Jose Gonzalo Zavaleta, M.D.; Denial of Application, 64128-64131 [2012-25576]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 77, Number 202 (Thursday, October 18, 2012)]
[Notices]
[Pages 64128-64131]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25576]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Jose Gonzalo Zavaleta, M.D.; Denial of Application

    On March 2, 2011, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause (Order) to Jose Gonzalo Zavaleta, M.D. (Applicant), of 
Alexandria, Louisiana (La.). The Order proposed the denial of 
Applicant's pending applications for DEA Certificates of Registration 
as a practitioner, which he filed on April 19, 2010 (Control Number 
W10020882C) and on December 9, 2010 (Control Number W10078290C), for 
the registered location of 1217 Willow Glen

[[Page 64129]]

River Road, Alexandria, La., on the ground that his registration would 
be ``inconsistent with the public interest.'' Order at 1 (citing 21 
U.S.C. 823(f)).
    The Show Cause Order incorporated by reference the allegations of a 
previous Show Cause Order which had been issued on February 23, 2009; a 
copy of the latter was attached to the second Show Cause Order. Id. at 
1-2. The first Show Cause Order had alleged that Applicant voluntarily 
surrendered his DEA Certificate of Registration, BZ5998250, on March 
26, 2008, after being charged with six counts of prescribing controlled 
substances beyond authority and accepted medical treatment, in 
violation of La. Rev. Stat. Ann. Sec.  40:971(C)(1)(2008) (effective 
Aug. 15, 2006). Id. The first Order further alleged that Applicant 
prescribed controlled substances to undercover agents with ``cursory or 
no medical examinations, and without a legitimate medical purpose in 
violation of 21 U.S.C. Sec.  841(a)(1),'' including a total of 75 
dosage units of hydrocodone (including Lortab and/or Lorcet), which are 
schedule III narcotics; 20 dosage units of Xanax, a schedule IV 
controlled substance; and six ounces of Phenergan with codeine, a 
schedule V narcotic cough syrup. Id. Finally, the first Order alleged 
``[Applicant] facilitated the undercover officers' procurement of drugs 
by fraudulent means'' when he advised them to ``provide false medical 
information'' to justify ``illegitimate prescriptions.'' Id. at 2.
    In addition to these allegations, the Second Show Cause Order 
alleged that on June 24, 2010, Applicant had entered into a consent 
agreement with the Louisiana State Board of Medical Examiners which had 
found ``that reasonable cause existed for recommending that a formal 
Administrative Complaint be filed against [him], charging [him] with 
violation of the Louisiana Medical Practice Act.'' Show Cause Order at 
2. The Second Show Cause Order further alleged that ``[t]o avoid the 
filing of a formal Administrative Complaint, [Applicant] entered into a 
consent order with the Board * * * in which [he] accepted a public 
reprimand and various conditions [were] place upon [his] medical 
license.''
    On March 7, 2011, the Second Show Cause Order, which also notified 
Applicant of his right to either request a hearing on the allegations 
or to submit a written statement in lieu of a hearing, the procedures 
for doing so, and the consequence if he failed to do either, was served 
on Applicant by certified mail addressed to him at the address listed 
on his second and third applications. Id. at 2 (citing 21 CFR 1316.47; 
21 CFR 1301.43). Since service of the Second Order, more than thirty 
days have now passed and neither Applicant, nor anyone purporting to 
represent him, has either requested a hearing or submitted a written 
statement in lieu of a hearing. See 21 CFR 1301.43(b)-(d). Accordingly, 
I find that Applicant has waived his rights to a hearing or to submit a 
written statement. Id. 1301.43(d). I therefore issue this Decision and 
Final Order without a hearing based on relevant material contained in 
the investigative record submitted by the Government. I make the 
following findings.

Findings

    On July 27, 2011, I issued a Decision and Final Order denying 
Respondent's application which he filed on July 28, 2008 and which was 
the subject of the first Show Cause Order. See Jose Gonzalo Zavaleta, 
M.D., 76 FR 49506 (Aug. 10, 2011). Therein, I made extensive findings 
that are res judicata in this proceeding.
    Applicant was previously the holder of DEA Certificate of 
Registration, BZ5998250, which authorized him to dispense controlled 
substances in schedules II through V as a practitioner at the 
registered location of 5629 Jackson Street Ext., Alexandria, Louisiana. 
76 FR 49506. However, on March 26, 2008, concurrent with Applicant's 
arrest on state drug charges (the circumstances of which are set forth 
below), he voluntarily surrendered his registration. Id. Applicant's 
registration was then retired by DEA on March 27, 2008. Id.
    On July 28, 2008, Applicant applied for a new DEA registration as a 
practitioner in schedules IV and V; this application was denied by my 
Order of August 10, 2011. Id. On April 19, 2010, Applicant filed a 
second application for a practitioner's registration, seeking authority 
to handle controlled substances in schedules II thorugh V at the 
registered location of Rapides Primary Health Care Center, 1217 Willow 
Glenn River Rd., Alexandria, La. 71302. GX 6, at 1. On his application, 
Respondent stated that ``the DA made me an offer for a program called 
PTI and no DEA license for two years. Now, I have completed my part of 
the deal, meaning I completed two years without [a] DEA license, and 
now I want my unrestricted DEA license back.'' Id. On December 9, 2010, 
Respondent filed a third application; this application was also for the 
registered location of the Rapides Primary Health Care Center. GX 7.
    Applicant first came to the attention of law enforcement on January 
17, 2008, when Louisiana State Police received a call from a pharmacist 
that he had authorized prescriptions for ``excessive amounts of name 
brand narcotics with no generic substitutions allowed.'' 76 FR at 
49506. Upon receipt of this information, an undercover state trooper 
(UC1) visited Applicant's clinic with audio/video recording equipment 
on January 23, 2008. Id. When Applicant asked UC1 ``why he was there,'' 
UC1 responded by requesting ``[h]ydrocodone pain pills.'' Id. UC1 
``initially denied that he was in pain but, after negotiating with 
[Applicant], he agreed to falsely state that he was suffering from a 
sexually transmitted disease,'' and Applicant recorded this false 
information in UC1's medical file. Id. Then, Applicant, without any 
physical examination to verify the claim of illness or symptoms, wrote 
prescriptions for 15 Lortab \1\ pills and an antibiotic. Id. The 
undercover agent paid $100 for the visit. Id.
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    \1\ Lortab, which is a combination drug containing hydrocodone 
and acetaminophen, is a schedule III controlled substance. 21 CFR 
1308.13(e)(iv).
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    Five days later, on January 28, 2008, UC1 returned to Applicant's 
clinic seeking additional ``pain pills.'' Id. However, Applicant denied 
his request for more pain pills ``because `big brother' was watching 
him.'' Id.
    Thereafter, on January 30, February 8, and February 28, 2008, a 
second state trooper (UC2) visited Applicant's clinic in an undercover 
capacity, while equipped with an audio/video recording device. Id. At 
UC2's first visit, Applicant issued her a prescription for 
hydrocodone,\2\ notwithstanding UC2's ``initially den[ying] she was in 
pain'' and ``later stat[ing] she was in pain in order to obtain a 
prescription for hydrocodone.'' Id. At her second visit on February 8, 
Applicant provided prescriptions for hydrocodone and Phenergan with 
codeine,\3\ the latter being a cough syrup, ``even though she had no 
cough or congestion and exhibited no such symptoms.'' Id. On UC2's 
third visit, she requested and obtained from Applicant prescriptions 
for hydrocodone and Xanax.\4\ Id. To justify issuing the prescriptions, 
Applicant ``coached'' UC2 about what to say and recorded the coached 
statements in her medical file. Id. At the

[[Page 64130]]

undercover visits, Applicant never ``require[d] any medical records nor 
did he conduct any physical examinations.'' Id.
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    \2\ Hydrocodone is typically combined with acetaminophen. In 
this formulation, it is a schedule III controlled substance. 21 CFR 
1308.13(e)(iv).
    \3\ Phenergan with codeine cough syrup consists of a combination 
of promethazine and codeine; it is a schedule V controlled 
substance. 21 CFR 1308.15(c).
    \4\ Xanax (alprazolam) is a schedule IV controlled substance. 21 
CFR 1308.14(c)(1).
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    On March 20, 2008, after a state court judge issued a warrant for 
Applicant's arrest, Louisiana State Police alerted DEA to the 
investigation and pending arrest. Id. Thereafter, on March 26, 2008, 
Applicant was arrested and charged with ``six counts of prescribing 
beyond authority and accepted medical treatment, a violation of 
Louisiana Revised Statute 40:971C(1).'' Id. Based on Applicant's 
arrest, a DEA Diversion Investigator asked for the voluntary surrender 
of his DEA registration; Applicant agreed and signed a DEA-104, 
Voluntary Surrender of Controlled Substance Privileges.\5\ Id. at 
49506-07.
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    \5\ As part of the record in this matter, the Government 
submitted a copy of the Consent Order applicant entered into with 
the Louisiana State Board of Medical Examiners. GX 5. While therein, 
Applicant ``acknowledge[d] that the reported information could 
provide the Investigating Officer with probable cause to pursue 
formal administrative proceedings against him for violation of the 
[Louisiana Medical Practice] Act,'' Applicant did not admit to any 
of the allegations. Id. at 2. Accordingly, I do not rely on the 
Consent Order to make any findings regarding violations of federal 
law by the Applicant in prescribing to undercover agents.
     However, I find that Respondent had a full and fair opportunity 
to litigate the allegations of the first DEA Show Cause Order, even 
if he did not avail himself of it. See Alan H. Olefsky, 76 FR 20025, 
20031 (2011); Robert L. Dougherty 76 FR 16823, 16830 (2011). 
Accordingly, those findings are res judicata in this proceeding. 
Olefsky, 76 FR at 20031; Dougherty, 76 FR at 16830.
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    Respondent has presented no evidence that he acknowledges his 
misconduct and accepts responsibility for it.

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 in the case of a practitioner, 
Congress directed 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.
    ``[T]hese factors are considered in the disjunctive.'' Robert A. 
Leslie, 68 FR 15227, 15230 (2003). I may rely on any one or a 
combination of factors and may give each factor the weight I deem 
appropriate in determining whether * * * to deny an application. Id. 
Moreover, I am ``not required to make findings as to all of the 
factors.'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005) (citing 
Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005)).
    In this matter, while I have considered all of the factors, I 
conclude that it is not necessary to make findings with respect to 
factors one (the recommendation of the state licensing board), three 
(applicant's conviction record) and five (such other conduct which may 
threaten public health and safety). Having previously found that 
Applicant has committed acts which render his registration 
``inconsistent with the public interest,'' 76 FR at 49507 (quoting 21 
U.S.C. 823(f), 824(a)(4)), and Applicant having failed to present any 
evidence to rebut this conclusion, I will order that his pending 
applications for registration be denied.

Factors Two and Four--Applicant's Experience in Dispensing Controlled 
Substances and Compliance With Applicable Laws Related to Controlled 
Substances

    Under a longstanding DEA regulation, a prescription for a 
controlled substance is not ``effective'' unless it is ``issued for a 
legitimate medical purpose by an individual practitioner acting in the 
usual course of his professional practice.'' 21 CFR 1306.04(a). This 
regulation further provides that ``an order purporting to be a 
prescription issued not in the usual course of professional treatment * 
* * is not a prescription within the meaning and intent of [21 U.S.C. 
829] and * * * the person issuing it, shall be subject to the penalties 
provided for violations of the provisions of law related to controlled 
substances.'' Id.; see also La. Rev. Stat. Ann. Sec.  40:961(33) (2008) 
(effective Aug. 15, 2004); \6\ La. Rev. Stat. Ann. Sec.  40:1238.2(A) 
(2008) (effective Aug. 15, 2006).\7\
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    \6\ Louisiana law defines the term ``prescription'' to mean ``a 
written request for a drug * * * issued by a licensed physician * * 
* for a legitimate medical purpose, for the purpose of correcting a 
physical, mental, or bodily ailment, and acting in good faith in the 
usual course of his professional practice.'' La. Rev. Stat. Ann. 
Sec.  40.961(33).
    \7\ This statute provides that:
     A prescription, in order to be effective in legalizing the 
possession of legend drugs, shall be issued for a legitimate medical 
purpose by one authorized to prescribe the use of such legend drugs. 
An order purporting to be a prescription issued to a drug abuser or 
habitual user of legend drugs, not in the course of professional 
treatment, is not a prescription within the meaning and intent of 
this Section. Any person who knows or should know that he or she is 
filling such a prescription or order to a drug abuser or habitual 
user of legend drugs, as well as the person issuing the 
prescription, may be charged with a violation of this Section.
    La. Rev. Stat. Ann. Sec.  40:1238.2(A).
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    As the Supreme Court recently explained, ``the [CSA's] prescription 
requirement * * * ensures patients use controlled substances under the 
supervision of a doctor so as to prevent addiction and recreational 
abuse. As a corollary, [it] also bars doctors from peddling to patients 
who crave the drugs for those prohibited uses.'' Gonzales v. Oregon, 
546 U.S. 243, 274 (2006) (citing United States v. Moore, 423 U.S. 122, 
135, 143 (1975)); see also La. Rev. Stat. Ann. Sec.  40:1238.2(A) 
(2008) (effective Aug. 15, 2006).
    Under the CSA, it is fundamental that a practitioner must establish 
and maintain a bonafide doctor-patient relationship in order to act 
``in the usual course of * * * professional practice'' and to issue a 
prescription for a ``legitimate medical purpose.'' Laurence T. 
McKinney, 73 FR 43260, 43265 n.22 (2008); see also Moore, 423 U.S. at 
142-43 (noting that evidence established that physician ``exceeded the 
bounds of `professional practice,''' when ``he gave inadequate physical 
examinations or none at all,'' ``ignored the results of the tests he 
did make,'' and ``took no precautions against * * * misuse and 
diversion''). The CSA generally looks to state law to determine whether 
a doctor and patient have established a bonafide doctor-patient 
relationship. See Kamir Garces-Mejias, 72 FR 54931, 54935 (2007); 
United Prescription Services, Inc., 72 FR 50397, 50407 (2007); but see 
21 U.S.C. Sec.  829(e)(2)(B) (providing federal standard for 
prescribing over the internet).
    Under the regulation of the Louisiana Board of Medical Examiners, 
in the treatment of ``intractable pain * * * a physician shall comply'' 
with the Louisiana Pain Rules, including the requirements that a 
physician perform an ``[e]valuation of the [p]atient'' and make a 
``[m]edical [d]iagnosis.'' La. Admin. Code tit. 46:XLV.6921(A) (2008). 
``Evaluation of the patient shall initially include relevant medical, 
pain, alcohol and substance abuse histories, an assessment of the 
impact of pain on the patient's physical and psychological functions, a 
review of previous diagnostics studies, previously utilized therapies, 
an assessment of coexisting illnesses, diseases, or conditions, and an 
appropriate physical examination.'' Id.

[[Page 64131]]

(emphasis added); see also Armstrong v. La. State Bd. of Med. 
Examiners, 868 So. 2d 830, 840 (La.App. 4 Cir. Feb. 18, 2004) 
(upholding two year suspension of physician's license; noting that when 
prescribing controlled substances for relief of non-malignant pain is 
``unaccompanied by appropriate testing, diagnosis, oversight and 
monitoring * * * the physician falls below generally accepted standards 
of care''); Pastorek v. La. State Bd. of Med. Examiners, 4 So. 3d 833 
(La.App. 4 Cir. Dec. 17, 2008). The Board's rules further require that 
a ``medical diagnosis * * * be established and fully documented in the 
patient's medical record.'' La. Admin. Code tit. 46:XLV.6921(A)(2) 
(2008).
    Louisiana law also prohibits a physician from ``[a]ssist[ing] a 
patient or any other person in obtaining a controlled dangerous 
substance through misrepresentation, fraud, forgery, deception, or 
subterfuge.'' La. Rev. Stat. Ann. Sec.  40:971.2 (2008) (effective Aug. 
15, 2005). It is also unlawful for a physician to ``prescribe * * * 
legally controlled substances beyond his respective prescribing 
authority or for a purpose other than accepted medical treatment of 
disease, condition, or illness. Id., at Sec.  40:971(C)(1) (2008) 
(effective Sept. 9, 1988).
    As found in my Decision and Order of July 27, 2011, on four 
occasions, Applicant prescribed drugs containing hydrocodone (including 
Lortab and/or Lorcet), which are schedule III narcotics; Xanax, a 
schedule IV controlled substance; and Phenergan with codeine, a 
schedule V narcotic cough syrup; to Louisiana State Troopers acting in 
undercover capacities. See 76 FR at 49508. Notably, Applicant issued 
these prescriptions without conducting a physical examination at any of 
the visits and the undercover agents received these prescriptions even 
though they did not demonstrate conditions or symptoms that would 
justify the prescriptions. Id.
    Moreover, both undercover agents initially denied they were in 
pain, but Applicant assisted the agents in obtaining controlled 
substances by encouraging them to make false statements. See id. For 
example, while he denied being in pain, UC1 asked Applicant for 
``[h]ydrocodone pain pills,'' and then ``negotiate[ed]'' with Applicant 
to ``falsely state'' he had a sexually transmitted disease. Id. 
Likewise, Applicant also ``coached'' the second undercover agent on 
what to say to ``justify issuing the prescriptions and wrote her 
coached statements in a medical file.'' Id. Therefore, Applicant failed 
to establish a physician-patient relationship, lacked a legitimate 
medical purpose, and acted outside of the usual course of professional 
practice in prescribing controlled substances to the undercover agents 
and thus violated Federal law. See id. (citing 21 CFR 1306.04(a); 21 
U.S.C. 841(a)(1); see also Louisiana v. Moody, 393 So. 2d 1212, 1215 
(La. 1981) (holding that physician furnished prescriptions for ``other 
than a legitimate medical purpose'' based on evidence showing that 
prescriptions were issued in response to specific requests of patients 
and physician did not conduct physical examinations or take medical 
histories)).
    I therefore hold again that granting Applicant's applications for a 
new registration ``would be inconsistent with the public interest.\8\'' 
21 U.S.C. 823(f). Accordingly, I will order that Applicant's pending 
applications be denied.
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    \8\ As found above, Applicant stated in his second application 
that ``the DA made me an offer for a program called PTI and no DEA 
license for two years,'' and that because he has ``completed two 
years without [a] DEA license,'' he ``want[s] [his] unrestricted DEA 
license back.'' GX 6. Respondent has presented no evidence that any 
DEA official agreed to the deal he made with the district attorney, 
and in any event, a state official has no authority to bind this 
Agency. See Edmund Chein, 72 FR 6580, 6590 (2007) (Congress granted 
the authority to determine whether a registration ``is consistent 
with the public interest'' to ``the Attorney General of the United 
States, and that authority has been delegated solely to the 
officials of [DEA]. State officials therefore lack authority to 
resolve a matter pending before the Drug Enforcement 
Administration'' and cannot bind this Agency.) (citing 21 U.S.C. 
824, 28 CFR 0.100(b), and Fourth Street Pharmacy v. DEA, 836 F.2d 
1137, 1139 (8th Cir. 1988)); see also 21 U.S.C. 823(f)).
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Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 
CFR 0.100(b), I order that the applications (Control Numbers W10020882C 
and W10078290C) of Jose Gonzalo Zavaleta, M.D., for a DEA Certificate 
of Registration as a practitioner be, and they hereby are, denied. This 
order is effective November 19, 2012.

    Dated: October 8, 2012.
Michele M. Leonhart,
Administrator.
[FR Doc. 2012-25576 Filed 10-17-12; 8:45 am]
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