Joy's Ideas, Revocation of Registration, 33195-33199 [05-11249]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 70, Number 108 (Tuesday, June 7, 2005)]
[Notices]
[Pages 33195-33199]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-11249]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 03-35]


Joy's Ideas, Revocation of Registration

    On June 13, 2003, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Joy's Ideas (Joy's Ideas/Respondent) proposing 
to revoke its DEA Certificate of Registration 003278JIY as a 
distributor of list I chemicals and deny its pending application for 
renewal under 21 U.S.C. 824(a)(4) and 823(h) as being inconsistent with 
the public interest. The Order to Show Cause alleged, in sum, that 
Respondent was distributing list I chemicals to what DEA has identified 
as the ``gray market'' and that a September 2001 audit by DEA Diversion 
Investigators showed the company had serious record keeping 
deficiencies.
    Respondent requested a hearing on the issues raised by the Order to 
Show Cause and the matter was docketed before Administrative Law Judge 
Gail A. Randall. Following pre-hearing procedures, a hearing was held 
in Memphis, Tennessee, on March 11 and 12, 2004. At the hearing, both 
parties called witnesses to testify and introduced documentary 
evidence. Subsequently, both parties filed Proposed Findings of Fact, 
Conclusions of Law, and Argument.
    On September 29, 2004, Judge Randall issued her Recommended 
Findings of Fact, Conclusions of Law, and Decision of the 
Administrative Law Judge (Opinion and Recommended Ruling), recommending 
that Respondent's registration to distribute pseudoephedrine and 
ephedrine products be continued and its application for renewal be 
granted, subject to enumerated monitoring conditions. She recommended 
denying the request to distribute phenylpropanolamine. The Government 
filed Exceptions to the Opinion and Recommended Ruling, to which 
Respondent submitted a Reply and on November 8, 2004, Judge Randall 
transmitted the record of these proceedings to the Deputy 
Administrator.
    The Deputy Administrator has considered the record in its entirety 
and pursuant to 21 CFR 1316.67, hereby issues her final order based 
upon findings of fact and conclusions of law hereinafter set forth. 
Except as otherwise set forth in this final order, the Deputy 
Administrator adopts the findings of fact and conclusions of law of the 
Administrative Law Judge. The Deputy Administrator agrees with the 
recommendation that Respondent be denied registration to distribute 
phenylpropanolamine, but disagrees with Judge Randall's recommendation 
that Respondent be registered to distribute ephedrine and 
pseudoephedrine, even under close monitoring conditions.
    Respondent is a sole proprietorship owned and operated by Ms. Joy 
Carter which is located in Memphis, Tennessee. It has been a DEA 
registrant since March 1998 and holds DEA Certificate of Registration 
003278JIY. On November 10, 2003, Ms. Carter filed an application for 
renewal of that registration, which was due to expire on December 31, 
2003. In it, she sought registration to distribute list I products

[[Page 33196]]

containing pseudoephedrine, ephedrine and phenylpropanolamine. Having 
filed a timely application for renewal, Respondent has been allowed to 
continue distributing listed chemicals during the pendency of these 
proceedings. See 21 CFR 1309.45.
    In September 2001, DEA Diversion Investigators conducted a routine 
regulatory investigation of Respondent and met Ms. Carter at her 
residence, which is also the registered premises. The physical security 
and monitoring systems were found to be adequate and Ms. Carter 
testified at the hearing that she had never had any listed chemical 
products stolen or lost.
    As a part of their investigation, the Diversion Investigators 
conducted a two day accountability audit. However, the results were 
hampered by Respondent's lack of an accurate inventory and 
investigators assigned a beginning inventory of zero as their starting 
inventory. Ms. Carter was cooperative and provided investigators all 
purchase and sales records for the period covering March 1, 2001 to 
September 12, 2001. At the conclusion of the audit, investigators found 
there were overages of four listed chemical products and shortages of 
two such products. Ms. Carter was unable to account for 15 100-count 
bottles of ``Efedrin'' and 557 60-count bottles of ``Mini-thins.'' The 
overages involved 6-count packages and 60-count bottles of ``Efedrin,'' 
60-count bottles of ``Max Brand Two Way'' and 6-count packages of 
``Mini Thins.''
    Evidence was introduced that overages can be anticipated when a 
zero starting inventory is used and/or they may be attributable to 
improperly maintained records. Shortages can result from improperly 
maintained records or from theft or loss of the product. At the 
hearing, a mathematical error impacting the overage of one product was 
discovered and a former DEA Diversion Investigator testified that more 
often than not, these audits do not result in perfectly balanced 
inventories, particularly when a zero opening balance is used.
    At the hearing Ms. Carter testified that before receiving the Order 
to Show Cause, she was unfamiliar with procedures for ensuring 
accountability of listed chemicals or how to conduct an audit. After 
receiving that Order, she began working with her attorney and certified 
pubic accountant to establish procedures for accurately recording 
purchase and sales data and initiated weekly physical inventories of 
listed chemicals. This system was put into operation in November 2003 
and records introduced at the hearing showed that Ms. Carter was 
adhering to the improved accountability procedures.
    The Respondent is a wholesale distributor of about 200 sundry 
products to convenience stores and gas stations. Seven of her 
approximately 60 customers are located in Arkansas and Mississippi and 
the balance are in Memphis. Each of these customers buy listed 
chemicals from Joy's Ideas, which makes up between 20 to 30 percent of 
Respondent's total sales. Most customers purchase approximately $100.00 
of list I chemical products from Respondent each month.
    Ms. Carter, the sole employee, testified she personally delivers 
the listed chemicals and places them on customer's shelves. As a 
result, she believed she could monitor her customers' stocks and tell 
if she was their only supplier of listed products. Affidavits from 
several long term customers were also introduced which affirmed they 
only purchased listed chemicals from Respondent and their retail 
customers did not buy more than two weeks packets or bottles of listed 
chemicals at a time. According to records introduced at the hearing, 
Respondent also did not exceed the threshold quantities of sales to a 
single purchaser which are established by the Comprehensive 
Methamphetamine Control Act of 1996. Ms. Carter further testified that 
she instructed her customers to not sell more than two bottles of 
ephedrine products to any single customer.
    Ms. Carter has never been charged or convicted under Federal or 
state law of any crime involving controlled substances or listed 
chemicals. Joy's Ideas is her only source of income and she expressed 
fear that if she were not able to provide customers listed chemicals, 
they would take their entire business to other wholesalers, who could 
provide ``one stop'' shopping.
    List I chemicals are those that may be used in the manufacture of a 
controlled substance in violation of the Controlled Substance Act. 21 
U.S.C. 802(34); 21 CFR 1310.02(a). Pseudoephedrine and ephedrine are 
list I chemicals which are legitimately manufactured and distributed in 
single entity and combination forms as decongestants and 
bronchodilators, respectively. Both are used as precursor chemicals in 
the illicit manufacture of methamphetamine and amphetamine.
    Phenylpropanolamine, also a list I chemicals, is a legitimately 
manufactured and distributed product used to provide relief of symptoms 
resulting from inflammation of the sinus, nasal and upper respiratory 
tract tissues and for weight control. Phenylpropanolamine is also used 
as a precursor in the illicit manufacture of methamphetamine and 
amphetamine. In November 2000, the United States Food and Drug 
Administration issued a public health advisory requesting drug 
companies to discontinue marketing products containing 
phenylpropanolamine, due to risk of hemorrhagic stroke. As a result, 
pharmaceutical companies have stopped using phenylpropanolamine as an 
active ingredient. See, Gazaly Trading, 69 FR 22,561 (2004).
    As testified to by government witnesses and as addressed in 
previous DEA final orders, methamphetamine is an extremely potent 
central nervous system stimulant and its abuse is a persistent and 
growing problem in the United States. See, e.g., Direct Wholesale, 69 
FR 11,654 (2004); Branex, Inc., 69 FR 8,682 (2004); Denver Wholesale, 
67 FR 99,986 (2002); Yemen Wholesale Tobacco and Candy Supply, Inc., 67 
FR 9,997 (2002).
    The Government introduced documentary and testimonial evidence 
regarding the rapid proliferation of clandestine methamphetamine 
laboratories in Tennessee and its adjoining states and described local 
methods of production, as well as the multiple health hazards and 
social costs stemming from production and abuse of methamphetamine. As 
discussed in several recently published final orders, Tennessee leads 
the DEA Atlanta Region in the number of clandestine laboratories 
seized. See, e.g., Elk International Inc., d.b.a. Tri City Wholesale 
(Elk International), 70 FR 24,615 (2005); Prachi Enterprises, Inc., 69 
FR 69,407 (2004); CWK Enterprises, Inc., 69 FR 69,400 (2004). Further, 
DEA has found that local ``[d]istributors or retailers serving the 
illicit methamphetamine trade observe no borders and trade across state 
lines.'' Id. 69 FR at 69,401.
    A DEA Special Agency credibly testified that the list I chemical 
product of choice found in about eighty percent of illicit laboratories 
in Tennessee is distributed under the off-name brand ``Max Brand'' 
label and is usually obtained from convenience stores. Judge Randall 
found Respondent has distributed this product. However, there was no 
direct evidence showing a known diversion of Respondent's products to 
illicit manufacturing.
    By written declaration, a DEA Diversion Investigator contrasted the 
``traditional'' market for list I chemicals with what DEA has termed 
the ``gray market'' for these products. The traditional market, 
characterized by a short distribution chain from

[[Page 33197]]

manufacturer to distributor to retailer, typically includes large chain 
grocery stores, chain pharmacies, large convenience stores and large 
discount stores. The gray market is characterized by additional layers 
of distribution and includes such non-traditional retailers as small 
convenience stores, gas stations and other retail establishments where 
customers do not usually purchase over-the-counter medications. These 
non-traditional retailers typically sell higher-strength products in 
larger package sizes, such as 60, 100 or 120-county bottles of 60 mg. 
pseudoephedrine. The Diversion Investigator also identified the off-
name brands found in disproportionate numbers during clandestine 
laboratory seizures. These included Max Brand, Mini Two Way, MiniThin 
and Action-Pseudo products.
    In previous final orders DEA has identified convenience stores as 
the ``primary source'' for the purchase of ``Max Brand products, which 
are the preferred brand for use by illicit methamphetamine producers.* 
* * '' See, Elk International, supra, 70 FR 24,615; Express Wholesale, 
69 FR 62,086, 62,087 (2004); see also, RAM, Inc. d/b/a American 
Wholesale Distribution Corp., 70 FR 11,693 (2005).
    By declaration, the Government introduced evidence regarding 
ephedrine and pseudoephedrine sales and the convenience store market 
from Mr. Jonathan Robbin, a consultant in marketing information systems 
and databases, who is an expert in statistical analysis and 
quantitative marketing research.
    Using the 1997 United States Economic Census of Retail Trade, Mr. 
Robbin tabulated data indicating that over 97% of all sales of non-
prescription drug products, including non-prescription cough, cold and 
nasal congestion remedies, occur in drug stores and pharmacies, 
supermarkets, large discount merchandisers, mail-order houses and 
through electronic shopping. He characterized these five retail 
industries as the traditional marketplace where such goods are 
purchased by ordinary customers.
    Analyzing national sales data specific to over-the-counter, non-
prescription drugs containing pseudoephedrine, Mr. Robbin's research 
and analysis showed that a very small percentage of the sales of such 
goods occur in convenience stores; only about 2.6% of the Health and 
Beauty Care category of merchandise or 0.05% of total in-store (non-
gasoline) sales. He determined that the normal expected retail sales of 
pseudoephedrine tablets in a convenience store would range between 
$10.00 and $30.00 per month, with an average monthly sales figure of 
about $20.00 and that sales of more than $100.00 in a month would be 
expected to occur in a random sampling about once in one million to the 
tenth power.
    According to Mr. Robbin, after evaluating Tennessee convenience 
store sales data, half of the Tennessee stores analyzed showed implied 
sales over ten times expectation, with ten of them over twenty times 
expectation. These differences were extremely significant statistically 
and in his expert opinion, ``[t]he implausible nature of such 
exceptionally large hypothetical sales at retail leads to a virtually 
incontrovertible conclusion that the goods are not actually being 
purveyed at retail to ordinary customers in the store's trading area at 
all, but are being diverted to some other channel `under the counter.' 
'' He concluded that many small Tennessee convenience stores were not 
selling pseudoephedrine and ephedrine products for their intended 
purpose as non-prescription drugs in the legitimate market and the 
assumption that they were supplying a ``gray market'' was statistically 
supported ``many times over * * *''
    Pursuant to 21 U.S.C. 823(h), the Deputy Administrator may deny an 
application for a Certificate of Registration if she determines that 
granting the registration would be inconsistent with the public 
interest, as determined under that section. Section 823(h) requires the 
following factors be considered in determining the public interest:
    (1) Maintenance of effective controls against diversion of listed 
chemicals into other than legitimate channels;
    (2) Compliance with applicable Federal, State, and local law;
    (3) Any prior conviction record under Federal or State laws 
relating to controlled substances or to chemicals controlled under 
Federal or State law;
    (4) Any past experience in the manufacture and distribution of 
chemicals; and
    (5) Such other factors as are relevant to and consistent with the 
public health and safety.
    As with the public interest analysis for practitioners and 
pharmacies pursuant to subsection (f) of section 823, these factors are 
considered in the disjunctive; the Deputy Administrator may rely on any 
one or combination of factors, and may give each factor the weight she 
deems appropriate in determining whether a registration should be 
revoked or an application for registration denied. See, e.g., Direct 
Wholesale, supra, 69 FR 11,654; Energy Outlet, 64 FR 14,269 (1999); 
Henry J. Schwartz, Jr., M.D., 54 FR 16,422 (1989).
    As to factor one, maintenance by the applicant of effective 
controls against diversion, the Deputy Administrator agrees with Judge 
Randall that Respondent's physical security system is adequate. With 
regard to the 2001 accountability audit's results, Judge Randall found 
the statistics ``questionable'' and based on the statistics alone, 
could not conclude that any listed chemical products distributed by 
Respondent had been diverted. She also concluded that Ms. Carter had a 
faulty accountability system at the time of the audit. However, that 
was mitigated by the significant accountability improvements crafted by 
her certified public accountant after receipt of the Order to Show 
Cause. Judge Randall also found Ms. Carter had a long standing 
relationship with her customers and personally delivered their listed 
chemical products and placed them on the shelves, allowing her to 
monitor whether or not they were obtaining listed chemicals from other 
wholesalers. Judge Randall concluded this factor weighted in favor of 
registration.
    The Deputy Administrator agrees with the Government's Exceptions 
that the shortages established by the 2001 inventory would normally 
show up as overages, given that a zero opening balance was used, and 
that diversion may be inferred from such shortages. However, given the 
apparent good faith of Ms. Carter to avoid diversion and the inadequate 
accountability systems she was using at the time of the audit, under 
the facts of this case the inference of diversion attributable to the 
audit is not strong.
    On the other hand, given the number of Respondent's retail 
customers and imprecise and unrecorded ``eyeball'' monitoring of what 
is on their shelves, the Deputy Administrator has concern over Ms. 
Carter's ability to know, with an acceptable degree of certainty, 
whether or not her customers are obtaining products from other 
distributors. DEA has previously found that gray markets retailers 
supplying chemicals for illicit use regularly acquire their product 
from multiple distributors in order to mask their acquisition of large 
amounts of listed chemicals. See, Elk International Inc., supra, 70 FR 
24,615; Titan Wholesale, Inc., 70 FR 12,727 (2005).
    Further, convenience store operators engaged in this illicit trade 
could be obtaining products from other wholesalers, yet not be 
displaying them on retail shelves, also compromising Ms. Carter's 
efforts to ensure she was the only supplier. Accordingly, so long as 
Respondent services this suspect

[[Page 33198]]

market, even the most sincere efforts by Ms. Carter to self-regulate 
her customers cannot guarantee that current and/or future customers 
will not be obtaining precursor chemicals from other distributors, as 
well as from Respondent, and then resell them for illicit purposes.
    Nevertheless, given Ms. Carter's commendable actions to improve her 
accountability systems and her honest and credible desire to avoid 
contributing to the scourge of methamphetamine, in a ``close call,'' 
the Deputy Administrator agrees with Judge Randall that factor one 
weighs in favor of continued registration.
    With regard to factor two, Respondent's compliance with applicable 
Federal, state and local law, Judge Randall concluded this factor also 
weighs in favor of registration. However, the significance for this 
factor and factor five as well, the Deputy Administrator notes that 
state legislatures throughout the United States are actively 
considering legislation designed to impede the ready availability of 
precursor chemicals. Many of these proposals are similar to legislation 
enacted by the State of Oklahoma, titled the ``Oklahoma Methamphetamine 
Reduction Act of 2004.'' Under that measure, as of April 6, 2004, 
pseudoephedrine tablets were designated as Schedule V controlled 
substances and may be sold only from licensed pharmacies within that 
state.
    As a result, it is prohibited in Oklahoma to sell these products 
from gray market establishments, such as independent convenience 
stores, which have contributed so much to the methamphetamine abuse 
problem. See, e.g., Express Wholesale, supra, 69 FR at 62,809 [denying 
DEA registration to an Oklahoma gray market distributor, in part, 
because of new state restrictions].
    A review of data for 2004 reveals the Oklahoma law has resulted in 
an apparent reduction in the number of seizures involving clandestine 
methamphetamine laboratories in that state. These developments are 
encouraging and represent an important step in the ongoing battle to 
curb methamphetamine abuse in the United States. State legislation, 
such as Oklahoma's, reflects a positive trend and growing recognition 
that the diversion of precursor chemicals through the gray market 
insidiously impacts public health and safety. See, e.g., Tysa 
Management, d/b/a Osmani Lucky Wholesale, 70 FR 12,732, 12,734 (2005) 
[denying registration to intended Oklahoma distributor, in part, on 
basis of enactment of recent state legislation]; Express Wholesale, 
supra, 69 FR at 62,089.
    Of particular relevance to Joy's Ideas and similarly situated 
Tennessee applicants and registrants, after Judge Randall signed her 
Opinion and Recommended Ruling, legislation was enacted by the State of 
Tennessee patterned after the Oklahoma initiative. That legislation 
(Senate Bill 2318/House Bill 2334), collectively known as the ``Meth-
Free Tennessee Act of 2005,'' was signed into law by Governor Phil 
Bredeson on March 31, 2005, and makes it unlawful for establishments, 
other than licensed pharmacies, to sell tableted pseudoephedrine 
products in Tennessee after April 1, 2005. This included both name 
brand and off-name brand products. See, e.g., Elk International Inc., 
supra, 70 FR 24,615.
    According to evidence introduced at the hearing, approximately 53 
of Respondent's 60 customers are convenience stores and gas stations 
located in Tennessee. Therefore, with only a few exceptions, 
Respondent's entire customer base is now prohibited by state law from 
selling the pseudoephedrine products Respondent seeks DEA registration 
to distribute. Thus, factor two weighs heavily against registration. 
See, Elk International, supra, 70 FR at 24,618; Tysa Management, d/b/a 
Osmani Lucky Wholesale, supra, 70 FR at 12,734; Express Wholesale, 
supra, 69 FR at 62,089.
    As to factor three, any prior conviction record relating to listed 
chemicals or controlled substances, the Deputy Administrator concurs 
with Judge Randall that there is no evidence of any prior convictions 
of Respondent or its owner relating to listed chemicals or controlled 
substances. Accordingly, this factor weighs in favor of registration.
    With regard to factor four, the applicant's past experience in 
distributing listed chemicals, Judge Randall found that Ms. Carter's 
lack of knowledge concerning how to conduct accountability audits and 
lack of inventory control, which were uncovered in the 2001 audit, 
weighed against Respondent's continued handling of listed chemical 
products. However, this was balanced by Ms. Carter's aggressive actions 
to improve her inventory and accountability practices. She was also 
familiar with listed chemical products, as well as her customers, and 
never sold over-the threshold quantities.
    The Administrative Law Judge concluded that while ``a close 
matter,'' because of Ms. Carter's willingness to create and maintain a 
viable inventory system and her familiarity with her customers' 
operations, factor four weighed in favor of continued registration, 
especially if close monitoring was maintained by DEA over Respondent. 
The Deputy Administrator disagrees with this conclusion.
    The evidence showed Respondent was selling most of her convenience 
store customers about $100.00 of list I chemicals per month. As 
established by Mr. Robbin's expert opinion evidence, this far exceeds 
the amount of expected sales of these products for legitimate 
therapeutic purposes. Even though, as Judge Randall concluded, there 
was no direct evidence that Respondent contributed to the diversion of 
listed chemical products, she did find the record contained ``abundant 
statistical evidence that, without further explanation, would logically 
lead to the conclusion that the Respondent distributed more listed 
chemical products to its convenience store customers than could 
reasonably be sold at resale for legitimate use.''
    The Deputy Administrator cannot find a plausible explanation in the 
record for this deviation from the expected norm, other than diversion 
at the retail level. Accordingly, while Ms. Carter may have been an 
unknowing and unintentional contributor to Tennessee's methamphetamine 
problem, it is logical to infer that the listed products she was 
distributing to area convenience stores were being diverted to illicit 
purposes. Accordingly, the Deputy Administrator finds that factor four 
weights against Respondent's continued registration.
    With regard to factor five, other factors relevant and consistent 
with the public health and safety, Judge Randall acknowledged earlier 
DEA precedent applying this factor to deny registration to a gray 
market distributor based on statistical evidence. See, Xtreme 
Enterprises, Inc., 67 FR 76,195 (2002); Branex, Inc., supra, 69 FR 
8,682, 8,693. However, based on the amounts of listed products being 
distributed by Respondent, their wholesale prices and Ms. Carter's 
apparent good faith and willingness to adhere to DEA requirements, 
given the facts of the case, Judge Randall was unwilling to conclude 
that Respondent's listed chemical products were being diverted or would 
likely be diverted in the future. She therefore found factor five 
weighed in favor of continued registration to distribute ephedrine and 
pseudoephedrine.
    In Xtreme Enterprises, the Deputy Administrator found its owner had 
only a rudimentary knowledge of what

[[Page 33199]]

would constitute a suspicious order and no experience in the 
manufacture or distribution of listed chemicals. While given Ms. 
Carter's past experience, those findings do not apply to Respondent. 
However, most significant for this and similar cases, the Deputy 
Administrator also found that ``[v]irtually all of the Respondent's 
customers, consisting of gas station and convenience stores, are 
considered part of the grey market, in which large amounts of listed 
chemicals are diverted to the illicit manufacture of amphetamine and 
methamphetamine.'' Xtreme Enterprises, Inc., supra, 67 FR at 76,197.
    DEA has expansively applied Xtreme Enterprises to a multitude of 
applicants and registrants seeking to do business in the gray market. 
See e.g., Express Wholesale, supra, 69 FR 62,086; Value Wholesale, 69 
FR 58,548 (2004); K & Z Enterprises, Inc., 69 FR 51,475 (2004); William 
E. ``Bill'' Smith d/b/a B & B Wholesale, 69 FR 22,559 (2004); Branex 
Incorporated, supra, 69 FR 8,682; Shop It for Profit. 69 FR 1,311 
(2003); Shani Distributors, 69 FR 62,324 (2003).
    As in those cases, Ms. Carter's lack of a criminal record, previous 
general compliance with the law and regulations and willingness to 
comply with regulations and guard against diversion, are far outweighed 
by her intent to continue selling ephedrine and pseudoephedrine 
exclusively in the gray market. Unlawful methamphetamine production and 
use is a growing public health and safety concern throughout the United 
States and specifically in the locality where Respondent does business. 
Pseudoephedrine and ephedrine are the precursor products used to 
manufacture methamphetamine and area laboratory operators have 
predominantly acquired their precursor chemicals from the customer base 
Respondent seeks to continue serving. While Ms. Carter may intend to 
avoid contributing to this problem, the risk of diversion once her 
listed chemicals enter the gray market is real, substantial and 
compelling.
    This reasoning has also been applied by the Deputy Administrator in 
a series of final orders published after Judge Randall issued her 
Opinion and Recommended Ruling in the matter. See, Elk International, 
supra, 70 FR 24,615; TNT Distributors, Inc., supra, 70 FR 12,729; Titan 
Wholesale, Inc., supra, 70 FR 12,727; RAM, Inc. d/b/a American 
Wholesale Distribution Corp., supra, 70 FR 11,693; Al-Alousi, Inc., 70 
FR 3,561 (2005); Volusia Wholesale, 69 FR 69,409, (2004); Prachi 
Enterprises, Inc., supra, 69 FR 69,407; CWK Enterprises, Inc. 69 FR 
69,400 (2004); J & S Distributors, 69 FR 62,089 (2004); Express 
Wholesale, supra, 69 FR 62,086; Absolute Distributing, Inc., 69 FR 
62,078 (2004).
    In any event, Judge Randall's recommendation that Respondent be 
allowed to continue distributing listed chemicals to convenience stores 
in Tennessee, albeit with close monitoring by DEA through the 
submission of a monthly log and consent to inspection without an 
administrative inspection warrant, has been mooted by Tennessee's 
recent enactment of legislation requiring that all pill and tablet 
pseudoephedrine products, including those marketed under traditional 
brand names, be sold only through registered pharmacies. As this state 
statute, discussed more fully under factor two, effectively bars 
distribution of those products throughout Tennessee's gray market, it 
is also relevant under factor five and weighs heavily against 
Respondent's continued registration. See, e.g., Elk International, 
supra, 70 FR at 24,618.
    Finally, as recommended by Judge Randall, due to the apparent lack 
of safety associated with the use of phenylpropanolamine, factor five 
is also relevant to Respondent's initial proposal to distribute that 
product. DEA has previously determined that such a request constitute a 
ground under factor five for denial of an application for registration. 
See J & S Distributors, supra, 69 FR 62,089; Gazaly Trading supra, 69 
FR 22,561; William E. ``Bill'' Smith d/b/a B & B Wholesale, supra, 69 
FR 22,559; Shani Distributors, supra, 68 FR 62,324. However, it is 
noted that after the hearing and the Government's filing of its 
Exceptions to the Opinion and Recommended Ruling, Respondent's Reply 
indicated that it did not intend to carry products containing 
phenylpropanolamine.
    Based on the foregoing, the Deputy Administrator concludes that 
continuing Respondent's registration and granting its pending 
application for renewal would be inconsistent with the public interest.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in her by 21 U.S.C. 
823 and 28 CFR 0.100(b) and 0.104, hereby orders that DEA Certificate 
of Registration, 003278JIY, issued to Joy's Ideas, be, and it hereby 
is, revoked. Further, the pending application for renewal of said 
Certificate of Registration submitted by Joy's Ideas should be, and 
hereby is, denied.
    This order is effective July 7, 2005.

    Dated: May 25, 2005.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 05-11249 Filed 6-6-05; 8:45 am]
BILLING CODE 4410-09-M