Oakland Medical Pharmacy; Revocation of Registration, 50100-50102 [E6-14045]
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methamphetamine. See id. at 9, 11–13.
The Order also alleged that
Respondent’s employees knew that the
KPD was arresting Respondent’s
customers, that customers would often
complain about the police, and that the
police would sometimes enter the
pharmacy to look for a suspect. See id.
at 16. In addition, many of Respondent’s
customers were from out of town. See
id.
The Show Cause Order also recounted
the facts surrounding a complaint that
had been filed with the Louisiana Board
of Pharmacy against Respondent. The
complainant alleged that on both
January 17 and February 3, 2004, her 19
year old son had obtained from
Respondent a combination prescription
of 90 hydrocodone 10 mg., 90
carisoprodol 350 mg., and 30
alprazolam 2mg. See id. at 16. On
February 5, 2004, the complainant’s son
died of respiratory failure due to acute
and chronic drug use. Id. The autopsy’s
toxicology tests found elevated levels of
hydrocodone and alprazolam. See id.
Finally, the Show Cause Order alleged
that the majority of prescriptions filled
by Respondent were for the
aforementioned drug combination and
were issued by a small group of doctors.
See id. at 17. The Order alleged that
‘‘[b]ased upon the sheer volume of
duplicate prescriptions from the large
volume of customers written by the
same group of doctors, and the
knowledge that [Respondent’s]
customers were routinely being arrested
* * * after leaving’’ the pharmacy,
Respondent ‘‘knows or should know
that the combination prescriptions it
fills are not valid prescriptions.’’ Id. The
Order thus alleged that Respondent and
its pharmacists were diverting ‘‘massive
amounts of controlled substances’’ in
violation of 21 U.S.C. 841(a)(1), and 21
CFR 1306.04. Id. at 17.
On May 5, 2005, Respondent
requested a hearing; the case was
assigned to Administrative Law Judge
(ALJ) Mary Ellen Bittner. On May 25,
2005, the Government sought to stay the
proceeding and moved for summary
disposition. The basis for the motion
was that on April 28, 2005, Respondent
had entered into a consent agreement
with the Louisiana Board of Pharmacy.
Pursuant to the agreement, Respondent
surrendered its Louisiana Controlled
Dangerous Substances License. The
Government thus contended that
because Respondent no longer had
authority under state law to engage in
the distribution of controlled
substances, see 21 U.S.C. 824(a)(3), it
was no longer entitled to hold a Federal
registration. The Government further
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contended that Respondent’s request for
a hearing should be dismissed.
On June 9, 2005, Respondent filed a
response. Respondent advised that it
did not oppose the Government’s
motion. Respondent further
acknowledged that it had voluntarily
surrendered its state license and was
thus not eligible to hold a DEA
registration.
On July 1, 2005, the ALJ granted the
Government’s motion for summary
disposition. The ALJ observed that,
under longstanding agency precedent,
‘‘a registrant may not hold a DEA
registration if it is without appropriate
authority under the laws of the state in
which it does business.’’ ALJ Dec. at 2
(citing, inter alia, Rx Network of South
Florida, LLC, 69 FR 62,093–01 (2004);
Wingfield Drugs, Inc., 52 FR 27,070
(1987)). The ALJ further noted that
Respondent had admitted that it was no
longer licensed in Louisiana and thus
was not entitled to hold a DEA
registration. Id. Because there were no
material facts in dispute, the ALJ
granted the Government’s motion and
recommended that I revoke
Respondent’s registration and deny any
pending applications for renewal or
modification of its registration. See id. at
2–3.
Having considered the record as a
whole, I hereby issue this decision and
final order. I adopt in its entirety the
ALJ’s opinion and recommended
decision. Because the facts are
straightforward and not in dispute, I
conclude that there is no need to
elaborate on them. As the ALJ found,
Respondent is no longer authorized to
distribute controlled substances under
State law. Therefore, under our
precedents, Respondent is not entitled
to maintain its DEA registration. See,
e.g., Rx Network of South Florida, 69 FR
at 62095.
Order
Accordingly, pursuant to the
authority vested in me by 21 U.S.C.
823(f) and 824(a), as well as 28 CFR
0.100(b) and 0.104, I hereby order that
DEA Certificate of Registration, No.
BM8291572, issued to Michael’s
Discount Pharmacy, be, and it hereby is,
revoked. I further order that any
pending applications for renewal or
modification of such registration be, and
they hereby are, denied. This order is
effective September 25, 2006.
Dated: August 15, 2006.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E6–14049 Filed 8–23–06; 8:45 am]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 05–15]
Oakland Medical Pharmacy;
Revocation of Registration
On October 27, 2004, I, the Deputy
Administrator of the Drug Enforcement
Administration, issued an Order to
Show Cause and further ordered the
immediate suspension of DEA
Certificate of Registration, AO6837477,
issued to Oakland Medical Pharmacy
(Respondent) of Madison Heights,
Michigan. The Show Cause Order
proposed to revoke Respondent’s
pharmacy registration and to deny any
pending applications for renewal or
modification of its registration on the
ground that Respondent’s continued
registration would be inconsistent with
the public interest. See 21 U.S.C. 823(f)
and 824(a). The Order of Immediate
Suspension was based on my
preliminary finding that Respondent’s
continued registration ‘‘would
constitute an imminent danger to the
public health and safety because of the
substantial likelihood’’ that Howard
Applebaum, Respondent’s owner and
chief pharmacist would ‘‘continue to
divert controlled substances to persons
who will abuse them.’’ Show Cause
Order at 3. The Show Cause Order also
notified Respondent of its right to a
hearing. Id.
The Show Cause Order specifically
alleged that between February 2002 and
October 2004, Mr. Applebaum had ‘‘[o]n
many occasions * * * provided [two
undercover] agents with refills of
controlled substance prescriptions when
refills had not been authorized by a
physician.’’ Id. at 2. The Show Cause
Order further alleged that Mr.
Applebaum had ‘‘also provided the
agents with excessive amounts of
controlled substances that had not been
authorized by a physician’’ by providing
the agents with refills when he
dispensed the initial prescriptions. Id.
The Order also alleged that Mr.
Applebaum had provided refills to the
agents long before their original
prescriptions would have been used up.
Id.
The Show Cause Order alleged that on
July 26, 2004, Mr. Applebaum filled a
controlled substance prescription for an
agent ‘‘with no authorization from her
physician.’’ Id. The Order also alleged
that on the same day, the agent observed
Mr. Applebaum provide another
customer with two refills for a
controlled substance. Id.
The Show Cause Order further alleged
that a review Respondent’s records for
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the period January 2003 through May
2004 indicated that ‘‘Mr. Applebaum
routinely dispenses unauthorized
controlled substances by providing early
refills * * * and multiple refills of
prescriptions for the same controlled
substances on the same date.’’ Id. The
Order also alleged that Respondent’s
records show that ‘‘Mr. Applebaum
dispenses narcotic to drug addicts and
to individuals obtaining treatment for
narcotic addiction.’’ Id.
The Show Cause Order alleged that
‘‘Mr. Applebaum was ‘‘routinely
dispens[ing] contraindicated controlled
substances at the same time to the same
patient,’’ and that he was also
‘‘routinely dispens[ing] controlled
substances’’ to doctor shoppers. Id.
Finally, the Show Cause Order alleged
that from October 2003 through April
2004, Respondent had purchased
350,000 units of hydrocodone products
and that 46 percent of the hydrocodone
prescriptions it dispensed were issued
by the same physician. Id. at 3. The
Order thus alleged that there was a
‘‘substantial likelihood that Mr.
Applebaum will continue to divert
controlled substances to’’ drug abusers
and that Respondent’s continued
registration ‘‘would constitute an
imminent danger to public health and
safety.’’ Id.
On December 13, 2004, the Office of
the Administrative Law Judges received
Respondent’s request for a hearing. The
case was assigned to Administrative
Law Judge (ALJ) Gail A. Randall.
On December 22, 2004, the
Government moved for summary
disposition. The basis for the motion
was that on November 16, 2004, the
Michigan Board of Pharmacy had filed
an Administrative Complaint against
Respondent and had also summarily
suspended Respondent’s state pharmacy
license. The State’s Order of Summary
Suspension was effective immediately.
The Government thus contended that
because Respondent no longer had
authority under state law to distribute or
dispense controlled substances, see 21
U.S.C. 824(a)(3), it was not entitled to
hold its Federal registration. The
Government further contended that
there was no factual matter in dispute.1
On January 21, 2005, Respondent
filed an opposition to the Government’s
motion. While Respondent
acknowledged that the State had
summarily suspended its registration, it
contended that the State’s action ‘‘was
predicated in large part on the
1 Upon receipt of the Government’s motion, the
ALJ ordered that the proceedings be stayed pending
a decision on the motion and further order
Respondent to file a reply.
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immediate ex-parte suspension of
respondent’s DEA registration * * *
and the facts developed by the DEA.’’
Resp. Answer to Motion for Summary
Disp. at 1. Respondent further
contended that the hearing before the
State ALJ was ongoing and that the state
order was not final. See id. Respondent
argued that for DEA to rely on the
State’s summary suspension when the
State’s action was based on the original
DEA proceeding ‘‘is a case of bootstrapping extraordinaire.’’ Id. at 2.
Respondent thus contended that it
would be ‘‘fundamentally unfair’’ to
grant the Government’s motion. Id.
Respondent further contended that
revocation was not required by the
statutory language of 21 U.S.C.
824(a)(3). See id. (quoting 21 U.S.C.
824(a)(3) (‘‘a registration * * * may be
suspended or revoked by the Attorney
General upon a finding that the
registrant has had his State license or
registration suspended, revoked or
denied by competent State authority’’).
According to Respondent, ‘‘[t]he action
is not mandatory nor is it warranted in
this situation where the respondent has
specifically requested a hearing on the
merits and is currently in the midst of’’
a State hearing ‘‘on the issue of whether
* * * Respondent’s conduct merits [an]
order of summary suspension of the
licenses by the State.’’ Id. at 2–3.
Respondent thus requested that the ALJ
deny the Government’s motion for
summary disposition and that the
Federal proceeding be stayed until the
State issued a decision on the merits.
On February 4, 2005, the ALJ issued
an Order for Status Report. In the order,
the ALJ notified the parties that she had
taken the matter under advisement and
that the proceedings would remain
stayed. The ALJ also ordered
Respondent to file a status report with
respect to its State license on or before
April 18, 2005. The ALJ further notified
Respondent that if it failed to file the
report, the ALJ would rule on the
government’s motion based on the
information then before her. See Order
for Status Report at 1.
As of May 27, 2005, Respondent had
not filed a status report. The ALJ
therefore issued her order, opinion and
recommended decision. In her order,
the ALJ granted the Government’s
motion for summary disposition, denied
the Respondent’s request for a
continued stay of the proceedings and
recommended the revocation of
Respondent’s registration on the ground
that Respondent lacked State authority
to handle controlled substances. See
ALJ Dec. at 5–7.
The ALJ specifically found that
‘‘Respondent did not deny that it is
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50101
currently without state authorization to
handle controlled substances.’’ ALJ Dec.
at 5. The ALJ further noted that
Respondent had failed to file a report
advising her of the status of the state
proceeding. See id. Because state
authorization is an essential prerequisite
to a DEA registration, see id. at 4, and
it was undisputed that ‘‘that the
Respondent does not have authority to
handle controlled substances in the
jurisdiction where it seeks to maintain
its DEA registration,’’ the ALJ granted
the Government’s motion for summary
disposition. Id. at 5.
The ALJ acknowledged Respondent’s
argument that it was ‘‘unfair’’ for DEA
to revoke its registration based on the
Michigan suspension, because it had
been based on the DEA Order to Show
Cause and Immediate Suspension of
Registration. Id. at 5–6. The ALJ further
noted that ‘‘such an action is circular
and may result in the Respondent being
denied an opportunity to adjudicate the
facts.’’ Id. at 6.
The ALJ also denied Respondent’s
request for a stay until the conclusion of
the state proceeding. According to the
ALJ, ‘‘[t]he fact remains that the
Respondent currently lacks state
authorization to handle controlled
substances, and therefore cannot remain
registered with the DEA.’’ Id. The ALJ
thus concluded that she had ‘‘no choice
but to grant summary disposition at the
present time, and to deny’’
Respondent’s motion for a stay. Id.
Thereafter, Respondent sought
reconsideration of the ALJ’s
recommended decision. The basis for
Respondent’s motion was that he had
not intentionally failed to file a Status
Report but had erroneously believed,
based on a phone conversation with
Government counsel that occurred on
April 11, 2005, that Government
counsel ‘‘was going to investigate the
matter and confirm with Respondent’s
counsel whether it was still necessary
for him to file anything additional in
writing given the status of the’’ state
hearing. Resp. Req. for Recon. at 2.
Respondent’s counsel stated that when
he did not hear back from Government
counsel, he ‘‘wrongly assumed that the
issue had been resolved.’’ Id.
Respondent further informed the ALJ
that the state proceedings were
continuing and that the proceeding had
been ‘‘an elongated and vigorously
contested hearing,’’ which had been
held on five different dates with one
additional date to follow, at which the
State’s ‘‘expert pharmacy witness’’ was
to testify. Id. at 3.
The Government responded that
while it did not object to the late filing
of the status report, it did object to
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reconsideration of the ALJ’s decision.
See Govt. Resp. at 2. While the
Government counsel did not remember
the aforementioned telephone
conversation, he did not dispute that
Respondent’s counsel may have asked
him whether he had to file anything. Id.
The Government further pointed out
that Respondent’s counsel did not
contend that he had not received the
ALJ’s Order for Status Report, and that
the Order, which the Government had
not received, presumably clearly stated
the deadline for filing the Status Report.
See id. at 2–3.
The Government contended that
whether Respondent should be
permitted to file a status report was
irrelevant because Respondent’s state
license had been suspended in
November 2004 and had remained so
since then. The Government further
argued that ‘‘Respondent still does not
know when the state proceedings will
end, and there is no assurance that
Respondent will regain its state
authority.’’ Id. at 3. According to the
Government, ‘‘[t]he ALJ based her
Decision on the fact that Respondent
had no state authority to handle
controlled substances at the time of the
Decision. That fact was true at the time
of the deadline for the status report, at
the time of the Decision and is true at
the present.’’ Id. Therefore, the
Government argued that there was no
basis for the ALJ to reconsider her
decision.
The ALJ denied Respondent’s motion
for reconsideration. Again, the ALJ
noted that ‘‘under the Controlled
Substances Act it is clear that the DEA
does not have statutory authority to
maintain a registration if the registrant
is without state authority to handle
controlled substances in the state in
which the registrant conducts
business.’’ Order Denying Resp. Req. for
Recon. at 2. The ALJ then transmitted
the record to me.2
Having considered the record as a
whole, I hereby issue this decision and
final order. I adopt the ALJ’s findings of
fact and conclusions of law. I further
adopt the ALJ’s recommended decision
to revoke Respondent’s registration. I do
not, however, adopt the opinion to the
extent it suggests that it was ‘‘unfair’’ for
this agency to revoke Respondent’s
Federal registration based on the State
proceeding and that ‘‘such an action is
circular and may result in the
Respondent being denied an
2 I emphasize that there is no provision in DEA’s
regulations for either party to request
reconsideration of an ALJ’s recommended decision.
See generally 21 CFR Subpart D. The appropriate
means of challenging the ALJ’s decision is to file
exceptions. See 21 CFR 1316.66.
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opportunity to adjudicate the facts.’’ ALJ
Dec. at 6.
I acknowledge that the State’s
Administrative Complaint relied in part
on my Order to Show Cause and
Immediate Suspension of Registration.
See Admin. Complaint at 3. But the
state complaint did not rely solely on
my action. The state complaint cited a
variety of grounds under Michigan law
for imposing sanctions including
‘‘failing to comply with applicable
Federal laws,’’ id. at 2 (citing Mich.
Comp. Laws § 333.7311(1)(f));
dispensing of ‘‘controlled substances for
other than legitimate medical
purposes,’’ id. (citing Mich. Comp. Laws
§ 333.7311(1)(g)); and ‘‘if an officer or
stockholder of the pharmacy lacks good
moral character.’’ Id. at 2–3 (citing
Mich. Comp. Laws § 333.17768(2)(a)).
The complaint further alleged that
Respondent had violated these
provisions of state law. Id. at 3–4.
Furthermore, the State’s Order of
Summary Suspension was based on the
‘‘careful consideration of the
documentation filed’’ in the State’s
administrative proceeding including the
complaint. Order of Summary
Suspension 1. The State’s Order also
provided a procedure for Respondent to
petition for dissolution of the state
suspension. See id.
I take the State on its word and
conclude that its decision to summarily
suspend Respondent’s state license was
not based solely on my order but was
also based on its own evaluation of the
evidence. Furthermore, as Respondent
itself pointed out, the State proceeding
has been ‘‘an elongated and vigorously
contested hearing,’’ which included at
least six days of hearings with the State
putting on an expert witness. It is hard
to imagine why a proceeding would take
so long to litigate and require expert
testimony if it did not involve an
adjudication of the underlying facts.
Thus, I do not accept the ALJ’s
conclusion that it is ‘‘circular’’ for this
agency to revoke Respondent’s
registration based on the State’s
summary suspension order and that
doing so ‘‘may result in * * *
Respondent being denied an
opportunity to adjudicate the facts.’’ ALJ
Dec. at 6. Quite the opposite, it appears
that the State entered its suspension
order based on its own examination of
the evidence; it further appears that
Respondent has had a full and fair
opportunity to litigate the facts in the
State proceeding.
DEA’s regulations make clear that the
ALJ’s decision is only a
recommendation; it is not the final
agency action. The revocation of
Respondent’s Federal registration
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becomes final only with this order. Yet
in the interval between the ALJ’s
decision and the publication of this
order, Respondent has submitted no
evidence to show that the State has
lifted its suspension.
As the ALJ correctly recognized, DEA
has consistently held that a registrant
may not hold a DEA registration if it is
without appropriate authority under the
laws of the state in which it does
business. See, e.g., Rx Network of South
Florida, LLC, 69 FR 62,093 (2004);
Wingfield Drugs, Inc., 52 FR 27,070
(1987). Respondent does not have
authority under Michigan law to handle
controlled substances. Therefore, it is
not entitled to maintain its DEA
registration. See Rx Network of South
Florida, 69 FR at 62095.
Order
Accordingly, pursuant to the
authority vested in me by 21 U.S.C.
823(f) and 824(a), as well as 28 CFR
0.100(b) and 0.104, I hereby order that
DEA Certificate of Registration, No.
AO6837477, issued to Oakland Medical
Pharmacy be, and it hereby is, revoked.
I further order that any pending
applications for renewal or modification
of its registration be, and they hereby
are, denied. This order is effective
September 25, 2006.
Dated: August 15, 2006.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E6–14045 Filed 8–23–06; 8:45 am]
BILLING CODE 4410–09–P
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Sujak Distributors; Denial of
Application
On May 18, 2005, the Deputy
Assistant Administrator, Office of
Diversion Control, Drug Enforcement
Administration (DEA), issued an Order
to Show Cause to Sujak Distributors
(Respondent). The Show Cause Order
proposed to deny Respondent’s
application for a DEA Certificate of
Registration as a distributor of List I
chemicals on the ground that
Respondent’s registration would be
inconsistent with the public interest.
See U.S.C. 823(h).
The Show Cause Order specifically
alleged that Respondent was proposing
to sell ephedrine and pseudoephedrine
products, which are precursors used in
the manufacture of methamphetamine,
to convenience stores, gas stations and
liquor stores in the Davenport, Iowa
area. See Show Cause Order at 2. The
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]]>Agencies
[Federal Register Volume 71, Number 164 (Thursday, August 24, 2006)]
[Notices]
[Pages 50100-50102]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-14045]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 05-15]
Oakland Medical Pharmacy; Revocation of Registration
On October 27, 2004, I, the Deputy Administrator of the Drug
Enforcement Administration, issued an Order to Show Cause and further
ordered the immediate suspension of DEA Certificate of Registration,
AO6837477, issued to Oakland Medical Pharmacy (Respondent) of Madison
Heights, Michigan. The Show Cause Order proposed to revoke Respondent's
pharmacy registration and to deny any pending applications for renewal
or modification of its registration on the ground that Respondent's
continued registration would be inconsistent with the public interest.
See 21 U.S.C. 823(f) and 824(a). The Order of Immediate Suspension was
based on my preliminary finding that Respondent's continued
registration ``would constitute an imminent danger to the public health
and safety because of the substantial likelihood'' that Howard
Applebaum, Respondent's owner and chief pharmacist would ``continue to
divert controlled substances to persons who will abuse them.'' Show
Cause Order at 3. The Show Cause Order also notified Respondent of its
right to a hearing. Id.
The Show Cause Order specifically alleged that between February
2002 and October 2004, Mr. Applebaum had ``[o]n many occasions * * *
provided [two undercover] agents with refills of controlled substance
prescriptions when refills had not been authorized by a physician.''
Id. at 2. The Show Cause Order further alleged that Mr. Applebaum had
``also provided the agents with excessive amounts of controlled
substances that had not been authorized by a physician'' by providing
the agents with refills when he dispensed the initial prescriptions.
Id. The Order also alleged that Mr. Applebaum had provided refills to
the agents long before their original prescriptions would have been
used up. Id.
The Show Cause Order alleged that on July 26, 2004, Mr. Applebaum
filled a controlled substance prescription for an agent ``with no
authorization from her physician.'' Id. The Order also alleged that on
the same day, the agent observed Mr. Applebaum provide another customer
with two refills for a controlled substance. Id.
The Show Cause Order further alleged that a review Respondent's
records for
[[Page 50101]]
the period January 2003 through May 2004 indicated that ``Mr. Applebaum
routinely dispenses unauthorized controlled substances by providing
early refills * * * and multiple refills of prescriptions for the same
controlled substances on the same date.'' Id. The Order also alleged
that Respondent's records show that ``Mr. Applebaum dispenses narcotic
to drug addicts and to individuals obtaining treatment for narcotic
addiction.'' Id.
The Show Cause Order alleged that ``Mr. Applebaum was ``routinely
dispens[ing] contraindicated controlled substances at the same time to
the same patient,'' and that he was also ``routinely dispens[ing]
controlled substances'' to doctor shoppers. Id. Finally, the Show Cause
Order alleged that from October 2003 through April 2004, Respondent had
purchased 350,000 units of hydrocodone products and that 46 percent of
the hydrocodone prescriptions it dispensed were issued by the same
physician. Id. at 3. The Order thus alleged that there was a
``substantial likelihood that Mr. Applebaum will continue to divert
controlled substances to'' drug abusers and that Respondent's continued
registration ``would constitute an imminent danger to public health and
safety.'' Id.
On December 13, 2004, the Office of the Administrative Law Judges
received Respondent's request for a hearing. The case was assigned to
Administrative Law Judge (ALJ) Gail A. Randall.
On December 22, 2004, the Government moved for summary disposition.
The basis for the motion was that on November 16, 2004, the Michigan
Board of Pharmacy had filed an Administrative Complaint against
Respondent and had also summarily suspended Respondent's state pharmacy
license. The State's Order of Summary Suspension was effective
immediately. The Government thus contended that because Respondent no
longer had authority under state law to distribute or dispense
controlled substances, see 21 U.S.C. 824(a)(3), it was not entitled to
hold its Federal registration. The Government further contended that
there was no factual matter in dispute.\1\
---------------------------------------------------------------------------
\1\ Upon receipt of the Government's motion, the ALJ ordered
that the proceedings be stayed pending a decision on the motion and
further order Respondent to file a reply.
---------------------------------------------------------------------------
On January 21, 2005, Respondent filed an opposition to the
Government's motion. While Respondent acknowledged that the State had
summarily suspended its registration, it contended that the State's
action ``was predicated in large part on the immediate ex-parte
suspension of respondent's DEA registration * * * and the facts
developed by the DEA.'' Resp. Answer to Motion for Summary Disp. at 1.
Respondent further contended that the hearing before the State ALJ was
ongoing and that the state order was not final. See id. Respondent
argued that for DEA to rely on the State's summary suspension when the
State's action was based on the original DEA proceeding ``is a case of
boot-strapping extraordinaire.'' Id. at 2.
Respondent thus contended that it would be ``fundamentally unfair''
to grant the Government's motion. Id. Respondent further contended that
revocation was not required by the statutory language of 21 U.S.C.
824(a)(3). See id. (quoting 21 U.S.C. 824(a)(3) (``a registration * * *
may be suspended or revoked by the Attorney General upon a finding that
the registrant has had his State license or registration suspended,
revoked or denied by competent State authority''). According to
Respondent, ``[t]he action is not mandatory nor is it warranted in this
situation where the respondent has specifically requested a hearing on
the merits and is currently in the midst of'' a State hearing ``on the
issue of whether * * * Respondent's conduct merits [an] order of
summary suspension of the licenses by the State.'' Id. at 2-3.
Respondent thus requested that the ALJ deny the Government's motion for
summary disposition and that the Federal proceeding be stayed until the
State issued a decision on the merits.
On February 4, 2005, the ALJ issued an Order for Status Report. In
the order, the ALJ notified the parties that she had taken the matter
under advisement and that the proceedings would remain stayed. The ALJ
also ordered Respondent to file a status report with respect to its
State license on or before April 18, 2005. The ALJ further notified
Respondent that if it failed to file the report, the ALJ would rule on
the government's motion based on the information then before her. See
Order for Status Report at 1.
As of May 27, 2005, Respondent had not filed a status report. The
ALJ therefore issued her order, opinion and recommended decision. In
her order, the ALJ granted the Government's motion for summary
disposition, denied the Respondent's request for a continued stay of
the proceedings and recommended the revocation of Respondent's
registration on the ground that Respondent lacked State authority to
handle controlled substances. See ALJ Dec. at 5-7.
The ALJ specifically found that ``Respondent did not deny that it
is currently without state authorization to handle controlled
substances.'' ALJ Dec. at 5. The ALJ further noted that Respondent had
failed to file a report advising her of the status of the state
proceeding. See id. Because state authorization is an essential
prerequisite to a DEA registration, see id. at 4, and it was undisputed
that ``that the Respondent does not have authority to handle controlled
substances in the jurisdiction where it seeks to maintain its DEA
registration,'' the ALJ granted the Government's motion for summary
disposition. Id. at 5.
The ALJ acknowledged Respondent's argument that it was ``unfair''
for DEA to revoke its registration based on the Michigan suspension,
because it had been based on the DEA Order to Show Cause and Immediate
Suspension of Registration. Id. at 5-6. The ALJ further noted that
``such an action is circular and may result in the Respondent being
denied an opportunity to adjudicate the facts.'' Id. at 6.
The ALJ also denied Respondent's request for a stay until the
conclusion of the state proceeding. According to the ALJ, ``[t]he fact
remains that the Respondent currently lacks state authorization to
handle controlled substances, and therefore cannot remain registered
with the DEA.'' Id. The ALJ thus concluded that she had ``no choice but
to grant summary disposition at the present time, and to deny''
Respondent's motion for a stay. Id.
Thereafter, Respondent sought reconsideration of the ALJ's
recommended decision. The basis for Respondent's motion was that he had
not intentionally failed to file a Status Report but had erroneously
believed, based on a phone conversation with Government counsel that
occurred on April 11, 2005, that Government counsel ``was going to
investigate the matter and confirm with Respondent's counsel whether it
was still necessary for him to file anything additional in writing
given the status of the'' state hearing. Resp. Req. for Recon. at 2.
Respondent's counsel stated that when he did not hear back from
Government counsel, he ``wrongly assumed that the issue had been
resolved.'' Id. Respondent further informed the ALJ that the state
proceedings were continuing and that the proceeding had been ``an
elongated and vigorously contested hearing,'' which had been held on
five different dates with one additional date to follow, at which the
State's ``expert pharmacy witness'' was to testify. Id. at 3.
The Government responded that while it did not object to the late
filing of the status report, it did object to
[[Page 50102]]
reconsideration of the ALJ's decision. See Govt. Resp. at 2. While the
Government counsel did not remember the aforementioned telephone
conversation, he did not dispute that Respondent's counsel may have
asked him whether he had to file anything. Id. The Government further
pointed out that Respondent's counsel did not contend that he had not
received the ALJ's Order for Status Report, and that the Order, which
the Government had not received, presumably clearly stated the deadline
for filing the Status Report. See id. at 2-3.
The Government contended that whether Respondent should be
permitted to file a status report was irrelevant because Respondent's
state license had been suspended in November 2004 and had remained so
since then. The Government further argued that ``Respondent still does
not know when the state proceedings will end, and there is no assurance
that Respondent will regain its state authority.'' Id. at 3. According
to the Government, ``[t]he ALJ based her Decision on the fact that
Respondent had no state authority to handle controlled substances at
the time of the Decision. That fact was true at the time of the
deadline for the status report, at the time of the Decision and is true
at the present.'' Id. Therefore, the Government argued that there was
no basis for the ALJ to reconsider her decision.
The ALJ denied Respondent's motion for reconsideration. Again, the
ALJ noted that ``under the Controlled Substances Act it is clear that
the DEA does not have statutory authority to maintain a registration if
the registrant is without state authority to handle controlled
substances in the state in which the registrant conducts business.''
Order Denying Resp. Req. for Recon. at 2. The ALJ then transmitted the
record to me.\2\
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\2\ I emphasize that there is no provision in DEA's regulations
for either party to request reconsideration of an ALJ's recommended
decision. See generally 21 CFR Subpart D. The appropriate means of
challenging the ALJ's decision is to file exceptions. See 21 CFR
1316.66.
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Having considered the record as a whole, I hereby issue this
decision and final order. I adopt the ALJ's findings of fact and
conclusions of law. I further adopt the ALJ's recommended decision to
revoke Respondent's registration. I do not, however, adopt the opinion
to the extent it suggests that it was ``unfair'' for this agency to
revoke Respondent's Federal registration based on the State proceeding
and that ``such an action is circular and may result in the Respondent
being denied an opportunity to adjudicate the facts.'' ALJ Dec. at 6.
I acknowledge that the State's Administrative Complaint relied in
part on my Order to Show Cause and Immediate Suspension of
Registration. See Admin. Complaint at 3. But the state complaint did
not rely solely on my action. The state complaint cited a variety of
grounds under Michigan law for imposing sanctions including ``failing
to comply with applicable Federal laws,'' id. at 2 (citing Mich. Comp.
Laws Sec. 333.7311(1)(f)); dispensing of ``controlled substances for
other than legitimate medical purposes,'' id. (citing Mich. Comp. Laws
Sec. 333.7311(1)(g)); and ``if an officer or stockholder of the
pharmacy lacks good moral character.'' Id. at 2-3 (citing Mich. Comp.
Laws Sec. 333.17768(2)(a)). The complaint further alleged that
Respondent had violated these provisions of state law. Id. at 3-4.
Furthermore, the State's Order of Summary Suspension was based on the
``careful consideration of the documentation filed'' in the State's
administrative proceeding including the complaint. Order of Summary
Suspension 1. The State's Order also provided a procedure for
Respondent to petition for dissolution of the state suspension. See id.
I take the State on its word and conclude that its decision to
summarily suspend Respondent's state license was not based solely on my
order but was also based on its own evaluation of the evidence.
Furthermore, as Respondent itself pointed out, the State proceeding has
been ``an elongated and vigorously contested hearing,'' which included
at least six days of hearings with the State putting on an expert
witness. It is hard to imagine why a proceeding would take so long to
litigate and require expert testimony if it did not involve an
adjudication of the underlying facts. Thus, I do not accept the ALJ's
conclusion that it is ``circular'' for this agency to revoke
Respondent's registration based on the State's summary suspension order
and that doing so ``may result in * * * Respondent being denied an
opportunity to adjudicate the facts.'' ALJ Dec. at 6. Quite the
opposite, it appears that the State entered its suspension order based
on its own examination of the evidence; it further appears that
Respondent has had a full and fair opportunity to litigate the facts in
the State proceeding.
DEA's regulations make clear that the ALJ's decision is only a
recommendation; it is not the final agency action. The revocation of
Respondent's Federal registration becomes final only with this order.
Yet in the interval between the ALJ's decision and the publication of
this order, Respondent has submitted no evidence to show that the State
has lifted its suspension.
As the ALJ correctly recognized, DEA has consistently held that a
registrant may not hold a DEA registration if it is without appropriate
authority under the laws of the state in which it does business. See,
e.g., Rx Network of South Florida, LLC, 69 FR 62,093 (2004); Wingfield
Drugs, Inc., 52 FR 27,070 (1987). Respondent does not have authority
under Michigan law to handle controlled substances. Therefore, it is
not entitled to maintain its DEA registration. See Rx Network of South
Florida, 69 FR at 62095.
Order
Accordingly, pursuant to the authority vested in me by 21 U.S.C.
823(f) and 824(a), as well as 28 CFR 0.100(b) and 0.104, I hereby order
that DEA Certificate of Registration, No. AO6837477, issued to Oakland
Medical Pharmacy be, and it hereby is, revoked. I further order that
any pending applications for renewal or modification of its
registration be, and they hereby are, denied. This order is effective
September 25, 2006.
Dated: August 15, 2006.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E6-14045 Filed 8-23-06; 8:45 am]
BILLING CODE 4410-09-P
