a Memorandum of
Agreement (MOA) with the Agency, the Order alleged that Respondent had
violated the MOA in two ways: First, by failing to produce the log of
his controlled substance prescriptions which he was required to
maintain when DEA Diversion Investigators (DIs) visited his practice
premises on April 13, 2005, and; second, by failing to report two
changes of his practice location. Id. at 1, 2-3. Finally, the Order
alleged that on November 21, 2004, Respondent submitted a new
application for a registration which he falsified by failing to
disclose his April 1992 and October 1994 felony convictions for
offenses related to controlled substances, as well as the existence of
the MOA. Id. at 3.
Respondent, through his counsel, requested a hearing. The matter
was assigned to a DEA Administrative Law Judge (ALJ), who conducted a
hearing on January 16, 2008, in Phoenix, Arizona. ALJ at 2. Both
parties called witnesses to testify and introduced documentary evidence
into the record. Following the hearing, both parties filed briefs
containing their proposed findings of fact, conclusions of law and
argument. Id.
On April 2, 2009, the ALJ issued her Recommended Decision. Therein,
the ALJ concluded that Respondent ``knowingly issued prescriptions for
controlled substances using an expired DEA registration number over a
span of nearly two years'' but that the ``lack of evidence that
Respondent issued prescriptions for other than a legitimate purpose * *
* weigh[s] in favor of a finding that Respondent's registration would
not be inconsistent with the public interest.'' Id. at 26.
The ALJ also found that Respondent's conviction record for two
felonies under Arizona law involving controlled substances weighed ``in
favor of a finding that Respondent's registration would be inconsistent
with the public interest.'' Id. at 27. Based on his failure to disclose
these two felonies on his November 21, 2004 application, the ALJ
further found that Respondent materially falsified his application but
concluded that his conduct was only negligent because an office manager
had completed the form for him. Id. at 28-29. The ALJ credited
``Respondent's testimony and * * * his expressions of regret and
recognition of his wrongdoing on this specific point, and * * *
therefore conclude[d] that his material falsification in the 2004
application [did] not warrant denying his application.'' Id. at 30.
Next, the ALJ found ``that Respondent failed to adhere to certain
requirements contained'' in a Memorandum of Agreement (MOA) which he
was required to enter into with the Agency as a condition of obtaining
a registration. Id. More specifically, Respondent ``failed to maintain
a log of all controlled substances that he prescribed as of the date of
the April 2005 site visit'' and he failed to notify the Agency of his
changes in the location of his practice address. Id. 30-31. The ALJ
also found, however, that Respondent ``equally accepts responsibility
for what went wrong[ ] and has demonstrated a commitment to cooperate
with DEA in the future.'' Id. at 32. Moreover, while the ALJ noted that
Respondent had been convicted (in 1985) in Thailand of possession and
attempted smuggling of marijuana, as well as a more recent conviction
for driving under the influence, the ALJ also noted that Respondent was
then practicing ``at a clinic that serves a primarily underserved and
underinsured population'' and that this is ``an appropriate
consideration in determining whether [his] application * * * should be
granted.'' Id. at 33.
Based on his multiple convictions for controlled substances
offenses and his ``considerable difficulty [in] adhering to some of the
requirements of the'' MOA, the ALJ concluded that the Agency had ``made
out a prima facie case for denying [Respondent's] application.'' Id.
The ALJ reasoned, however, that ``[d]espite his criminal convictions
involving controlled substances in the 1990s, Respondent appears to
have put that period of his life behind him.'' Id. at 34.
[[Page 20012]]
In the ALJ's view, Respondent's ``most recent conviction involving
controlled substances occurred more than fifteen years ago [and]
[s]ince that time, he has neither been implicated in nor been convicted
of any other crime involving controlled substances [and] [t]he
Government presented no evidence that the future would hold any
differently.'' Id. Based on his ``expression of remorse and his
expressed willingness to comply with restrictions on his
registration,'' the ALJ ``conclude[d] that the public interest would
best be served by granting Respondent a restricted registration''
subject to four conditions. Id. These were that: (1) Respondent must
comply with all Federal, State and local laws and regulations relating
to controlled substances; (2) Respondent may not personally use
controlled substances in any form or for any reason without a
prescription issued by a duly licensed physician who possesses a valid
DEA Certificate of Registration; (3) Respondent must permit DEA
personnel to enter his practice location at any time during normal
business hours, without prior notice, to verify compliance with all
applicable laws and regulations relating to controlled substances, as
well as with any or all restrictions imposed on Respondent as a
condition of his registration with the DEA; and (4) Respondent must
notify the DEA Phoenix Division, in writing, of any change of business
address or employer. Id. at 34-35.
Neither party filed exceptions to the ALJ's decision. On May 7,
2009, the ALJ forwarded the record to me for a final agency action.
During the initial review of the record, it was noted that the
Government had introduced into evidence--over Respondent's objection--a
printout of a data compilation prepared by SearchPoint, a private
entity, which purportedly listed the prescriptions Respondent issued
between October 8, 2003 and May 23, 2005. The Government introduced
this document, which is not a record required to be maintained under
either federal or state law, to prove the allegations that Respondent
had issued controlled substance prescriptions even after he knew his
registration had expired and had done so even after being told to stop
by DEA Investigators. Because Respondent's objection went to the
foundation for admitting the compilation and the reliability of the
information it contains, and the Government did not establish that the
methods used to compile the data were sufficiently trustworthy, I
remanded the case to the ALJ for further proceedings and specifically
instructed the Government to address various questions as set forth in
the remand order.\1\ Following additional proceedings, the ALJ
forwarded the record back to me for final agency action.
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\1\ To make clear, I remanded the case because there was no
prior Agency decision addressing the admissibility of data
compilations prepared by private entities.
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Having considered the entire record, I hereby issue this Decision
and Final Order. I agree with the ALJ's conclusions that: (1)
Respondent materially falsified his application, (2) that he has a
significant history of convictions relating to controlled substances;
(3) that he failed to meet the MOA's requirements with respect to both
his proper keeping of a log and his obligation to notify the Agency of
any changes in his practice location.\2\ As the ALJ recognized, these
findings establish a prima facie case for the denial of his
application.
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\2\ Under the express terms of the MOA, Respondent agreed to
surrender his registration without issuance of an Order to Show
Cause in the event that he failed to comply with the MOA. GX 3, at
3. Also, a violation of the MOA's terms would ``result in the
initiation of proceedings to revoke'' Respondent's registration. Id.
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However, I reject the ALJ's conclusion that Respondent's employment
at a clinic that serves an underserved population is ``an appropriate
consideration in determining whether [his] application * * * should be
granted.'' ALJ at 33; see also Gregory D. Owens, 74 FR 36751, 36756-57
(2009) (rejecting consideration of socioeconomic status of
practitioner's patients as appropriate consideration under the CSA).
Moreover, while I do not reject the ALJ's findings that Respondent has
accepted responsibility for his misconduct, I reject her proposed
sanction because it clearly rests on a fundamental misunderstanding as
to the scope of permissible sanctions under the CSA. Given the
circumstances of this matter, I conclude that Respondent's application
should be denied at this time.
The Reliability of the SearchPoint Data Compilation
Before proceeding to make factual findings, it is necessary to
resolve the issue of whether the ALJ properly admitted--over
Respondent's objection that the Government had not laid a proper
foundation--Government Exhibit 8, which it represents to be a data
compilation listing the prescriptions Respondent issued between October
8, 2003 and May 23, 2005.\3\ The Government argues that this exhibit
showed that Respondent had issued controlled substance prescriptions
not only following the expiration of his registration, but also after
he knew it had expired and even after he was told by DEA Investigators
to stop doing so.\4\ Gov. Proposed Findings at 7-8, 10-11. The ALJ
relied on this evidence, in part, in her decision.
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\3\ The ALJ overruled the objection after determining that the
Exhibit had been provided to Respondent in advance of the hearing
even though Respondent's counsel had objected on grounds of lack of
foundation and that ``we have no way of determining the accuracy of
the information as set forth herein.'' Tr. 66. While under the
Agency's regulation, ``[t]he authenticity of all documents submitted
in advance [is] deemed admitted unless written objection thereto is
filed with the presiding officer,'' 21 CFR 1316.59(c), there is no
such rule applicable to objections based on a lack of foundation.
The ALJ apparently confused these two independent grounds for
objecting to the admission of evidence.
\4\ Notably, the Government did not introduce into evidence
either copies of any prescriptions Respondent wrote during this
period, or pharmacy dispensing logs, even though such evidence
should have been readily obtainable (as a pharmacy is required to
keep such records for two years, see 21 CFR1304.04(a) and
1304.22(c)), and is what the Government customarily uses in these
proceedings to establish that a practitioner wrote unlawful
prescriptions.
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Under the Administrative Procedure Act (APA), an Order must be
``supported by and in accordance with the reliable, probative and
substantial evidence.'' 5 U.S.C. 556(d). While the Agency's decision
may be based on hearsay evidence, see Richardson v. Perales, 402 U.S.
389, 410 (1971), such evidence must still be reliable.
The compilation is not, however, a record maintained by a
government agency. Nor is it a record which is required to be
maintained under either federal or state law. Moreover, on reviewing
the compilation, there appeared to be various discrepancies which
called into question the data's reliability. As I noted in the remand
order, this Office is unaware of any judicial decisions either
admitting or excluding similar data compilations prepared by
SearchPoint.
At the hearing, a DI testified that prescription information is
entered by a pharmacy into a computer which is then collected and sent
to SearchPoint. Tr. 43. The DI did not, however, explain the basis of
his knowledge. Moreover, the record did not establish the procedures or
methods used by the pharmacies in entering the information, when the
information is entered, whether either the pharmacies or SearchPoint
have any procedures to verify the accuracy of the information, whether
the data is properly secured, and whether there are procedures to
protect the data from manipulation. Cf. McCormick on Evidence Sec.
314, at 886 (3d ed. 1984).
[[Page 20013]]
The record also did not establish whether a prescription that was
signed by both Respondent and a supervising physician (which was one of
Respondent's defenses to the allegation that he continued to prescribe
even after he realized his registration had expired) would be
attributed to Respondent or the physician. Nor did the record establish
why, where refills were authorized by a single prescription, the
printout provided the same date for the date the prescription was
written and the date it was dispensed.
Because the record did not adequately establish the procedures or
methods used to compile this database and that the compilation is
sufficiently trustworthy so as to satisfy the APA's requirement that
the evidence be reliable, I remanded the case to the ALJ with
instructions to address these various concerns. I also expressly
ordered that the questions ``must be addressed by a witness who has
personal knowledge of the procedures and methods used by Searchpoint.''
Remand Order at 3.
On remand, the Government submitted an affidavit of the same
Diversion Investigator whose testimony I previously found to be
inadequate for establishing that the SearchPoint data is reliable. From
his affidavit, it is clear that the DI lacks personal knowledge of the
procedures and methods used by SearchPoint. See Affidavit of Miguel
Rodriguez.
This, by itself, is reason to conclude that the Government has
failed to comply with the remand order. However, even in his affidavit,
the DI offered no evidence which establishes that the SearchPoint data
is reliable. To the contrary, the DI explained that:
[t]he accuracy and authenticity of the data was only as good as the
accuracy of the pharmacy reporting. It was stipulated to all DEA
investigators, that SearchPoint was only a pointing tool and the
data provided by SearchPoint was to be verified against actual
records that the pharmacy, distributor, [or] practitioner was
required to maintain by current regulations and laws.''
Id. at 4 (emphasis added).
The DI further acknowledged that he ``did not verify the
information found during the query of the SearchPoint database prior to
meeting with [Respondent] on April 13, 2005.'' Id. at 4-5. (Indeed, it
is apparent that the DIs did not verify the information even after
meeting with Respondent as there are no ``actual records'' in
evidence.) The DI's statement that the SearchPoint data was only to be
used as a ``pointing tool'' begs the question of why the actual
pharmacy (or Respondent's patient) records were never obtained.
Based on the DI's assertion that the SearchPoint database was ``a
valuable tool in DEA's investigative efforts,'' id. at 5, ``the
Government respectfully request[ed] an additional finding that the
SearchPoint data proved useful in DEA's investigation of Respondent,
and helped further the objectives of DEA's investigation.'' Gov't
Memorandum on Remand at 2. Contrary to the Government's understanding,
whether the SearchPoint data proved useful in its investigation is not
material to the resolution of any issue in this proceeding.
As the Government's brief makes clear, determining the extent of
Respondent's issuance of prescriptions after his registration expired
and assessing his culpability in doing so is one of the central issues
in this matter. Given that there was no clear agency precedent
addressing the admissibility of similar data compilations, this
proceeding was remanded to determine whether the SearchPoint data was
sufficiently reliable to prove that Respondent had continued to issue
controlled substance prescriptions not only after he became aware that
his registration had expired, but also after he was told by a DI to
stop doing so.
Notwithstanding that the remand order clearly stated what the
Government was required to show to establish that this evidence is
reliable, it failed to do so. Because the Government failed to comply
with the remand order and offers no valid excuse for its failure to do
so, I conclude that the SearchPoint compilation is not competent
evidence and should have been excluded. See 21 CFR 1316.59(a) (``The
presiding officer shall admit only evidence that is competent,
relevant, material and not unduly repetitious.''). Accordingly, as
ultimate factfinder, I do not base any of my findings on it.
Findings
Respondent is a physician assistant, who is licensed by the Arizona
Regulatory Board of Physicians Assistants (The Board). GXs 6 & 7. At
the time of the hearing, Respondent was 49 years of age. Tr. 286.
Respondent obtained a Bachelor of Science degree in human biology
in 1997 and a Master's degree in physician assistant studies in October
1999. Id. at 208. After obtaining his state license, Respondent
commenced working as a physician assistant; his duties involve
performing physical exams, making diagnoses, treating patients,
interpreting test results, and ordering diagnostic tests and studies.
Id.
On October 26, 2000, Respondent applied for a DEA registration to
handle controlled substances in Schedules II through V as a mid-level
practitioner. GX 2. On the application, Respondent was required to
answer four ``liability questions''; the questions included whether the
applicant had ever been convicted of an offense related to controlled
substances under either federal or state law. Id. at 2.
Respondent answered in the affirmative and provided an explanation
of the circumstances surrounding a 1992 marijuana conviction. Id.
Respondent wrote that in 1989 or 1990, a friend he met in karate class
was involved in ``selling dope'' and that Respondent ``made the
horrible mistake of trying to make a `fast buck.' '' Id. Respondent
also stated on the application that ``I entered guilty pleas in 1992
and have never violated any of the terms of my probation.'' Id.
Respondent also stated on the application that his ``criminal
convictions were expunged by the Maricopa County Superior Court in
1999,'' based on the recommendation of his probation officer. Id. He
also ``regret[ted] this experience in [his] life'' and that his ``goal
was to be the best P.A. and father I can be.'' Id.
On February 12, 2001, the Agency granted Respondent's application.
GX 1. However, because of his prior conviction, the Agency issued him a
restricted registration; as a condition of his registration, Respondent
was required to enter into a Memorandum of Agreement (MOA), which
imposed various conditions on his registration. Tr. 19; GX 3.
The MOA further detailed Respondent's drug-related offenses, which
included two other drug convictions, one of which should clearly have
been disclosed on his application, but was not. On May 3, 1985,
Respondent was convicted in Bangkok, Thailand for ``Possession and
Attempted Smuggling'' of approximately 145 grams of marijuana. GX 3, at
1. The court suspended the 21-month sentence, and Respondent paid a
fine and completed two years of probation. Id.
On or about April 10, 1992, Respondent entered into a plea
agreement in which he pled guilty to ``Attempted[] Possession, Use,
Production, Sale and Transportation'' of approximately eight pounds of
marijuana, a class 3 felony under Arizona law. Id. Respondent paid a
fine, was jailed for two months, and was placed on five years'
probation.\5\ Id.
[[Page 20014]]
With respect to this incident, Respondent maintained at the hearing
that he ``was approached by somebody'' and ended up being ``a fall
guy.'' Tr. 284.
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\5\ On June 16, 1999, the Maricopa County Superior Court vacated
the judgment of guilt and restored Respondent's civil rights. Id. at
2. This is the felony that he listed on his application in 2000.
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On October 24, 1994, Respondent was found guilty of ``Conspiracy to
Transfer, Sell or Possess'' a narcotic drug, a class 2 felony under
Arizona law, based on his involvement in a conspiracy to illegally
import cocaine from Panama to the United States. GX 3, at 2. Respondent
was fined and sentenced to seven years' probation, but the probation
was subsequently reduced.\6\ Id. With respect to this conviction,
Respondent maintained at the hearing that he was not ``directly
involved'' in the conspiracy because he only ``had phone conversations
with the particular individual,'' but he nevertheless pled guilty. Id.
at 288-90.
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\6\ The Superior Court also apparently vacated this conviction
in 1999, when it restored Respondent's civil rights. Tr. 210.
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Respondent did not disclose this conviction on his initial
application. GX 2, at 2; Tr. 293. When questioned as to why, Respondent
stated that he ``suppose[d]'' that it was because of ``inadvertence''
on his part and added that ``[i]t was all at the same time,''
apparently referring to the marijuana distribution offense. Tr. 293.
As found above, as a condition of his registration, Respondent
entered into an MOA, under which he agreed to comply with various
conditions. The MOA was to remain in effect for five years from the
date of signing, January 25, 2001, during which time the DEA would be
able to monitor Respondent's handling of controlled substances. Tr.
115-16; GX 3, at 2.
As relevant to the allegations in this proceeding, Respondent
agreed ``to maintain a log for five years, which will list all
controlled substances that he prescribes.'' GX 3, at 2. The log was
``subject to inspection by DEA for five years from the date'' the MOA
was ``fully executed,'' which was January 30, 2001. Id. at 2-3.
Second, Respondent agreed ``that DEA personnel may enter his place
of practice at any time during regular business hours, without prior
notice, to verify compliance'' with the MOA. Id. at 3. Finally,
Respondent agreed ``to notify the DEA Phoenix Division prior to
transferring his DEA Certificate of Registration to another address
within the state of Arizona or to another state.'' Id. In the MOA,
Respondent indicated that he would be registered at the location of
3201 West Peoria Avenue, Suite A-202, Phoenix, Arizona. Id. at 1.
In October 2000, Respondent began working as a physician assistant
under the supervision of a Dr. John Curtin, at the above address. Tr.
223. Sometime thereafter, Respondent contracted pneumonia and missed
substantial time from work; upon his return, his hours were reduced.
Id. at 224. Consequently, in 2001 or 2002, Respondent left this
position and went to work for William Zachow, D.O., who owned 21st
Century Family Medicine (21st Century), 6707 North 19th Ave., Suite
201, Phoenix, Arizona. Id. at 167-68, 224. Respondent did not notify
DEA of this change of practice address, as required by the MOA.\7\ Tr.
38-39.
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\7\ Respondent also testified that the year 2001 was a difficult
year: In May his father fell from a roof and was hospitalized for 21
days with a brain hemorrhage before he finally died; Respondent took
in three more dependents into his household as a result of his
father's death; later that year, Respondent developed pneumonia, and
when he returned to work his employer noticed he was depressed and
referred him to counseling; then the national crisis of September
11, 2001 happened. Tr. 220-221. Respondent testified that ``there
was a lot of stuff that happened in 2001 that I think I was a little
bit confused, just overwhelm[ed].'' Id. at 221. While this sequence
of events may have overwhelmed Respondent, and provide some basis
for excusing his failure to notify the Agency of his having changed
his location, it is not a credible explanation for his failure to
renew his registration, which did not expire until June 30, 2003.
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As part of Respondent's employment agreement at 21st Century, the
clinic was to handle matters related to his licensing fees, his
malpractice coverage and his DEA registration. Id. at 224.
Specifically, Sonia Zachow, Dr. Zachow's wife, ``would take care of the
fees and all the licensing and the DEA.'' Id. at 224-25. Respondent
testified that this was a verbal agreement, as it had originally been
with his first employer, Dr. John Curtin, and that he trusted Dr.
Zachow to honor the agreement. Id. at 219. Respondent testified that
``[f]rom my understanding, all my mail went to [Sonia Zachow] and
through her. I didn't receive any.'' Id. at 225. In particular,
Respondent testified that he never received a notification from DEA
that his registration would expire after June 30, 2003. Id. Given that
he had not notified the Agency of his new address, this is hardly
surprising.
Shirley Reigle, a medical assistant at 21st Century, testified that
she was employed at the clinic when Respondent was hired and that she
worked with Respondent for four or five years. Id. at 168, 193. Ms.
Reigle testified that she managed the ``back office,'' coordinating the
activities of the medical assistants, while Sonia Zachow managed the
``front office,'' or business office. Id. at 169-71. Mrs. Zachow's
responsibilities included the renewal of the licenses and DEA
registrations held by the clinic's physicians and physician assistants,
the renewal of insurance coverage and the billing of insurance claims.
Id. at 171, 174, 176. According to Ms. Reigle, Mrs. Zachow's
responsibilities further included notifying the DEA if a physician or
physician assistant moved his or her location of practice. Id. at 188.
However, in one instance prior to Respondent's employment at 21st
Century, Ms. Reigle tried to induce Mrs. Zachow to give notice of a
move but ended up having to provide the information to DEA herself. Id.
at 204-05.
Respondent's DEA registration expired June 30, 2003. Id. at 42; GX
1. According to Ms. Reigle, sometime in late 2003, Mrs. Zachow entered
the office that Ms. Reigle shared with Respondent and threw a bill from
the DEA onto Respondent's desk, saying, ``Why should I pay his DEA
license when we're selling the practice.'' Tr. 176-77, 181. Ms. Reigle
testified that she believed that Respondent ``had gone for the day''
and that, when she told Respondent about the incident later and he went
to his desk to look, the bill was no longer on his desk. Id. at 177,
199. While Ms. Reigle testified that she told Respondent about the
incident, he apparently took no action to determine whether he still
held a valid registration.
Respondent testified that he did not receive notice that his
registration required renewal and that, had he known, he would not have
continued to practice without it. Id. at 225. Respondent admitted,
however, that at the time he received his registration he knew it was
subject to renewal in three years. Id. at 301. He further asserted that
he did not keep track of the time or display his registration
certificate and that he expected the office manager to handle matters
pertaining to his licenses, as that was done for all incoming health
care providers. Id. Respondent did, however, acknowledge that he was
ultimately responsible for renewing his registration. Id. at 220.
Respondent left 21st Century sometime between July and October
2004, when Dr. Zachow sold the clinic.\8\ Id. at 217. Respondent began
practicing at the 51st Avenue Clinic (51st Avenue), which is located at
4700 North 51st Street, Suite 6, in Phoenix. Id.; GX 4, at 1.\9\
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\8\ As was much of his testimony regarding the dates of various
events, Respondent's testimony as to the date when he left 21st
Century and commenced working at the 51st Avenue clinic was vague.
\9\ Respondent used the address of this clinic on his 2004
application. GX 4.
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When the clinic did not offer him adequate hours, Respondent
resumed
[[Page 20015]]
working on a part-time base at 21st Century and split his time between
the two clinics. Tr. 217-18. Sometime in October 2004, Respondent
received a letter from the Arizona Physician's Assistants Board
notifying him that his ``license had lapsed [on] October 1, 2004.'' GX
9, at 4.
Respondent testified that during the period in which he moved to
the new practice, pharmacies were not honoring the prescriptions he
wrote at his new employer, and that his ``office was getting calls for
the prescriptions that [he] had been writing, and they were talking
about a DEA number.'' Tr. 226-27. Notwithstanding the phone calls,
Respondent maintained that he did not know that the registration had
``lapsed'' until three or four months later when, in November 2004 or
early 2005, he was ``contacted by DEA.'' Id. at 226-27. In November
2004, Ms. Muniz, the office manager at 51st Avenue, told Respondent
that he needed to reapply for a DEA registration.\10\ Id. at 228.
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\10\ In a letter he faxed to a DI on April 24, 2005, Respondent
indicated that in October of 2004, he ``received a letter stating
that my P.A. license had expired'' and that after ``doing some
investigation, it turn[ed] out [that] my fees had not been paid.''
GX 9, at 1. Sometime around the time that he got his state license
reinstated, he ``got a call from the former office manager stating
that I had better check up on my malpractice fees. It turn[ed] out
those had not been paid in over a year.'' Id. Moreover, in the same
October time period, his new clinic ``was getting calls back from
the pharmacy saying that my DEA license was no longer valid'' but
that he did not think too much about it at first as ``I didn't know
that the license could expire.'' Id. at 2.
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According to Respondent, Ms. Muniz filled out the application for
him and showed him only the signature page, which he signed without
reviewing. Id. at 228-29, 262-63, 309-10. As with his previous
application, the form asked Respondent whether he had ``ever been
convicted of a crime in connection with controlled substances under
state or federal law?'' GX 4, at 1; ALJ Ex. 3, at 3. The ``no'' answer
was circled on the application. GX 4, at 1. Moreover, Respondent left
blank the box which the form provided for explaining a ``yes'' answer
to this question, and which is on the same page as the signature block.
Id. at 2. The application was then submitted.
As to why he did not disclose his convictions, Respondent
testified: ``I was busy. I was probably seeing 50 patients a day. I was
trying to make an impression.'' Tr. 228. According to Respondent, had
Ms. Muniz given him the entire application, he would have given a
detailed explanation and an answer of ``yes'' to the liability
question, just as he had done on his October 2000 application. Id. at
229.
The ALJ specifically credited Respondent's testimony that he would
not have provided a ``no'' answer ``had he personally filled out the
form'' and that ``he would have detailed the explanation of his past
conduct as he had done in 2000.'' ALJ at 29. The ALJ further credited
Respondent's ``expressions of regret and recognition of his
wrongdoing'' in submitting the application. Id. at 30. The Government
did not except to these findings.
It is undisputed that after filing his application, Respondent
continued to write prescriptions for controlled substances under his
expired registration even though he then clearly knew that it had
expired and did so through at least March 2005. See GX 9, at 4; see
also Resp. Prop. Findings at 6-7. Respondent offered two main (and
somewhat inconsistent) explanations for why he continued to write
prescriptions during this period.
First, in a written statement he provided to an Agency investigator
in April 2005, Respondent claimed that ``after reapplying'' there was
``some confusion * * * as to what was going on at that time, some
months went by and [he] was informed by the clinic's office manager
that she had taken care of everything and it was okay to write again.''
GX 9, at 4. Continuing, Respondent explained that Ms. Muniz had
contacted someone ``at DEA headquarters and he had informed her that we
had filled out the incorrect application and our money had been posted
to the wrong account, he said he would fax over the correct application
to be filled out immediately and faxed back.'' Id. Respondent
maintained that employees had said that ``the money would be posted to
the correct account and this would make the license active at this
point.'' Id. Respondent faxed in the new application on February 17,
2005. Id.
Respondent further asserted that he ``wrote very few prescriptions
during this time [when he] was waiting for a copy of the new license.''
Id. According to Respondent, ``[a]fter several weeks of not receiving
[the] paperwork[,] we called again and were informed that there was a
problem.'' Id. Respondent added that ``[a]t this time I discontinued
completely and left the controlled substances, the few we do write up
to the responsibility of my supervising physicians.'' Id. at 5.
Finally, Respondent claimed that while he could not ``recall the very
last prescription I wrote, it probably was over a month or two ago and
was some cough syrup with codeine as I wrote very little in the first
place.'' Id.
Second, in his testimony, Respondent further claimed that he ``was
getting co-signatures on the prescriptions if I did need to write or
just having them written altogether by a supervising physician.'' Tr.
230. Respondent explained that the co-signed prescriptions would be
``[o]ne prescription, my name and the doctor's name, usually above
mine.'' Id. at 231. Respondent also asserted that the pharmacy ``might
have run it [the prescription] as my DEA, but actually the doctor, the
supervising physician, it was under his DEA as well if his signature''
was on the prescription. Id. Respondent further asserted that he had
``some copies'' available that would show that his prescriptions were
being co-signed. Id.
Respondent submitted a letter (which is unsworn) dated April 22,
2005 written by Ms. Muniz, Director of Operations for the 51st Ave.
Family Clinic. RX 8. According to the letter, Respondent submitted a
renewal application sometime around December 3, 2004, when the payment
for the application fee cleared. Id. However, after several months,
Respondent had still not gotten his registration. Id. According to Ms.
Muniz, she then called DEA Headquarters and was told that Respondent
had submitted the wrong form. Id. The employee at DEA Headquarters then
faxed over the correct form which Respondent then submitted. Id.
According to Ms. Muniz, the employee told her that he would post the
previous payment to the correct account and this would activate
Respondent's registration. Id. However, according to an affidavit of a
DEA Diversion Investigator, ``there is no record of'' Respondent's
having submitted an application after November 21, 2004. Affidavit of
Miguel Rodriguez, at 6.
Based on Respondent's ``no'' answer on his 2004 application to the
liability question regarding whether he had any prior convictions for
controlled substances offenses, a DI commenced an investigation. Tr.
93. The DI reviewed the records from the Agency's prior investigation,
police reports and the MOA. Id. at 93-95. He also learned that, in
September 2003, Respondent had been arrested in Florida for a hit-and-
run incident while driving under the influence.\11\ Id. at 103.
---------------------------------------------------------------------------
\11\ There was no evidence presented that Respondent was under
the influence of a controlled substance at the time of the incident.
Tr. 256. Moreover, there is no evidence in this record that
Respondent has recently abused controlled substances. I therefore
conclude that the incident has little relevance to the issues in
this proceeding and deem it unnecessary to make further findings.
---------------------------------------------------------------------------
[[Page 20016]]
Using Respondent's registration number, the DI also conducted a
search of Respondent's controlled substance prescriptions using the
SearchPoint database. Id. at 42-44, 76. The data indicated that
Respondent had written controlled substance prescriptions after the
expiration of his registration (June 30, 2003). Id. at 42-43. However,
the DI testified that after reviewing the data, he did not have any
concerns about Respondent's prescribing other than that he lacked a
registration. Tr. 152.
On April 13, 2005, as part of his investigation of Respondent's
application, the DI and his senior partner visited Respondent at the
51st Avenue clinic, which was the address Respondent had given on his
application. Tr. 30-31. However, this address was different from
Respondent's address of record on file with the Agency, as Respondent
had not notified the Agency that he had changed his practice location
and had therefore violated the MOA. Id. at 31.
According to the DI, Respondent was not authorized to handle
controlled substances at the 51st Avenue clinic. Id. at 33. The DI
testified that, although failing to notify DEA of a change of address
is not typically the sole basis for revoking a DEA registration,
Respondent's failure to comply with the address-change provision of the
MOA gave cause for particular concern. Id. at 109. However, the
Government produced no evidence that Respondent had done anything other
than write prescriptions at this address.
During the visit, the DI did not observe Respondent working under
the supervision of a physician, and Respondent did not inform him or
his partner that he was working under physician supervision. Id. at 31-
32. The DIs then asked to inspect the log which Respondent was required
to maintain under the MOA. Id. at 33. Respondent left the room and
returned with a box containing an assortment of papers and several
folders in no particular order. Id. at 33-34. Respondent partially
attributed the disorganization of his ``log'' to the fact that he was
in the process of moving into a new practice while continuing to work
part-time at the other such that each location had its own records. Id.
at 327. Yet, at this point, he had been at 51st Avenue clinic for at
least six months.
According to the DI, his partner examined the contents of the box
and asked whether Respondent had records more recent than those for the
year 2003. Id. at 35-36, 124-25, 160-61. Respondent answered that he
could ``put something together,'' thus indicating that he was not
currently keeping a log. Id. at 36, 125. However, the DIs did not take
the box to copy the contents and ``never asked for a copy.'' Id. at
249, 251. Respondent later testified that ``I had it together and I'd
have produced--I even took a ledger and * * * copied them all down so I
did have a log book of the individual entries.'' \12\ Id. at 251.
---------------------------------------------------------------------------
\12\ Copies of this document were apparently offered as
Respondent's Exhibit 2. However, the Government objected to the
admission of the exhibit on the ground that it was not timely
exchanged, and the ALJ sustained the objection.
---------------------------------------------------------------------------
In a subsequent conversation, Respondent offered the material to
the DI to which the latter responded: `` `No, I'll give [the letters]
you have already provided to me to Washington and it will go from
there.' '' Id. The DI admitted that he and his partner did not ask for
copies of the materials in the box and did not offer Respondent the
option to submit later the materials that he would gather together. Id.
at 128.
Respondent testified that he had photocopied his notes of ``patient
encounters,'' which contained ``the patient's name, date of birth,
everything that we're seeing about that patient on that day and the
reasonable explanation of why you would write a controlled substance
for that patient on that day'' as well as the controlled substance
prescriptions he had written and then placed the copies in a manila
folder in a box. Id. at 216, 235, 239. Respondent testified that he
thought this would be ``even better than a logbook.'' Id. at 216, 235.
As he explained:
Now I thought that if there was ever a question about my writing
abilities and what I was doing, that I could pull up the patient
encounter and show my reasonable action on why I would write a
prescription on that particular day for that particular patient. So
I thought it was actually better than a logbook.
Id. at 236.\13\
---------------------------------------------------------------------------
\13\ At the hearing, Respondent attempted to enter copies of
this ``log'' into evidence as Respondent's Exhibit 1, but the
Government objected on the ground that the documents had not been
timely provided to the Government. Id. at 242-43, 248. The ALJ's
sustained the objection and rejected the evidence. Id. at 248.
The parties disputed whether what Respondent had presented to the
DIs constituted a log. According to the DI, a log is ``something that
we could easily obtain and review to check and verify [Respondent's]
prescription habits,'' which would normally be a ``bound book with
notations'' or a ``binder with prescriptions.'' Tr. 34-35. The DI
testified that he did not consider the records in the box to be
``easily reviewable.'' Id. at 36. However, he later conceded that the
MOA did not specify what format the log was to be maintained in and
that the information he sought could be obtained from the copies of the
prescriptions. Id. at 36, 122.
Respondent testified that he ``[p]robably'' did not ``completely''
understand the MOA's requirement. Id. at 215. However, he also
testified that ``[a] log is actually a journal reading; it's a
journal.'' Id. at 321. Respondent then testified that he thought ``that
a patient list was even better [and] was the same thing as a log
book.'' Id. He also maintained that ``there was nothing in the [MOA]
that told me how * * * a patient log book should look,'' but then
acknowledged that he never inquired of the Agency what the log should
consist of ``[b]ecause [he] thought that from what [he] had seen with
other physicians, what they used was a photo- a three- or double--you
know, the two-sided prescriptions where you just get a copy of it,
that's what I'd seen.'' Id. at 322.
Respondent further testified that, while initially he kept the
copies of prescriptions and patient encounters in a box in the office
in chronological order, when he moved from 21st Century to 51st Avenue
in October 2004, he placed the records from the new location in another
box. Id. at 217, 237. Thus, at the meeting on April 13, 2005, he was
only able to produce a portion of the prescriptions he had written as
the remaining records were at 21st Century. Id. at 235-38.
The DIs discussed with Respondent the MOA's requirement that he
notify the DEA before transferring his registration to another address.
Id. at 37; GX 3, at 3. Respondent told them that he was not sure
whether he had notified the Agency of his most recent move, and he
acknowledged that he had moved to 51st Avenue approximately six months
earlier. Tr. 38-39. He also told the DIs that he had worked at 21st
Century for four years prior to the move to 51st Avenue and that this
address was also different from the address at which he had originally
been registered. Id. at 38-39, 154; RXs 6 & 8. Respondent provided the
DIs with two changes of address: 4700 North 51st Avenue, Suite 6,
Phoenix, Arizona, and 1526 West Glendale Avenue, Suite 109, Phoenix,
Arizona. Tr. 38-39. Although he testified that it was ultimately his
responsibility to advise the DEA that he had changed his practice
address, Respondent maintained that it had been the responsibility of
Mrs. Zachow to do so. Id. at 188 & 190.
The DIs also discussed with Respondent the fact that his DEA
[[Page 20017]]
registration had expired. Tr. 59. Respondent told them that he had
learned that the registration had expired several months before their
meeting. Id. at 59, 113-14. Respondent further told the investigators
that the office manager (Sonia Zachow) had been responsible for
renewing the registration and had failed to do so. Id. at 112, 114-15.
During the April 13, 2005 meeting, the DI's senior partner
instructed Respondent to desist from writing prescriptions for
controlled substances; Respondent agreed that he would not write
prescriptions for controlled substances. Id. at 62-63, 78.
At the hearing, Respondent testified that he had complied with the
DI's instruction. Id. at 345. More specifically, Respondent testified
that ``I've been compliant from the day when I said--when they told me
you can't write controlled substances I've been--not written one.'' Id.
A DI testified that sometime after May 23, 2005, he conducted a
second search of Respondent's DEA registration number on SearchPoint
and found that Respondent had written controlled substance
prescriptions after the April 13, 2005, meeting. Tr. 77. However, for
reasons explained above, because the Government did not comply with the
instructions in the remand order for establishing that the SearchPoint
data is reliable, I conclude that the Government has not proved that
Respondent violated the DI's order to stop writing prescriptions. I
further find that the Government has failed to produce any reliable
evidence rebutting Respondent's contention that he had his
prescriptions co-signed by a supervising physician after he became
aware that his registration had expired.\14\
---------------------------------------------------------------------------
\14\ The Government does not address whether this practice is
even permissible under Arizona law.
---------------------------------------------------------------------------
At the hearing, Respondent testified that he was compliant with the
MOA; that his work as a physicians assistant was difficult and
stressful; that he had no training in office administration; and that
he had learned how to be a ``better professional'' from this experience
with his DEA registration expiring. Tr. 257-59.
Respondent testified that, although he currently works as a
physicians assistant without writing controlled substance
prescriptions, his lack of authority to do so significantly diminishes
his employer clinic's ability to treat patients: he is the only health
care provider at the current clinic and cannot prescribe drugs
necessary to treat such common ailments as excessive weight, Attention
Deficit Disorder/Attention Deficit-Hyperactivity Disorder, acute pain,
acute anxiety attacks, and testosterone deficiencies. Id. at 267 & 278.
If he cannot substitute a non-controlled substance, he must refer a
patient who requires a controlled substance to a physician or another
facility. Id. at 273.
According to Respondent, in around July 2005, his boss at the 51st
Avenue clinic gave him two weeks to resolve the issues surrounding his
DEA registration and told him he would lose his job if he did not do so
because insurance companies use the DEA registration number as a
tracking number for reimbursement. Id. at 259-60. Respondent
subsequently lost his job at this clinic but subsequently gained
employment at his current clinic. Id. at 260.
Respondent further testified that he had ``made a lot of mistakes''
and that he did not ``plan on this happening again.'' Id. at 267.
Respondent added that he could not ``afford to make any mistakes in
[his] life anymore,'' that he had ``made plenty'' and was ``sorry'' to
have ``made them'' and was ``remorseful.'' Id. at 268. He further
stated that while ``I made countless errors here * * * I've learned
from them and I don't think I'll ever see a courtroom again.'' Id.
Discussion
Section 303(f) of the Controlled Substances Act (CSA) provides that
an application for a practitioner's registration may be denied upon a
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 CSA requires that the following
factors be considered:
(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.
These factors may be considered in the disjunctive, and I ``may
rely on any one or a combination of factors and may give each factor
the weight [I] deem[] appropriate'' in determining whether an
application for registration should be denied. Robert A. Leslie, 68 FR
15227, 15230 (2003). Moreover, I am ``not required to make findings as
to all the factors.'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005);
see also Morall v. DEA, 412 F.3d 165, 173-74 (DC Cir. 2005).
Under DEA precedent, the various grounds for revocation or
suspension of an existing registration which Congress enumerated in
section 304(a), 21 U.S.C. 824(a), are also properly considered when
deciding whether to grant or deny an application under section 303(f)
because `` `the law would not require an agency to indulge in the
useless act of granting a license on one day only to withdraw it on the
next.' '' Anthony D. Funches, 64 FR 14267, 14268 (1999) (quoting Kuen
H. Chen, 58 FR 65401, 65402 (1993)); see also Alan R. Schankman, 63 FR
45260 (1998). These include section 304(a)(1), which provides for the
suspension or revocation of a registration in the event that the
registrant ``has materially falsified any application filed pursuant to
or required by this subchapter.'' 21 U.S.C. 824(a)(1). Thus, the
allegation that Respondent materially falsified his application is
properly considered in this proceeding.
The Government bears the burden of proof in showing that the
issuance of a registration is inconsistent with the public interest. 21
CFR 1301.44(d). However, where the Government has made out a prima
facie case, the burden shifts to the applicant to ``present[]
sufficient mitigating evidence'' to show why he can be entrusted with a
new registration. Medicine Shoppe-Jonesborough, 73 FR 364, 387 (2008)
(quoting Samuel S. Jackson, 72 FR 23848, 23853 (2007) (quoting Leo R.
Miller, 53 FR 21931, 21932 (1988))). ``Moreover, because `past
performance is the best predictor of future performance,' ALRA Labs,
Inc. v. DEA, 54 F.3d 450, 452 (7th Cir.1995), [DEA] has repeatedly held
that where a registrant has committed acts inconsistent with the public
interest, the registrant must accept responsibility for [his] actions
and demonstrate that [he] will not engage in future misconduct.''
Medicine Shoppe, 73 FR at 387; see also Jackson, 72 FR at 23853; John
H. Kennedy, 71 FR 35705, 35709 (2006); Cuong Trong Tran, 63 FR 64280,
62483 (1998); Prince George Daniels, 60 FR 62884, 62887 (1995).
Factor One--The Recommendation of the State Licensing Board
The Arizona Regulatory Board of Physician Assistants has made no
recommendation in this matter as to whether Respondent's application
should be granted. However, it is undisputed that Respondent holds a
current Arizona Physician Assistant's license and possesses authority
under
[[Page 20018]]
State law to dispense controlled substances. While Respondent therefore
meets an essential prerequisite for obtaining a registration under the
CSA, 21 U.S.C. 823(f), DEA has held repeatedly that a practitioner's
possession of State authority is not dispositive of the public interest
determination. See Mortimer B. Levin, 55 FR 8209, 8210 (1990).
Factors Two, Three, and Four--Respondent's Experience in Dispensing
Controlled Substances, Conviction Record Under Federal and State Laws
for Offenses Related to the Manufacture, Distribution, or Dispensing of
Controlled Substances, and Compliance With Applicable Laws Related to
Controlled Substances
As found above, on two prior occasions, Respondent was convicted of
offenses under Arizona law related to the distribution of both
marijuana (in 1992) and cocaine (in 1994).\15\ Subsequently, in 1999,
both of these convictions were vacated upon his having successfully
completed probation.
---------------------------------------------------------------------------
\15\ It is also noted that in 1985, Respondent was convicted in
Thailand of the offense of Possession and Attempted Smuggling'' of
marijuana. While this conviction is not encompassed within factor
three, it is properly considered under factor five.
---------------------------------------------------------------------------
Given the obvious concerns raised by his prior criminal conduct,
see GX 3, at 2; following Respondent's obtaining of his PA license, the
Agency granted his application for a registration on the condition that
he enter into the MOA, under which he agreed to comply with several
conditions beyond those imposed by the CSA and DEA regulations. Of
relevance here, Respondent agreed to maintain, for a period of five
years, a log ``list[ing] all controlled substances that he prescribes''
which was also to ``be subject to inspection * * * for five years.'' GX
3, at 3. In addition, Respondent ``agree[d] to notify the DEA Phoenix
Division prior to transferring his * * * [r]egistration to another
address within the state of Arizona or to another state.'' Id.
As the ALJ found, Respondent did not comply with either condition.
ALJ at 30-32. When asked to present his log, he provided a box which
contained an assortment of papers and folders in no particular order,
with some papers hanging out from the sides of the box. Moreover, the
most recent records were for the year 2003.
While the meaning of the MOA provision seems clear, and Respondent
eventually acknowledged that a log is ``a journal,'' Tr. 321, even
accepting Respondent's explanation that he was in compliance by
compiling his notes of patient encounters and the controlled substance
prescriptions, it undisputed that he did not have a complete record of
his prescribing activities as he lacked records after the year
2003.\16\ I therefore hold that he violated the MOA's log-keeping
provision.
---------------------------------------------------------------------------
\16\ Respondent did not dispute that he prescribed after 2003.
---------------------------------------------------------------------------
Moreover, while the MOA clearly stated that Respondent was required
to notify the local DEA office prior to transferring his registration
to another address, Respondent twice changed his practice location
without notifying the Agency. Here again, Respondent violated the terms
of the MOA. However, standing alone, Respondent's violations of the MOA
would not warrant the denial of his application given his expression of
remorse.
Alleged Violations of 21 U.S.C. 843(a)(2)
Under the CSA, it is ``unlawful for any person knowingly or
intentionally * * * to use in the * * * dispensing of a controlled
substance * * * a registration number which is fictitious, revoked,
suspended, expired, or issued to another person[.]'' 21 U.S.C.
843(a)(2) (emphasis added). Doing so is a felony offense which is
punishable by ``a term of imprisonment of not more than 4 years, a fine
under Title 18, or both.'' Id. at Sec. 843(d)(1).
The ALJ found that that ``is undisputed that Respondent issued
prescriptions for controlled substances after his DEA registration
expired in June 2003, and that he continued to do so even after
submitting an application for a new registration.'' ALJ at 24. While
apparently crediting Respondent's testimony that he was not aware that
his registration expired ``until late 2004,'' the ALJ concluded that
``there is no doubt that he was aware of its expiration after that
time, and that he therefore knowingly used an expired registration in
violation of the statute when he continued to write prescriptions after
late 2004.'' Id. (citing 21 U.S.C. 843(a)(2)). However, the ALJ
rejected the Government's contention that Respondent issued
prescriptions even after the April 2005 meeting during which a DI told
him to stop. Id.
The Government apparently accepts Respondent's contention that he
did not know that his registration had expired until sometime in the
fall of 2004 when he applied for a new registration. See Gov. Br. 6
(Proposed Finding 11) (``Respondent testified that he was unaware that
his DEA registration had expired and wasn't notified in writing or
otherwise of the expiration.'').\17\ The Government's contention that
Respondent violated 21 U.S.C. 843(a)(2) is therefore based on his
having issued prescriptions even after he submitted his application and
clearly knew that his registration had expired. Id. at 10. The
Government further argues that ``exacerbat[ing] his unlawful conduct,
Respondent continued issuing prescriptions under his expired * * *
registration after DEA investigators advised him against doing so
during the * * * April 2005 inspection.'' Id. at 10-11.
---------------------------------------------------------------------------
\17\ While the Government established that Respondent's
registration expired on June 30, 2003, GX 1, it did not introduce
into evidence a copy of the Certificate of Registration which was
issued to him. Such certificates typically include the expiration
date. Nor does the Government argue that proof of actual knowledge
is not required to sustain a violation of 21 U.S.C. 843(a)(2).
---------------------------------------------------------------------------
To prove these allegations, the Government relied on a data
compilation of his purported prescriptions, the reliability of which it
failed to establish. As the DI candidly explained, this data ``was only
a pointing tool'' and ``was to be verified against the actual records
that'' a pharmacy or practitioner is ``required to maintain'' under the
CSA and DEA's regulations. Inexplicably, the Government did not produce
any reliable evidence showing the controlled substances prescriptions
he authorized such as patient medical records, copies of the actual
prescriptions, or pharmacy dispensing logs. In sum, the Government did
not produce reliable evidence establishing the extent to which
Respondent continued to prescribe controlled substances following the
expiration of his registration.
It acknowledged that in a letter to one of the DIs, Respondent
stated that he had resumed prescribing at some point following the
submission of his application. Moreover, there is a degree of
inconsistency between Respondent's contentions that: (1) His office
manager had contacted someone at DEA Headquarters and been told that he
could write again; and (2) that he had a supervising physician co-sign
the prescriptions. Nonetheless, because there is no reliable proof
establishing the specific prescriptions which Respondent wrote
following his becoming aware that his registration had expired, and the
Government does not dispute either the factual basis of his contention
that he had his prescriptions co-signed or the legality of this
practice, there is insufficient evidence to show that Respondent
violated 21 U.S.C. 843(a)(2). I therefore reject the
[[Page 20019]]
Government's contention (and the ALJ's conclusion) that Respondent
violated 21 U.S.C. 843(a)(2).
Factor Five--Such Other Conduct Which May Threaten Public Health and
Safety
Under this factor, the ALJ considered the allegations that
Respondent materially falsified his 2004 application and that he had
been convicted of driving under the influence. ALJ at 27-33. She also
deemed it appropriate to consider Respondent's ``employment at a clinic
that serves a primarily underserved and underinsured population.'' Id.
at 33.\18\
---------------------------------------------------------------------------
\18\ She also considered Respondent's violations of the MOA
under this factor. I conclude, however that these violations are
properly considered in assessing his experience in dispensing
controlled substances. Moreover, as noted above, Respondent's 1985
conviction in the Thai courts for possession and attempting to
smuggle marijuana is properly considered under this factor. However,
it is noted that this conviction is now twenty-five years old.
---------------------------------------------------------------------------
The Material Falsification Allegation
As found above, on his 2004 application, Respondent answered ``no''
to the question: ``Has the applicant ever been convicted of a crime in
connection with controlled substances under state or federal law?'' GX
4, at 1. Moreover, Respondent left blank the box which the application
provided for explaining a ``yes'' answer. Id. at 2. By signing the
application, Respondent ``certif[ied] that the forgoing information
furnished on [the] application [wa]s true and correct.'' Id.
Respondent does not dispute that he should have disclosed the two
Arizona convictions on his application. Resp. Br. at 13 (``It seems
obvious that the 2004 application should have included the same
information regarding felony convictions that [the] 2000 application
had.''). Indeed, it cannot be disputed that his answer was false and
materially so given that under the public interest standard, the Agency
is required to consider, inter alia, both an ``applicant's conviction
record under Federal or State laws relating to the manufacture,
distribution, or dispensing of controlled substances,'' 21 U.S.C.
823(f)(3), and his ``[c]ompliance with applicable State, Federal, or
local laws relating to controlled substances.'' Id. Sec. 823(f)(4).
Given the statutory factors, it is clear that Respondent's false answer
was ``capable of influencing'' the decision as to whether his
application should be granted. See Jackson, 72 FR at 23852 (`` `The
most common formulation' of the concept of materiality is that `a
concealment or misrepresentation is material if it ``has a natural
tendency to influence, or was capable of influencing, the decision of''
the decisionmaking body to which it was addressed.' '' (quoting Kungys
v. United States, 485 U.S. 759, 770 (1988) (quoting Weinstock v. United
States, 231 F.2d 699, 701 (DC Cir. 1956))).
That the Agency did not rely on Respondent's false statement and
grant his application does not make the statement immaterial. The
Lawsons, Inc., 72 FR 74334, 74339 (2007) (quoting United States v.
Alemany Rivera, 781 F.2d 229, 234 (1st Cir. 1985) (``It makes no
difference that a specific falsification did not exert influence so
long as it had the capacity to do so.''); United States v. Norris, 749
F.2d 1116, 1121 (4th Cir. 1984) (``There is no requirement that the
false statement influence or effect the decision making process of a
department of the United States Government.''). Nor does it matter that
some employees of the Agency were previously aware of Respondent's
criminal history. See The Lawsons, 72 FR at 74339 n.7.
Respondent nonetheless contends that he did not intentionally
falsify the application, Resp. Br. at 13-14, and the ALJ credited his
testimony that the office manager at the clinic, where he was then
working, filled out the application for him and that he signed it in
haste without carefully reviewing it. ALJ at 8. The ALJ also credited
his testimony that if he had ``personally filled out the form * * * he
would have detailed the explanation of his past conduct as he had done
in 2000.'' Id. at 29.
While I accept the ALJ's credibility findings, I reject her
conclusion that Respondent was merely ``negligent.'' Id. Notably,
between the form's blocks for signing and printing one's name, the form
stated: ``I hereby certify that the forgoing information furnished on
this application is true and correct.'' GX 4, at 2. Given the
certification's location on the application, Respondent cannot credibly
claim that he did not read it. Respondent's testimony simply begs the
question of what information he thought he was certifying as being
``true.''
Likewise, the form's block for explaining his answers to the
liability questions was on the same side as the signature and
certification blocks. In addition, Respondent had previously completed
an application in which he disclosed his criminal convictions; he
likewise knew, based on the detailed recitation of his various drug-
related offenses in the MOA (although he apparently rarely, if ever,
reviewed the MOA), that these offenses were of particular concern to
DEA. Respondent clearly had reason to know that he was required to
disclose his criminal convictions to the Agency.
Finally, the ALJ gave insufficient consideration to the
circumstances surrounding the 2004 renewal. Notably, this was not a
routine renewal. Rather, at the time it was submitted, Respondent
clearly knew that his registration had long since expired. And,
notwithstanding his claim that he was a harried practitioner who was
trying to make an impression with his employer by seeing numerous
patients, reviewing the form for completeness would have taken no more
than a few minutes.
I therefore conclude that Respondent deliberately failed to read
the front of the form. As several courts have noted, deliberate
avoidance is generally not a defense to an allegation of material
misrepresentation. United States v. Puente, 982 F.2d 156, 159 (5th Cir.
1993) (``[A] defendant who deliberately avoids reading the form he is
signing cannot avoid criminal sanctions for any false statements
contained therein.''); Hanna v. Gonzales, 128 Fed. Appx. 478, 480 (6th
Cir. 2005) (rejecting alien's claim that he did not willfully
misrepresent material fact because friend filled out application for
him; having signed the application under oath, his ``failure to apprise
himself of the contents of this important document constituted
deliberate avoidance--an act the law generally does not recognize as a
defense to misrepresentation'').
The ALJ failed to acknowledge this line of authority. Instead, she
relied on several Agency decisions and reasoned that the ``lack of
intent to deceive is a relevant consideration in determining whether a
registrant or applicant should possess a DEA registration.'' ALJ at 30
(quoting Rosalind A. Cropper, 66 FR 41040, 41048 (2001)). However, the
cases cited by the ALJ are readily distinguishable. See id. (citing
Samuel Arnold, 63 FR 8687 (1998); Martha Hernandez, 62 FR 61145
(1997)).
For instance, in Cropper, the physician was completely unaware of
the underlying agency action which she had failed to disclose on her
application. 66 FR at 41048. That is a far cry from this case as
Respondent clearly knew that he had been previously convicted of two
felony drug offenses in the Arizona courts.
In Samuel Arnold, a physician failed to disclose on his application
a prior suspension of his state medical license based on misconduct
which was not related to controlled substances. 63 FR at 8687. However,
the Deputy Administrator found credible the testimony of two witnesses
that Respondent had called a DEA Office on
[[Page 20020]]
a speaker phone to inquire as to whether he was required to disclose
the suspension and was told by an Agency employee that he did not have
to because his ``license was no longer suspended.'' Id. at 8687-88.
Here, however, Respondent makes no claim that in filling out the
application he relied on erroneous advice from an Agency employee as to
what he was required to disclose.
Of the cases cited by the ALJ, only Martha Hernandez, 62 FR 61145
(1997), and Theodore Neujahr, 65 FR 5680 (2000), provide any comfort to
Respondent. In Hernandez, while my predecessor concluded that the
practitioner's material falsifications in failing to disclose the
suspension by two States of her medical licenses (for failing to pay
her student loans, which she believed was not within the intent of the
liability question) ``indicate a careless disregard for attention to
detail,'' he imposed only a reprimand and conditions on her
registration. Id. at 61148. While my predecessor agreed that ``this
lack of connection to controlled substances [wa]s not dispositive of
the matter,'' he concluded that it was ``relevant in determining the
appropriate remedy.'' Id. Here, by contrast, Respondent's
falsifications involve his failure to disclose his convictions for
controlled substances offenses and are clearly relevant in determining
the appropriate sanction.\19\ See 21 U.S.C. 823(f)(3).
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\19\ Having reviewed the Agency's decision in Neujahr, I
conclude that the case was wrongly decided because the respondent
there did not fully address his misconduct, which included not only
his failure to disclose his having surrendered his authority under
Federal law to write prescriptions for schedule II controlled
substances, but also his failure to disclose a State proceeding
which placed his veterinary license on probation; at his DEA
hearing, the respondent offered no explanation as to this separate
act of material falsification. 65 FR at 5681. In Neujahr, the ALJ
concluded that the respondent ``apparently regretted that conduct.''
Id. at 5682. To make clear, the Agency should not have to guess as
to whether one has accepted responsibility for his misconduct. A
registrant/applicant's acceptance of responsibility must be clear
and manifest.
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The ALJ also relied on Neujahr, a case in which the Agency granted
the application of practitioner, notwithstanding that he had he had
materially falsified it, because he ``acknowledged that he falsified
his applications, he apparently regretted that conduct, and [the ALJ]
believe[d] that he will not repeat it.'' ALJ at 30 & n.86 (quoting 65
FR at 5682). Subsequently in her decision, the ALJ reasoned that while
the Government had ``made out a prima face case for denying his
application, * * * it is important to note that the [Agency's] decision
whether to grant or deny an application for registration is a
prospective, rather than a retrospective, determination.'' Id. at 34.
It is true that proceedings under section 303 and 304 of the CSA
are remedial and not punitive. See, e. g., Jackson, 72 FR at 23853.
However, contrary to the ALJ's understanding, the remedial nature of
this proceeding does not preclude the Agency from considering the
deterrent value of a sanction with respect to both the Respondent and
others in setting the remedy. See Southwood Pharmaceuticals, Inc., 72
FR 36487, 36504 (2007). As Southwood makes clear, ``even when a
proceeding serves a remedial purpose, an administrative agency can
properly consider the need to deter others from engaging in similar
acts.'' Id. (citing Butz v. Glover Livestock Commission Co., Inc., 411
U.S. 182, 187-188 (1973) (upholding Agency's authority ``to employ that
sanction as in [its] judgment best serves to deter violations and
achieve the objectives of [the] statute'')). The ALJ, however, did not
even acknowledge Southwood.
Contrary to the ALJ's conclusion that Respondent will conduct
himself henceforth in a responsible fashion, see ALJ at 34, Respondent
made a similar promise in the MOA when he agreed to ``abide by its
contents in good faith.'' GX 3, at 3. See also ALRA Laboratories, Inc.
v. DEA, 54 F.3d 450, 452 (7th Cir. 1995) (``An agency rationally may
conclude that past performance is the best predictor of future
performance.''). Respondent, however, then proceeded to ignore his
obligations under the MOA.
Under these circumstances, granting Respondent's application
subject to the restrictions proposed by the ALJ, which do no more than
replicate the conditions imposed by the MOA, amounts to no sanction at
all. In short, adopting the ALJ's proposed sanction would send the
wrong message to both Respondent, who has demonstrated a disturbing
lack of attention to the requirements of being a registrant, as well as
other applicants/registrants, especially those who would submit an
application without carefully reviewing it for completeness and
truthfulness.
Accordingly, I conclude that Respondent's application should be
denied. However, given Respondent's expression of remorse, I conclude
that Respondent can re-apply for a new registration six months from the
effective date of this Order. Provided that his application is not
materially false and that he has committed no other acts which would
warrant the denial of his application, the Agency will expeditiously
grant his renewal application and issue him a new registration subject
to the conditions of the 2001 MOA.\20\
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\20\ I place no weight on Respondent's DUI/Hit and Run
conviction there being no evidence that he was under the influence
of a controlled substance at the time. See David E. Trawick, 53 FR
5326, 5327 (1988) (noting that factor five encompasses ``wrongful
acts relating to controlled substances committed by a registrant
outside of his professional practice but which relate to controlled
substances'').
The ALJ also opined that it is appropriate to consider
Respondent's employment at a clinic that serves an ``underserved and
underinsured populations.'' ALJ at 33. However, I have previously
rejected this reasoning noting that ``[t]he public interest standard
of 21 U.S.C. 823(f) is not a freewheeling inquiry but is guided by
the five specific factors which Congress directed the Attorney
General to consider [and that] consideration of the socioeconomic
status of a practitioner's patient population is not mandated by the
text of either 21 U.S.C. 823(f) or 824(a)(4), which focus primarily
on the acts committed by a practitioner.'' Gregory D. Owens, 74 FR
36751, 36757 (2009). I further noted that such a rule is
``unworkable,'' and ``would inject a new level of complexity into
already complex proceedings and take the Agency far afield of the
purpose of the CSA's registration provisions, which is to prevent
diversion.'' Id. at n.22. I therefore do not consider the issue.
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Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f), as well
as 28 CFR 0.100(b) and 0.104, I order that the application of Mark De
La Lama for a DEA Certificate of Registration as a mid-level
practitioner be, and it hereby is, denied. This order is effective May
11, 2011.
Dated: April 1, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-8536 Filed 4-8-11; 8:45 am]
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