Decision and Order: Clair L. Pettinger, M.D., 61591-61620 [2013-24052]

Download as PDF Vol. 78 Thursday, No. 192 October 3, 2013 Part IV Department of Justice tkelley on DSK3SPTVN1PROD with NOTICES2 Drug Enforcement Administration Decision and Order: Clair L. Pettinger, M.D.; Notice VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\03OCN2.SGM 03OCN2 61592 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 13–12] tkelley on DSK3SPTVN1PROD with NOTICES2 Decision and Order: Clair L. Pettinger, M.D. On June 5, 2013, Administrative Law Judge Christopher B. McNeil (hereinafter, ALJ) issued the attached Recommended Decision 1 (hereinafter, cited as R.D.).Therein, the ALJ found that the Government had proved that the Respondent issued nine prescriptions for controlled substances ‘‘that were not for a legitimate medical need and were not issued in the ordinary course of a professional medical practice,’’ as well as a prescription for hydrocodone after his DEA registration had been suspended, and that this evidence establishes that ‘‘the Respondent’s continued [registration] is inconsistent with the public interest. R.D. at 57. The ALJ further found that the Government ‘‘has made a prima facie case in support of the proposed order revoking the Respondent’s registration’’ and that ‘‘Respondent . . . failed to affirmatively acknowledge specific acts of improper prescribing of controlled substances and failed to establish by credible and substantial evidence effected steps taken in remediation.’’ Id. at 58. Accordingly, the ALJ found that ‘‘the Government has established cause to revoke the Respondent’s DEA’’ registration, id., and recommended that his registration be revoked and that any pending applications to renew or modify his registration be denied. Id. at 59. Both parties filed exceptions to the Recommended Decision. Thereafter, the record was forwarded to me for Final Agency Action. Having considered the record in its entirety, including each party’s exceptions, I have decided to adopt the ALJ’s findings of fact and conclusions of law, except as discussed below. While I reject some aspects of the ALJ’s discussion, I agree with the ALJ’s legal conclusions that Respondent violated federal law in prescribing to each of the undercover officers, and that the Government has established a prima facie case to revoke Respondent’s registration on the ground that he has committed acts which render his registration ‘‘inconsistent with the public interest.’’ 21 U.S.C. 824(a)(4). I further agree with the ALJ’s conclusion that Respondent has failed to produce sufficient evidence to rebut the 1 All citations to the Recommended Decision are to the slip opinion as issued by the ALJ. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 Government’s prima facie case, as notwithstanding the unrefuted evidence that he knowingly and intentionally diverted drugs by issuing unlawful prescriptions, he failed to acknowledge his misconduct. A discussion of each party’s exceptions follows. Respondent’s Exceptions Respondent first takes exception to the ALJ’s finding that he authorized a new prescription for 180 dosage units of Norco, a combination drug containing hydrocodone, a schedule III controlled substance, and acetaminophen, for his patient B.D., on December 21, 2012, ten days after he had been served with the Order to Show Cause and Immediate Suspension of Registration. Resp. Exceptions, at 1–4. In support of the allegation, the Government introduced several documents from the Safeway Pharmacy which filled the prescription. These included: (1) A copy of a prescription issued to B.D. by Respondent on October 22, 2012 for 180 dosage units of Norco, which authorized two refills; and (2) a printout from the pharmacy showing B.D.’s medical expenses between August 13 and December 21, 2012. GX 24, at 2, 4. Of note, the latter shows that the prescription, which was assigned the number 4362259, was filled on October 22, 2012, and refilled on November 12 and December 3, 2012. Id. at 4. Of further note, this document shows that on December 21, 2012, the pharmacy dispensed an additional 180 tablets of Norco to B.D., under a new prescription number and attributed the prescription to Respondent. Id. The Government also introduced into evidence a copy of a prescription refill request form, which was dated December 20, 2012, and which was faxed by the pharmacy to Respondent and then faxed backed to the pharmacy. Id. at 3; Tr. 91. Under the heading ‘‘PRESCRIPTION REQUEST,’’ the form indicated that the prescription was for B.D. and was 180 tablets of Norco; the form also stated that the prescription was ‘‘First Filled’’ on ‘‘Oct 22, 2012,’’ and ‘‘Last Filled’’ on ‘‘Dec 3, 2012.’’ Id. In the space for the doctor’s signature, the form bore the following notation: ‘‘N Pettinger MD Can fill current refill No New Refill.’’ Id. On the upper right side of the form, were the words ‘‘MD and ‘‘OK x 1,’’ each of which was circled; in addition, an arrow was drawn from the latter to the words ‘‘No New Refill.’’ Id. At the hearing, the Special Agent, who was the Case Agent, testified that upon serving the Order to Show Cause and Immediate Suspension of Registration on Respondent, he told Respondent ‘‘that he was unable to PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 dispense, prescribe or otherwise issue controlled substances from that point on’’ and that Respondent ‘‘stated to me that he understood that.’’ Tr. 87. The Case Agent further explained that while it was illegal for Respondent to authorize a new prescription after his registration was suspended, any refills that had been authorized prior to the suspension could be filled. Id. at 112. In his testimony, the Case Agent explained that when the Refill Request fax was sent, ‘‘the patient had already refilled all the refills that were on the previous prescription’’; the Agent also answered ‘‘no,’’ when asked if it would have been necessary to contact Respondent if there had been additional refills remaining on the prescription. Id. at 92. The Case Agent further testified that as far as he knew, pharmacists call a physician only to verify a new prescription and would not call to verify a refill. Id. at 112–13. The Case Agent also testified (erroneously) that there was no information on the Refill Request form that showed that all of the previously authorized refills had been dispensed by the pharmacy. Id. at 115. Finally, the Case Agent testified that he could not state that Respondent had ‘‘knowingly’’ issued a new prescription in violation of the suspension order. Id. at 116. Reviewing the Refill Request form, the ALJ concluded that the circled words ‘‘MD’’ and ‘‘No New Refill,’’ along with the arrow drawn to the words ‘‘No New Refill,’’ ‘‘indicat[e] that the pharmacist contacted [Respondent] and was told it was okay to dispense 180 generic Norco tablets, despite the fact that the pharmacy had already dispensed all of the medication authorized by the prescription written by [Respondent] on October 22, 2012.’’ R.D. at 9. The ALJ thus reasoned that ‘‘[w]hile this evidence does not establish that the pharmacist told [Respondent] that B.D. filled this prescription three times already, it does establish that [Respondent] knowingly authorized another 180 unit dispensation after being called by the pharmacist, a condition that would not have existed had there been a refill available under the original prescription.’’ Id. at 10. Taking exception to this finding, Respondent asserts that ‘‘Exhibit 24 does not establish that Respondent was aware of the prior refills.’’ Resp. Exceptions, at 3. However, notwithstanding the testimony of the Case Agent and the ALJ’s finding, the Refill Request form actually did contain evidence that the previously authorized refills had been dispensed. Specifically, the form indicates that the prescription had last been filled on December 3, 2012 E:\FR\FM\03OCN2.SGM 03OCN2 tkelley on DSK3SPTVN1PROD with NOTICES2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices and been filled in the full amount of 180 tablets. RX 24, at 3. Moreover, the bottom of the form includes the notations: ‘‘Remaining Qty: O’’ and ‘‘Rx Expires On: 04/23/2013.’’ RX 24, at 3. These, of course, are references to the previous prescription which had been issued on October 22, 2012, and which, in accordance with DEA regulations, was good for six months. See 21 CFR 1306.22(a). Beyond this, as the ALJ pointed out, had there been any refills remaining on the original (October 22nd) prescription, the pharmacy would have had no reason to send the refill request form. Respondent nonetheless asserts that his notation on the Refill Request Form used the word ‘‘refill’’ and not ‘‘prescription’’ and further states: ‘‘can fill current refill no new refill.’’ Resp. Exceptions, at 4. He argues that ‘‘[t]his contemporaneous handwritten note can only be interpreted as documenting Respondent’s belief that he was confirming the ‘‘current’’ (i.e., existing) refill authorization and specifically declining to authorize a ‘new refill’ (current prescription), just as instructed by’’ the Case Agent. Id. However, in his exceptions, Respondent entirely ignores that the Refill Request form also contains the circled notations of ‘‘MD’’ and ‘‘OK x 1,’’ along with the arrow that was drawn towards the words ‘‘No New Refill.’’ As noted above, based on these notations, the ALJ concluded that Respondent ‘‘knowingly authorized another 180 unit dispensation after being called by the pharmacist.’’ R.D. at 10. The ALJ’s conclusion that Respondent was called by the pharmacist and approved an additional dispensation of Norco is a permissible inference from the evidence.2 While this may not be the only permissible inference which can be drawn from the notation, it nonetheless constitutes probative evidence of the allegation. Significantly, when called to testify, Respondent invoked his Fifth Amendment privilege. However, as the Supreme Court has explained, ‘‘the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them.’’ Baxter v. Palmigiano, 425 U.S. 308, 318 (1976). As the Tenth Circuit has noted, ‘‘[t]his rule applies with equal force to administrative proceedings.’’ MacKay v. DEA, 664 F.3d 808, 820 (10th Cir. 2011) (citing Hoxie 2 The Case Agent testified that the documents, which are identified as pages 2–4 of Government Exhibit 24, were obtained from the pharmacist at the Safeway Pharmacy and are ‘‘true and accurate cop[ies] of the documentation [he] obtained from the’’ pharmacy. Tr. 89. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 v. DEA, 419 F.3d 477, 483 (6th Cir. 2005)). See also Keating v. Office of Thrift Supervision, 45 F.3d 322, 326 (9th Cir. 1995). Because Respondent refused to testify in response to the evidence suggesting that he had spoken with a pharmacist and authorized an additional dispensing (notwithstanding his having written ‘‘No New Refill’’ on the Refill Request form), I draw an adverse inference and conclude that he did authorize the December 21, 2012 dispensing, at which time his registration had been suspended. And because there was no reason for the pharmacy to contact him regarding a refill request unless there were no refills remaining, I conclude that Respondent knowingly authorized the dispensing in violation of the Immediate Suspension Order. Next, Respondent argues that the nine prescriptions which he issued to the undercover officers ‘‘cannot possibly be probative of whether [his] continued [r]egistration is inconsistent with the public interest.’’ Resp. Exceptions, at 5. According to Respondent, ‘‘[i]n addressing the public interest question, the key word is obviously the word ‘is[,]’ not ‘was.’ ’’ Id. Respondent thus maintains that because the undercover officers ‘‘never intended to consume the medication’’ and ‘‘were never at risk from this medication,’’ his issuance of the prescriptions is not probative of the public interest. Id. He further asserts that because he issued the prescriptions ‘‘over a year before the hearing,’’ his conduct in issuing them ‘‘cannot possibly be probative of whether [his] continued Registration [is] inconsistent with the public interest unless the Government shows either that this conduct ‘‘typif[ies] his conduct with actual patients who did consume the medications’’ or that his ‘‘prescribing practices did not improve to the point that he was in compliance with DEA requirements and the applicable standard of care.’’ Id. Respondent thus concludes by arguing that ‘‘[t]his analysis goes to the heart of the public interest question under 21 U.S.C. § [§ ] 823(f)(4) and 824,’’ and that ‘‘[a]ll of these provisions require an assessment of [his] current conduct and compliance.’’ Id. at 6. As for his contention that ‘‘the key word is . . . ‘is’ [and] not ‘was,’ ’’ Respondent ignores, that in section 824(a), Congress granted the Agency authority to suspend or revoke a registration ‘‘upon a finding that the registrant . . . has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest.’’ 21 U.S.C. PO 00000 Frm 00003 Fmt 4701 Sfmt 4703 61593 824(a)(4) (emphasis added). Thus, while a decision to continue or grant a new registration is prospective in nature, the Agency properly bases the public interest determination on instances of past misconduct, of which, here, there is no shortage.3 As the Seventh Circuit has explained, and as the Agency has noted in numerous cases, ‘‘past performance is the best predictor of future performance.’’ ALRA Labs, Inc., v. DEA, 54 F.3d 450, 452 (7th Cir. 1995); see also, e.g., Medicine ShoppeJonesborough, 73 FR 364, 387 (2008), pet. for rev. denied, Medicine ShoppeJonesborough v. DEA, 300 Fed. Appx. 409 (6th Cir. 2008). As for Respondent’s contention that the nine unlawful prescriptions are not probative of the public interest determination, because the undercover agents ‘‘never intended to consume the medication’’ and thus were ‘‘never at risk,’’ Resp. Exceptions at 5, the evidence clearly showed that Respondent intentionally and knowingly diverted controlled substances. Indeed, as catalogued by the ALJ, the Government’s Expert testified to some twenty-two areas of concern regarding Respondent’s prescribing practices. See R.D. at 30–32. These included his failure to resolve numerous red flags such as statements by the undercover officers that they were either diverting controlled substances or seeking them for recreational use; his falsification of medical records by indicating that he had performed an extensive physical exam when he had not; his failure to even examine the area of the body which was the source of an 3 Notwithstanding that section 823(f) authorizes the Attorney General to ‘‘deny an application for [a practitioner’s] registration . . . if the Attorney General determines that the issuance of such registration . . . would be inconsistent with the public interest,’’ here again, the provision explicitly recognizes the probative nature of an applicant’s past conduct in making this determination as demonstrated by factor two, which directs the Attorney General to consider ‘‘[t]he applicant’s experience in dispensing . . . controlled substances,’’ and factor three, which directs the Attorney General to consider ‘‘[t]he applicant’s conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.’’ 21 U.S.C. 823(f)(2) & (3). While the text of factor four, which directs the Attorney General to consider ‘‘[c]ompliance with applicable State, Federal or local laws relating to controlled substances’’ is not similarly limited to an applicant’s past conduct, (nor limited to the specific applicant, see David A. Ruben 78 FR 38363, 38385 n.47 (2013)), the Agency has long considered an applicant’s record of compliance with laws related to controlled substances under this factor. See Albert Lepis, M.D., 51 FR 17555, 17555–56 (1986) (discussing physician’s dispensings in violation of state law limiting quantity of controlled substances that could be prescribed under factor four (as well as factor two)); Carriage Apothecary, Inc., 52 FR 27599, 27600 (1987). E:\FR\FM\03OCN2.SGM 03OCN2 tkelley on DSK3SPTVN1PROD with NOTICES2 61594 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices undercover officer’s purported pain; his—in the words of the Government’s Expert—‘‘[t]rolling for symptomology’’; his suggesting to a patient that she claim to have pain radiating from her back into her leg to justify obtaining an MRI, as this was needed to justify his prescribing of oxycodone to her; and his typically rapid fire review with the patients of their medical history. See id. at 30–33. That each of the patients was an undercover agent does not make any of Respondent’s acts of prescribing to them any less a violation of federal law. I thus reject Respondent’s fatuous contention that his prescribing to the undercover officers is not probative of whether his registration is inconsistent with the public interest unless the Government can show that his conduct ‘‘can somehow be translated to typify his conduct with actual patients who did consume the medications.’’ Resp. Exceptions, at 5. Respondent did allow that his prescribings to the undercover agents would be probative of the public interest determination if the Government could show that his ‘‘prescribing practice did not improve to the point that he was in compliance with DEA requirements and the applicable community standard of care.’’ Id. Here again, Respondent is confused, but not because the Agency’s precedent is unclear. Under Agency precedent, DEA can revoke based on proof of a single act of intentional or knowing diversion. See Dewey C. MacKay, 75 FR 49956, 49977 (2010); see also Daniel Olefsky, 57 FR 928, 928–29 (1992). Moreover, where, as here, the Government makes out a prima facie case by showing that a registrant has committed acts which render his registration inconsistent with the public interest and which support the revocation of his registration, the registrant bears the burden of producing evidence to show that he accepts responsibility for his misconduct and has taken sufficient remedial measures to assure the Administrator that he will not engage in future misconduct. MacKay, 75 FR at 49977. (collecting cases). Having established its prima facie case by showing that Respondent diverted controlled substances on multiple occasions, the Government was not required to show that his ‘‘prescribing practices [have] not improve[d] to the point that he [is] in compliance with DEA requirements and the applicable . . . standard of care.’’ Resp. Exceptions, at 5. Next, Respondent argues that ‘‘[i]t is significant that the Government failed to introduce any evidence or testimony concerning Respondent’s care of a single VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 current patient, even a ‘drug seeking’ one.’’ Id. at 6. He also asserts that ‘‘[t]he Government seized hundreds of medical charts’’ when it served the Immediate Suspension Order and yet ‘‘failed to introduce a single one of these charts, although presumably they were aware that Respondent had drug seeking patients in his practice.’’ Id. Because of the extent and egregious nature of his misconduct, Respondent’s registration was Immediately Suspended simultaneously with the commencement of this proceeding. Thus, Respondent is without authority to lawfully dispense controlled substances to any current patient. Respondent does not explain why his care of a single current patient would be probative of his ability to responsibly and lawfully dispense controlled substances. As for the Government’s failure ‘‘to introduce a single one of’’ the patient charts it seized, the Government was not required to provide any such evidence to prove its case. Having conducted the nine undercover visits, the Government could reasonably conclude, based on its review of the evidence obtained during those visits, that Respondent was engaged in the diversion of controlled substances and that it had sufficient evidence to bring this proceeding. See T.J. McNichol, 77 FR 57133, 57146 (2012) (rejecting ALJ’s reasoning that the Government was required to review patients charts it had seized ‘‘to develop evidence that might enlighten the administrative record of [physician’s] positive prescribing practices’’; ‘‘[h]aving garnered evidence of what it believed to be unlawful prescriptions issued to . . . four undercover officers, the Government was entitled to go to hearing with that evidence’’). In a variation on a previous theme, Respondent further argues that his prescribing to the undercover officers ‘‘is useless in determining the public interest question’’ because ‘‘all’’ of the agents engaged in ‘‘diverting behavior’’ by ‘‘discussing extraneous matters’’ with him. Resp. Exceptions, at 7. Respondent asserts that this behavior is atypical of drug seeking patients and that ‘‘it tended to divert [his] attention from the symptoms he was asking about so that the recording would contain less evidence of a legitimate examination and history taking’’ and also diverted his ‘‘attention from his note taking which distorted the medical record itself.’’ Id. However, as explained above, Respondent did not testify, and thus, there is no evidence to support his assertion that the putatively extraneous conversations diverted his attention PO 00000 Frm 00004 Fmt 4701 Sfmt 4703 from his responsibilities in either questioning his patients regarding their conditions and medical history or his note taking. Moreover, as the ALJ found (see R.D. at 15), while the Agents may have initiated the extraneous conversations, such as when Agent Breeden noted that Respondent had gone to Nebraska and that ‘‘they play Penn State . . . this week,’’ Respondent perpetuated the conversation by noting ‘‘that Joe Paterno thing is so stupid,’’ that ‘‘these politically correct people just piss me off to no end’’ and continuing to discuss the Penn State/ Jerry Sandusky scandal for several minutes thereafter.4 See GX 5, at 8–12. Furthermore, the extraneous conversation had long ended by the time Agent Breeden and Respondent proceeded to discuss what drugs the former (in his undercover capacity) was using and why he was using them, and during which the following exchange occurred: Dr: So you use the norcos and? Agent: Uh yes I use pretty much whatever I (unintelligible) whatever I have available. Dr: Ok the opanas are so damned expensive do you notice any high out of the opanas at all they make you dopy for (unintelligible)? Agent: (unintelligible) well compare to the old the old oxy’s um . . . you know I got some friends who’ve used the um who don’t like ‘em um I personally I like ‘em I mean I (unintelligible). Dr: which ones? Agent: the opanas . . . but they’re harder to get for than the . . . roxicodones are . . . and they’re way more expensive though. Dr: yea. Agent: the opanas are . . . ya know twice as much as the Roxicodone are. Dr: and then you you get the norcos as well? Agent: some sometimes mostly the Roxicodone and the opanas. GX 5, at 27–28. Moreover, a further review of the transcript and recording shows that Respondent was not distracted when he informed the Agent that ‘‘for pain medication I would charge you $200 dollars . . . and then I charge you $80 dollars a month for your prescriptions,’’ 4 Respondent asserts that the ALJ’s Recommended Decision ‘‘recognized [that] all Agents engaged in this diverting behavior,’’ by trying to distract him during his evaluation of the patients. Resp. Exceptions, at 7. However, following a review of the recordings, I agree with the ALJ’s finding: That the conversations engaged in by these agents were [not] designed to divert [Respondent’s] attention or keep him from performing a proper, adequate, physical examination. To the contrary, most of the extraneous dialogue recorded here was occasioned by Respondent himself. The record does, however, make clear that each of the undercover agents tried to act like drug-seeking patients. . . . R.D. at 15. E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices but that he was ‘‘gonna do [the Agent] better than that because . . . I’m gonna give you the cannabis card’’ for which, ‘‘when I do the pain medication prescriptions with the cannabis then you know I charge $180 for the cannabis recommendation,’’ but that ‘‘on the initial evaluation I charge people half on their prescriptions so instead of charging you $80 bucks I charge you $40.’’ GX 5, at 38. Nor was Respondent distracted by the Agent when the latter explained that he had $200 on him and Respondent agreed that ‘‘for $200 we’ll just go ahead and do your prescriptions for your norcos and your and stuff’’ and ‘‘do the [cannabis] card for you too.’’ Id. Later, after a discussion of various cannabis related issues, Respondent and the Agent proceeded to discuss what prescriptions the latter wanted, with the following exchange occurring: Dr: . . . what are we gonna do as far as prescriptions for what are you using you say you are using norcos? Agent: ah mostly the uh opana or the uh roxies um and then if uh I’m not sure if it’d be the same prescription or not (unintelligible) the cough syrup too. Dr: ok so basically you want to end up getting the oxycodone you want the IR’s the 30 IR’s? Agent: Ah, yea. Dr: ok and how many of those . . . are you taking? Agent: what is it (unintelligible) for a month what is it 120? Dr: Ok. tkelley on DSK3SPTVN1PROD with NOTICES2 Id. at 41–42. Here again, Respondent was not distracted. Nor was he distracted when the Agent also asked for the cough syrup, and Respondent replied: ‘‘I’ll give you the promethazine.’’ Id. at 42.5 5 It is noted that Respondent did ask the Agent various questions regarding his medical history. However, he did not ask any questions about the Agent’s purported pain level and how it affected his ability to function. See Tr. 343 (testimony of Government’s Expert: ‘‘he’s a tile man, and nowhere in the information that I listened to or read was there any conversation about how his pain conditions [sic] was interfering with his ability to be a tile man. It seems to me it would be very hard to be a tile man if you had knee pain or back pain.’’); id. at 344–45 (testimony of Government’s Expert; ‘‘nor did I get any impression from the transcript or the recording of the degree of pain that was being suffered on a scale of one to [ten], or even using such words as mild, moderate or severe. None of that language was employed’’); id. at 325–26 (Expert’s testimony discussing scope of questioning by a physician in assessing a patient’s pain complaint). Nor does Respondent explain why these distractions prevented him from examining the Agent’s knee, which was the purported area of the Agent’s pain. See Tr. 133 (Agent’s testimony that Respondent did not at any point look at his knee); see id. at 345–46 (testimony of Government’s Expert: Noting that upon review of Agent Breeden’s medical record, there was ‘‘a very nondetailed examination of the musculoskeletal system, VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 Finally, Respondent argues that the ALJ failed to give proper weight to his evidence of remediation. Resp. Exceptions, at 8–9. First, he argues that the ALJ failed to recognize that he expressed remorse when he admitted to the Case Agent ‘‘that he had been over prescribing in the past.’’ Id. at 8. Second, he argues that while the ALJ acknowledged ‘‘the testimony of two patients (of Respondent) who received appropriate examinations and treatment,’’ the ALJ ‘‘made no finding impugning the veracity of [the clinic employee who testified] about improvements in the practice with respect to controlled substance prescribing.’’ Id. at 8–9. As for the testimony of Respondent’s patients that they received appropriate examinations and treatment and were helped by his treatment, neither patient testified that they possess medical expertise. Moreover, because under the CSA, ‘‘registration is limited to those who have authority to dispense controlled substances in the course of professional practice, and patients with legitimate medical conditions routinely seek treatment from licensed medical professionals, every registrant can undoubtedly point to an extensive body of legitimate prescribing over the course of [his] professional career.’’ Jayam Krishna-Iyer, 74 FR 459, 463 (2009). Thus, while Respondent may have treated these two legitimate patients appropriately, this says nothing about his management of persons who seek controlled substances to either abuse or divert them. See MacKay v. DEA, 664 F.3d at 819 (‘‘Although Dr. MacKay may have engaged in the legitimate practice of pain medicine for many of his patients, the conduct found by the Deputy Administrator with respect to K.D. and M.R. is sufficient to support although that was quite relevant to the pain complaint, the pain complaint being knee pain. One would customarily expect to see a highly detailed knee examination and an examination of the joints on either side of the knee, that being the ankle and the hip’’). I also reject Respondent’s contention that the Government’s Expert’s testimony should be ‘‘given very little weight’’ because she ‘‘had never qualified as an expert witness’’ by testifying in a medical board case on ‘‘the ‘‘treatment of non-cancer pain.’’ Resp. Exceptions, at 8. There is, of course, a first time for everything, and the Expert testified that she has reviewed other cases for the state medical board which involved the long-term use of opiates in managing chronic, non-cancer pain. Tr. 320. In addition, the Expert testified that she has been a clinical professor of medicine at the U.C. Davis School of Medicine for nearly thirty years; she also testified that in her prior position, she had evaluated one to five patients each week to determine whether to initiate long term opioid therapy for non-cancer pain and had prescribed oxycodone for one to two patients a week. Id. at 322–23. PO 00000 Frm 00005 Fmt 4701 Sfmt 4703 61595 her determination that his continued registration is inconsistent with the public interest.’’). It is acknowledged that the Practice Manager at the urgent care clinic, where Respondent is now employed, testified regarding the new procedures he instituted to screen out non-complying patients. However, to rebut the Government’s prima facie case, Respondent was required to produce evidence not only as to his corrective measures, he was also required to acknowledge his misconduct in prescribing to the undercover officers. Medicine Shoppe-Jonesborough, 73 FR at 387 (quoting Samuel S. Jackson, 72 FR 23848, 23853 (2007)); John H. Kennedy, 71 FR 35705, 35709 (2006). As the Tenth Circuit has explained: . . . The DEA may properly consider whether a physician admits fault in determining if the physician’s registration should be revoked. When faced with evidence that a doctor has a history of distributing controlled substances unlawfully, it is reasonable for the . . . Administrator to consider whether that doctor will change his or her behavior in the future. And that consideration is vital to whether continued registration is in the public interest. Without Dr. MacKay’s testimony, the Deputy Administrator had no evidence that Dr. McKay recognized the extent of his misconduct and was prepared to remedy his prescribing practices. MacKay, 664 F.3d at 820 (citing Hoxie v. DEA, 419 F.3d 477, 483 (2005)). Here, the only evidence regarding whether Respondent admits fault with respect to anything, was his admission during an interview (on the date the ISO was served) with the Case Agent ‘‘that some of his patients were not legitimate’’ and that ‘‘a number of them were receiving too many pills.’’ Tr. 104. Indeed, as noted above, at the hearing, Respondent invoked his Fifth Amendment privilege. Thus, Respondent has entirely failed to address the multiple acts of intentional diversion which he committed when he prescribed to the undercover officers. Respondent has therefore failed to produce sufficient evidence to rebut the conclusion that his continued registration would be consistent with the public interest. See MacKay, 664 F.3d at 820; Medicine ShoppeJonesborough, 73 FR at 387. The Government’s Exceptions While the Government apparently agrees with the ALJ’s ultimate conclusion of law and recommended order (i.e., that Respondent’s registration is inconsistent with the public interest and should be revoked), it takes exception to two features of his recommended decision. First, it takes E:\FR\FM\03OCN2.SGM 03OCN2 tkelley on DSK3SPTVN1PROD with NOTICES2 61596 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices exception to the ALJ’s conclusion that even in a proceeding brought pursuant to section 824(a)(4), it must identify in the Show Cause Order each of the public interest factors it is relying on. Govt. Exceptions, at 1–4. Second, it takes exception to the ALJ’s legal conclusion that factor two (the experience factor) should not be considered ‘‘[w]here evidence of the Respondent’s experience, as expressed through his patients and employees, is silent with respect to the quantitative volume of the Respondent’s experience,’’ R.D. at 56, thus impliedly suggesting that the Government has an obligation to put forward evidence as to the volume of a registrant’s prescribing activities in order to rely on this factor. Gov. Exceptions, at 4–9. Both of the Government’s exceptions are well taken. As for his conclusion that the Government cannot rely on factor two because it did not cite the factor in either the Show Cause Order or its PreHearing Statements, the ALJ cites no authority for this hyper-technical view of the Agency’s notice obligation. Contrary to the ALJ’s understanding, that the Government did not refer to factor two until its opening statement violated neither federal law nor the Due Process Clause. Here, the Government set forth that it was proposing the revocation of Respondent’s registration ‘‘pursuant to 21 U.S.C. 824(a)(4) . . . because [his] continued registration is inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).’’ ALJ Ex, 1, at 1. In addition, the Government set forth specific factual allegations regarding each of the nine undercover visits which it alleged resulted in Respondent issuing prescriptions ‘‘outside the usual course of professional practice or for other than a legitimate medical purpose.’’ Id. at 2–3. The Government further alleged that Respondent violated 21 U.S.C. 841(a)(1), which makes it unlawful to intentionally or knowingly distribute a controlled substance except as authorized by the Controlled Substances Act, as well as 21 CFR 1306.04(a), which requires that a controlled substance prescription ‘‘be issued for a legitimate medical purpose by [a] practitioner acting in the usual course of his professional practice.’’ ‘‘ ‘Pleadings in administrative proceedings are not judged by the standards applied to an indictment at common law.’ ’’ Aloha Airlines v. Civil Aeronautics Bd., 598 F.2d 250, 262 (D.C. Cir. 1979) (quoted in CBS Wholesale Distributors, 74 FR 36746, 36749 (2009)); accord Citizens State Bank of Marshfield v. FDIC, 751 F.2d 209, 213 VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 (8th Cir. 1984). Thus, ‘‘the failure of the Government to disclose an allegation in the Order to Show Cause is not dispositive and an issue can be litigated if the Government otherwise timely notifies a [r]espondent of its intent to litigate the issue.’’ CBS Wholesale, 74 FR at 36570. And while the Agency has held that ‘‘the parameters of the hearing are determined by the prehearing statements,’’ consistent with numerous court decisions, it has also recognized that even where an allegation was not raised in either the Show Cause Order or pre-hearing statements, the parties may nonetheless litigate an issue by consent. Pergament United Sales, Inc., v. NLRB, 920 F.2d 130, 135–37 (2d Cir. 1990); see also Duane v. Department of Defense, 275 F.3d 988, 995 (10th Cir. 2002) (discussing Facet Enterprises, Inc., v. NLRB, 907 F.2d 963, 974 (10th Cir. 1990); ‘‘we held that defendant had constructive notice of an alternate theory of liability not described in the formal charge when the agency detailed that theory during its opening argument and at other points during the hearing and when the defendant’s conduct revealed that it understood and attempted to defend against that theory’’); Grider Drug #1 & Grider Drug #2, 77 FR 44070, 44077 (2012) n.23 (holding that notwithstanding that the Government did not provide adequate notice of its intent to litigate an allegation in either the Show Case Order or its pre-hearing statements, where respondents ‘‘did not object that the allegation was beyond the scope of the proceeding and that they were denied adequate notice of it’’ and ‘‘fully litigated the issue,’’ the allegation was litigated by consent) (citing Citizens State Bank, 751 F.2d at 213; Kuhn v. Civil Aeronautics Bd., 183 F.2d 839, 841–42 (D.C. Cir. 1950); and Yellow Freight System, Inc., v. Martin, 954 F.2d 353, 358 (6th Cir. 1992)). ‘‘The primary function of notice is to afford [a] respondent an opportunity to prepare a defense by investigating the basis of the complaint and fashioning an explanation that refutes the charge of unlawful behavior.’’ Pergament United Sales, 920 F.2d at 135 (citation omitted). The Government adequately fulfilled this function when it disclosed the legal authority for the Agency’s proposed revocation of Respondent’s registration, see ALJ Ex. 1, at 1 (citing 21 U.S.C. 824(a)(4), 823(f)); the factual allegations that Respondent had issued prescriptions for oxycodone to undercover agents on nine different occasions, see id. at 2–3; and the legal basis for its contention that the prescriptions were unlawful. See id. at PO 00000 Frm 00006 Fmt 4701 Sfmt 4703 2 (alleging that Respondent ‘‘issued these prescriptions outside the usual course of professional practice or for other than a legitimate medical purpose, in violation of 21 U.S.C. 823(f)(4),6 841(a)(1), and 21 CFR 1306.04(a)’’). That the Government did not specifically reference it was seeking an analysis of this evidence under factor two (as well as factor four) until its opening statement did not in any way prejudice Respondent.7 Respondent neither objected to the Government’s argument, nor argued in its post-hearing brief that he was prejudiced by the Government’s assertion that his various violations ‘‘are grounds for revocation of [his] registration based on’’ both factors two and factor four. Tr. 70. Indeed, in a section of his post-hearing brief entitled ‘‘undisputed matters,’’ Respondent noted that ‘‘[t]he Government, in its opening statement set forth its intention to prove, in its case and [sic] chief, that Respondent’s DEA registration should be revoked based on the public interest factors set forth in 21 U.S.C. 823(f) factors 2 and 4 only.’’ Resp. Post-Hrng. Br. 4 (citing Tr. 69–70). Thus, even if the public interest factors created substantive rules of conduct, which they do not, this case stands four square with Facet Enterprises. See 907 F.2d at 972. Even if Respondent had claimed prejudice, I would not find the argument persuasive. This is so because whether the Government’s evidence regarding the prescriptions was considered under factor two (the experience factor), factor four (the compliance factor), or both factors together, Respondent knew ‘‘ ‘what conduct was being alleged and ha[d] a fair opportunity to present [his] defense.’ ’’ Duane v. Department of Defense, 275 F.3d at 995 (quoting Facet Enterprises., 907 F.2d at 972). The allegations that Respondent violated the CSA’s prescription requirement and 6 While the Government alleged that Respondent’s prescribings to the undercover agents violated section 823(f)(4), this provision cannot be violated because it does not create a substantive rule of conduct. Rather, it is simply a factor which Congress directed the Agency to consider in making the public interest determination under section 823(f). Cf. Bio Diagnostic International, 78 FR 39327, 39330 (2013) (quoting Penick Corp., Inc. v. DEA, 491 F.3d 483, 490 (D.C. Cir. 2007) (other citations omitted) (‘‘the ‘enumerated factors represent components of the public interest rather than independent requirements for registration’ ’’)). 7 See Tr. 70 (‘‘These violations of the Controlled Substances Act and DEA regulations are grounds for revocation of the Respondent’s DEA registration based on the public interest pursuant to 21 U.S.C. 824(a)(4) as determined by 21 U.S.C. 823(f), Factor 2, the registrant’s experience at dispensing controlled substances, and Factor 4, compliance with applicable state, federal or local laws relating to controlled substances.’’). E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices unlawfully distributed controlled substances to the undercover agents, as well as the potential defenses to the allegations, are the same whether the conduct is considered under factor two or factor four. Accordingly, while I agree with the ALJ’s conclusion that Respondent waived any objection to the Agency’s consideration of the prescription evidence under factor two, I reject the ALJ’s conclusion that the Government did not provide adequate notice of ‘‘its intention to rely on Factor Two in this hearing.’’ R.D. at 46. The Government also took exception to the ALJ’s legal conclusion that factor two ‘‘should not be used to determine whether Respondent’s continued registration is inconsistent with the public interest.’’ Gov. Exceptions, at 4– 9. In support of this conclusion, the ALJ offered the following reasoning: tkelley on DSK3SPTVN1PROD with NOTICES2 In order to establish a basis for revoking a Certificate of Registration based on the provisions of 21 U.S.C. § 823(f)(2) (Factor Two), and assuming Factor Two applies to both applicants and registrants, the Government must present evidence establishing, by at least a preponderance, that the experience of the Respondent in dispensing controlled substances is of such character and quality that his continued registration is inconsistent with the public interest. This requires evidence of both the qualitative and quantitative volume of the Respondent’s experience. Where evidence of the Respondent’s experience, as expressed through his patients and employees, is silent with respect to the quantitative volume of the Respondent’s experience, and requires speculation to support an adverse finding under Factor Two, this Factor should not be used to determine whether the Respondent’s continued registration is inconsistent with the public interest. R.D. at 56. I reject the ALJ’s analysis as it entirely ignores relevant precedent and is illogical. Earlier in his Recommended Decision, the ALJ explained that ‘‘in analyzing a registrant’s experience under Factor Two [that] the Administrator should consider the context of a registrant’s entire dispensing practices, notwithstanding that isolated acts against the public interest can outweigh substantial positive experience.’’ R.D. at 43. As support for this reasoning, the ALJ cited four cases: The Eleventh Circuit’s unpublished decision in Jayam Krishna-Iyer; as well as the Agency’s decisions in Jeffery J. Becker, 77 FR 72387 (2012); T.J. McNichol, 77 FR 57133 (2012); and Rene Casanova, 77 FR 58150 (2012). Notably, the ALJ did not discuss either the Agency’s decision on remand in Krishna-Iyer, 74 FR 459 (2009), or its decision in Dewey C. MacKay, 75 FR 49956 (2010). Nor did the ALJ discuss the Tenth Circuit’s VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 decision in MacKay. See MacKay v. DEA, 664 F.3d 808 (10th Cir. 2011). On remand in Krishna-Iyer, I discussed at length the role of so-called ‘‘positive experience’’ evidence in Agency proceedings where, as here, the Government has proved that a registrant has committed intentional diversion. Therein, in response to the court’s instruction that I re-consider my findings under the experience factor, giving ‘‘particular attention to the entire corpus of [the physician’s] record in dispensing controlled substances [notwithstanding that there was no such evidence in the record], not only the experience [with the] undercover officer[s],’’ I assumed, without deciding, that the physician’s ‘‘prescribings of controlled substances to every other person she has treated constitute ‘positive experience.’ ’’ 74 FR at 462–63. However, I explained that the physician’s ‘‘prescribings to thousands of other patients do not . . . render her prescribings to the undercover officers any less unlawful, or any less acts which ‘are inconsistent with the public interest.’ ’’ Id. at 463 (21 U.S.C. 823(f)). Moreover, I then explained that under the CSA, only those persons who are authorized to dispense controlled substances under the laws of the State in which they practice are entitled to be registered. Id. Continuing, I explained that ‘‘[b]ecause under law, registration is limited to those who have authority to dispense controlled substances in the course of professional practice, and patients with legitimate medical conditions routinely seek treatment from licensed medical professionals, every registrant can undoubtedly point to an extensive body of legitimate prescribing over the course of her professional career.’’ Id. I then discussed several cases in which the practitioners had argued that the Agency should ignore their acts of intentional or reckless diversion because they had dispensed controlled substances to thousands of patients legitimately. Id. (discussing Paul J. Caragine, Jr., 63 FR 51592, 51599–600 (1998); Medicine Shoppe-Jonesborough, 73 FR at 386 & n.56). For example, in Caragine, the Agency noted in its discussion of factor two that the physician had practiced medicine for 20 years and had ‘‘seen over 15,000 patients.’’ 63 FR at 51599. While the Agency did not dispute this, it explained that what was ‘‘[a]t issue in this proceeding is Respondent’s controlled substance prescribing to 18 patients.’’ Id. After a lengthy discussion of the physician’s prescribing practices with respect to the patients (some of which rejected the ALJ’s findings of PO 00000 Frm 00007 Fmt 4701 Sfmt 4703 61597 improper prescribing), which was conducted under the auspices of factor two, see id. at 51599–600, the Agency explained ‘‘that even though the patients at issue are only a small portion of Respondent’s patient populations, his prescribing of controlled substances to these individuals raises serious concerns regarding [his] ability to responsibly handle controlled substances in the future.’’ Id. at 51600.8 More recently, in Medicine ShoppeJonesborough, I concluded that notwithstanding the pharmacy’s argument that it had 17,000 patients, the evidence that it had diverted controlled substances to twelve patients established that its ‘‘experience in dispensing controlled substances warrants a finding that its continued registration is inconsistent with the public interest.’’ 73 FR at 386. Noting that ‘‘[t]he fundamental question under the CSA is whether Respondent ‘has committed such acts as would render [its] registration inconsistent with the public interest,’ ’’ I concluded that ‘‘[n]o amount of legitimate dispensings can render Respondent’s flagrant violations [acts which are] ‘consistent with the public interest.’ ’’ Id. n. 56. In Krishna-Iyer, I also noted that DEA had revoked a practitioner’s registration based on a physician’s presentation, at the same time, of two fraudulent prescriptions to a pharmacy, noting that the physician had ‘‘ ‘refuse[d] to accept responsibility for his actions and does not even acknowledge the criminality of his behavior.’ ’’ Id. at 463 (discussing and quoting Alan H. Olefsky, 57 FR 928, 928–29 (1992)). I therefore held that ‘‘evidence that a practitioner has treated thousands of patients does not negate a prima facie showing that the practitioner has committed acts inconsistent with the public interest.’’ Id. And I further explained that ‘‘[w]hile such evidence may be of some weight in assessing whether a practitioner has credibly shown that she has reformed her practices, where a practitioner commits intentional acts of diversion and insists she did nothing wrong, such evidence is entitled to no weight.’’ Id. Thus, in Krishna-Iyer, I adhered to my previous conclusion that the ‘‘Respondent’s dispensings to the undercover officers and her pre-signing of prescriptions and unlawful delegation of her prescribing authority 8 Moreover, in contrast to this case, the Agency acknowledged that the patients at issue all ‘‘had legitimate medical problems that warranted some form of treatment.’’ 63 FR at 51601. It should also be noted there was no evidence that the physician had knowingly or intentionally diverted controlled substances and the physician put on evidence of his rehabilitation. E:\FR\FM\03OCN2.SGM 03OCN2 61598 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 to her nurse, establish a prima facie case that her continued registration is ‘inconsistent with the public interest.’ ’’ Id. (quoting 21 U.S.C. 824(a)(4)). I also made clear that had Respondent not acknowledged her misconduct, I would have revoked her registration again. Subsequently, in MacKay, I found that the evidence that the physician had intentionally diverted controlled substances to two patients and did so on multiple occasions was ‘‘sufficient to hold that the government had made a prima facie showing that [the physician] had committed acts which render his registration inconsistent with the public interest.’’ 75 FR at 49977. Citing the Eleventh Circuit’s unpublished decision in Krishna-Iyer, the physician argued that ‘‘ ‘[a] better assessment of [his] medical practice and habits can be ascertained from [his] numerous positive experiences in prescribing controlled substances, some of which were recounted by the patients themselves . . . at the hearing.’ ’’ Id. (quoting Resp. Summation Br. at 3). Based on my decision on remand in Krishna-Iyer, I rejected Respondent’s argument. See id. As I explained: ‘‘even assuming, without deciding, that Respondent’s prescribing practices to all of his other patients (including those whose medical records were reviewed by the Government’s expert) fully complied with the CSA and Utah law, these prescribings do not refute the evidence showing that he intentionally diverted to [the two patients] in violation of both the CSA and Utah law.’’ Id. I therefore rejected the physician’s ‘‘arguments and conclude[d] that the Government ha[d] established a prima facie case that his continued registration is ‘inconsistent with the public interest.’ ’’ Id. (citing 21 U.S.C. 823(f)).9 On review of the Agency’s decision, the Tenth Circuit held ‘‘that substantial evidence supports the [Agency’s] findings under factors two and four’’ that the physician had ‘‘knowingly diverted controlled substances in violation of state and federal law.’’ MacKay v. DEA, 664 F.3d at 818. Addressing the physician’s contention that the Agency had failed to consider his ‘‘positive experience’’ evidence, the Tenth Circuit explained: None of the evidence presented by Dr. MacKay undermines the evidence relating to [the two patients]. Although numerous 9 The physician also put on the testimony of three fellow physicians and introduced affidavits from sixteen other physicians. 75 FR at 49977. I placed no weight on this evidence because none of the physicians had personal knowledge of the physician’s prescribing with respect to the two patients. Id. at n.37. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 patients and colleagues of Dr. MacKay related their positive experiences with him, none had any personal knowledge regarding his treatment of [them]. Notably, Dr. MacKay’s medical expert . . . failed to specifically discuss and justify Dr. MacKay’s treatment of [the two patients]. As a result, none of Dr. MacKay’s evidence contradicts the testimony and evidence presented by the DEA relating to the knowing diversion of drugs to these two patients. Nor did the Deputy Administrator misweigh the five statutory factors for determining the propriety of revocation, see 21 U.S.C. § 823(f). In light of Dr. MacKay’s misconduct relating to factors two and four, the government made a prima facie showing that Dr. MacKay’s continued registration is inconsistent with the public interest. See MacKay, 75 FR at 49,977. Although Dr. MacKay may have engaged in the legitimate practice of pain medicine for many of his patients, the conduct found by the Deputy Administrator with respect to [the two patients] is sufficient to support her determination that his continued registration is inconsistent with the public interest. Id. at 819. The Tenth Circuit thus denied the physician’s petition for review. As noted above, in his discussion of the experience factor, the ALJ entirely failed to discuss the Agency’s decision on remand in Krishna-Iyer, as well both the Agency’s and Tenth Circuit’s decision in MacKay. However, as these precedents make clear, allegations that a practitioner has violated the prescription requirement (21 CFR 1306.04(a)) are properly considered—for obvious reason—under the experience factor. Moreover, while the respondentpractitioner in a proceeding brought under sections 823(f) and 824(a)(4) may put on evidence as to his experience as a compliant registrant, the Government has no obligation to put forward such evidence. Thus, as the Tenth Circuit’s decision in MacKay demonstrates, where the Government proves that a registrant has violated the prescription requirement, its evidence is still sufficient to make out a prima facie case under 21 U.S.C. 824(a)(4) even where the registrant has produced evidence of his experience as a compliant registrant. That being the case, it is absolutely clear that, where, as here, the Government has proved that a registrant has violated the prescription requirement, the Government is entitled to a finding that the evidence with respect to the registrant’s experience in dispensing controlled substances establishes that he ‘‘has committed such acts as would render his registration . . . inconsistent with the public interest.’’ 21 U.S.C. 824(a)(4); MacKay, 664 F.3d at 819. This is so, even where there is no evidence ‘‘with respect to [the PO 00000 Frm 00008 Fmt 4701 Sfmt 4703 practitioner’s] overall practice history,’’ and ‘‘we do not know the number of patients he has served.’’ R.D. at 45.10 Indeed, notwithstanding various cases which have discussed the volume of a practitioner’s dispensing activity as a relevant consideration under the experience factor, no case has ever placed the burden of producing evidence as to the volume of a practitioner’s legitimate dispensings on the Agency. This is for good reason, as one of the fundamental principles of the law of evidence is that the burden of production on an issue is typically allocated to the party which is ‘‘most likely to have access to the proof.’’ Christopher B. Mueller & Laird C. Kirkpatrick, 1 Federal Evidence § 3:3, at 432 (3d ed. 2007).11 I therefore reject the ALJ’s conclusion of law that ‘‘[w]here evidence of the Respondent’s experience, as expressed through his patients and employees, is silent with respect to the quantitative volume of the Respondent’s experience, . . . this Factor should not be used to determine whether the Respondent’s continued registration is inconsistent with the public interest.’’ R.D. at 56. Consistent with Agency precedent which has long considered violations of the CSA’s prescription requirement under factor two (as well as factor four), I hold that the evidence relevant to factor two establishes that Respondent violated 21 CFR 1306.04(a) when he dispensed controlled substances to the various undercover officers, and that this establishes a prima facie case that he has committed acts which ‘‘render his registration inconsistent with the public interest.’’ 21 U.S.C. 824(a)(4). See also Carriage Apothecary, 52 FR 27599, 27600 (1987) (holding that evidence that pharmacy failed to maintain proper records and could not account for significant quantities of controlled substances was relevant under both factors two and four); Eugene H. Tapia, 52 FR 30458, 30459 (1987) (considering evidence that physician did not perform physical exams and issued medically unnecessary prescriptions under factor two; no evidence regarding quantity of physician’s legitimate dispensings); Thomas Parker Elliott, 52 FR 36312, 36313 (1987) (adopting ALJ’s conclusion 10 The ALJ further explained that ‘‘we do not know . . . the value of [the Respondent’s] service to the community, or other similar demographic factors relevant to the issue.’’ R.D. 45. Contrary to the ALJ’s understanding, there is no need to know any of this, because the Agency has held that socalled ‘‘community impact’’ evidence is irrelevant to the public interest determination. See Linda Sue Cheek, 76 FR 66972, 66972–73 (2011); Gregory D. Owens, 74 FR 36571, 36757 (2009). 11 Nor is the Agency required to calculate a ratio of a practitioner’s lawful to unlawful dispensings. E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices that physician’s ‘‘experience in the handling [of] controlled substances clearly warrants finding that his continued registration is inconsistent with the public interest,’’ based on physician’s having ‘‘prescribed enormous quantities of highly addictive drugs to [ten] individuals’’ without adequate medical justification); Fairbanks T. Chua, 51 FR 41676, 41676– 77 (1986) (revoking registration under section 824(a)(4) and citing factor two, based, in part, on findings that physician wrote prescriptions which lacked a legitimate medical purpose; physician’s ‘‘improper prescribing habits clearly constitute grounds for the revocation of his . . . [r]egistration and the denial of any pending applications for renewal’’). * * * * * In his discussion of factor two, the ALJ also explained that: tkelley on DSK3SPTVN1PROD with NOTICES2 [o]n its face, Factor Two does not appear to be directly related to registrants like Dr. Pettinger. By its express terms, Factor Two applies to applicants, and calls for an inquiry into the applicant’s ‘‘experience in dispensing, or conducting research with respect to controlled substances.’’ Thus, it is not clear that the inquiry into Dr. Pettinger’s experience in dispensing controlled substances is warranted, given the limited scope of this factor. R.D. at 42. The ALJ nonetheless ‘‘assum[ed] [that] Factor Two does indeed pertain to both registrants and applicants.’’ Id. at 42; see also R.D. 56 (‘‘assuming Factor Two applies to both applicants and registrants’’). Contrary to the ALJ’s understanding, there was no need to assume that Factor Two applies to registrants. As demonstrated by the several hundred agency decisions which have considered all five of the public interest factors in revocation proceedings brought against practitioners, it does.12 See, e.g., Thomas H. McCarthy, 54 FR 20936, 20938 (1989) (revoking registration and holding that ‘‘[a]n applicant’s ‘experience in dispensing’ (which includes prescribing and administering), made applicable to registrants by 21 U.S.C. 824(a)(4), is a statutory factor which ‘shall’ be considered as set out in 21 U.S.C. 823(f)(2)’’). In section 824(a)(4), Congress provided the Agency with authority to suspend or revoke a registration ‘‘upon a finding that the registrant . . . has 12 In addition to the cases involving practitioners, there are numerous published decisions of revocation proceedings brought against other categories of registrants (such as list I chemical distributors) in which the Agency considered all of the public interest factors applicable to the particular category of registrant. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.’’ 21 U.S.C. 824(a)(4) (emphasis added). In section 823, Congress set for the registration requirements for each category of registrant under the CSA, including practitioners. See 21 U.S.C. 823(f). With respect to practitioners, the Agency has long and consistently held that all five of the factors set forth in section 823(f) are to be considered in making the public interest determination. See, e.g., McCarthy, 54 FR at 20938. To be sure, factors two and three refer to ‘‘[t]he applicant’s experience’’ and ‘‘[t]he applicant’s conviction record,’’ rather than ‘‘the registrant’s.’’ Id. As for why they do, the answer is obvious: The purpose of section 823 is to set forth the registration requirements, i.e., the criteria for determining whether the granting of an application for registration is consistent with the public interest. Given that the initial determination of whether ‘‘issuance of [a] registration . . . would be inconsistent with the public interest,’’ id., is made before an applicant is ever registered, it would make little sense to refer to ‘‘[t]he registrant’s experience.’’ Indeed, none of the factors applicable to any of the seven categories of registrant set forth in section 823 refers to ‘‘the registrant.’’ Implicit in the ALJ’s reasoning is the notion that only those public interest factors which do not explicitly reference ‘‘the applicant’’ should be considered in a proceeding brought under section 824(a)(4). Not only does the ALJ’s proposed construction place undue reliance on literalism while ignoring both the statute’s context and Congress’s purposes in enacting section 824(a)(4), it adoption would lead to strange results. For example, in the case of a list I chemical distributor, four of the five factors used in making the public interest determination refer to the ‘‘the applicant.’’ See 21 U.S.C. 823(h)(1)–(4). Accordingly, were I to adopt the ALJ’s interpretation, in a revocation proceeding, these four factors would be rendered null and the only factor to be considered would be ‘‘such other factors as are relevant to and consistent with the public health and safety.’’ Id. § 823(h)(5) (emphasis added). This begs the question of how the Agency would determine whether the factors asserted to be within this factor were truly ‘‘other’’ without having considered the other four factors. Moreover, under the ALJ’s interpretation, the factors to be considered in a revocation proceeding PO 00000 Frm 00009 Fmt 4701 Sfmt 4703 61599 brought against a practitioner would vary from case to case, depending upon whether the practitioner had filed any pending applications. Thus, where the practitioner has not filed a renewal application (or an application to modify his registration), only factors one, four, and five could be considered in determining whether the acts he committed render his registration inconsistent with the public interest. However, upon the practitioner’s filing of a renewal application (or application to modify), he would once again be an applicant and the Agency would then have authority (and be required) to consider all five factors in determining whether he had committed acts which ‘‘render his registration . . . inconsistent with the public interest.’’ 21 U.S.C. 824(a)(4). This is simply a prescription for inconsistent decisionmaking. Notably, the Agency has never interpreted the CSA in the manner suggested by the ALJ. Thus, while some of the earlier decisions in cases brought under section 824(a)(4) did not explicitly cite factor two (or the other factors for that matter), the Agency has long considered factor two in revocation proceedings brought under section 824(a)(4). See Tapia, 52 FR at 30459; Elliott, 52 FR at 36312; Chua, 51 FR at 41676–77. And in McCarthy, the Agency made explicit what was previously implicit (but was nonetheless the Agency’s practice), when it held that ‘‘[a]n applicant’s ‘experience in dispensing’ . . . [is] made applicable to registrants by 21 U.S.C. 824(a)(4), [and] is a statutory factor which ‘shall’ be considered’’ in a revocation proceeding. 54 FR at 20938. The Agency’s interpretation is fully supported by the legislative history of the Drug Enforcement Amendments to the Comprehensive Crime Control Act of 1984. See Public Law 98–473, § 512, 98 Stat. 2068, 2073 (1984). As the House Report explained, the ‘‘[i]mproper diversion of controlled substances by practitioners is one of the most serious aspects of the drug abuse problem. However, effective Federal action against practitioners has been severely inhibited by the limited authority in current law to deny or revoke practitioner registrations.’’ H.R. Rep. No. 98–1030, at 266 (1984), reprinted in 1984 U.S.C.C.A.N. 3182, 3448. Continuing, the House Report explained that: because of a variety of legal, organizational, and resource problems, many States are unable to take effective or prompt action against violating registrants. Since State revocation of a practitioner’s license or registration is a primary basis on which E:\FR\FM\03OCN2.SGM 03OCN2 61600 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices Federal registration may be revoked or denied, problems at the State regulatory level have had a severe adverse impact on Federal anti-diversion efforts. The criteria of prior felony drug conviction for denial or revocation of registration has proven too limited in certain cases as well, for many violations involving controlled substances which are prescription drugs are not punishable as felonies under State law. Moreover, delays in obtaining conviction allow practitioners to continue to dispense drugs with a high abuse potential even where there is strong evidence that they have significantly abused their authority to dispense controlled substances. Clearly, the overly limited bases in current law for denial or revocation of a practitioner’s registration do not operate in the public interest. tkelley on DSK3SPTVN1PROD with NOTICES2 Id. Congress thus amended section 823(f) ‘‘to expand the authority of the Attorney General to deny a practitioner’s registration application’’ based upon a finding ‘‘that registration would be ‘inconsistent with the public interest,’ ’’ by considering the five factors, which the House Report then set forth. Id. And Congress also amended section 824(a) ‘‘to add to the current bases for denial, revocation[] or suspension of registration a finding that registration would be inconsistent with the public interest on the grounds specified in 21 U.S.C. § 823, which will include consideration of the new factors added by section 509, as discussed supra.’’ Id. at 3449 (emphasis added). Notably, nowhere did the report suggest that the Agency should consider only those factors that do not use the words ‘‘the applicant.’’ Accordingly, consistent with the Agency’s longstanding interpretation,13 13 At the close of the hearing, the ALJ explained that while he had ‘‘seen court and DEA construction that assumes that factor 2 applies to registrants as well as applicants,’’ he was ‘‘in a learning curve here.’’ Tr. 500. The ALJ then explained that ‘‘I don’t see how factor 2 applies here at all,’’ even though ‘‘I have seen cases that tell me that I should be construing factor 2 as though it’s written for both the applicant and the registration [sic].’’ Id. at 500–01. The ALJ thus asked the parties to address ‘‘what your take is on that.’’ Id. The Government complied, yet even after the Government provided applicable precedent, see Gov’t’s Post-Hearing Br. 22–23 (citing Thomas H. McCarthy, 54 FR 20936, 20938 (1989)), the ALJ was apparently still unconvinced. See R.D. at 42. As stated above, there are several hundred Agency decisions which have applied factor two (as well as factor three) in section 824(a)(4) proceedings brought against practitioners. Moreover, having seen court decisions, none of which questioned the Agency’s longstanding construction of the statute, there was no reason to require the parties to brief the issue or to ruminate as to whether factor two even applies. It does. See Iran Air v. Kugelman, 996 F.2d 1253, 1260 (D.C. Cir. 1993) (quoting Joseph Zwerdling, Reflections on the Role of an Administrative Law Judge, 25 Admin. L. Rev. 9, 12– 13 (1973) (an ALJ ‘‘ ‘is governed, as is the case of any trial court, by the applicable and controlling VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 in future cases brought against practitioners under section 824(a)(4), the ALJ should rest assured that factor two (as well as factor three) applies in making the public interest determination. So too, in any proceeding brought under section 824(a)(4), the ALJ shall, in making the public interest determination, consider all of the public interest factors set forth in the relevant provision of section 823. To the extent the evidence submitted by either party is relevant under a particular factor, the ALJ shall make the appropriate findings. However, the ALJ’s failure to make findings under factor two does not alter the outcome of this matter. Because I agree with the ALJ’s conclusions of law that there is substantial evidence that Respondent issued nine prescriptions to the undercover agents in violation of 21 CFR 1306.04(a), because he lacked a legitimate medical purpose and acted outside of the usual course of professional practice, and this conduct is also properly considered under factor four (compliance with applicable laws related to controlled substances), I adopt the ALJ’s conclusion of law that ‘‘Respondent’s continued [registration] is inconsistent with the public interest’’ and ‘‘warrant[s] the revocation of’’ his registration and the ‘‘the denial of any pending application.’’ R.D. 57. And for reasons explained earlier, I also adopt the ALJ’s legal conclusion that Respondent authorized a prescription for hydrocodone after his registration had been suspended, and this conduct is also inconsistent with the public interest.14 Id. Finally, because Respondent has entirely failed to address the multiple acts of intentional diversion which he committed when he prescribed controlled substances to the undercover officers, I agree with the ALJ’s conclusion of law that ‘‘Respondent has failed to affirmatively acknowledge specific acts of improper prescribing,’’ id. at 58, and that he has not put forward sufficient evidence to show why he can be entrusted with a registration. See MacKay, 664 F.3d at 820. Accordingly, I will adopt the ALJ’s recommendation that I revoke Respondent’s registration and deny any precedents. These precedents include . . . the agency’s policies as laid down in its published decisions . . . Once the agency has ruled on a given matter . . . it is not open to reargument by the administrative law judge’ ’’)). 14 While I also adopt this conclusion, Respondent’s violations in prescribing controlled substances to the undercover agents provides more than sufficient evidence to support the revocation of his registration. PO 00000 Frm 00010 Fmt 4701 Sfmt 4703 pending applications to renew or modify his registration.15 Order Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a)(4), as well as 28 CFR 0.100(b), I order that DEA Certificate of Registration Number AP6572716, issued to Clair L. Pettinger, M.D., be, and it hereby is, revoked. I further order that any pending application of Clair L. Pettinger, M.D., to renew or modify the aforesaid Certificate of Registration, be, and it hereby is, denied. This Order is effective immediately. Dated: September 18, 2013. Michele M. Leonhart, Administrator. Paul Soeffing, Esq., for the Government Alan Kaplan, Esq., for the Respondent Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision of the Administrative Law Judge Nature of the Case Administrative Law Judge Christopher B. McNeil. Respondent Clair L. Pettinger, M.D., is registered with the Drug Enforcement Administration as an individual practitioner authorized to prescribe Schedule II–V controlled substances under DEA Certificate of Registration Number AP6572716, with an office at 4707 Greenleaf Court, Suite A, Modesto, California, 95356. His DEA Certificate of Registration expires by its own terms on March 31, 2015.16 He also is licensed to practice medicine as a physician and surgeon in the State of California under license number G29874, which will expire by its own terms on March 31, 2015.17 He has been licensed to practice medicine in the State of California since July 1, 1975 and has, heretofore, never been the subject of disciplinary actions by the DEA or by the State of California.18 On December 11, 2012, the DEA served Dr. Pettinger with an Order to Show Cause and Immediate Suspension of his DEA Registration dated December 10, 2012, whereby his DEA Certificate was suspended pursuant to 21 U.S.C. 824(d).19 The Government alleged Dr. Pettinger distributed controlled 15 For the same reasons that I ordered that Respondent’s registration be immediately suspended, I conclude that the public interest necessitates that this Order be effective immediately. 21 CFR 1316.67. 16 Per stipulation of the parties, see Order of February 5, 2013, ALJ Exhibit 13, at 1. 17 Tr. at 481. 18 Per stipulation of the parties, see Order of February 5, 2013, ALJ Exhibit 13, at 1. 19 Id. E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices substances to five undercover law enforcement officers outside the usual course of professional practice or for other than a legitimate medical purpose, in violation of 21 U.S.C. 823(f)(4) and 841(a)(1), and 21 CFR 1306.04(a). Further, the Government alleged that Dr. Pettinger prescribed a high volume of controlled substances, particularly oxycodone through September 2012.20 Based on this set of conditions, the Administrator suspended Dr. Pettinger’s Certificate effective immediately and provided Dr. Pettinger with the opportunity to show cause why this immediate suspension should end and why the Administrator should not permanently revoke Dr. Pettinger’s DEA Certificate. While this matter was pending before me, the Government alleged further that after the Immediate Suspension Order was issued and a served upon Dr. Pettinger, Dr. Pettinger issued a new prescription dispensing hydrocodone to a patient on December 21, 2012.21 Statement of the Issue tkelley on DSK3SPTVN1PROD with NOTICES2 The general issue to be adjudicated by the Administrator, with the assistance of this recommended decision, is whether the record as a whole establishes, by substantial evidence, that Dr. Pettinger’s continued DEA registration is inconsistent with the public interest, as that term is used in Sections 303 and 304 of the Controlled Substances Act, Title 21, United States Code, Sections 823 and 824. Under this Act, the DEA may revoke the Certificate of Registration of a Registrant upon sufficient evidence establishing that the Registrant’s continued registration is inconsistent with the public interest. Continued registration is inconsistent with the public interest if (among other bases) a Registrant who is otherwise authorized to prescribe controlled substances does so outside the usual course of his or her professional practice, or does so for other than a legitimate medical purpose. The specific issue is thus whether by at least a preponderance of the evidence the Government has established that Dr. Pettinger prescribed controlled substances to any of the five undercover agents outside the usual course of his professional practice or for other than a legitimate medical purpose. 20 At the hearing, the Government did not present evidence to support allegations in the Order to Show Cause that referred to Dr. Pettinger’s prescription history. Order to Show Cause and Immediate Suspension of Registration, at paragraphs 4(a) through 4(e), pages 3–4. These allegations therefore are not currently before me. 21 Government Prehearing Statement at 4. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 Summary of the Evidence The evidence in this record consists of recorded proceedings conducted during a brief hearing held in Arlington, Virginia on February 5, 2013 and a twoday hearing in Sacramento, California held on April 2–3, 2013, along with the documents admitted into evidence during those hearings. Included in the admitted exhibits are five audio recordings and six audio-visual recordings. By agreement of the parties, I listened to and, where appropriate, viewed the recordings after the evidentiary hearing was concluded. The contents of those recordings thus are part of the evidence now before me. The Government’s case is based in part on the testimony of five investigators who presented to Dr. Pettinger under assumed identities. Dr. Pettinger, who goes by Nate Pettinger, M.D., maintained a medical office under the name of Medical Cannabis of Northern California, or MCNC, at 2222 Watt Avenue Suite B1, Sacramento, California.22 Each of the five government investigators worked for federal agencies, including the DEA, the United States Department of Health and Human Services, and the FBI. DEA Special Agent Robert Kittrell testified regarding the overall scope of this investigation. Each of the participating undercover agents testified regarding what they heard and saw during their interactions with Dr. Pettinger, describing the discussion and examinations that preceded Dr. Pettinger’s issuance of a total of nine prescriptions for controlled substances. The Government then presented testimony from an expert medical witness regarding the nature of the examinations that led to Dr. Pettinger prescribing controlled substances to these undercover agents. The Government also called Dr. Pettinger as a witness, but after being sworn in and acknowledging his identity, Dr. Pettinger refused to answer further questions and invoked his Fifth Amendment right to avoid selfincrimination. Although he did not testify on his own behalf, Dr. Pettinger presented testimony from an employee and two patients, with the intention of demonstrating that it would be improper to make generalizations adverse to Dr. Pettinger’s regular practice based on the undercover activity. Without directly admitting to any violation of DEA diversion control regulations, Dr. Pettinger argues that the visits with the undercover agents are not 22 Government PO 00000 Frm 00011 Exhibit 25 at 1. Fmt 4701 Sfmt 4703 61601 indicative of his ordinary practice, urging that the Government’s evidence does not establish that he has in any way endangered the public. Further, Dr. Pettinger urges that I find that he has taken remedial steps appropriate under the circumstances, such that further action by the DEA is not warranted. After carefully considering the testimony elicited at the hearing, examining the admitted exhibits, evaluating the arguments of counsel, and weighing the record as a whole, I have set forth my recommended findings of fact, conclusions of law, and analysis below. Because I find that a preponderance of the evidence establishes that the Respondent’s continued registration would be inconsistent with the public interest, I recommend the Administrator revoke Dr. Pettinger’s DEA Certificate and deny any pending application for the same. Testimony From DEA Special Agent Kittrell Robert Kittrell is a DEA Special Agent with the Tactical Diversion Squad in the Sacramento District Office.23 Agent Kittrell has been a criminal investigator with the DEA since 1991. He attended a 14-week training academy at Quantico, Virginia, studying subjects that included a review of drug laws, tactical training, training in the use of firearms, training in investigations, training in the use of undercover agents, and training in financial investigations.24 He has furthered his studies through continuing education, including recent attendance at an 80-hour course in the investigation of controlled substance diversions involving pharmacies and doctors.25 Agent Kittrell described two kinds of controlled substance diversion: One involving drug gangs that send people to doctors’ offices with the intent to get prescriptions for controlled substances; and the other involving what Agent Kittrell described as ‘‘rogue doctors’’ who ‘‘will prescribe controlled substances to people without medical necessity.’’ 26 He said that characteristics of such rogue doctors include prescribing the controlled substances that patients ask for, with little or no medical evaluation. He explained that these doctors ‘‘will not ask for a lot of medical records’’ and are ‘‘just getting the patients in, writing them the script and getting them out.’’ 27 23 Transcript at 75. at 75–6. 25 Id. at 76. 26 Id. at 76–7. 27 Id. at 77. 24 Id. E:\FR\FM\03OCN2.SGM 03OCN2 tkelley on DSK3SPTVN1PROD with NOTICES2 61602 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices Agent Kittrell said that he served as the Case Agent—the agent in charge of the DEA’s investigation of Dr. Pettinger. He explained that an undercover investigator for the Department of Health and Human Services, Rob Breeden, approached him after Agent Breeden was able to obtain controlled substances without medical necessity.28 In response, the team supervised by Agent Kittrell began investigating Dr. Pettinger. According to Agent Kittrell, agents in these cases are trained to approach the Certificate holder equipped with recording devices. The agents will sometimes simply ask for pills and may speak vaguely about medical problems. ‘‘They’ll try to avoid answering questions. They won’t provide any medical records or, if they do, they’ll be falsified. . . . They won’t complain of any immediate pain. They won’t complain of any pain at all sometimes. They’ll basically give every indication they can that the drugs are going to be diverted or that they’re going to be abused or that there’s no medical need for it.’’ 29 On cross examination, Agent Kittrell elaborated on this approach, stating that undercover agents can be ‘‘vague’’ about whether they have any actual pain.30 When asked whether the agents were instructed to attempt to divert the doctor’s attention during these examinations, Agent Kittrell stated that ‘‘[w]e leave a lot of those things up to the undercovers themselves in each individual case because a lot of it has to do with what’s going on at the time. You know, is it possible for an undercover agent to try to be friendly with the doctor when it happens? Absolutely. Does that include extraneous conversations? Absolutely.’’ 31 He agreed with the premise that during their preparation for undercover assignments, agents are ‘‘instructed to not act like a legitimate patient,’’ but instead are to act the way a drug-seeking patient would act.32 Supporting the actions of the undercover agents were medical records and patient questionnaires prepared by the undercover officers and identified as Exhibits 25, 26, and 27.33 According to Agent Kittrell, Agent Breeden completed Exhibit 25, which encompasses the patient questionnaire for a fictional patient named Danny Daly, when he visited Dr. Pettinger.34 Similarly, FBI Special Agent Neeki Bianchi completed the patient questionnaire for a fictional patient named Nichole Hancock, shown as Exhibit 26.35 DEA Special Agent Bob Ghazanfari completed the patient questionnaire for a fictional patient named Reza Soltani, shown as Exhibit 27.36 Each of these records was submitted to Dr. Pettinger by the undercover agents, and was then recovered after Agent Kittrell obtained a search warrant to seize evidence from the doctor’s office and residence.37 According to Agent Kittrell, similar false medical files compiled for use by the other two undercover agents had been delivered to Dr. Pettinger in the course of the agents’ visits, but were not located during subsequent searches of Dr. Pettinger’s office or home.38 They were, however, provided by Dr. Pettinger after Agent Kittrell requested them.39 Upon execution of the search and arrest warrants Agent Kittrell participated in questioning Dr. Pettinger. According to Agent Kittrell, Dr. Pettinger said that when presented with a pain management patient, ‘‘he does a complete physical workup and that includes blood pressure, heart rate, respiration, height, weight, and a complete physical exam.’’ 40 Dr. Pettinger told Agent Kittrell that in these cases he would request the patient’s medical records, including any MRIs or x-rays, to evaluate the basis for the prescription being requested by the patient.41 Dr. Pettinger told Agent Kittrell he would perform a complete physical exam again on follow-up visits.42 According to Agent Kittrell, Dr. Pettinger stated ‘‘that he knew that he had a soft heart and that he was probably prescribing too much. He stated that about 20 percent of his patients were pill seekers and that 50 percent were probably receiving too many meds. He stated to me that he had received a lot of complaints from pharmacies, but if he was guilty of anything, he was guilty of not calling the pharmacies back, but he had been taking steps to correct that and trying to work with pharmacies so that they would accept his prescriptions.’’ 43 34 Id. at 81. 35 Id. 36 Id. 44 Id. at 82. 38 Id. 29 Id. at 77–8. at 78–79. 30 Id. at 95. 31 Id. 32 Id. at 96. 33 Id. at 80. 39 Id. VerDate Mar<15>2010 at 103, and Respondent’s Exhibits C and D. at 85–6. 41 Id. at 86. 42 Id. 43 Id. 40 Tr. 19:03 Oct 02, 2013 Jkt 232001 PO 00000 Frm 00012 at 86. at 87. 46 Id. at 104. 47 Id. at 105. 48 Id. at 106–7. 49 Id. at 108. 50 Id. at 109. 51 Id. at 110–1. 52 Id. at 87. 45 Id. 37 Id. 28 Id. According to Agent Kittrell, during this questioning Dr. Pettinger stated that if a patient came to him for pain medication and did not have any medical records, ‘‘he would only prescribe Norcos [hydrocodone] to begin with, which is a Schedule III narcotic.’’ 44 Further, he told Agent Kittrell that he was ‘‘taking steps to try to wean out or weed out problem patients . . . [and] if a patient came to him and stated that they were selling the pills, that he wouldn’t write a prescription.’’ 45 Agent Kittrell stated that, in addition to these efforts, Dr. Pettinger told him he was trying to identify patients who were ‘‘double dipping,’’ in that they were obtaining controlled substances from more than one doctor at the same time.46 According to Agent Kittrell, Dr. Pettinger reported that he was ‘‘really clamping down’’ on patients who appeared to be misusing medication and that as of July 2011 he had stopped accepting new patients.47 Asked on cross examination whether that is exactly what the DEA expects doctors to do, Agent Kittrell agreed that if there is abuse of prescription medication, double-dipping, or the use of fraudulent medical records, a doctor should discharge the patient.48 When asked whether this constitutes ‘‘remediation’’ by the doctor, Agent Kittrell stated, ‘‘Yes, it’s like that,’’—but clarified that this was ‘‘kind of like shutting the barn door after the cow got out[.]’’ 49 On cross examination Agent Kittrell agreed with the proposition that one way to verify whether Dr. Pettinger had engaged in remediation and reduced his prescribing would be to obtain patient activity reports from the California Substance Utilization Review and Evaluation (CURES) tracking system.50 Agent Kittrell said he obtained ‘‘some’’ reports on Dr. Pettinger’s patients from the CURES system, but he acknowledged that these reports were ‘‘not part of the evidence packages here.’’ 51 Agent Kittrell stated that he served an order of immediate suspension on Dr. Pettinger, telling him that ‘‘he was unable to dispense, prescribe, or otherwise issue controlled substances from that point on.’’ In response, Dr. Pettinger ‘‘stated that he understood that.’’ 52 Despite acknowledging this bar Fmt 4701 Sfmt 4703 E:\FR\FM\03OCN2.SGM 03OCN2 tkelley on DSK3SPTVN1PROD with NOTICES2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices to further prescribing, Dr. Pettinger did not stop writing prescriptions, according to Agent Kittrell. According to Agent Kittrell, the order of immediate suspension was delivered to Dr. Pettinger on December 11, 2012.53 Exhibit 24 is a photocopy of a prescription for patient B.D., directing dispensation of 180 units of Norco 10/ 325 (indicating 10 mg of hydrocodone and 325 mg of acetaminophen). This prescription predates the December 11, 2012 order, and it allows for two refills. Also in Exhibit 24 is a photocopy of records from Safeway Pharmacy #2242, located in Sacramento, California. The Medical Expenses record (page 4 of Exhibit 24) reflects that the prescription was first filled on October 22, 2012, and then again on November 12, 2012, and on December 3, 2012. Thus, by December 3, 2012, all of the authorized dispensations under this prescription had been filled. According to Agent Kittrell, at this point if a pharmacy were to dispense any additional narcotics, the patient would need to produce a new prescription.54 According to Agent Kittrell, despite being prohibited from prescribing controlled substances as of December 11, 2012, Dr. Pettinger authorized B.D. to receive an additional 180 units of Norco on December 21, 2012. Agent Kittrell identified a faxed Prescription Refill Request, shown at page 3 of Exhibit 24, and stated that this was a prescription issued by Dr. Pettinger after the effective date of the suspension order he received on December 11, 2012.55 Agent Kittrell stated that while doing routine follow-up work regarding Dr. Pettinger, he contacted the pharmacist responsible for dispensing the Norco equivalent to B.D. He testified that the pharmacist told B.D. that there were no remaining refills on the initial prescription, so the pharmacist sent a fax to Dr. Pettinger’s office. In response, the pharmacist received what has been marked as page 3 of Exhibit 24, through which Dr. Pettinger authorized the pharmacy to dispense 180 units of Norco to this patient.56 To support his contention that this dispensation was the result of a new prescription and not simply the refilling of the earlier one, Agent Kittrell stated that a pharmacist would have no obligation to contact the prescribing source if the prescription had valid refills that had not yet been dispensed. Given that the pharmacist here did see the need to contact Dr. Pettinger, it follows that the earlier prescription could no longer serve as a basis for dispensing another 180 units of Norco—and that the faxed sheet constitutes a new prescription.57 Agent Kittrell added that, about four days after he spoke with the Safeway pharmacist, he got a call from Dr. Pettinger, who asked if he could authorize a new prescription for a patient to whom he had previously prescribed narcotics. Agent Kittrell said he told Dr. Pettinger no, that only prescriptions that were written prior to December 11, 2012 could be filled or refilled, but that Dr. Pettinger could not authorize any new prescriptions.58 On cross examination, Agent Kittrell agreed with the premise that there is nothing in Exhibit 24 that establishes that Dr. Pettinger knew D.B. had already filled and refilled the earlier prescription to its limit.59 There is handwriting on page three of Exhibit 24 that uses the word ‘‘refill,’’ which Agent Kittrell agreed appears to have been written by Dr. Pettinger.60 This page, captioned ‘‘Prescription Refill Request,’’ appears to have been faxed from Dr. Pettinger’s office on December 21, 2012 (as it bears that designation on the bottom of the page). At the signature block, we see ‘‘N Pettinger MD—Can fill current refill No New Refill.’’ Above that, with an arrow pointing to the ‘‘No New Refill’’ language, there are two circles, one with ‘‘MD’’ and the other with ‘‘OK x 1’’, indicating that the pharmacist contacted Dr. Pettinger and was told it was okay to dispense 180 generic Norco tablets, despite the fact that the pharmacy had already dispensed all of the medication authorized by the prescription written by Dr. Pettinger on October 22, 2012.61 Despite the fact that the pharmacists would not have contacted Dr. Pettinger if refills remained on this prescription as of December 21, 2012, and despite the fact that the December 21, 2012 fax shows the pharmacist did contact Dr. Pettinger and was told it was okay to issue another 180 units of generic Norco, when Agent Kittrell was asked ‘‘You can’t state sitting here today that Dr. Pettinger knowingly issued a new prescription on December 21, 2012, in violation of the suspension order?’’ he responded ‘‘Knowingly? No.’’ 62 While this evidence does not establish that the pharmacist told Dr. Pettinger that B.D. filled this prescription three times already, it does establish that Dr. 57 Id. at 92. at 93. 59 Id. at 115. 60 Id. at 116. 61 Government Exhibit 24 at 3. 62 Tr. at 116. 58 Id. 53 Id. at 80. at 92. 55 Id. at 89. 56 Id. at 91. 54 Id. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 PO 00000 Frm 00013 Fmt 4701 Sfmt 4703 61603 Pettinger knowingly authorized another 180 unit dispensation after being called by the pharmacist, a condition that would not have existed had there been a refill available under the original prescription. Agent Kittrell also agreed with the proposition that persons who lie to doctors in order to get prescription medications are committing crimes and that in such cases the doctors are, to a certain degree, victims of those crimes.63 He agreed also that the five undercover agents who presented to Dr. Pettinger were engaged in acts that would be crimes if committed by private citizens.64 Consistent with this theory, but after the close of the hearing and after the time set for offering evidence had passed, counsel for the Respondent submitted a copy of a letter sent to GreenLeaf Urgent Care dated April 2, 2013, from the U.S. Department of Justice. The letter is addressed to Dr. Pettinger and contains information provided pursuant to the Department’s Victim Notification System. The letter states that Dr. Pettinger had been identified as a victim during an investigation involving twelve defendants, all of whom were named in the letter. The letter itself is silent with respect to the nature of the charges against these defendants, and does not indicate why or how Dr. Pettinger is regarded as a victim. The nexus between the letter and this administrative hearing is uncertain, but Respondent’s counsel in his cover letter states that ‘‘[w]e believe that the individuals listed in the letter received or obtained controlled substances in Dr. Pettinger’s name by means of criminal conduct for which they are now being prosecuted and which may also be relevant to the current DEA proceeding.’’ While not properly before me, this letter will be maintained as a proffer, identified in the record as ALJ Exhibit 22. Evidence From the Undercover Operatives Robb Breeden works as a Special Agent for the United States Department of Health and Human Services in its Office of the Inspector General, out of the Sacramento, California field office.65 He has worked there since 2007, and his training includes attendance at a fifteen week training course at the Federal Law Enforcement Training Center in Glencoe, Georgia, which included 120 hours of specialized tactical training and 120 hours of undercover training 63 Id. at 118. 64 Id. 65 Id. E:\FR\FM\03OCN2.SGM at 122. 03OCN2 61604 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices that included the identification of pills and drug diversion.66 According to Agent Breeden, after receiving an initial complaint regarding Dr. Pettinger, he made the first of four visits to the doctor’s office using the fictitious name of Daniel Joseph Daly on November 10, 2011, using an audio recorder. The recording from that visit appears in the record as Government Exhibit 5, and is accompanied by a transcript of the conversations recorded during that visit.67 Acting as Mr. Daly, Agent Breeden appeared for an appointment at Dr. Pettinger’s medical office on Watt Avenue in Sacramento.68 He stated that upon his arrival at the office, he found the office was locked and that Dr. Pettinger was not present.69 He stated that he then called Dr. Pettinger’s cell phone and reached the doctor, who told him he would be at the office in a moment. Upon Dr. Pettinger’s arrival, Agent Breeden greeted him while holding in one hand a small, travelsized bottle of scotch whiskey.70 Agent Breeden accompanied Dr. Pettinger into the doctor’s office, where Agent Breeden gave the doctor some medical records, some paperwork, and an MRI report.71 According to Agent Breeden, Dr. Pettinger noticed the bottle of scotch, commenting that it was easier to buy alcohol than cannabis.72 Agent Breeden identified Government Exhibit 25 as a copy of the patient questionnaire form filled out at Dr. Pettinger’s request. The first five pages of this form appear to be designed for a patient to provide identifying data and a medical history. As Agent Breeden noted in his testimony, the first page of Government Exhibit 25 (captioned ‘‘The California Compassionate Use Act of 1996, Eligibility Questionnaire’’) includes a statement requiring the applicant to state whether he or she is a ‘‘law enforcement officer, undercover officer or investigator for the Federal Government, State of California, county, city, or any other organization therein here today with the intent of 66 Id. at 123. at 123–4. 68 Id. at 124. 69 Id. at 126. 70 Id. and Government Exhibit 5, transcript at 1 (‘‘let me get rid of my lunch here’’). 71 Tr. at 126. 72 Id. and Government Exhibit 5, transcript at 2 (Agent Breeden: ‘‘But I can’t buy marijuana. It’s stupid.’’ Dr. Pettinger: ‘‘Right. Well, I mean, that that’s [unintelligible] you know, take the scotch and you can do that, but you can’t end up getting marijuana. It seems crazy, doesn’t it? The thing about it is you can’t even kill a baby with marijuana unless you stuff their mouth so full they can’t breathe; I mean you can’t get enough into ’em to kill ’em.’’) tkelley on DSK3SPTVN1PROD with NOTICES2 67 Id. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 investigating Medical Cannabis of Northern California or Nate Pettinger, M.D.’’ Pages 6 through 9 of Government Exhibit 25 are labeled ‘‘For Physician’s Use Only,’’ and consist of a single-page form apparently filled out by Dr. Pettinger on each of the four visits referred to by Agent Breeden: November 10, 2011, December 6, 2011, January 13, 2012, and May 9, 2012. Page 10 of this exhibit is a copy of a Physician Statement and Recommendation dated November 10, 2011 on which is also a copy of a California Driver License issued to Daniel Joseph Daly, identifying Mr. Daly as ‘‘a patient whose possession and/or cultivation of medical cannabis is permissible’’ under California law, signed by Dr. Pettinger and Agent Breeden as Daniel Daly. Accompanying this Physician’s Statement is a form captioned ‘‘Consent to Assume Risk for Medical Marijuana,’’ dated November 10, 2011, and signed by both Agent Breeden as Daniel Daly and Dr. Pettinger. Also included in Government Exhibit 25 are photocopies of four prescriptions, whose dates match the dates of Agent Breeden’s four office visits. In each instance, the prescriptions are signed by Dr. Pettinger under his office letterhead, and are for Oxycodone 30 mg IR [Instant Release]. In the prescription issued on the initial visit (November 10, 2011), Dr. Pettinger prescribed 120 units of this controlled substance. He prescribed 200 units in the prescription dated December 6, 2011, and 220 units for those dated January 13, 2012 and May 9, 2012. After Agent Breeden completed the requested paperwork, he met with Dr. Pettinger in the doctor’s office. He described the office as lacking things he would normally associate with a doctor’s office: there was no examination table, no eye chart, no scale—only a cuff for taking blood pressure and a stethoscope.73 Subsequent records, notably the video recordings at Exhibits 15, 17, 20 and 22, established further that the office that served for these examinations consisted of the doctor’s office desk and two upholstered office chairs. Agent Breeden explained that during this initial visit, he and Dr. Pettinger spoke for quite a while about the use of cannabis.74 He said at one point in the meeting, Dr. Pettinger did conduct a very brief physical examination, one that lasted ‘‘a couple of minutes’’ and consisted of Dr. Pettinger asking ‘‘a dozen or two health history questions 73 Tr. at 127. 74 Id. PO 00000 Frm 00014 Fmt 4701 Sfmt 4703 very quickly’’ and then feeling along his spine, and took a reading of his blood pressure.75 Although Agent Breeden complained of knee pain on his patient questionnaire,76 Agent Breeden expressly denied that Dr. Pettinger ever actually saw either of his knees—as he never removed his pants during this office visit.77 He said the only other physical contact with Dr. Pettinger came in the form of frisking the agent: ‘‘he patted me down. I think in my report at the time I thought he was patting me down for a weapon. He didn’t focus on the knee. It was basically like a frisk like a law enforcement officer would do.’’ 78 The recording of this office visit confirms the substance of Agent Breeden’s testimony: Dr. Pettinger spent a substantial percentage of this visit discussing how cannabis can be used medicinally. Although Agent Breeden told Dr. Pettinger he was experiencing knee pain, this subject did not come up in the conversation until 59 minutes had passed, and even then the topic was only briefly addressed by Dr. Pettinger. There is no evidence suggesting that Dr. Pettinger palpated the knee, checked for range of motion, or in any other way examined either of Agent Breeden’s knees during this visit. Agent Breeden testified that at no time did Dr. Pettinger actually look at his knees.79 Further, although the initial prescription written by Dr. Pettinger based on this visit including both oxycodone and cough syrup with promethazine and codeine, there is nothing in this record indicating the patient was experiencing a cough or needed cough syrup. In addition, the ‘‘For Physician’s Use Only’’ notes for the initial visit reflect clear respiration and full range of motion in the musculoskeletal system, indicating no medical basis for prescribing either pain medication or a cough suppressant.80 The record does show that in the medical records he presented to Dr. Pettinger, Mr. Daly reportedly had told a Dr. Fazeri that he was experiencing esophageal problems, as a basis for obtaining cough syrup.81 There is, however, no evidence indicating there were any complaints of cough presented during this initial meeting with Dr. Pettinger. Further, the record shows Agent Breeden mentioned having been treated for a possible plantar wart, which Dr. 75 Id. at 127–8. 76 Government Exhibit 25 at 3. at 162–3. 78 Id. at 163. 79 Id. at 133. 80 Government Exhibit 25 at 6. 81 Tr. at 155. 77 Tr. E:\FR\FM\03OCN2.SGM 03OCN2 tkelley on DSK3SPTVN1PROD with NOTICES2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices Pettinger agreed could result in back or knee problems.82 There is, however, no evidence in the Daly records or in the patient interview by Dr. Pettinger establishing the patient actually had back problems—whether caused by plantar warts or by any other condition. Agent Breeden was asked about the use of an MRI report in support of his request for pain medication. He said the MRI report is genuine and was based on an MRI he had taken at the Open Advantage MRI company, although instead of having his own name on the original report he altered it so that it appeared to refer to the fictitious Dan Daly.83 He said he did not actually have anything wrong with his knees, but that the results indicated he had a medial meniscus tear—something he was not aware of, but later learned that ‘‘if you take anybody over the age of 30 almost all of them are going to have a torn meniscus.’’ 84 He testified that during the initial visit he presented this altered report to Dr. Pettinger, who received it and noted its receipt in the physician’s note page (Government Exhibit 25, page 6).85 Agent Breeden stated that at the start of each of the three subsequent visits to Dr. Pettinger’s office, he was asked to produce the MRI, suggesting that the office had lost or misplaced the report.86 Notwithstanding the fact that the MRI was not found in these records, Dr. Pettinger proceeded to prescribe oxycodone to Agent Breeden after each office visit. During cross examination, Agent Breeden was asked whether he had deliberately attempted to divert attention during the initial office visit with Dr. Pettinger, out of a concern that ‘‘the record was starting to show that Dr. Pettinger was genuinely trying to give you medical treatment[.]’’ 87 That does not, however, appear to be the case. In my review of the record and after listening to all of the audio recordings and watching all of the video recordings, I found the more persistent pattern was that Dr. Pettinger paused for significant periods of time during all of his patient visits, that he tended to speak slowly, quietly, and with deliberation; that the pauses were sometimes prompted by his need to write down observations or other notes in the patient medical files; and that the patients (not just Agent Breeden, but all of the undercover investigators) filled in these gaps by chatting with the doctor, typically discussing extraneous matters to which Dr. Pettinger had earlier referred. Examples of these include Dr. Pettinger’s repeated references to notable football coaches Sandusky and Paterno; his description of using tinctures as a way of ingesting concentrated forms of cannabis; and the negative and hostile feelings he was experiencing after finding that someone had stolen the catalytic converter off of his car. I cannot conclude that the conversations engaged in by these agents were designed to divert Dr. Pettinger’s attention or keep him from performing a proper, adequate physical examination. To the contrary, most of the extraneous dialogue recorded here was occasioned by Dr. Pettinger himself. The record does, however, make it clear that each of the undercover agents tried to act like drug-seeking patients—a point Agent Breeden acknowledged in cross examination.88 The record reflects that Agent Breeden’s second visit to Dr. Pettinger’s Watt Avenue office on December 6, 2011 was substantially the same as the first visit.89 Notable in this context is the absence of evidence demonstrating that Dr. Pettinger performed any kind of physical examination of Agent Breeden’s knee prior to Dr. Pettinger writing a prescription for oxycodone, and that most of the examination was spent discussing the medicinal use of cannabis. Agent Breeden stated that Dr. Pettinger asked no questions about his pain level, made no attempt to palpate Agent Breeden’s knee, ‘‘did a quick palpation of my abdomen,’’ measured his blood pressure, and then ended the exam.90 Also notable was that at this meeting, after discussing the versatility of cannabis for medicinal purposes, Dr. Pettinger issued a prescription for Marinol as a means for justifying the presence of the active ingredients in cannabis in Agent Breeden’s bloodstream, should he ever have to submit to urinalysis or other drug screening after consuming products containing cannabis.91 HHS Special Agent David Kvach accompanied Agent Breeden on his second visit to Dr. Pettinger’s office. Agent Kvach has been a Special Agent for HHS since 2006. He has been trained at the Federal Law Enforcement Center and completed the Inspector General’s investigative training course.92 In 2008 he also completed the internal special 82 Id. 83 Id. 88 Id. 84 Id. at 164. at 166. 85 Tr. at 133. 86 Id. 87 Id. at 156. 89 Id. VerDate Mar<15>2010 at 157. at 134–6 and Government Exhibit 7. 90 Id. at 138. 91 Id. at 137. 92 Id. at 178. 19:03 Oct 02, 2013 Jkt 232001 PO 00000 Frm 00015 Fmt 4701 Sfmt 4703 61605 agent course provided by HHS; he completed electronics and technical surveillance training in 2009; he completed advanced undercover and survival techniques training in 2010; he completed undercover school in 2012; and he completed training in the narcotics, vice, and street crimes supervisor course in 2013. In many respects, his initial visit to Dr. Pettinger’s office resembled that of Agent Breeden. Using audio recording equipment and under the assumed name of Alex Gonza, Agent Kvach presented as a patient seeking medication for back pain.93 Agent Kvach identified Respondent’s Exhibit C, pages 3 through 7, as forms he filled out at this first visit.94 The recording revealed a meeting that lasted more than an hour, although here again, as was the case with the initial meeting between Agent Breeden and Dr. Pettinger, most of the time was spent discussing medicinal uses of cannabis.95 Agent Kvach described meeting with Dr. Pettinger after filling out some parts of these forms, and stated parts of the forms he left blank had later been filled in, although he could not say by whom.96 In both Agents Breeden’s and Kvach’s reports, they noted that although they left unanswered those questions regarding cannabis use, the forms now show someone (presumably Dr. Pettinger) filled in answers to these questions, presumably based on what was discussed during these initial visits—although I find this was not always the case, and find substantial evidence that Dr. Pettinger included complaints and diagnoses (including insomnia and back pain) that were never raised by the undercover agents or that were flatly denied by the agents. Agent Kvach confirmed Agent Breeden’s description of Dr. Pettinger’s office, noting the absence of an examination table and the very limited amount of examination equipment, which included a blood pressure cuff and a stethoscope, and little else.97 Unlike Agent Breeden, Agent Kvach brought no medical records with him for this first visit.98 Agent Kvach noted that Dr. Pettinger wrote on the patient history form that the patient ‘‘will be bringing MRI,’’ but that never actually happened.99 He explained further, on cross examination, that while Dr. Pettinger did not seek any x-rays, he did 93 Id. at 181. at 182. 95 Government Exhibit 9, audio recording and transcript. 96 Tr. at 183–4. 97 Id. at 185. 98 Id. at 187. 99 Id. 94 Id. E:\FR\FM\03OCN2.SGM 03OCN2 61606 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 ask Agent Kvach to obtain an MRI report: ‘‘He informed me that even if the MRI read out normal, he needed my MRI.’’100 Agent Kvach described Dr. Pettinger’s examination as ‘‘a cursory check’’ that included taking his blood pressure and putting a stethoscope under the agent’s jacket, possibly to listen to his heart and lungs.101 After this examination, Dr. Pettinger recommended medical marijuana and issued Agent Kvach a prescription for 120 units of oxycodone 30 mg IR, dated December 6, 2011.102 Agent Breeden returned for a third visit to Dr. Pettinger’s office on January 13, 2012, the substance of which was recorded by audio recording and is transcribed at Government Exhibit 11. I would note that the first 38 minutes of this recording have not been transcribed. From my review of the audio recording, I understand that this part of the recording was not transcribed because it represents the time Agent Breeden was in Dr. Pettinger’s waiting room, waiting for his appointment with Dr. Pettinger. The discussion recorded on the audio disc but not transcribed appears to be between Agent Breeden and Sean Ledford, the receptionist working in Dr. Pettinger’s office. As Agent Breeden correctly stated, all interactions between himself and Dr. Pettinger have been transcribed.103 Having listened to the discussion between Agent Breeden and Mr. Ledford, I note only that while the exchanges between Agent Breeden and Mr. Ledford have not been included in the written transcript, their absence is not legally significant. During this third visit, Agent Breeden introduced Dr. Pettinger to DEA Special Agent Daniel Patrick Moriarty, who was using the fictional name of Jason Kelly.104 Agent Moriarty has worked as a DEA Special Agent since 2004. He completed basic and advanced training at Quantico, Virginia, on subjects including firearms and enforcing narcotics laws.105 He testified about the one visit he made to Dr. Pettinger’s office on January 13, 2012, and identified the video recording and transcript of that visit.106 Agent Moriarty testified that he presented to Dr. Pettinger as a patient seeking medication for pain relating to ‘‘knee issues.’’ 107 Agent Moriarty said he presented the same MRI report that Agent Breeden had presented at his initial visit with Dr. Pettinger (save for the fact that when Agent Moriarty presented it, the document had been altered using Photoshop to show the name of Jason Kelly instead of Dan Daly).108 Agent Moriarty identified pages 2 through 6 of Respondent’s Exhibit D as the questionnaire he filled out at his visit to Dr. Pettinger’s office.109 As was the case with Agents Breeden and Kvach, Agent Moriarty described filling out parts of these forms, and later finding answers that he himself did not provide—including a claim of insomnia, which he stated he did not make either when filling out the form or during the patient interview that followed.110 Agent Moriarty described his initial visit with Dr. Pettinger in terms similar to those presented by Agents Breeden and Kvach. He said Dr. Pettinger’s exam included taking his blood pressure and pulse, and that he then ‘‘walked around his desk to where I was seated and kind of I guess pushed my shoulders or touched my shoulders. He had a reflex tool and tapped each knee. That’s kind of it. I think he looked in my ears.’’ 111 He said the entire exam was performed while he was seated in the office chair next to the doctor’s desk, and that the doctor never required the agent to remove his jeans in the course of this exam.112 Based on this examination, Agent Moriarty was able to obtain a prescription for 180 units of oxycodone 30 mg IR.113 Agent Kvach returned to Dr. Pettinger’s office on January 24, 2012, for a second visit, this time accompanied by FBI Special Agent Neeki Bianchi.114 Agent Bianchi has been a Special Agent with the FBI for nine years.115 She stated that during this service, she trained for four months in Quantico, Virginia, and has subsequently been trained in counterterrorism, healthcare fraud, and undercover operations.116 She said she made one undercover visit to Dr. Pettinger’s office using the name Nicole Hancock, and identified Government Exhibit 17 as a video recording and transcript of that visit.117 According to Agent Bianchi, she and HHS Special Agent Kvach represented to be boyfriend and girlfriend for this 108 Id. at 248, 276. at 269. 110 Id. at 270. 111 Id. at 271. 112 Id. at 272. 113 Id. at 273 and Government Exhibit 12. 114 Tr. at 189. 115 Id. at 221. 116 Id. 117 Id. at 222, 224. visit and met jointly with Dr. Pettinger, with Agent Kvach returning in his role as Alex Gonza.118 Both Agent Bianchi and Agent Kvach recorded this meeting, although for approximately ten minutes Agent Kvach absented himself from the office visit so that he could use the men’s restroom and smoke a cigarette. Regrettably, both of those events are part of the video recording offered by the Government as Exhibit 15, although they lend no substance to this report. On the other hand, the recording created by Agent Bianchi (found at Government Exhibit 17) captured without interruption the entire office visit she and Agent Kvach had with Dr. Pettinger on January 24, 2012. In her testimony, Agent Bianchi summarized her meeting with Dr. Pettinger. She recalled telling Dr. Pettinger she used cannabis recreationally, but that she was meeting with him in order to get a prescription for pain medication.119 During the joint interview, Agent Kvach in his role as Alex Gonza told Dr. Pettinger that Ms. Hancock had been using his oxycodone, and Agent Bianchi did not dispute this, but instead stated she was there to obtain an oxycodone prescription for her own use.120 When Dr. Pettinger asked whether she was experiencing pain, she said no; and she gave the same answer when he asked whether she was having difficulty sleeping.121 When he asked why she needed pain medication, Agent Bianchi responded by saying the medication makes her talkative and happy.122 In response, Dr. Pettinger told Agent Bianchi that in order to obtain a prescription for oxycodone, she would need to arrange to have an MRI taken and have the results filed with his office.123 When Agent Bianchi asked Dr. Pettinger how to go about getting an MRI, specifically asking him what kind of pain she needed to report in order to justify getting an MRI that would serve this purpose, Dr. Pettinger told her to report pain in her back that radiates down to her leg.124 Before ending this office visit, Dr. Pettinger checked Agent Bianchi’s blood pressure and ‘‘ran his hand from [her] lower back to [her] upper back[.]’’ 125 At that point, Dr. Pettinger wrote a prescription authorizing an MRI, recommended her for medical marijuana, and issued a 109 Id. 100 Id. at 201. at 185–6. 102 Id. and Government Exhibit 8. 103 Id. at 141. 104 Id. at 146, 241. 105 Id. at 241. 106 Id. at 242 and Government Exhibit 13. 107 Tr. at 247. 101 Id. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 PO 00000 Frm 00016 Fmt 4701 Sfmt 4703 118 Id. at 224. at 225 and Government Exhibit 17. 120 Tr. at 225. 121 Id. at 226–7 and Government Exhibit 17. 122 Tr. at 226 and Government Exhibit 17. 123 Tr. at 226. 124 Id. 125 Id. 119 Id. E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 prescription for 90 units of oxycodone 30 mg IR.126 As was the case when Agents Breeden and Kvach first met with Dr. Pettinger, Agent Bianchi testified that although she left many of the questions unanswered in the initial patient questionnaire, Dr. Pettinger appears to have filled in answers that had been left blank—in any event, the agent stated she herself did not answer these questions, and assumed the answers were written in by Dr. Pettinger. She expressly denied any complaint of insomnia or back pain, although these ailments were listed as medical complaints in her patient questionnaire.127 DEA Special Agent Babak Ghazanfari testified about his visit to Dr. Pettinger’s office. Agent Ghazanfari has worked for the DEA for approximately five years, and is currently assigned to the Tactical Diversion Squad in the Sacramento District Office.128 His training includes completion of approximately nineteen weeks of training at the Justice Training Center in Quantico, Virginia on all aspects of drug enforcement, including surveillance techniques, defensive tactics, and arrest procedures.129 Agent Ghazanfari said he went to Dr. Pettinger’s Modesto, California office on March 20, 2012, and identified Government Exhibit 20 as the audiovisual recording of that visit. Using the fictional name of Reza Babak Soltani, Agent Ghazanfari completed the patient questionnaire shown in Government Exhibit 27, and met with Dr. Pettinger shortly thereafter.130 Agent Ghazanfari testified that although Dr. Pettinger’s physician notes indicate a complaint of left knee pain, the agent never made any such complaint to Dr. Pettinger—a point that is confirmed by the recording made during this office visit. To the contrary, when Dr. Pettinger asked ‘‘so the knee is what’s bothering you?’’ Agent Ghazanfari responded ‘‘well, used to, used to’’ and when the doctor followed that with ‘‘so the weather gets to you a little bit with it?’’ the agent responded ‘‘nah, it’s not really bothering me all that much.’’ 131 The record establishes that Nikki, who was Dr. Pettinger’s assistant at the Modesto office, took Agent Ghazanfari’s blood pressure,132 and Dr. Pettinger himself used an otoscope to examine the 126 Id. at 227 and Government Exhibit 16 at 1–2, Government Exhibit 26 at 8–9. 127 Tr. at 230 and Government Exhibit 17. 128 Tr. at 279. 129 Id. 130 Id. at 284. 131 Government Exhibit 20, audio-video recording and transcript at 7. 132 Tr. at 286. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 agent’s ears, and used a stethoscope to examine heart and lung sounds.133 According to Agent Ghazanfari, Dr. Pettinger conducted ‘‘a patdown, touched certain parts of my body, rubbed my neck, kind of felt around me, tapped on my knees a little bit, and then he put his stethoscope up to my heart or the area of my heart and began to tell me that I had some irregular heart beat or something to that effect,’’ all while the agent remained seated.134 Dr. Pettinger also had the MRI Agent Breeden referred to, this time altered to reflect that it referred to Reza Soltani.135 When Dr. Pettinger inquired about the medication Agent Ghazanfari was currently taking, he responded by saying he was taking Percocets, Norcos, and oxys, and that ‘‘oxys are the ones that do it for me,’’ but that he was obtaining them from the street, not through any valid prescriptions.136 At the conclusion of this meeting, Dr. Pettinger presented the agent with a prescription for 150 units of oxycodone 30 mg IR.137 Agent Breeden made one final visit to Dr. Pettinger’s office, on May 9, 2012.138 During this visit, much of the time the doctor spent with Agent Breeden was dedicated to discussing problems Dr. Pettinger was having with pharmacists, who were starting to reject his prescriptions.139 Dr. Pettinger made the point that he ‘‘wrote more prescriptions [for oxycodone] than 50 doctors combined,’’ and was irritated by questions presented to him by pharmacists, some of which arose because his first name is Clair, which leads on occasion to uncertainty about whether the prescribing doctor is male or female, resulting in a lot of unnecessary questions. 140 Agent Breeden described Dr. Pettinger performing a medical exam that was similar to previous exams, in that it was short and involved only a blood pressure check and stethoscope monitoring of the chest area.141 At one point in this meeting, Agent Breeden told Dr. Pettinger that he had used some of the prior oxycodone prescription to ‘‘pay back’’ a third person, at which point Dr. Pettinger told him that he would not continue to issue prescriptions for oxycodone if the 133 Government Exhibit 20, audio-video recording and transcript at 17. 134 Tr. at 288. 135 Tr. at 285. 136 Id. at 292 and Government Exhibit 20, audiovideo recording and transcript at 12. 137 Tr. at 289 and Government Exhibit 19. 138 Tr. at 147. 139 Id. at 149 and Government Exhibit 22. 140 Id. 141 Id. PO 00000 Frm 00017 Fmt 4701 Sfmt 4703 61607 patient was selling or giving pills away.142 When Agent Breeden assured Dr. Pettinger he would no longer give away or sell his pills, Dr. Pettinger wrote a prescription for 220 units of oxycodone 30 mg IR.143 When asked on cross-examination whether he ever felt in danger while in Dr. Pettinger’s presence, Agent Breeden said he did indeed feel in danger, noting first that the doctor told him he possessed a .357 handgun and hollow point bullets, and then noting the doctor’s agitation when describing how he would use the weapon.144 Testimony From the Government’s Expert Medical Witness The Government’s expert witness was Barbara Neyhart, M.D. Dr. Neyhart has been a physician for 35 years, and currently works at the University of California—Davis Medical Center.145 After completing medical school at Rush Medical College in Chicago, Dr. Neyhart completed residencies in internal medicine and family medicine, and has been a clinical professor at the School of Medicine at the University of California—Davis since 1984.146 She also maintained a family medical practice in both office and clinical settings.147 Through this course of practice, Dr. Neyhart has often encountered drug-seeking patients as well as patients with legitimate chronic pain symptoms.148 She has experience treating persons with chronic pain and with prescribing medication for persons with chronic pain.149 She has provided medical testimony as an expert for the Licensing Division of the State of California for more than ten years, and was a general medical consultant for the Division prior to her service as an expert.150 In order to prepare for this hearing, Dr. Neyhart read the exhibits presented to her, and reviewed the recordings that are part of our record, spending approximately 16 hours doing so.151 After presenting her curriculum vitae (Government Exhibit 28), the Government offered Dr. Neyhart as an expert medical witness in the standard of care for patients with pain complaints who are being treated by general 142 Id. 143 Tr. at 150 and Government Exhibit 21. at 153. 145 Id. at 312. 146 Id. at 314. 147 Id. 148 Id. at 314–5. 149 Id. at 315. 150 Id. at 316. 151 Id. at 451–2. 144 Tr. E:\FR\FM\03OCN2.SGM 03OCN2 61608 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 practitioners.152 During voir dire of the witness, Respondent’s counsel established that Dr. Neyhart believes she is ‘‘no less [an expert in pain management medicine] than [Dr. Pettinger].’’ 153 She stated that while she has not testified in medical board cases that focus on the long-term use of opiates for the management of chronic non-cancer pain, she has reviewed such cases.154 The record shows that Dr. Neyhart currently staffs the Breast Health Clinic, serving women who have recently been diagnosed with a newly manifested breast mass, a position that does not call upon her to decide whether or not to embark on long-term opioid therapy.155 That being said, however, she stated in the last five years she has been called upon to decide whether to embark on long-term opioid therapy for non-cancer pain between one and five times a week, until she took her most recent position eighteen months ago.156 Dr. Neyhart said within the subset of cases where she was called upon to make such determinations, she has prescribed oxycodone possibly one or two times weekly.157 As such, Dr. Neyhart established she had significant clinical experience treating persons with chronic pain, including experience using oxycodone in those treatment plans. Based on the answers provided during this part of the examination, the Respondent made no objection to my finding Dr. Neyhart to be an expert, asking only that the limitations presented during voir dire be taken into account when weighing any opinions rendered by the witness.158 As a result, I granted the Government’s motion to have Dr. Neyhart regarded as a medical expert, under the scope presented by the Government.159 Dr. Neyhart began by describing in general terms what the standard of care calls for when a patient presents with a complaint of pain. In these cases, the physician must take a complete medical history with respect to the pain complaint, including ‘‘when did it start; was there a trauma that caused this to start; what is the degree of pain that is currently being suffered.’’ 160 She noted that doctors will sometimes use a numeric scale of one to ten when questioning about the degree of pain at 152 Id. at 317. at 318. 154 Id. at 320. 155 Id. at 321. 156 Id. at 322. 157 Id. at 323. 158 Id. at 324. 159 Id. at 325. 160 Id. issue.161 Beyond these metrics, Dr. Neyhart said the history must also include information about the character of the pain (sharp or dull); the frequency of the pain (constant, periodic, or intermittent); the degree of interference with day-to-day activities and with the ability to seek gainful employment and engage in intimate and non-intimate relationships; and whether there is a psychological impact occasioned by the pain. She said the doctor also needs to inquire about the different modalities of relief sought to date: what have other doctors said and done, what surgeries have been proposed, and what physical therapy has been undertaken? 162 Equally important, according to Dr. Neyhart, is the history of medications used thus far: what medications were used, were the medications effective, were there side effects of note? 163 Dr. Neyhart examined the patient questionnaires presented in the exhibits. She noted that generally, the patient questionnaires she encounters do not call for the prospective patient to disclose whether he or she is a law enforcement officer, and she saw no reason to inquire about the birth order of the patient. Nevertheless, Dr. Neyhart did not describe these forms as deficient.164 She acknowledged that the forms are designed for use in cases involving medicinal cannabis use under the California Compassionate Use Act, and stated she has testified in cannabis cases and found these forms to be similar to those she has seen in those cases, but that such forms would be considered nonstandard in the course of a family practice.165 Dr. Neyhart next examined the Physician Notes form found in these patient records, describing the form itself as ‘‘a fairly standard document on which a physician would record elements of the history that were not recorded in the questionnaire and also the objective physical exam findings.’’ 166 Each of these lines has a specific significance, according to Dr. Neyhart. She explained the role each plays in the examination, noting the significance of objective findings— findings not dependent on the stated history, but on objectively determined data. These include vital sign measurements—blood pressure, pulse rate, respiration rate, and weight.167 They also include physical examination of the head, eyes, ears, nose and throat; the respiratory system including the lungs; the cardiovascular system including the heart and peripheral pulses; the abdomen, the musculoskeletal system, and the integumentary system (skin surfaces).168 According to Dr. Neyhart, the objective exam calls for the use of objective measurements: blood pressure would be taken by a standard blood pressure cuff; pulse counts would be taken by counting the pulse bounds; and weight would be taken by a scale.169 She said that a cursory exam could be taken in as little as five minutes, while a more thorough exam could take as long as half an hour.170 Next on the form is ‘‘Impression,’’ which affords the physician an opportunity to take the history and physical exam information and render a diagnosis or, more commonly, a range of diagnoses.171 Thus, an impression is not a recapitulation of the chief complaint— instead, it is the result of the physician digesting both the subjective history and objective facts, resulting in a diagnosis.172 Later, Dr. Neyhart explained that ‘‘[t]he ‘chief complaint’ is really and truly what the patient says. It’s not what is determined after an extensive history is taken. Most of the time actually the chief complaint is determined by a medical assistant, not by a highly trained clinical professional such as a physician.’’ 173 The Recommendation line provides a place for the physician to describe the plan for this patient: ‘‘so, for a complaint of pain . . . there are many ways to relieve pain. They can involve physical therapy. It can involve application of ice, the change in the activity that is causing the pain. There are many different things. But it can also involve the prescribing of therapeutics and there is a range of therapeutics that can be prescribed.’’ 174 Addressing next the records she reviewed, Dr. Neyhart said she read the patient records and listened to and watched the recordings obtained by the undercover agents in preparation for her testimony. Based on this, Dr. Neyhart was asked a series of questions about the events depicted in these recordings. In her review of the first visit by Agent Breeden to Dr. Pettinger’s office, Dr. Neyhart noted first the language used by the agent in offering his MRI to 153 Id. VerDate Mar<15>2010 161 Id. 168 Id. 162 Id. 169 Id. at 325–6. 163 Id. at 326. 164 Id. at 326–7. 165 Id. at 328. 166 Id. at 329. 167 Id. at 332–3. 19:03 Oct 02, 2013 Jkt 232001 PO 00000 Frm 00018 Fmt 4701 at 333–4. at 334. 170 Id. 171 Id. at 334. at 335. 173 Id. at 432. 174 Id. at 336. 172 Id. Sfmt 4703 E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 Dr. Pettinger. She observed that in a ‘‘standard medical visit,’’ a patient would offer a complaint of pain, saying something like ‘‘I hurt my knee,’’ whereas here, the agent said words to the effect that he was giving the doctor a copy of his MRI because ‘‘I knew you needed something for your records.’’ 175 Dr. Neyhart explained that ordinarily a history of present illness ‘‘would tend to go along the lines of ‘Have you had any previous testing? May I review that previous testing so I can use it in the course of formulating the diagnosis?’ Not in order of justifying a later prescription.’’ 176 Dr. Neyhart next considered Agent Breeden’s discussion with Dr. Pettinger regarding sleep. She described sleep difficulty as ‘‘a very common complaint,’’ and one that ‘‘doesn’t really stand out as a unique thing.’’ 177 According to Dr. Neyhart, if sleep disorder is a ‘‘dominant complaint, a physician operating within the standard of care would inquire [in] more detail what strategies had been employed by this individual to solve their sleep problems that did not involve the use of medication.’’ 178 This would include questions such as ‘‘[d]o they calm down at the end of the day? Do they not eat huge meals at the end of the day? Alcohol commonly can interfere with sleep, and [the character Agent Breeden was playing] was of a misuser of alcohol. So alcohol would factor rather significantly into any inquiry into sleep.’’ 179 Dr. Neyhart next considered the colloquy between Agent Breeden and Dr. Pettinger regarding the putative patient’s admission that he ‘‘basically uses whatever opioids he can get his hands on rather than a more systematic fashion as would customarily be used for somebody who is under treatment for chronic pain condition.’’ 180 Such a patient presentation would, in Dr. Neyhart’s opinion, constitute a red flag for abuse.181 She said another red flag arose when the agent was vague about treatment in the past, locations for such treatment, and providers of such treatment. She explained that such vagueness gives rise to a concern for doctor shopping.182 Similarly, where the agent told Dr. Pettinger words to the effect that he could not recall whether he had knee pain or back pain, she was 175 Id. 176 Id. 183 Id. 184 Government 180 Id. 181 Id. at 339. VerDate Mar<15>2010 Exhibit 5, recording and transcript at 33. 185 Tr. at 340. 186 Id. 187 Government Exhibit 5, recording and transcript at 37. 188 Tr. at 341. at 338. 179 Id. 182 Id. 19:03 Oct 02, 2013 be ‘‘a red flag for most clinicians for a patient to come in with a complaint but really direct the encounter towards obtaining the specific remedy for the complaint, especially if said remedy is a controlled substance.’’ 189 Dr. Neyhart next considered the exchange between Agent Breeden and Dr. Pettinger in which Dr. Pettinger asks ‘‘Okay. So basically you want to be given oxycodone?’’ 190 Dr. Neyhart explained that after listening to the audio recording and reading the transcript, ‘‘this seemed more of a business negotiation than a clinical encounter to me. A clinical encounter would be, ‘Let’s get back to your knee pain and what is the best way to relieve your knee pain.’ This . . . had more of a flavor of, ‘So what is it that you want from me in terms of a prescription?’ ’’ 191 She expressed a similar concern regarding the exchange between Agent Breeden and Dr. Pettinger in which Dr. Pettinger explained that prescriptions for Norco could include refills, but those for oxycodone cannot. She said ‘‘[t]hat should not factor into the decision of what is the most appropriate treatment.’’ 192 Dr. Neyhart was asked to offer her impressions about the responses found in the patient questionnaire for this encounter. One red flag, according to Dr. Neyhart, is that the patient indicates he works as a ‘‘tile man,’’ but after listening to the patient interview and exam, she said ‘‘nowhere is the information that I listened to or read was there any conversation about how his pain condition was interfering with his ability to be a tile man. It seems to me that it would be very hard to be a tile man if you had knee pain or back pain.’’ 193 In addition, Dr. Neyhart observed that while the patient reported drinking ten drinks per week, and while that amount itself is not excessive, the character being portrayed by Agent Breeden ‘‘disclosed that there was a much greater use of alcohol’’ than was reported in the questionnaire.194 Elaborating on this point, Dr. Neyhart said that if a patient presented to her in her office holding a bottle of alcohol, as was the case with Agent Breeden, this would have caused a concern on her part, ‘‘because that is so inappropriate . . . in the middle of a clinical 189 Id. at 336–7. at 337. 177 Id. 178 Id. ‘‘not very clear from this exchange whether or not the pain is driving the clinical encounter or the desire for a preconceived prescriptive opioid is driving that encounter.’’ 183 During the initial medical examination, Dr. Pettinger asked Agent Breeden if he had any of the following conditions: nosebleeds, sore throat, difficulty swallowing, respiratory problems, asthma, bronchitis, pneumonia, irregular heartbeat, chest pain, [something that was unintelligible], fever, scarlet fever, GI problems, nausea, vomiting, diarrhea, hepatitis, pancreatitis, urinary difficulties, kidney stones, or blood in the urine.184 I listened to this recitation, and found it to be presented with such great speed and lack of interest as to be almost a sham. Dr. Neyhart was more charitable in her description, stating that, ‘‘I listened to this recording and what was impressive to me was how rapidly this particular array of symptoms was recited by Dr. Pettinger. I would not have been able to follow it myself, and I consider myself a person who is familiar with medical language.’’ 185 The words followed one to the next without pause and without distinction. As Dr. Neyhart explained, ‘‘[t]he standard practice would be to separate it out. Do you have any problems with your eyes, nose or throat? Pause for response. Do you have any problems with lumps or bumps in your neck or problems with your thyroid? Pause for response. Do you have any problems with breathing or shortness of breath or asthma or wheezing? Pause for response.’’ 186 Having listened to this presentation of symptoms, I too found Dr. Pettinger’s questions to have been perfunctorily presented in a manner not designed to elicit a meaningful response. Next, Dr. Neyhart was asked about the exchange between Agent Breeden and Dr. Pettinger during which Dr. Pettinger asked whether the patient intended to grow cannabis. In response, the agent stated ‘‘um, probably not. Really, um, I just wanted to get, ah the—my meds; that’s the main thing I was trying, ‘cause we talked on the phone and you said, um, the discount.’’ 187 Dr. Neyhart stated that in this exchange, the agent ‘‘was really getting down to his agenda, and his agenda was to obtain a prescription.’’ 188 This, she said, would 61609 Jkt 232001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4703 190 Id. at 342, quoting Government Exhibit 5, at 41 (Dr. Pettinger: ‘‘ok so basically you want to end up getting the oxycodones. You want the IRs, the 30 IRs?’’ Agent Breeden: ‘‘ah yea.’’) 191 Tr. at 342. 192 Id. at 343. 193 Id. 194 Id. E:\FR\FM\03OCN2.SGM 03OCN2 61610 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 encounter.’’ 195 She also noted that the patient (on page five of the questionnaire) reported ‘‘an array of different opioid medications that are listed as presently using,’’ but that the patient ‘‘had purportedly not seen a physician since his days in Florida except for perhaps one encounter with a physician in Sonoma County. So there is an inconsistency about how these substances would have been obtained in the course of a legitimate medical encounter.’’ 196 Dr. Neyhart next described her impressions of the physician notes found on page six of this patient’s records. She identified several areas of concern: [T]he first thing that stood out for me is there is really not much detail with regard to the history of present illness recorded there. There is no indication about how long knee pain has been present, no indication of whether or not other modalities of treatment have been employed or prior imaging or prior consultations. There’s just not a lot of detail. I don’t get the idea from what is recorded there, nor did I get any impression from the transcript or the recording of the degree of pain that was being suffered on a scale of one to ten, or even using such words as mild, moderate or severe. None of that language was employed. I also don’t get an impression from this form of whether or not there is periodicity to the pain or an intermittent nature to the pain, or how it is interfering with occupational work. I mean, it’s just not there. The next thing that came up for me on this is that the weight is recorded, and my understanding was that there was not a scale in Dr. Pettinger’s office because there is much interchange about what is your weight, and then Dr. Pettinger would record whatever number the agent posing as a patient would state. So the weight as recorded here, it is implied that it was actually objectively determined, but actually it wasn’t. It was actually a piece of history and . . . in the customary course of medical practice you might write up under review of systems ‘Patient states weight is X’. The next thing that shows up for me is a very detailed examination of the HEENT, although that was not really relevant to the pain complaint, and a very non-detailed examination of the musculoskeletal system, although that was quite relevant to the pain complaint, the pain complaint being knee pain. One would customarily expect to see a highly detailed knee examination and an examination of the joints on either side of the knee, that being the ankle and the hip. With a complaint of back pain, there would be a full examination of the back, and that would involve a palpitation of [the] entire spine by range of motion of the entire spine, [the] integrity of the nerve roots emanating from the spine. These are not evaluations that can be made in a fully clothed patient seated on a standard chair, and it was my impression of little snippets of video that I was able to see that there was no exam table in Dr. Pettinger’s office, nor were the characters asked to remove their clothing.197 Dr. Neyhart was asked considering the recording and transcript, and considering the medical records presented regarding this encounter, whether (in her expert opinion) the issuance of prescription medications recorded here was legitimate. In response, Dr. Neyhart stated ‘‘there is no evidence that this prescription was provided in the course of usual medical care for a pain condition.’’ 198 She explained that ‘‘[t]he agent comes to Dr. Pettinger with a complaint of pain. There was a very limited history taken pertaining to the pain complaint. There was no examination that I could see, that I could discern was done in the area of the pain complaint. Thus, no diagnosis could be rendered beyond ‘patient states pain.’ While ‘patient states pain’ is commonly the case, there are many ways to address a complaint of pain that do not involve the prescribing of controlled substances.’’ 199 In her evaluation of each of the other patient encounters presented her, Dr. Neyhart found similar areas of concern. These included: • Prescribing a synthetic form of cannabis (Marinol) not for treatment purposes but to help the patient (Agent Breeden) avoid problems with employers or law enforcement personnel; 200 • Failing to maintain control over the MRI provided by Agent Breeden, and failure to request a replacement copy during the course of his treatment; 201 • Failing to adequately inquire in follow up visits, to determine whether prescribed medications worked as intended and whether they caused any adverse reactions for the patient (Agent Breeden); 202 • Describing in written physician’s records a ‘‘quite extensive’’ physical examination, where the actual time that elapsed (as revealed in the audio recording) ‘‘was very, very brief, so it’s impossible . . . to imagine how such a complete physical examination had been performed’’; 203 • Failing to resolve inconsistency in Agent Breeden’s report that he was working out and running on the one hand, with his complaint of knee pain on the other hand; 204 at 346. 196 Id. at 344. VerDate Mar<15>2010 197 Id. 198 Id. at 344–6. at 347. 199 Id. 200 Id. at 349. 201 Id. at 353. 203 Id. 204 Id. 19:03 Oct 02, 2013 Jkt 232001 205 Id. at 356. at 363. 207 Id. at 364. 208 Id. at 366. 209 Id. at 366–8. 210 Id. at 367. 211 Id. at 368. 212 Id. at 368–9, 372–3. 213 Id. at 374–5, 377. 214 Id. at 376–7, 406–7. 206 Id. 202 Id. 195 Id. • Failing to address information provided by Agent Breeden that he diverted some of the previously prescribed units of oxycodone for profit or to pay off a debt; 205 • Failing to address red flags associated with self-reported substance abuse in a patient (Agent Kvach) presented to Dr. Pettinger for the purpose of obtaining controlled substances for a third person; 206 • Failing to inquire further regarding prior prescriptions that had been issued to a patient (Agent Kvach) outside of the course of a medical encounter; 207 • Failing to resolve the red flag that arose when a patient asked for a particular prescription by brand name, by milligram amount, and by quantity (Agent Kvach); 208 • Requesting that a patient (Agent Kvach) obtain an MRI not to address or relieve suffering, but so that the doctor can justify providing the patient with the prescription being sought by the patient, and negotiating with the patient by offering to continue prescribing or increase the amount of controlled substances prescribed, provided the patient produces an MRI; 209 • Failing to resolve the red flag that arose when a patient (Agent Kvach) was vague about the amount of medication prescribed and taken in the past, in order to determine the medical validity of past use of controlled substances; 210 • Failing to obtain a sufficient medical history of treatment for back pain in a patient (Agent Kvach); 211 • Failing to examine the specific area in issue, failure to render a specific diagnosis, failure to inquire about alternative treatments, and representing to perform a complete physical examination during a time that was too short to permit such an exam of a patient (Agent Kvach); 212 • Prescribing pain medication under conditions where the patient (Agent Bianchi) reported having no pain symptoms, under conditions where it was clear the patient intended to use the medication recreationally; 213 • Failing to resolve medical concerns with a patient’s possible substance abuse through the recreational use of cannabis, prior to prescribing pain medication for the patient (Agent Bianchi and Agent Ghazanfari); 214 PO 00000 at 355. Frm 00020 Fmt 4701 Sfmt 4703 E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices • Failing to resolve the red flag that arose when it appeared one patient (Agent Kvach) was sharing his controlled substance medication with another patient(Agent Bianchi), without any medical indication; 215 • ‘‘Trolling for symptomatology,’’ by concluding a patient (Agent Bianchi) had anxiety based on the fact that she feels good when taking cannabis or oxycodone, in order to justify prescribing oxycodone, and suggesting the patient claim that she has pain radiating from her back to her leg, in order to justify obtaining an MRI that would then be used to justify prescribing pain medication; 216 • Failing to resolve the red flag that arose when a patient (Agent Ghazanfari) who sought pain medication also abused alcohol; 217 • Failing to resolve the red flag that arose when a patient seeking pain medication (Agent Ghazanfari) was vague about where and when he had knee surgery, vague about pain medication prescribed after that surgery, and suggested that the surgery was performed by his general practitioner; 218 • Failing to resolve the red flag that arose when a patient (Agent Ghazanfari) acknowledged selling oxycodone, prior to issuing a prescription for the same; 219 • Failing to include the examination of knees in the course of an examination based on a complaint of knee pain by a patient (Agent Ghazanfari); 220 • Concluding that a patient (Agent Ghazanfari) needed four oxycodone tablets daily, without first waiting for the patient to indicate what his past daily use had been, and then failing to resolve the red flag that arose when the patient stated that if the number was too high, he would be able to get rid of any excess units.221 Based on her review of each of these examination records, Dr. Neyhart expressed the expert medical opinion that the prescriptions for controlled substances reflected in this record were not rendered because of a determination of a legitimate medical condition.222 In 215 Id. at 378. at 378–81. 217 Id. at 407, 409. 218 Id. at 408–9. 219 Id. at 411. 220 Id. at 412. 221 Id. at 413. 222 Id. at 354 (prescription at Government Exhibit 25 at 14); 357–8 (prescription at Government Exhibit 25 at 13); 361–2 (prescription at Government Exhibit 25 at 12); 369–70 (prescription at Government Exhibit 8); 372–3 (prescription at Government Exhibit 14); 385 (prescription at Respondent Exhibit B at 8); 406 (Government tkelley on DSK3SPTVN1PROD with NOTICES2 216 Id. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 one instance, however, Dr. Neyhart stated that ‘‘an argument could have been made for the legitimacy’’ of the prescription. She explained that in the case of Dr. Pettinger’s treatment of Agent Moriarty (under the assumed name of Jason Kelly), she noted the agent’s character was ‘‘vague on the details’’ about past prescriptions and past treatment, both of which raised red flags the doctor should have resolved.223 Dr. Pettinger noted that the past prescriptions for oxycodone appeared to be ‘‘out of proportion to the degree of disability it caused’’.224 Dr. Neyhart, however, described Dr. Pettinger’s questions along these lines to be generally sufficient: ‘‘It was a reasonable exchange and there was some vagueness in terms of how disabling this particular condition was, but it appeared that it had been going on for some time. History seemed reasonable, that the pain comes and goes, and that’s what happens with knee pain. It does come and go. This is all consistent with usual medical practice, this exchange.’’ 225 Left unclear, however, was whether there had been a specific injury, what kinds of diagnostics were utilized, what treatment modalities were tried, or why those modalities were changed.226 Also of concern, according to Dr. Neyhart, was the ‘‘rapid-fire review’’ of possible medical conditions seen here, as in the other cases, and the fact that Dr. Pettinger prescribed oxycodone after recognizing that the patient’s use was ‘‘out of proportion to the amount of functional disability or pain that he was suffering.’’ 227 Asked to summarize her findings, Dr. Neyhart stated that it was her expert opinion that in eight of the nine prescriptions, there was no medical indication that would support issuing those prescriptions, and that in the prescription issued to Agent Moriarty, this was a ‘‘soft call.’’ 228 She expanded on this during cross examination, stating that the agent ‘‘did present with a history that made sense. He presented with an MRI report that made sense relative to his history. He stated that he was using oxycodone for this medical condition. And so the holes in the Swiss cheese kind of lined up, and that’s what made it a softer call than, for instance, the agent who presented herself as Hancock.’’ 229 She also agreed that the Exhibit 12); 414 (prescription at Government Exhibit 19). 223 Id. at 402. 224 Id. at 403. 225 Id. 226 Id. at 404. 227 Id. at 405–6. 228 Id. at 415. 229 Id. at 417. PO 00000 Frm 00021 Fmt 4701 Sfmt 4703 61611 fact that three of the agents all used the same MRI (save for altering the names thereon) would not be something a doctor would likely notice, and that if someone were to give her this MRI, she would likely be fooled into believing it was real.230 During cross examination, Dr. Neyhart agreed that a physician, when presented with Agent Moriarty’s claim that he took 180 oxycodone tablets a month, could reasonably believe such a statement; however, Dr. Neyhart stated that it would be ‘‘a big assumption’’ to assume such a prescription was medically indicated, because in her experience ‘‘if somebody requires 180 oxycodone a month or more, there are more appropriate long-acting medications that could be used.’’ 231 When asked to address the premise that Dr. Pettinger was trying to ‘‘titrate down’’ this patient to where he used only 90 units a month, Dr. Neyhart stated there was no documentation in the medical record supporting such a premise—only documentation proposing ‘‘a future tapering. There is no agreement entered into between Dr. Pettinger and this patient. Thus it is impossible for me to conclude that this was step one of a plan.’’ 232 Also on cross examination Dr. Neyhart agreed with the premise that, with some patients suffering from acute intractable pain, the patient will sometimes take medication that is not prescribed to them, and on occasion will get medication from relatives or others, without waiting for an appointment to see a doctor. She said such behavior is ‘‘not an all-in-all deal breaker, but it is a red flag.’’ 233 She also agreed with the premise that, after an initial diagnosis calling for pain medication is made, the failure to administer a physical exam in a follow up visit with the doctor is not in and of itself problematic, but here ‘‘[w]hat is problematic is the documentation of the physical exam that did not occur.’’ 234 Dr. Neyhart said she has experience treating patients who exhibit drugseeking behavior. She agreed that this population of patients will make a great effort to try to convince physicians to prescribe controlled substances, and will sometimes provide false information or vague answers when asked about their medical history.235 In addition, while it is not a typical experience, Dr. Neyhart has had patients 230 Id. at 418–9. at 423–4. 232 Id. at 430. 233 Id. at 435–6. 234 Id. at 437. 235 Id. at 444. 231 Id. E:\FR\FM\03OCN2.SGM 03OCN2 61612 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices in this population attempt to divert her attention when she was inquiring into the patient’s medical history, to avoid answering the questions presented.236 tkelley on DSK3SPTVN1PROD with NOTICES2 Testimony by Dr. Pettinger and Evidence Regarding Remediation Dr. Pettinger testified briefly, on direct examination as a witness for the Government.237 After responding to questions establishing his identity, Dr. Pettinger declined to answer questions regarding the substance of the charges against him, invoking the privilege against self-incrimination.238 On his own behalf, Dr. Pettinger offered the testimony of two patients and a member of his staff. Dr. Pettinger began treating Tammy Gouthro in December 2010.239 According to Ms. Gouthro, she sought Dr. Pettinger’s help for pain management, and continued treatment with him through June 2012.240 She explained that she had a work-related back injury seventeen years earlier that required fusing the L4 and L5 vertebrae.241 She said this fusion and damage to her right sciatic nerve led to a 91 percent disability rating and created significant chronic pain, leaving her bedridden for much of the time.242 Due to a lack of insurance, Ms. Gouthro had no doctor at the time she visited Dr. Pettinger, and ‘‘pain medicine wasn’t an option for me. It didn’t work[.]’’ 243 When asked to describe Dr. Pettinger’s office, Ms. Gouthro said she was examined in the office where Dr. Pettinger has his desk and file cabinets. She said the room had a stethoscope and ‘‘reflection gadgets’’— possibly referring to a reflex hammer used to strike the patellar ligament when testing the synapses at the L4 level of the spinal cord. She said Dr. Pettinger took her blood pressure, asked her about her pain level, had her stand, ‘‘and asked me if I’d walk on my heel and walk on my toes and performed pressure points and did the actual just the exterior of my back. That’s all that he examined was the exterior where the injury and all that is, and then, like I said, he had me see how I walked forward on tippy-toes and walked back on my heel to see balance[.]’’ 244 Dr. Pettinger did not offer any medical records to support Ms. Gouthro’s testimony. In addition, Ms. Gouthro said she told Dr. Pettinger she had x-rays of 236 Id. 237 Id. at 303–4. at 304. 239 Id. at 252–3. 240 Id. at 253. 241 Id. at 254. 242 Id. 243 Id. at 255. 244 Id. at 257, 260. 238 Id. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 the areas needing treatment, but she never provided them because he did not require them.245 When asked how this examination was different than others she has had, Ms. Gouthro said ‘‘my normal doctors have a lounge, a bed that you lay on if they wanted further extension, but other than that this is pretty much basically the same as I get from my doctors.’’ 246 Following this examination, Dr. Pettinger prescribed cannabis for Ms. Gouthro, and then prescribed Norco, which Ms. Gouthro said did not work for her.247 Ms. Gouthro praised Dr. Pettinger for helping her end her use of opiates, stating that by using cannabis she has been free of other pain medication since December 4, 2010.248 Brenda Sue Martin testified on Dr. Pettinger’s behalf, stating that Dr. Pettinger began treating her at the end of 2011 or the beginning of 2012.249 She explained that she sought treatment for degenerative disc disease following neck surgery, in the hope that she might avoid back surgery.250 She said while she has a regular doctor, she went to Dr. Pettinger for pain management, understanding that he specializes in that field.251 Ms. Martin testified that during the first office visit, Dr. Pettinger examined ‘‘my back, my neck, my range of motion with my arms, the bending over, different things like that.’’ 252 Dr. Pettinger did not, however, offer any medical records documenting this examination. Ms. Martin said she had already been diagnosed, so ‘‘[i]t wasn’t like he had to diagnose me.’’ 253 She explained that when she first met with Dr. Pettinger, she was taking methadone 10 mg units, 480 units a month, 90 Norco units, 90 Soma units, and clonazepam as needed for panic attacks.254 She said she did not want to continue taking these medications, and Dr. Pettinger agreed to take steps to reduce her dependence on these, first by reducing the amount of methadone she took each day.255 This proved effective, allowing her to reduce her daily dose of methadone from 480 to 360 units.256 Dr. Pettinger sought to present testimony from three other patients: Kim Parham, Lorenzo Watkins, and Jean 245 Id. at 266. at 257–8. 247 Id. at 255. 248 Id. at 259. 249 Id. at 390. 250 Id. 251 Id. at 391. 252 Id. at 392. 253 Id. at 393. 254 Id. 255 Id. at 394. 256 Id. 246 Id. PO 00000 Frm 00022 Fmt 4701 Kea.257 According to the Respondent’s prehearing statement, these three witnesses were called for the same reasons Ms. Gouthro and Ms. Martin were called. All five, according to the prehearing statement, would testify that, beginning in September 2012, before becoming aware of the DEA investigation, Dr. Pettinger modified his medication protocols, drastically reduced his prescribing patterns, and instituted new procedures designed to minimize diversion and improper use of scheduled substances. They would also testify that Dr. Pettinger’s actions were within the ordinary course of medical practice, and that his prescriptions were for a legitimate medical purpose.258 In none of these cases did Dr. Pettinger offer copies of his physician notes or medical records of treatment. I sustained the Government’s objection to allowing testimony from Ms. Parham, Mr. Wakins, and Ms. Kea.259 In his oral proffer of what these three witnesses would say, Respondent’s counsel represented that each witness ‘‘has a different medical condition. Some of them were experiencing a need to reduce dependence on pain medication. . . . Also, some of them have different experiences regarding history taking, diversion of a conversation, that type of thing[.]’’ 260 By the time this proffer was made it was clear—based on the testimony provided by Ms. Gouthro and Ms. Martin—that these witnesses lacked any knowledge about any ‘‘new procedures designed to minimize diversion and improper use of scheduled substances,’’ as had been averred in the Respondent’s Prehearing Statement. It was clear Dr. Pettinger would offer no written documentation reflecting his treatment of these patients. It was also clear the witnesses were being presented to describe the manner in which Dr. Pettinger treated patients who were not engaged in drug-seeking behavior. Given the nature of the charges in the Order to Show Cause, the testimony of Ms. Martin and Ms. Gouthro was tangential at best, and of little evidentiary value. The testimony of three additional patients would not have contributed in a meaningful way to the record and was for that reason excluded. Dr. Pettinger’s final witness was Nancy McGowan, Practice Manager at Greenleaf Urgent Care.261 She explained 257 Id. at 395–6. 258 Respondent’s Statement at 3–5. 259 Tr. at 396. 260 Id. 261 Id. at 459. Sfmt 4703 E:\FR\FM\03OCN2.SGM 03OCN2 Supplemental Prehearing Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 that Greenleaf Urgent Care is a medical office owned by Jim Daniels and operated by Dr. Pettinger.262 Ms. McGowan stated that she began her job as the office manager at Greenleaf in August 2012, and understands that, prior to that time, the focus of the office had been pain management.263 She explained that when she arrived, Dr. Pettinger was not accepting any new patients ‘‘because he was scaling his business down, scaling the pain management part of it down, and we were going to transition to more of an urgent care.’’ 264 There was no testimony regarding Dr. Pettinger’s operation of the medical office known as Medical Cannabis of Northern California, nothing to indicate what happened with the two medical offices (in Sacramento and Modesto) visited by the five undercover agents, nor was there any testimony establishing that MCNC was now operating as Greenleaf Urgent Care. Ms. McGowan did state that Dr. Pettinger wanted to scale down the pain management practice because some of his patients ‘‘were just not complying well, and he wanted to get out of that business.’’ 265 She explained that in some cases, patients were asked to produce medical records such as test results, MRIs, x-rays, and medication histories, and when a patient could not produce needed documentation, Dr. Pettinger would no longer treat them.266 She said these patients also needed to provide referrals from primary care physicians, indicating the need for pain management, along with progress notes from those referring doctors.267 Ms. McGowan stated that even before she began working at the office, Dr. Pettinger had developed a pain management consent form which he had his patients sign—although no such form has been presented in this matter.268 She stated that the agreement prohibits sharing medications and includes a requirement that the patient agree to use only one pharmacist, so that the patient doesn’t ‘‘doctor-shop’’.269 Rather than accept the patient’s word about referring sources, the office will require enough information to permit the doctor or staff to contact the referring source to confirm the patient’s diagnosis and note the existing course of treatment.270 262 Id. at 460. at 461. 265 Id. at 462. 266 Id. 267 Id. at 462–3. 268 Id. at 463. 269 Id. at 465–6. 270 Id. at 464. According to Ms. McGowan, efforts to address non-compliant patients were being made even before she arrived in August 2012. She said she saw records of patients who had been discharged from Dr. Pettinger’s practice due to noncompliance in her review of charts once she started working there.271 Further, she said she and Dr. Pettinger discussed applying these same standards to new patients, if at some point he decided to resume that part of the practice.272 Ms. McGowan was aware of instances where a pharmacist would call to inquire about customers who presented prescriptions from both Dr. Pettinger and another doctor, for the same medication. In those cases, a termination letter had been developed and would be used to terminate the patient from Dr. Pettinger’s practice.273 She said similar steps were taken when it appeared that multiple prescriptions for the same controlled substances were being presented from people living in the same household.274 According to Ms. McGowan, efforts to determine whether a patient was obtaining prescriptions for pain medication from more than one doctor could have been aided by reports under the CURES system, which is used by pharmacies and doctors to reflect patient prescription use.275 Ms. McGowan said that at this time, a patient who produced nothing more than an MRI would not qualify for treatment, and that during the time she has been with the office, Dr. Pettinger has reduced the amount of scheduled medications he prescribes.276 When asked whether the owner’s instructions to her regarding patient noncompliance changed at all between August 2012 and now, Ms. McGowan said no; the only changes she noted were that ‘‘we were terminating patients a lot more’’ and ‘‘decreasing the amount of medications significantly.’’ 277 There was, however, no evidence or other testimony establishing that Dr. Pettinger has ever acknowledged writing prescriptions for controlled substances without conducting a sufficient medical examination, without requiring objective medical documentation relevant to the patient’s report of pain, or in the course of an office visit that resembled more a negotiation by a drugseeker than a legitimate medical examination. 263 Id. 264 Id. VerDate Mar<15>2010 19:03 Oct 02, 2013 at 468. at 469. 273 Id. at 470. 274 Id. at 471. 275 Id. at 473. 276 Id. at 477. 277 Id. at 478–9. 61613 Analysis This administrative action began when the DEA’s Administrator issued an Order suspending Dr. Pettinger’s DEA Certificate of Registration and ordering him to show cause why that Certificate should not be revoked. The Order alleged that Dr. Pettinger distributed controlled substances by issuing prescriptions under conditions that violated provisions in sections 823(f)(4) and 841(a)(1) and 842 of Chapter 21 of the United States Code, and provisions of section 1306.04(a) of Chapter 21 of the Code of Federal Regulations. Thus, in order to revoke Dr. Pettinger’s Certificate of Registration, the Government has the burden of establishing, by at least a preponderance of the evidence, that allowing Dr. Pettinger to continue to issue prescriptions for controlled substances is contrary to the public interest. If the Government meets this burden, the burden of production then shifts to the Respondent, who has the opportunity to present evidence that he accepts responsibility for his misconduct, and has taken appropriate steps to prevent misconduct in the future.278 Under the registration requirements found in 21 U.S.C. 823(f), the Administrator should consider five factors in determining the public interest when presented with the actions of a physician engaged in prescribing controlled substances 279 These factors are: (1) The recommendation of the appropriate State licensing board or professional disciplinary authority. (2) The applicant’s experience in dispensing, or conducting research with respect to 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.280 Any one of these factors may constitute a sufficient basis for taking action against a registrant.281 Any one or a combination of factors may be relied upon, and when exercising authority as an impartial adjudicator, the Administrator may properly give each factor whatever weight she deems appropriate in determining whether a 271 Id. 272 Id. Jkt 232001 PO 00000 Frm 00023 Fmt 4701 279 Government’s Proposed Findings of Fact and Conclusions of Law at 27. 280 21 U.S.C. 823(f) (2005), current through Public Law 112–207 approved 12–7–12. 281 Robert A. Leslie, M.D., 68 FR 15227–01, 15230 (March 28, 2003). Sfmt 4703 E:\FR\FM\03OCN2.SGM 03OCN2 61614 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices registration should be rejected.282 Moreover, the Administrator is ‘‘not required to make findings as to all of the factors[.]’’ 283 The Administrator is not required to discuss each factor in equal detail, or even every factor in any given level of detail.284 The balancing of the public interest factors ‘‘is not a contest in which score is kept; the Agency is not required to mechanically count up the factors and determine how many favor the Government and how many favor the registrant. Rather, it is an inquiry which focuses on protecting the public interest[.]’’ 285 In this case, the Government does not contend there is a history of professional discipline by a licensing board, nor did it offer evidence of a criminal conviction pertaining to Dr. Pettinger. Accordingly, Factors One and Three are not presented as bases for revoking this Certificate. tkelley on DSK3SPTVN1PROD with NOTICES2 Factors One, Two, Three and Five There is some question regarding whether Factors Two and Five are properly before me. In its post-hearing brief, the Government initially posits that the issue in this matter is whether the Respondent’s registration ‘‘is inconsistent with the public interest, as that term is used in 21 U.S.C. 824(a)(4) and 823(f).’’ 286 As noted above, the citation to section 824(a)(4) calls for the Administrator to consider the ‘‘public interest’’ by examining the Respondent’s ‘‘[c]ompliance with applicable State, Federal, or local laws relating to controlled substances.’’ The specific federal law relied upon by the Government is found in 21 CFR 1306.04(a), which prohibits a practitioner from writing a prescription for controlled substances unless the prescription is ‘‘issued for a legitimate purpose by an individual practitioner acting in the usual course of his professional practice.’’ Guided by this language, the Government contends that Dr. Pettinger departed from the usual course of his professional practice by prescribing oxycodone to the five undercover agents, and that the prescriptions were not issued for a legitimate purpose.287 282 Morall v. DEA, 412 F.3d 165, 173–74 (D.C. Cir. 2005); JLB, Inc., d/b/a Boyd Drugs, 53 FR 43945– 02, 43947 (October 31, 1988); see also David E. Trawick, D.D.S., 53 FR 5326–01, 5327 (February 23, 1988). 283 Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also Morall v. DEA, 412 F.3d 165, 173– 74 (D.C. Cir. 2005). 284 Trawick v. DEA, 861 F.2d 72, 76 (4th Cir. 1988). 285 Jayam Krishna-Iyer, M.D., 74 FR 459–01, 462 (January 6, 2009). 286 Government’s Proposed Findings of Fact and Conclusions of Law at 1. 287 Id. at 15. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 As will be addressed below, the evidence pertaining to the issuance of these prescriptions does indeed lend itself to a finding that the prescriptions in question were not issued for a legitimate purpose and were not issued by a medical doctor who was acting in the usual course of his professional practice. Thus, an analysis under Factor Four appears warranted both by the express terms of the Order to Show Cause and by the nature of the evidence now before me. In its post-hearing brief, however, the Government contends that the public interest issue also should include an analysis of this evidence under Factors Two and Five.288 On its face, Factor Two does not appear to be directly related to registrants like Dr. Pettinger. By its express terms, Factor Two applies to applicants, and calls for an inquiry into the applicant’s ‘‘experience in dispensing, or conducting research with respect to controlled substances.’’ Thus, it is not clear that the inquiry into Dr. Pettinger’s experience in dispensing controlled substances is warranted, given the limited scope of this Factor. Assuming, however, that Factor Two does indeed pertain to both registrants and applicants, the record here does not include any substantial notice to Dr. Pettinger that the Government intended to rely on Factor Two as justification for revoking his Certificate of Registration. As the Respondent points out in his post-hearing brief, the first time the Government asserted it would seek an analysis under Factor Two was during the opening statement given during the hearing. From my review of the record, there was no clear mention of the Government intending to rely on the provisions of 21 CFR 823(a)(2) in the Order to Show Cause, nor was it brought forward in either the initial or supplemental prehearing statements filed by the Government. The same is true with respect to the Government’s reliance on Factor Five—and in this instance the Government raised Factor Five only after the hearing, in its posthearing brief. From this set of circumstances, Dr. Pettinger argues that I have ‘‘no alternative but to conclude that factors 1, 3 and 5 all militate in favor of respondents [sic] continued registration.’’ 289 I reach another conclusion, at least regarding Factor Five. I do agree that I should take into account, and regard as evidence favorable to Dr. Pettinger, the fact that the board licensing him has permitted him to renew that license, notwithstanding these pending administrative actions. Factor One calls for me to consider the ‘‘recommendation of the appropriate State licensing board or professional disciplinary authority.’’ Implicit in the fact that the California state licensing authority renewed Dr. Pettinger’s medical license is a tacit endorsement by the medical board of his continuing ability to safely and professionally serve his community. Further, and although it may be faint praise, the fact that Dr. Pettinger has not been charged or convicted of any crime does fall within the scope of Factor Three, which requires that I consider ‘‘[t]he applicant’s conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.’’ As is the case with Factor Two, Factor Three does not appear, on its face, to apply to registrants like Dr. Pettinger. Assuming, however, that this Factor applies with equal force to applicants and registrants alike, the evidence does reflect an absence of criminal convictions. As noted above, the Government did not identify Factors Two or Five as bases for taking action against Dr. Pettinger when it issued its Order to Show Cause and its Order of Immediate Suspension. Dr. Pettinger correctly notes that the first time Factor Two was mentioned was during the Government’s opening statement.290 Apart from making this observation, however, the Respondent does not make any objection to a Factor Two analysis, and as such any issue based on lack of notice is waived. The Administrator may consider evidence of positive experience under Factor Two; however, this evidence does not necessarily outweigh acts against the public interest, particularly where those acts are done intentionally. As stated in Holiday CVS: ‘‘In some (but not all) cases, viewing a registrant’s actions against a backdrop of how she has performed activity within the scope of the certificate can provide a contextual lens to assist in a fair adjudication of whether continued registration is in the public interest. In this regard, however, the Agency has applied principles of reason, coupled with its own expertise in the application of this factor. For example, the Agency has taken the reasonable position that this factor can be outweighed by acts held to be inconsistent with the public interest.’’ 291 290 Id. at 4. 291 Holiday 288 Id. at 18–20. 289 Respondent’s Post-Hearing Brief at 4. PO 00000 Frm 00024 Fmt 4701 Sfmt 4703 CVS, LLC, 77 FR 62316, 62340 (October 12, 2012) (adopting the ALJ’s recommended decision). E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices Assuming Factor Two applies equally to applicants and registrants, in analyzing a registrant’s experience under Factor Two the Administrator should consider the context of a registrant’s entire dispensing practices, notwithstanding that isolated acts against the public interest can outweigh substantial positive experience. This premise is explained as follows: tkelley on DSK3SPTVN1PROD with NOTICES2 • In Krishna-Iyer, the Agency,’’ ‘[i]n considering Petitioner’s experience in dispensing controlled substances under [F]actor 2, [ ] identified only four visits by three undercover patient[s], who were all attempting to make a case against [the Respondent]. The DEA failed to consider [the Respondent’s] experience with twelve patients whose medical charts were seized by the DEA, or with thousands of other patients. In short, the DEA did not consider any of [the Respondent’s] positive experience in dispensing controlled substances.’ ’’ 292 In an unpublished opinion, the Eleventh Circuit found the Agency’s failure to consider the Respondent’s positive experience ‘‘arbitrary and unfair.’’ The Court ‘‘vacated the [Final] Order and remanded the case for reconsideration, directing that ‘DEA should pay particular attention to the entire corpus of Petitioner’s record in dispensing controlled substances, not only the experience [with the] undercover officer.’ The Court further ordered that ‘[t]he five factors should . . . be re-balanced.’ ’’ 293 • But in T.J. McNichol, M.D.,294 the Administrator declined to adopt the ‘‘positive experience’’ arguments offered by the ALJ, ‘‘who ignored both the Agency’s subsequent decision on remand in KrishnaIyer, which addressed the role of ‘positive experience’ evidence in cases where the Government has proved intentional or knowing diversion, subsequent Agency cases applying this rule, and several court of appeals’ decisions (including that of the Eleventh Circuit), which have since upheld the Agency’s position’’. • Further, in Becker, the Administrator reaffirmed that ‘‘evidence [of a] significant level of sustained activity within the scope of the registration for a sustained period can be a relevant and correct consideration, which may be accorded due weight. The registrant’s knowledge and experience regarding the rules and regulations applicable to practitioners also may be considered. . . . Experience which occurred prior or subsequent to proven allegations of malfeasance may be relevant. Evidence that precedes proven misconduct may add support to the contention that, even acknowledging the gravity of a registrant’s transgressions, they are sufficiently isolated and/or attenuated that adverse action against his registration is not compelled by public interest concerns.’’ 295 292 Jayam Krishna-Iyer, M.D., 74 FR 459, 459 (January 6, 2009) (citing Krishna-Iyer v. DEA, No. 06–15034 (11th Cir. 2007), Slip Op. at 3). 293 Id. 294 T.J. McNichol, M.D., 77 FR 57133, 57144 (September 17, 2012). 295 Jeffery J. Becker, D.D.S., 77 FR 72387, 72404 (December 5, 2012) (adopting the ALJ’s VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 • And most recently, in Casanova, the ALJ properly considered evidence of the Respondent’s positive prescribing practices, alongside evidence of diversion to undercover agents. The Division Investigator testified that the Respondent’s practice was ‘‘not a pill mill, and that aside from the absence of a biennial inventory . . . [the practice] appeared to be within the scope of a normal medical practice. . . . Additionally, Respondent offered testimony that he gained experience dealing with acute and chronic pain patients and treating them with opioids, and familiarized himself with the [applicable state medical standards]. . . . Finally, Respondent testified that . . . he turned away a large number of patients [who exhibited signs of drug-seeking behavior].’’ 296 In the record now before me, we have evidence establishing multiple instances where Dr. Pettinger improperly issued prescriptions for oxycodone. The record, however, is silent with respect to his overall practice history: We do not know how long he has practiced medicine in the type of office reflected in this record; we do not know the number of patients he has served, or the value of that service to the community, or other similar demographic factors relevant to this issue. We know he was highly regarded by the two patients who testified, and we can assume the same can be said regarding the three patients who appeared and were willing to give testimony on the day of the hearing. We know from his office manager that by the time she began working for Dr. Pettinger, he was operating out of medical office using the name Greenleaf Urgent Care. It is not clear that this office was the successor to Dr. Pettinger’s medical office known as Medical Cannabis of Northern California, but we are expected to believe this is the case. Assuming this is true, both practices had an active caseload of patients, although there is no evidence with respect to the actual numbers of patients treated either before or after the Order to Show Cause was issued. We know from his office manager that Dr. Pettinger reportedly no recommended decision, which noted that, ‘‘[w]hile the Respondent’s level of professional achievement is undeniably impressive, he has offered no affirmative evidence regarding his experience dispensing controlled substances from peers, coworkers, or even himself. Still, his professional experience and contributions to his field have been considered in this recommended decision’’). 296 Rene Casanova, M.D., 77 FR. 58150, 58168–9 (Sept. 19, 2012) (‘‘carefully consider[ing] the evidence of Respondent’s past positive experiences in dispensing controlled substances,’’ yet ‘‘find[ing] those experiences are considerably outweighed by the substantial evidence of Respondent’s repeated misconduct in issuing controlled substance prescriptions to undercover law enforcement officers . . . [and] diminished by Respondent’s failure on the whole to admit or accept responsibility for any wrongdoing’’). PO 00000 Frm 00025 Fmt 4701 Sfmt 4703 61615 longer seeks new patients in need of pain management, and has taken steps to identify drug seeking patients and terminate his professional relationship with them. We cannot, however, point to substantial evidence establishing that the nine instances leading to the prescriptions of record are either isolated or are instead typical of Dr. Pettinger’s past or present practice. To the extent the Government would have me determine Dr. Pettinger’s experience in distributing controlled substances, it has given me little to permit me to compare the volume of Dr. Pettinger’s history of compliant service with the nine incidents of record here. Given the lack of evidence that would permit such an analysis, and given the lack of notice provided by the Government regarding its intention to rely on Factor Two in this hearing, I conclude Factor Two neither supports nor contradicts a finding that Dr. Pettinger’s continued registration is inconsistent with the public interest. Our record establishes that the Government did not indicate its reliance on Factor Five until after the hearing was over. Moreover, the factual allegations appearing in the Order to Show Cause do not, in and of themselves, suggest the Government intended to rely on theories that fall within the ambit of Factors Two or Five. The theories identified in the Order to Show Cause remained generally intact in the presentation of issues and summaries of witness testimony presented by the Government in both its initial and supplemental prehearing statements. The exception to this, as noted by the Respondent, is that fewer bases for action were presented during the hearing than had been alleged in the Order to Show Cause.297 In the Order to Show Cause, the Government noted that records provided by the California Department of Justice Controlled Substance Utilization Review and Evaluation System (CURES) suggested a pattern of prescribing a sufficiently high volume of oxycodone to warrant finding his continued registration with the DEA inconsistent with the public interest. As the Respondent correctly noted, the Government presented no evidence concerning data from the CURES system, apparently abandoning this evidence as a basis for action under the Order to Show Cause. Action based on Factor Five requires evidence of ‘‘[s]uch other conduct which may threaten the public health 297 Respondent’s E:\FR\FM\03OCN2.SGM 03OCN2 Post-Hearing Brief at 5. tkelley on DSK3SPTVN1PROD with NOTICES2 61616 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices and safety.’’ 298 Accordingly, if the conduct falls within the scope of Factors One through Four, it would not be ‘‘other’’ conduct and would be addressed by those Factors, and not through a Factor Five analysis. The Order to Show Cause and the evidence presented at the hearing both focused almost exclusively on the actions recorded during the nine occasions described by the five undercover agents. The one exception to this is the evidence establishing that Dr. Pettinger wrote a prescription for Norco after acknowledging receipt of the order that he issue no further controlled substance prescriptions. As will be discussed below, this presentation of evidence establishes by at least a preponderance that the prescriptions appearing as exhibits in this record were issued outside the usual course of professional practice and were issued for other than a legitimate medical purpose. As such, when he wrote these prescriptions Dr. Pettinger violated 21 U.S.C. 841(a)(1). Given that the primary basis for taking action against Dr. Pettinger is conduct that falls within the scope of Factor Four, an analysis under Factor Five would be unwarranted. I am mindful of the evidence introduced during the hearing establishing that Dr. Pettinger misrepresented his office practice when he was questioned by DEA Special Agent Kittrell. Summarized, this evidence includes Agent Kittrell recalling what Dr. Pettinger told him during his initial inquiry into Dr. Pettinger’s standard operating procedures. In his testimony, Agent Kittrell credibly stated that Dr. Pettinger assured him that he conducted a full physical examination prior to prescribing any controlled substances, and that he did so whether the patient was presenting for the first time or for a follow up visit. As evaluated by the Government’s expert medical witness, the evidence establishes that this was a false statement by Dr. Pettinger. The evidence establishes that Dr. Pettinger failed to perform a full physical examination in each of the cases reported by the undercover agents, leading to the conclusion that (as the Government suggests in its post-hearing brief) Dr. Pettinger lied to Agent Kittrell when he described his standard operating procedures in cases involving the prescription of controlled substances.299 Similarly, the evidence establishes that Dr. Pettinger lied to Agent Kittrell when he represented that if a patient presented seeking pain medication but had not medical records, all Dr. Pettinger would prescribe was Norco (hydrocodone)—a claim that was patently contradicted during the initial meetings with Agent Kvach and Agent Bianchi.300 Lying to a DEA agent in the course of the agent’s investigation into diversion of controlled substances is not conduct that falls within the scope of Factors One through Four, but it does fall squarely within the scope of Factor Five. Of concern here, however, is the fact that throughout its pre-hearing notices, the Government made no mention of its intention to raise such a claim. I have reviewed the Order to Show Cause and both the initial and supplemental prehearing statements and find no suggestion that the Government intended to confront Dr. Pettinger with evidence about his statement to Agent Kittrell regarding his practice of performing full physical examinations. The question thus is whether the Administrator should take disciplinary action based on evidence of improper conduct that was not disclosed to the Respondent until the hearing had begun. The Government’s failure to notify a responding party of the theory of the Government’s case becomes a critical issue in cases, such as the present case, that are brought under the Administrative Procedure Act. For example, in Bendix, the FTC ‘‘violated § 5 of the Administrative Procedure Act, 5 U.S.C. 554, when it decided the case on a theory of illegality which was never charged, raised, nor tried during the administrative hearing; never presented for consideration by the Hearing Examiner; and not raised as an issue or discussed by Complaint Counsel in the appeal to the Commission from the order of the Hearing Examiner dismissing the complaint. Bendix had no notice that it was charged under [this] theory of illegality and was accorded no opportunity to present evidence in defense against this theory.’’ 301 The court remanded the case, affording the parties a second opportunity to offer evidence. In Bendix, Government counsel presented three theories of illegality, each rejected by the Hearing Examiner. Thereafter, the Commission based its final decision on a wholly separate legal theory.302 ‘‘This [was] not a case where the initial complaint was couched in broad 300 Id., 298 21 CFR 823(f)(5). 299 Government’s Proposed Findings of Fact and Conclusions of Law at 20. VerDate Mar<15>2010 19:49 Oct 02, 2013 Jkt 232001 and citations therein. Corp. v. FTC, 450 F.2d 534, 537 (6th Cir. 1971) 302 Id. at 537. 301 Bendix PO 00000 Frm 00026 Fmt 4701 Sfmt 4703 generalities but subsequently was tried on the specific theory that ultimately justified [the Commission’s] finding[s].’’ 303 Indeed, ‘‘[c]ounsel for Bendix specifically asked both the Hearing Examiner and the [Government’s] Counsel for the theory upon which the case would be tried.’’ Government counsel expressly limited the legal theories at issue: ‘‘[r]epeated statements by counsel, witnesses, and the [Hearing] Examiner showed that everyone believed [these] to be the only issue[s]’’ in contention.304 At the conclusion of the hearing, Government counsel submitted a final brief to the Commission, which omitted any mention of alternative legal theories.305 ‘‘Bendix’s case was prepared and presented in response to certain enumerated theories. . . . The witnesses were questioned and cross-examined in terms of these issues. The documentary proof was keyed to these theories.’’ 306 Because ‘‘different defenses and proofs would be used in defending’’ the Commission’s alternate legal theory, Bendix was entitled to a remanded hearing.307 Similarly, the court remanded where it found on review that the NLRB did not afford the respondent a full and fair opportunity to litigate the issues comprising the final decision.308 After an administrative law judge conducted a hearing on the charges set forth in the Board’s complaint, the Board adopted the ALJ’s decision, but did so based on an ‘‘alter-ego’’ theory of corporate liability.309 Although the NLRB found ‘‘sufficient connection to the complaint for Respondent to anticipate’’ the newly-articulated legal theory, the Court of Appeals determined that the respondent was not accorded his due process rights as to the alter ego claim.310 ‘‘Respondent was unaware that the [ ] alter ego claim was raised in the proceeding. Even during the course of the evidentiary hearing, Respondent received no notice of the claim that [its subsidiary] was an alter ego[,]’’ and ‘‘[t]he ALJ never advised the parties that he would consider an alter ego claim.’’ 311 Because the respondent never received notice of the alter ego claim through the pleadings, the Court of Appeals determined that first time the respondent was informed that an 303 Id. at 541. 304 Id. 305 Id. 306 Id. at 542. at 541–2. 308 NLRB v. I.W.G., Inc., 144 F.3d 685 (10th Cir. 1998) 309 Id. at 687. 310 Id. 311 Id. at 688. 307 Id. E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices alter ego claim was alleged was in the post hearing brief filed prior to the ALJ’s decision.312 During the review by the Court of Appeals, the NLRB argued that the alter ego claim was fully and fairly litigated because ‘‘considerable evidence relevant to’’ the claim was presented and challenged at the hearing.313 However, the Court of Appeals noted that ‘‘the simple presentation of evidence important to an alternative claim does not satisfy the requirement that any claim at variance from the complaint be ‘fully and fairly litigated’ in order for the Board to decide the issue without transgressing [Respondent’s] due process rights.’’ 314 Given the substantial evidence of Dr. Pettinger’s violation of regulations controlling the distribution of oxycodone under Factor Four (thereby rendering a Factor Five analysis superfluous), given Dr. Pettinger’s failure to rebut the Government’s prima facie case (as will be addressed below), and given the Government’s failure to disclose in advance of the hearing its intention to rely on a Factor Five analysis, I cannot recommend relying on a Factor Five analysis, even as an alternative theory of the case. Factor Four Although it is unfortunately blended with a discussion of Factor Two, the Government’s post-hearing brief discussing Factor Four cogently summarizes the facts and the legal issues that lead me to conclude the Government has met its prima facie responsibilities in this case.315 While the overarching question is whether Dr. Pettinger’s continued certification is inconsistent with the public interest, the specific question under Factor Four is whether the behavior captured by the undercover agents reveals action by the Certificate holder that violates drug diversion laws. I find that it does. The specific instances of misconduct cited by the Government at pages 15 through 20 of its brief have been established by at least a preponderance of the evidence. Without attempting an exhaustive inventory here, these included failing to conduct a sufficient 312 Id. tkelley on DSK3SPTVN1PROD with NOTICES2 313 Id. 314 Id. (internal citations omitted). See also Soule Glass and Glazing Co. v. NLRB, 652 F.2d 1055 (1st Cir. 1981) (noting that ‘‘even if such an argument appeared explicitly in the General Counsel’s posthearing brief, such post-hoc characterizations of the case would not be relevant in determining whether the employer had notice of the issue and a meaningful opportunity to defend against it at the hearing’’). 315 Government’s Proposed Findings of Fact and Conclusions of Law at 14–19. VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 physical examination of each of the five undercover agents on each of their office visits; prescribing oxycodone without first resolving material medical issues suggesting the putative patients had serious alcohol, cannabis, and addictive painkiller problems; prescribing oxycodone to patients who were diverting oxycodone to help pay off debts and to share with friends; prescribing oxycodone to patients who had presented no medical records that would support their self-reported medical histories; and prescribing oxycodone to patients based on complaints of pain and sleep disorders despite the fact that those complaints were absent from the patient’s selfreported medical histories. The Government in its post-hearing brief aptly notes that in her review of these nine patient encounters with the five undercover agents and Dr. Pettinger, it appeared to the medical expert that Dr. Pettinger was more interested in negotiating the amount of oxycodone and related controlled substances that would be dispensed through his prescriptions, than he was in actually diagnosing the medical conditions of the agents. As the Respondent correctly notes, it is clear from the evidence that Dr. Pettinger encouraged these patients to avoid the use of oxycodone and other highly addictive painkillers. Both in his presentation to the Government’s undercover agents and in his treatment of his own patients, it is clear Dr. Pettinger sought to wean his patients off of oxycodone, and sought to discourage resorting to oxycodone wherever possible. That being said, however, it is also clear that he abandoned his own professed requirements when he issued the prescriptions at issue, by authorizing the dispensation of oxycodone without first requiring medical records and without ever evaluating treatment modalities that did not include narcotics. The testimony of the Government’s medical expert, Dr. Neyhart, provides substantial credible evidence establishing that the prescriptions shown in our record were not ‘‘issued for a legitimate medical purpose,’’ and were not issued ‘‘by an individual practitioner in the usual course of his professional practice.’’ 316 In his posthearing brief, Dr. Pettinger notes that Dr. Neyhart’s credentials do not include operating a pain management clinic and asserts that the weight to be given to her opinions should be tempered by the fact that the expert ‘‘is not a pain 316 See Sun & Lake Pharmacy, 76 FR 24,530, 24523 (quoting 21 CFR 1306.04(a)). PO 00000 Frm 00027 Fmt 4701 Sfmt 4703 61617 management specialist and had not even practiced primary care for at least eighteen months.’’ 317 This can be duly noted, but from the presentation of Dr. Neyhart’s credentials and from her very credible testimony, I find substantial evidence establishing that the actions recorded during these nine patient visits did not constitute the ‘‘usual course’’ of the professional practice of medicine, irrespective of whether the practitioner has or has not limited his practice to pain management. On the point of such limitation, I note that Dr. Pettinger’s cannabis practice, M.C.N.C., appears not to be a pain management clinic, but rather a clinic specializing in dispensing prescriptive cannabis. One of Dr. Pettinger’s patients stated she saw nothing that would indicate the office specialized in pain management, and the letterhead and signage in our record indicates Dr. Pettinger used the name ‘‘Medical Cannabis of Northern California’’ or the initials ‘‘M.C.N.C.’’ The impression I got from the evidence as a whole is that the practice focused not on pain management but on the medicinal use of cannabis. This is not to be critical of the practice but only to state that the practice bore few of the markings found in practices dedicated exclusively to the management of pain. This impression is primarily based on what I observed as I listened to the undercover patient visits and on the testimony of Dr. Pettinger’s three witnesses. A consistent pattern in the recorded visits by undercover agents was the thorough explanation Dr. Pettinger gave regarding the medicinal use of cannabis, along with his very clear exhortation that the patients do all they can to avoid the use of oxycodone and similar narcotic painkillers. That being said, however, the record also establishes a factual basis for Dr. Neyhart’s observation that Dr. Pettinger failed to engage in medical examinations of the type needed to diagnose these patients’ medical conditions or to explore treatment modalities other than the use of either cannabis or oxycodone. In his closing brief, Dr. Pettinger argues that ‘‘the undercover agents conduct is highly atypical and therefore cannot be extrapolated to the general population of drug seeking patients and therefore cannot demonstrate that Respondent’s prescribing constituted a danger to the general public (as opposed to the miniscule subset of hypothetical patients represented by the undercover 317 Respondent’s E:\FR\FM\03OCN2.SGM 03OCN2 Post-Hearing Brief at 7. tkelley on DSK3SPTVN1PROD with NOTICES2 61618 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices agents).’’ 318 The evidence from Dr. Neyhart did establish that drug seeking patients will attempt to divert attention and to ingratiate themselves with their potential prescribing sources. Agent Kittrell confirmed the same in his very credible testimony on this point. Further, nothing in the behavior of these undercover agents was so clearly incredible or outlandish as to warrant dismissing their actions as being ‘‘atypical’’. To the contrary, testimony from Dr. Neyhart and Special Agent Kittrell establishes that the means by which these agents sought to procure controlled substances were well within those employed by persons seeking to illegally divert controlled substances through this kind of office visit. It also should be noted that, even if I were to accept the premise that this was either outlandish or atypical behavior, I would nonetheless reach the conclusion that such behavior should have prompted a more studied response by Dr. Pettinger, rather than his capitulation or accommodation when the agents asked him to prescribe oxycodone. His failure to resolve the many red flags shown here compels the conclusion that his decision to prescribe dangerous narcotics put the public at risk and constitutes action ‘‘outside the usual course of his professional practice.’’ 319 Because it was thorough, internally consistent, consistent with the evidence presented generally, and not contradicted by any professional opinion to the contrary, I place great weight in the medical expert’s opinions regarding Dr. Pettinger’s practice. I find that the failure to resolve the multiple red flags present with each of the five undercover agents constitutes action outside the usual course of medical practice, and I find Dr. Pettinger’s decision to issue prescriptions based on a negotiation with these five patients, rather than based on a properly rendered medical diagnosis, compels the conclusion that the prescriptions in evidence here were not issued for a legitimate medical purpose. Upon these findings, the Government has met its burden of establishing a prima facie case in support of the Order to Show Cause. In his discussion about remediation, Dr. Pettinger posits that his decision to stop treating pain patients should be taken into account, and that he should be credited for improving his approach to drug seekers.320 First, as aptly pointed out by the Government in its post-hearing brief, the significant drop 318 Id. at 9. CFR 1306.04(a). 320 Respondent’s Post-Hearing Brief at 11. 319 21 VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 in prescriptions issued by Dr. Pettinger was doubtlessly precipitated, in part at least, by the fact that the Administrator suspended his Certificate.321 Beyond this, however, Dr. Pettinger did present evidence through his office manager, who testified that Dr. Pettinger has implemented measures to reduce ‘‘double dipping,’’ is accepting no new patients, is discharging problematic patients, refuses to prescribe to patients who appear to be trafficking, and is discharging patients who appear to be providing falsified records.322 As Dr. Pettinger correctly notes, all of these steps are steps that every practitioner should undertake when operating under a DEA Certificate. The record does not, however, include an express or implied acknowledgement by Dr. Pettinger that his actions with respect to the five undercover agents put the public at risk. The practices described by Dr. Pettinger’s office manager do not establish remedial efforts taken to correct the mistakes that have been revealed by the undercover action. Instead, they suggest Dr. Pettinger tired of having to negotiate with patients who came to know that he was willing to prescribe oxycodone without requiring medical justification. As noted above, Dr. Pettinger elected not to give sworn testimony on the issue of remediation, depriving the Administrator and the public with a clear demonstration of contrition and remediation. His silence also permits a negative inference to be drawn with respect to factual issues presented, as noted by the Government in its posthearing brief.323 Instead of hearing from Dr. Pettinger, we have the testimony of his office manager, who stated that many of the steps she described had been in place for some time, making it impossible to determine whether any of the steps were actually remedial in nature. It also must be noted that most of the measures listed as remedial in Dr. Pettinger’s post-hearing brief require him to act in a specific manner,324 but as we have only Ms. McGowan’s testimony on this point we have no clear record from Dr. Pettinger himself to confirm that he will in fact do what his office manager says he will do. Accordingly, I find insufficient evidence of remediation as to counter the Government’s prima facie case. 321 Government’s Proposed Findings of Fact and Conclusions of Law at 21. 322 Respondent’s Post-Hearing Brief at 11 and citations to the transcript therein. 323 Government’s Proposed Findings of Fact and Conclusions of Law at 20–1. 324 Id. at 12. PO 00000 Frm 00028 Fmt 4701 Sfmt 4703 Findings of Fact 1. Respondent is registered with DEA as an individual practitioner in Schedules II–V under DEA Certificate of Registration Number AP6572716, at 4707 Greenleaf Court, Suite A, Modesto, California, 95356. Respondent’s Certificate of Registration expires by its own terms on March 31, 2015. 2. The Respondent’s DEA Certificate of Registration expires by its own terms on March 31, 2015. He is licensed to practice medicine as a physician and surgeon in the State of California under license number G29874, which will expire by its own terms on March 31, 2015. 3. On December 12, 2012, DEA served Respondent with an Order to Show Cause and Immediate Suspension of Registration dated December 10, 2012, whereby Respondent’s DEA Certificate of Registration Number AP6572716 was suspended. 4. Between November 10, 2011 and May 9, 2012, undercover agents employed by the DEA, the FBI, and the U.S. Department of Health and Human Services represented to be patients seeking controlled substances from the Respondent at the Respondent’s medical offices in Sacramento and Modesto California. In each of nine instances reported here, the Respondent wrote prescriptions for controlled substances regulated by the DEA, including oxycodone, promethazine with codeine, and hydrocodone. 5. Prior to issuing these nine prescriptions, the Respondent did not conduct sufficient medical examinations to be able to diagnose the medical conditions for which these controlled substances were sought. In addition, the Respondent inappropriately counseled a patient on how to obtain a prescription for oxycodone where there were no objective signs or findings that would support such a prescription; counseled a patient on the use of Marinol as a means by which the patient could avoid adverse legal consequences if found to have the active ingredients of cannabis in his blood or urine; and failed to resolve issues arising when the undercover agents presented facts in the course of the medical examinations that warranted further inquiry, including the failure to produce objective signs and findings through MRIs and other medical sources to substantiate the need for pain medication; the failure to inquire into abuse of alcohol, opioids and cannabis when presented with evidence of the same; the illegal acquisition, diversion, and distribution of controlled substances; the failure to E:\FR\FM\03OCN2.SGM 03OCN2 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 make appropriate inquiries and take appropriate action when presented with drug-seeking behavior by these five agents; the failure to follow his own reported diagnostic and treatment procedures when presented with patients who lacked objective medical evidence supporting pain diagnoses; and the failure to reconcile inconsistencies between symptoms being reported by the undercover agents and reports of symptoms and conditions appearing in the physician’s notes from these patient visits. 6. On December 11, 2012, Special Agent Robert Kittrell served upon the Respondent the Administrator’s Order to Show Cause and Immediate Suspension of DEA Registration. After receiving this Order, the Respondent was prohibited from dispensing controlled substances under his DEA Certificate of Registration. Despite acknowledging this prohibition, the Respondent thereafter issued a prescription for hydrocodone for a patient who had exhausted an earlier prescription for the same. Conclusions of Law 1. When it proposes to revoke a DEA Certificate of Registration or deny any pending applications for such a Certificate, the Government is required to establish by at least a preponderance of the evidence that the holder’s continued registration is inconsistent with the public interest. 21 U.S.C. 823(f) and 824; and 21 CFR 1301.36 and 1301.37. 2. Five factors must be considered when determining the public interest in this case: (1) The recommendation of the appropriate state licensing board or professional disciplinary authority. (2) The applicant’s experience in dispensing, or conducting research with respect to 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. 21 U.S.C. 823(f). 3. Under 21 U.S.C. 23(f)(1) (Factor One), where the evidence establishes the Respondent’s California medical credentials were renewed by the state medical authority while DEA administrative proceedings were pending, the renewal of those credentials constitutes evidence that is consistent with continued Registration by the DEA. Such evidence is not, VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 however, dispositive of the question whether the Respondent’s continued DEA Certification is or is not consistent with the public interest. 4. In order to establish a basis for revoking a Certificate of Registration based on the provisions of 21 U.S.C. 823(f)(2) (Factor Two), and assuming Factor Two applies to both applicants and registrants, the Government must present evidence establishing, by at least a preponderance, that the experience of the Respondent in dispensing controlled substances is of such character and quality that his continued registration is inconsistent with the public interest. This requires evidence of both the qualitative manner and quantitative volume of the Respondent’s experience. Where evidence of the Respondent’s experience, as expressed through his patients and employees, is silent with respect to the quantitative volume of the Respondent’s experience, and requires speculation to support an adverse finding under Factor Two, this Factor should not be used to determine whether the Respondent’s continued registration is inconsistent with the public interest. 5. In order to establish a basis for revoking a Certificate of Registration based on the provisions of 21 U.S.C. 823(f)(3) (Factor Three), and assuming Factor Three applies to both applicants and registrants, the Government must present evidence of the Respondent’s conviction record under federal or state laws relating to the manufacture, distribution, or dispensing of controlled substances. As this Factor is neither alleged by the Government nor suggested by the evidence, and as there is evidence that the applicable licensing authority renewed the Respondent’s license while these administrative proceedings were pending, the Factor may be considered as supporting the Respondent’s continued registration. 6. Under 21 U.S.C. 823(f)(4) (Factor Four), the Administrator must consider the Respondent’s compliance with applicable state, federal, or local laws relating to controlled substances. A prescription for a controlled substance is unlawful unless it has been issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.325 7. Under the conditions presented in the record, the Respondent issued nine prescriptions for controlled substances regulated by the DEA that were not for a legitimate medical need and were not 325 Sun & Lake Pharmacy, 76 FR 24520, 23523 (May 2, 2011) (quoting 21 CFR 1306.04(a)). PO 00000 Frm 00029 Fmt 4701 Sfmt 4703 61619 issued in the ordinary course of a professional medical practice. Upon such evidence, the Government has established by at least a preponderance that the Respondent’s continued DEA Certification is inconsistent with the public interest, warranting the revocation of that Certification and the denial of any pending application for such a Certification. 8. Under the conditions presented in the record, the Government has established by at least a preponderance of the evidence that the Respondent issued a prescription for hydrocodone on December 21, 2011, at a time when his DEA Certificate had been suspended. Because such prescription activity requires a DEA Certificate, the actions attributed to the Respondent constitute noncompliance with applicable federal laws relating to controlled substances. Upon such proof, the Government has established by sufficient evidence that the Respondent’s continued DEA Certification is inconsistent with the public interest, warranting the revocation of that Certification and the denial of any pending application for such a Certification. 9. Under 21 U.S.C. 823(f)(5) (Factor Five), the Government may base its determination to revoke a DEA Certification on ‘‘such other conduct which may threaten the public health and safety.’’ Such a determination thus may not be based on circumstances falling within the scope of Factors One through Four, but rather must be based on circumstances not otherwise addressed in this section of the regulation. In this matter, the Government presented evidence that the Respondent falsely reported to Special Agent Kittrell that prior to dispensing controlled substances, the Respondent conducted appropriate medical examinations. This contention was raised for the first time in the Government’s post-hearing brief, and the Respondent has objected to the late introduction of this Factor as a basis for revocation. Under the Due Process Clause of the Fifth Amendment to the United States Constitution, the Government must provide adequate notice of the factual allegations it intends to prove.326 Where the Order to Show Cause and all prehearing statements provided to the Respondent did not include notice that the 326 CBS Wholesale Distribs., 74 FR 36746, 36749 (2009) (‘‘The Agency must provide a Respondent with notice of those acts which the Agency intends to rely on in seeking the revocation of its registration so as to provide a full and fair opportunity to challenge the factual and legal basis for the Agency’s Action.’’). E:\FR\FM\03OCN2.SGM 03OCN2 61620 Federal Register / Vol. 78, No. 192 / Thursday, October 3, 2013 / Notices tkelley on DSK3SPTVN1PROD with NOTICES2 Government intended to apply Factor Five in these proceedings, and where such intention was not made known to the Respondent until after the end of the evidentiary hearing, the provisions of Factor Five should not be used as a basis for taking adverse action against the Respondent. 10. Upon such evidence as is now before the Administrator, the Government has under Factor Four met its burden and has made a prima facie case in support of the proposed order revoking the Respondent’s DEA Certificate of Registration. 11. Upon a review of the record as a whole, including all claims made in the VerDate Mar<15>2010 19:03 Oct 02, 2013 Jkt 232001 Respondent’s post-hearing brief, where the Respondent has failed to affirmatively acknowledge specific acts of improper prescribing of controlled substances and failed to establish by credible and substantial evidence effective steps taken in remediation, there is insufficient evidence of remediation. Accordingly, the Government has established cause to revoke the Respondent’s DEA Certification. Recommendation As the Government has established its prima facie case by at least a preponderance of the evidence, and the PO 00000 Frm 00030 Fmt 4701 Sfmt 9990 Respondent has failed to rebut that case through a demonstration of sufficient remediation, the Respondent’s DEA Certificate of Registration should be REVOKED and any pending application for the renewal or modification of the same should be DENIED. Dated: June 5, 2013. Christopher B. McNeil, Administrative Law Judge. [FR Doc. 2013–24052 Filed 10–2–13; 8:45 am] BILLING CODE 4410–09–P E:\FR\FM\03OCN2.SGM 03OCN2

Agencies

[Federal Register Volume 78, Number 192 (Thursday, October 3, 2013)]
[Notices]
[Pages 61591-61620]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24052]



[[Page 61591]]

Vol. 78

Thursday,

No. 192

October 3, 2013

Part IV





Department of Justice





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Drug Enforcement Administration





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Decision and Order: Clair L. Pettinger, M.D.; Notice

Federal Register / Vol. 78 , No. 192 / Thursday, October 3, 2013 / 
Notices

[[Page 61592]]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 13-12]


Decision and Order: Clair L. Pettinger, M.D.

    On June 5, 2013, Administrative Law Judge Christopher B. McNeil 
(hereinafter, ALJ) issued the attached Recommended Decision \1\ 
(hereinafter, cited as R.D.).Therein, the ALJ found that the Government 
had proved that the Respondent issued nine prescriptions for controlled 
substances ``that were not for a legitimate medical need and were not 
issued in the ordinary course of a professional medical practice,'' as 
well as a prescription for hydrocodone after his DEA registration had 
been suspended, and that this evidence establishes that ``the 
Respondent's continued [registration] is inconsistent with the public 
interest. R.D. at 57. The ALJ further found that the Government ``has 
made a prima facie case in support of the proposed order revoking the 
Respondent's registration'' and that ``Respondent . . . failed to 
affirmatively acknowledge specific acts of improper prescribing of 
controlled substances and failed to establish by credible and 
substantial evidence effected steps taken in remediation.'' Id. at 58. 
Accordingly, the ALJ found that ``the Government has established cause 
to revoke the Respondent's DEA'' registration, id., and recommended 
that his registration be revoked and that any pending applications to 
renew or modify his registration be denied. Id. at 59.
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    \1\ All citations to the Recommended Decision are to the slip 
opinion as issued by the ALJ.
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    Both parties filed exceptions to the Recommended Decision. 
Thereafter, the record was forwarded to me for Final Agency Action.
    Having considered the record in its entirety, including each 
party's exceptions, I have decided to adopt the ALJ's findings of fact 
and conclusions of law, except as discussed below. While I reject some 
aspects of the ALJ's discussion, I agree with the ALJ's legal 
conclusions that Respondent violated federal law in prescribing to each 
of the undercover officers, and that the Government has established a 
prima facie case to revoke Respondent's registration on the ground that 
he has committed acts which render his registration ``inconsistent with 
the public interest.'' 21 U.S.C. 824(a)(4). I further agree with the 
ALJ's conclusion that Respondent has failed to produce sufficient 
evidence to rebut the Government's prima facie case, as notwithstanding 
the unrefuted evidence that he knowingly and intentionally diverted 
drugs by issuing unlawful prescriptions, he failed to acknowledge his 
misconduct. A discussion of each party's exceptions follows.

Respondent's Exceptions

    Respondent first takes exception to the ALJ's finding that he 
authorized a new prescription for 180 dosage units of Norco, a 
combination drug containing hydrocodone, a schedule III controlled 
substance, and acetaminophen, for his patient B.D., on December 21, 
2012, ten days after he had been served with the Order to Show Cause 
and Immediate Suspension of Registration. Resp. Exceptions, at 1-4. In 
support of the allegation, the Government introduced several documents 
from the Safeway Pharmacy which filled the prescription. These 
included: (1) A copy of a prescription issued to B.D. by Respondent on 
October 22, 2012 for 180 dosage units of Norco, which authorized two 
refills; and (2) a printout from the pharmacy showing B.D.'s medical 
expenses between August 13 and December 21, 2012. GX 24, at 2, 4. Of 
note, the latter shows that the prescription, which was assigned the 
number 4362259, was filled on October 22, 2012, and refilled on 
November 12 and December 3, 2012. Id. at 4. Of further note, this 
document shows that on December 21, 2012, the pharmacy dispensed an 
additional 180 tablets of Norco to B.D., under a new prescription 
number and attributed the prescription to Respondent. Id.
    The Government also introduced into evidence a copy of a 
prescription refill request form, which was dated December 20, 2012, 
and which was faxed by the pharmacy to Respondent and then faxed backed 
to the pharmacy. Id. at 3; Tr. 91. Under the heading ``PRESCRIPTION 
REQUEST,'' the form indicated that the prescription was for B.D. and 
was 180 tablets of Norco; the form also stated that the prescription 
was ``First Filled'' on ``Oct 22, 2012,'' and ``Last Filled'' on ``Dec 
3, 2012.'' Id. In the space for the doctor's signature, the form bore 
the following notation: ``N Pettinger MD Can fill current refill No New 
Refill.'' Id. On the upper right side of the form, were the words ``MD 
and ``OK x 1,'' each of which was circled; in addition, an arrow was 
drawn from the latter to the words ``No New Refill.'' Id.
    At the hearing, the Special Agent, who was the Case Agent, 
testified that upon serving the Order to Show Cause and Immediate 
Suspension of Registration on Respondent, he told Respondent ``that he 
was unable to dispense, prescribe or otherwise issue controlled 
substances from that point on'' and that Respondent ``stated to me that 
he understood that.'' Tr. 87. The Case Agent further explained that 
while it was illegal for Respondent to authorize a new prescription 
after his registration was suspended, any refills that had been 
authorized prior to the suspension could be filled. Id. at 112.
    In his testimony, the Case Agent explained that when the Refill 
Request fax was sent, ``the patient had already refilled all the 
refills that were on the previous prescription''; the Agent also 
answered ``no,'' when asked if it would have been necessary to contact 
Respondent if there had been additional refills remaining on the 
prescription. Id. at 92. The Case Agent further testified that as far 
as he knew, pharmacists call a physician only to verify a new 
prescription and would not call to verify a refill. Id. at 112-13.
    The Case Agent also testified (erroneously) that there was no 
information on the Refill Request form that showed that all of the 
previously authorized refills had been dispensed by the pharmacy. Id. 
at 115. Finally, the Case Agent testified that he could not state that 
Respondent had ``knowingly'' issued a new prescription in violation of 
the suspension order. Id. at 116.
    Reviewing the Refill Request form, the ALJ concluded that the 
circled words ``MD'' and ``No New Refill,'' along with the arrow drawn 
to the words ``No New Refill,'' ``indicat[e] that the pharmacist 
contacted [Respondent] and was told it was okay to dispense 180 generic 
Norco tablets, despite the fact that the pharmacy had already dispensed 
all of the medication authorized by the prescription written by 
[Respondent] on October 22, 2012.'' R.D. at 9. The ALJ thus reasoned 
that ``[w]hile this evidence does not establish that the pharmacist 
told [Respondent] that B.D. filled this prescription three times 
already, it does establish that [Respondent] knowingly authorized 
another 180 unit dispensation after being called by the pharmacist, a 
condition that would not have existed had there been a refill available 
under the original prescription.'' Id. at 10.
    Taking exception to this finding, Respondent asserts that ``Exhibit 
24 does not establish that Respondent was aware of the prior refills.'' 
Resp. Exceptions, at 3. However, notwithstanding the testimony of the 
Case Agent and the ALJ's finding, the Refill Request form actually did 
contain evidence that the previously authorized refills had been 
dispensed. Specifically, the form indicates that the prescription had 
last been filled on December 3, 2012

[[Page 61593]]

and been filled in the full amount of 180 tablets. RX 24, at 3. 
Moreover, the bottom of the form includes the notations: ``Remaining 
Qty: O'' and ``Rx Expires On: 04/23/2013.'' RX 24, at 3. These, of 
course, are references to the previous prescription which had been 
issued on October 22, 2012, and which, in accordance with DEA 
regulations, was good for six months. See 21 CFR 1306.22(a). Beyond 
this, as the ALJ pointed out, had there been any refills remaining on 
the original (October 22nd) prescription, the pharmacy would have had 
no reason to send the refill request form.
    Respondent nonetheless asserts that his notation on the Refill 
Request Form used the word ``refill'' and not ``prescription'' and 
further states: ``can fill current refill no new refill.'' Resp. 
Exceptions, at 4. He argues that ``[t]his contemporaneous handwritten 
note can only be interpreted as documenting Respondent's belief that he 
was confirming the ``current'' (i.e., existing) refill authorization 
and specifically declining to authorize a `new refill' (current 
prescription), just as instructed by'' the Case Agent. Id.
    However, in his exceptions, Respondent entirely ignores that the 
Refill Request form also contains the circled notations of ``MD'' and 
``OK x 1,'' along with the arrow that was drawn towards the words ``No 
New Refill.'' As noted above, based on these notations, the ALJ 
concluded that Respondent ``knowingly authorized another 180 unit 
dispensation after being called by the pharmacist.'' R.D. at 10.
    The ALJ's conclusion that Respondent was called by the pharmacist 
and approved an additional dispensation of Norco is a permissible 
inference from the evidence.\2\ While this may not be the only 
permissible inference which can be drawn from the notation, it 
nonetheless constitutes probative evidence of the allegation. 
Significantly, when called to testify, Respondent invoked his Fifth 
Amendment privilege. However, as the Supreme Court has explained, ``the 
Fifth Amendment does not forbid adverse inferences against parties to 
civil actions when they refuse to testify in response to probative 
evidence offered against them.'' Baxter v. Palmigiano, 425 U.S. 308, 
318 (1976). As the Tenth Circuit has noted, ``[t]his rule applies with 
equal force to administrative proceedings.'' MacKay v. DEA, 664 F.3d 
808, 820 (10th Cir. 2011) (citing Hoxie v. DEA, 419 F.3d 477, 483 (6th 
Cir. 2005)). See also Keating v. Office of Thrift Supervision, 45 F.3d 
322, 326 (9th Cir. 1995). Because Respondent refused to testify in 
response to the evidence suggesting that he had spoken with a 
pharmacist and authorized an additional dispensing (notwithstanding his 
having written ``No New Refill'' on the Refill Request form), I draw an 
adverse inference and conclude that he did authorize the December 21, 
2012 dispensing, at which time his registration had been suspended. And 
because there was no reason for the pharmacy to contact him regarding a 
refill request unless there were no refills remaining, I conclude that 
Respondent knowingly authorized the dispensing in violation of the 
Immediate Suspension Order.
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    \2\ The Case Agent testified that the documents, which are 
identified as pages 2-4 of Government Exhibit 24, were obtained from 
the pharmacist at the Safeway Pharmacy and are ``true and accurate 
cop[ies] of the documentation [he] obtained from the'' pharmacy. Tr. 
89.
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    Next, Respondent argues that the nine prescriptions which he issued 
to the undercover officers ``cannot possibly be probative of whether 
[his] continued [r]egistration is inconsistent with the public 
interest.'' Resp. Exceptions, at 5. According to Respondent, ``[i]n 
addressing the public interest question, the key word is obviously the 
word `is[,]' not `was.' '' Id.
    Respondent thus maintains that because the undercover officers 
``never intended to consume the medication'' and ``were never at risk 
from this medication,'' his issuance of the prescriptions is not 
probative of the public interest. Id. He further asserts that because 
he issued the prescriptions ``over a year before the hearing,'' his 
conduct in issuing them ``cannot possibly be probative of whether [his] 
continued Registration [is] inconsistent with the public interest 
unless the Government shows either that this conduct ``typif[ies] his 
conduct with actual patients who did consume the medications'' or that 
his ``prescribing practices did not improve to the point that he was in 
compliance with DEA requirements and the applicable standard of care.'' 
Id. Respondent thus concludes by arguing that ``[t]his analysis goes to 
the heart of the public interest question under 21 U.S.C. Sec.  [Sec.  
] 823(f)(4) and 824,'' and that ``[a]ll of these provisions require an 
assessment of [his] current conduct and compliance.'' Id. at 6.
    As for his contention that ``the key word is . . . `is' [and] not 
`was,' '' Respondent ignores, that in section 824(a), Congress granted 
the Agency authority to suspend or revoke a registration ``upon a 
finding that the registrant . . . has committed such acts as would 
render his registration under section 823 of this title inconsistent 
with the public interest.'' 21 U.S.C. 824(a)(4) (emphasis added). Thus, 
while a decision to continue or grant a new registration is prospective 
in nature, the Agency properly bases the public interest determination 
on instances of past misconduct, of which, here, there is no 
shortage.\3\ As the Seventh Circuit has explained, and as the Agency 
has noted in numerous cases, ``past performance is the best predictor 
of future performance.'' ALRA Labs, Inc., v. DEA, 54 F.3d 450, 452 (7th 
Cir. 1995); see also, e.g., Medicine Shoppe-Jonesborough, 73 FR 364, 
387 (2008), pet. for rev. denied, Medicine Shoppe-Jonesborough v. DEA, 
300 Fed. Appx. 409 (6th Cir. 2008).
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    \3\ Notwithstanding that section 823(f) authorizes the Attorney 
General to ``deny an application for [a practitioner's] registration 
. . . if the Attorney General determines that the issuance of such 
registration . . . would be inconsistent with the public interest,'' 
here again, the provision explicitly recognizes the probative nature 
of an applicant's past conduct in making this determination as 
demonstrated by factor two, which directs the Attorney General to 
consider ``[t]he applicant's experience in dispensing . . . 
controlled substances,'' and factor three, which directs the 
Attorney General to consider ``[t]he applicant's conviction record 
under Federal or State laws relating to the manufacture, 
distribution, or dispensing of controlled substances.'' 21 U.S.C. 
823(f)(2) & (3).
    While the text of factor four, which directs the Attorney 
General to consider ``[c]ompliance with applicable State, Federal or 
local laws relating to controlled substances'' is not similarly 
limited to an applicant's past conduct, (nor limited to the specific 
applicant, see David A. Ruben 78 FR 38363, 38385 n.47 (2013)), the 
Agency has long considered an applicant's record of compliance with 
laws related to controlled substances under this factor. See Albert 
Lepis, M.D., 51 FR 17555, 17555-56 (1986) (discussing physician's 
dispensings in violation of state law limiting quantity of 
controlled substances that could be prescribed under factor four (as 
well as factor two)); Carriage Apothecary, Inc., 52 FR 27599, 27600 
(1987).
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    As for Respondent's contention that the nine unlawful prescriptions 
are not probative of the public interest determination, because the 
undercover agents ``never intended to consume the medication'' and thus 
were ``never at risk,'' Resp. Exceptions at 5, the evidence clearly 
showed that Respondent intentionally and knowingly diverted controlled 
substances. Indeed, as catalogued by the ALJ, the Government's Expert 
testified to some twenty-two areas of concern regarding Respondent's 
prescribing practices. See R.D. at 30-32. These included his failure to 
resolve numerous red flags such as statements by the undercover 
officers that they were either diverting controlled substances or 
seeking them for recreational use; his falsification of medical records 
by indicating that he had performed an extensive physical exam when he 
had not; his failure to even examine the area of the body which was the 
source of an

[[Page 61594]]

undercover officer's purported pain; his--in the words of the 
Government's Expert--``[t]rolling for symptomology''; his suggesting to 
a patient that she claim to have pain radiating from her back into her 
leg to justify obtaining an MRI, as this was needed to justify his 
prescribing of oxycodone to her; and his typically rapid fire review 
with the patients of their medical history. See id. at 30-33. That each 
of the patients was an undercover agent does not make any of 
Respondent's acts of prescribing to them any less a violation of 
federal law. I thus reject Respondent's fatuous contention that his 
prescribing to the undercover officers is not probative of whether his 
registration is inconsistent with the public interest unless the 
Government can show that his conduct ``can somehow be translated to 
typify his conduct with actual patients who did consume the 
medications.'' Resp. Exceptions, at 5.
    Respondent did allow that his prescribings to the undercover agents 
would be probative of the public interest determination if the 
Government could show that his ``prescribing practice did not improve 
to the point that he was in compliance with DEA requirements and the 
applicable community standard of care.'' Id. Here again, Respondent is 
confused, but not because the Agency's precedent is unclear. Under 
Agency precedent, DEA can revoke based on proof of a single act of 
intentional or knowing diversion. See Dewey C. MacKay, 75 FR 49956, 
49977 (2010); see also Daniel Olefsky, 57 FR 928, 928-29 (1992). 
Moreover, where, as here, the Government makes out a prima facie case 
by showing that a registrant has committed acts which render his 
registration inconsistent with the public interest and which support 
the revocation of his registration, the registrant bears the burden of 
producing evidence to show that he accepts responsibility for his 
misconduct and has taken sufficient remedial measures to assure the 
Administrator that he will not engage in future misconduct. MacKay, 75 
FR at 49977. (collecting cases). Having established its prima facie 
case by showing that Respondent diverted controlled substances on 
multiple occasions, the Government was not required to show that his 
``prescribing practices [have] not improve[d] to the point that he [is] 
in compliance with DEA requirements and the applicable . . . standard 
of care.'' Resp. Exceptions, at 5.
    Next, Respondent argues that ``[i]t is significant that the 
Government failed to introduce any evidence or testimony concerning 
Respondent's care of a single current patient, even a `drug seeking' 
one.'' Id. at 6. He also asserts that ``[t]he Government seized 
hundreds of medical charts'' when it served the Immediate Suspension 
Order and yet ``failed to introduce a single one of these charts, 
although presumably they were aware that Respondent had drug seeking 
patients in his practice.'' Id.
    Because of the extent and egregious nature of his misconduct, 
Respondent's registration was Immediately Suspended simultaneously with 
the commencement of this proceeding. Thus, Respondent is without 
authority to lawfully dispense controlled substances to any current 
patient. Respondent does not explain why his care of a single current 
patient would be probative of his ability to responsibly and lawfully 
dispense controlled substances.
    As for the Government's failure ``to introduce a single one of'' 
the patient charts it seized, the Government was not required to 
provide any such evidence to prove its case. Having conducted the nine 
undercover visits, the Government could reasonably conclude, based on 
its review of the evidence obtained during those visits, that 
Respondent was engaged in the diversion of controlled substances and 
that it had sufficient evidence to bring this proceeding. See T.J. 
McNichol, 77 FR 57133, 57146 (2012) (rejecting ALJ's reasoning that the 
Government was required to review patients charts it had seized ``to 
develop evidence that might enlighten the administrative record of 
[physician's] positive prescribing practices''; ``[h]aving garnered 
evidence of what it believed to be unlawful prescriptions issued to . . 
. four undercover officers, the Government was entitled to go to 
hearing with that evidence'').
    In a variation on a previous theme, Respondent further argues that 
his prescribing to the undercover officers ``is useless in determining 
the public interest question'' because ``all'' of the agents engaged in 
``diverting behavior'' by ``discussing extraneous matters'' with him. 
Resp. Exceptions, at 7. Respondent asserts that this behavior is 
atypical of drug seeking patients and that ``it tended to divert [his] 
attention from the symptoms he was asking about so that the recording 
would contain less evidence of a legitimate examination and history 
taking'' and also diverted his ``attention from his note taking which 
distorted the medical record itself.'' Id.
    However, as explained above, Respondent did not testify, and thus, 
there is no evidence to support his assertion that the putatively 
extraneous conversations diverted his attention from his 
responsibilities in either questioning his patients regarding their 
conditions and medical history or his note taking. Moreover, as the ALJ 
found (see R.D. at 15), while the Agents may have initiated the 
extraneous conversations, such as when Agent Breeden noted that 
Respondent had gone to Nebraska and that ``they play Penn State . . . 
this week,'' Respondent perpetuated the conversation by noting ``that 
Joe Paterno thing is so stupid,'' that ``these politically correct 
people just piss me off to no end'' and continuing to discuss the Penn 
State/Jerry Sandusky scandal for several minutes thereafter.\4\ See GX 
5, at 8-12. Furthermore, the extraneous conversation had long ended by 
the time Agent Breeden and Respondent proceeded to discuss what drugs 
the former (in his undercover capacity) was using and why he was using 
them, and during which the following exchange occurred:
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    \4\ Respondent asserts that the ALJ's Recommended Decision 
``recognized [that] all Agents engaged in this diverting behavior,'' 
by trying to distract him during his evaluation of the patients. 
Resp. Exceptions, at 7. However, following a review of the 
recordings, I agree with the ALJ's finding:
    That the conversations engaged in by these agents were [not] 
designed to divert [Respondent's] attention or keep him from 
performing a proper, adequate, physical examination. To the 
contrary, most of the extraneous dialogue recorded here was 
occasioned by Respondent himself. The record does, however, make 
clear that each of the undercover agents tried to act like drug-
seeking patients. . . .
    R.D. at 15.
---------------------------------------------------------------------------

    Dr: So you use the norcos and?
    Agent: Uh yes I use pretty much whatever I (unintelligible) 
whatever I have available.
    Dr: Ok the opanas are so damned expensive do you notice any high 
out of the opanas at all they make you dopy for (unintelligible)?
    Agent: (unintelligible) well compare to the old the old oxy's um 
. . . you know I got some friends who've used the um who don't like 
`em um I personally I like `em I mean I (unintelligible).
    Dr: which ones?
    Agent: the opanas . . . but they're harder to get for than the . 
. . roxicodones are . . . and they're way more expensive though.
    Dr: yea.
    Agent: the opanas are . . . ya know twice as much as the 
Roxicodone are.
    Dr: and then you you get the norcos as well?
    Agent: some sometimes mostly the Roxicodone and the opanas.

GX 5, at 27-28.

    Moreover, a further review of the transcript and recording shows 
that Respondent was not distracted when he informed the Agent that 
``for pain medication I would charge you $200 dollars . . . and then I 
charge you $80 dollars a month for your prescriptions,''

[[Page 61595]]

but that he was ``gonna do [the Agent] better than that because . . . 
I'm gonna give you the cannabis card'' for which, ``when I do the pain 
medication prescriptions with the cannabis then you know I charge $180 
for the cannabis recommendation,'' but that ``on the initial evaluation 
I charge people half on their prescriptions so instead of charging you 
$80 bucks I charge you $40.'' GX 5, at 38. Nor was Respondent 
distracted by the Agent when the latter explained that he had $200 on 
him and Respondent agreed that ``for $200 we'll just go ahead and do 
your prescriptions for your norcos and your and stuff'' and ``do the 
[cannabis] card for you too.'' Id.
    Later, after a discussion of various cannabis related issues, 
Respondent and the Agent proceeded to discuss what prescriptions the 
latter wanted, with the following exchange occurring:

    Dr: . . . what are we gonna do as far as prescriptions for what 
are you using you say you are using norcos?
    Agent: ah mostly the uh opana or the uh roxies um and then if uh 
I'm not sure if it'd be the same prescription or not 
(unintelligible) the cough syrup too.
    Dr: ok so basically you want to end up getting the oxycodone you 
want the IR's the 30 IR's?
    Agent: Ah, yea.
    Dr: ok and how many of those . . . are you taking?
    Agent: what is it (unintelligible) for a month what is it 120?
    Dr: Ok.

    Id. at 41-42. Here again, Respondent was not distracted. Nor was he 
distracted when the Agent also asked for the cough syrup, and 
Respondent replied: ``I'll give you the promethazine.'' Id. at
42.\5\
---------------------------------------------------------------------------

    \5\ It is noted that Respondent did ask the Agent various 
questions regarding his medical history. However, he did not ask any 
questions about the Agent's purported pain level and how it affected 
his ability to function. See Tr. 343 (testimony of Government's 
Expert: ``he's a tile man, and nowhere in the information that I 
listened to or read was there any conversation about how his pain 
conditions [sic] was interfering with his ability to be a tile man. 
It seems to me it would be very hard to be a tile man if you had 
knee pain or back pain.''); id. at 344-45 (testimony of Government's 
Expert; ``nor did I get any impression from the transcript or the 
recording of the degree of pain that was being suffered on a scale 
of one to [ten], or even using such words as mild, moderate or 
severe. None of that language was employed''); id. at 325-26 
(Expert's testimony discussing scope of questioning by a physician 
in assessing a patient's pain complaint).
    Nor does Respondent explain why these distractions prevented him 
from examining the Agent's knee, which was the purported area of the 
Agent's pain. See Tr. 133 (Agent's testimony that Respondent did not 
at any point look at his knee); see id. at 345-46 (testimony of 
Government's Expert: Noting that upon review of Agent Breeden's 
medical record, there was ``a very nondetailed examination of the 
musculoskeletal system, although that was quite relevant to the pain 
complaint, the pain complaint being knee pain. One would customarily 
expect to see a highly detailed knee examination and an examination 
of the joints on either side of the knee, that being the ankle and 
the hip'').
     I also reject Respondent's contention that the Government's 
Expert's testimony should be ``given very little weight'' because 
she ``had never qualified as an expert witness'' by testifying in a 
medical board case on ``the ``treatment of non-cancer pain.'' Resp. 
Exceptions, at 8. There is, of course, a first time for everything, 
and the Expert testified that she has reviewed other cases for the 
state medical board which involved the long-term use of opiates in 
managing chronic, non-cancer pain. Tr. 320. In addition, the Expert 
testified that she has been a clinical professor of medicine at the 
U.C. Davis School of Medicine for nearly thirty years; she also 
testified that in her prior position, she had evaluated one to five 
patients each week to determine whether to initiate long term opioid 
therapy for non-cancer pain and had prescribed oxycodone for one to 
two patients a week. Id. at 322-23.
---------------------------------------------------------------------------

    Finally, Respondent argues that the ALJ failed to give proper 
weight to his evidence of remediation. Resp. Exceptions, at 8-9. First, 
he argues that the ALJ failed to recognize that he expressed remorse 
when he admitted to the Case Agent ``that he had been over prescribing 
in the past.'' Id. at 8. Second, he argues that while the ALJ 
acknowledged ``the testimony of two patients (of Respondent) who 
received appropriate examinations and treatment,'' the ALJ ``made no 
finding impugning the veracity of [the clinic employee who testified] 
about improvements in the practice with respect to controlled substance 
prescribing.'' Id. at 8-9.
    As for the testimony of Respondent's patients that they received 
appropriate examinations and treatment and were helped by his 
treatment, neither patient testified that they possess medical 
expertise. Moreover, because under the CSA, ``registration is limited 
to those who have authority to dispense controlled substances in the 
course of professional practice, and patients with legitimate medical 
conditions routinely seek treatment from licensed medical 
professionals, every registrant can undoubtedly point to an extensive 
body of legitimate prescribing over the course of [his] professional 
career.'' Jayam Krishna-Iyer, 74 FR 459, 463 (2009). Thus, while 
Respondent may have treated these two legitimate patients 
appropriately, this says nothing about his management of persons who 
seek controlled substances to either abuse or divert them. See MacKay 
v. DEA, 664 F.3d at 819 (``Although Dr. MacKay may have engaged in the 
legitimate practice of pain medicine for many of his patients, the 
conduct found by the Deputy Administrator with respect to K.D. and M.R. 
is sufficient to support her determination that his continued 
registration is inconsistent with the public interest.'').
    It is acknowledged that the Practice Manager at the urgent care 
clinic, where Respondent is now employed, testified regarding the new 
procedures he instituted to screen out non-complying patients. However, 
to rebut the Government's prima facie case, Respondent was required to 
produce evidence not only as to his corrective measures, he was also 
required to acknowledge his misconduct in prescribing to the undercover 
officers. Medicine Shoppe-Jonesborough, 73 FR at 387 (quoting Samuel S. 
Jackson, 72 FR 23848, 23853 (2007)); John H. Kennedy, 71 FR 35705, 
35709 (2006). As the Tenth Circuit has explained:

    . . . The DEA may properly consider whether a physician admits 
fault in determining if the physician's registration should be 
revoked. When faced with evidence that a doctor has a history of 
distributing controlled substances unlawfully, it is reasonable for 
the . . . Administrator to consider whether that doctor will change 
his or her behavior in the future. And that consideration is vital 
to whether continued registration is in the public interest. Without 
Dr. MacKay's testimony, the Deputy Administrator had no evidence 
that Dr. McKay recognized the extent of his misconduct and was 
prepared to remedy his prescribing practices.

MacKay, 664 F.3d at 820 (citing Hoxie v. DEA, 419 F.3d 477, 483 
(2005)).
    Here, the only evidence regarding whether Respondent admits fault 
with respect to anything, was his admission during an interview (on the 
date the ISO was served) with the Case Agent ``that some of his 
patients were not legitimate'' and that ``a number of them were 
receiving too many pills.'' Tr. 104. Indeed, as noted above, at the 
hearing, Respondent invoked his Fifth Amendment privilege. Thus, 
Respondent has entirely failed to address the multiple acts of 
intentional diversion which he committed when he prescribed to the 
undercover officers. Respondent has therefore failed to produce 
sufficient evidence to rebut the conclusion that his continued 
registration would be consistent with the public interest. See MacKay, 
664 F.3d at 820; Medicine Shoppe-Jonesborough, 73 FR at 387.

The Government's Exceptions

    While the Government apparently agrees with the ALJ's ultimate 
conclusion of law and recommended order (i.e., that Respondent's 
registration is inconsistent with the public interest and should be 
revoked), it takes exception to two features of his recommended 
decision. First, it takes

[[Page 61596]]

exception to the ALJ's conclusion that even in a proceeding brought 
pursuant to section 824(a)(4), it must identify in the Show Cause Order 
each of the public interest factors it is relying on. Govt. Exceptions, 
at 1-4. Second, it takes exception to the ALJ's legal conclusion that 
factor two (the experience factor) should not be considered ``[w]here 
evidence of the Respondent's experience, as expressed through his 
patients and employees, is silent with respect to the quantitative 
volume of the Respondent's experience,'' R.D. at 56, thus impliedly 
suggesting that the Government has an obligation to put forward 
evidence as to the volume of a registrant's prescribing activities in 
order to rely on this factor. Gov. Exceptions, at 4-9. Both of the 
Government's exceptions are well taken.
    As for his conclusion that the Government cannot rely on factor two 
because it did not cite the factor in either the Show Cause Order or 
its Pre-Hearing Statements, the ALJ cites no authority for this hyper-
technical view of the Agency's notice obligation. Contrary to the ALJ's 
understanding, that the Government did not refer to factor two until 
its opening statement violated neither federal law nor the Due Process 
Clause.
    Here, the Government set forth that it was proposing the revocation 
of Respondent's registration ``pursuant to 21 U.S.C. 824(a)(4) . . . 
because [his] continued registration is inconsistent with the public 
interest, as that term is defined in 21 U.S.C. 823(f).'' ALJ Ex, 1, at 
1. In addition, the Government set forth specific factual allegations 
regarding each of the nine undercover visits which it alleged resulted 
in Respondent issuing prescriptions ``outside the usual course of 
professional practice or for other than a legitimate medical purpose.'' 
Id. at 2-3. The Government further alleged that Respondent violated 21 
U.S.C. 841(a)(1), which makes it unlawful to intentionally or knowingly 
distribute a controlled substance except as authorized by the 
Controlled Substances Act, as well as 21 CFR 1306.04(a), which requires 
that a controlled substance prescription ``be issued for a legitimate 
medical purpose by [a] practitioner acting in the usual course of his 
professional practice.''
    `` `Pleadings in administrative proceedings are not judged by the 
standards applied to an indictment at common law.' '' Aloha Airlines v. 
Civil Aeronautics Bd., 598 F.2d 250, 262 (D.C. Cir. 1979) (quoted in 
CBS Wholesale Distributors, 74 FR 36746, 36749 (2009)); accord Citizens 
State Bank of Marshfield v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984). 
Thus, ``the failure of the Government to disclose an allegation in the 
Order to Show Cause is not dispositive and an issue can be litigated if 
the Government otherwise timely notifies a [r]espondent of its intent 
to litigate the issue.'' CBS Wholesale, 74 FR at 36570. And while the 
Agency has held that ``the parameters of the hearing are determined by 
the prehearing statements,'' consistent with numerous court decisions, 
it has also recognized that even where an allegation was not raised in 
either the Show Cause Order or pre-hearing statements, the parties may 
nonetheless litigate an issue by consent. Pergament United Sales, Inc., 
v. NLRB, 920 F.2d 130, 135-37 (2d Cir. 1990); see also Duane v. 
Department of Defense, 275 F.3d 988, 995 (10th Cir. 2002) (discussing 
Facet Enterprises, Inc., v. NLRB, 907 F.2d 963, 974 (10th Cir. 1990); 
``we held that defendant had constructive notice of an alternate theory 
of liability not described in the formal charge when the agency 
detailed that theory during its opening argument and at other points 
during the hearing and when the defendant's conduct revealed that it 
understood and attempted to defend against that theory''); Grider Drug 
#1 & Grider Drug #2, 77 FR 44070, 44077 (2012) n.23 (holding that 
notwithstanding that the Government did not provide adequate notice of 
its intent to litigate an allegation in either the Show Case Order or 
its pre-hearing statements, where respondents ``did not object that the 
allegation was beyond the scope of the proceeding and that they were 
denied adequate notice of it'' and ``fully litigated the issue,'' the 
allegation was litigated by consent) (citing Citizens State Bank, 751 
F.2d at 213; Kuhn v. Civil Aeronautics Bd., 183 F.2d 839, 841-42 (D.C. 
Cir. 1950); and Yellow Freight System, Inc., v. Martin, 954 F.2d 353, 
358 (6th Cir. 1992)).
    ``The primary function of notice is to afford [a] respondent an 
opportunity to prepare a defense by investigating the basis of the 
complaint and fashioning an explanation that refutes the charge of 
unlawful behavior.'' Pergament United Sales, 920 F.2d at 135 (citation 
omitted). The Government adequately fulfilled this function when it 
disclosed the legal authority for the Agency's proposed revocation of 
Respondent's registration, see ALJ Ex. 1, at 1 (citing 21 U.S.C. 
824(a)(4), 823(f)); the factual allegations that Respondent had issued 
prescriptions for oxycodone to undercover agents on nine different 
occasions, see id. at 2-3; and the legal basis for its contention that 
the prescriptions were unlawful. See id. at 2 (alleging that Respondent 
``issued these prescriptions outside the usual course of professional 
practice or for other than a legitimate medical purpose, in violation 
of 21 U.S.C. 823(f)(4),\6\ 841(a)(1), and 21 CFR 1306.04(a)'').
---------------------------------------------------------------------------

    \6\ While the Government alleged that Respondent's prescribings 
to the undercover agents violated section 823(f)(4), this provision 
cannot be violated because it does not create a substantive rule of 
conduct. Rather, it is simply a factor which Congress directed the 
Agency to consider in making the public interest determination under 
section 823(f). Cf. Bio Diagnostic International, 78 FR 39327, 39330 
(2013) (quoting Penick Corp., Inc. v. DEA, 491 F.3d 483, 490 (D.C. 
Cir. 2007) (other citations omitted) (``the `enumerated factors 
represent components of the public interest rather than independent 
requirements for registration' '')).
---------------------------------------------------------------------------

    That the Government did not specifically reference it was seeking 
an analysis of this evidence under factor two (as well as factor four) 
until its opening statement did not in any way prejudice Respondent.\7\ 
Respondent neither objected to the Government's argument, nor argued in 
its post-hearing brief that he was prejudiced by the Government's 
assertion that his various violations ``are grounds for revocation of 
[his] registration based on'' both factors two and factor four. Tr. 70. 
Indeed, in a section of his post-hearing brief entitled ``undisputed 
matters,'' Respondent noted that ``[t]he Government, in its opening 
statement set forth its intention to prove, in its case and [sic] 
chief, that Respondent's DEA registration should be revoked based on 
the public interest factors set forth in 21 U.S.C. 823(f) factors 2 and 
4 only.'' Resp. Post-Hrng. Br. 4 (citing Tr. 69-70). Thus, even if the 
public interest factors created substantive rules of conduct, which 
they do not, this case stands four square with Facet Enterprises. See 
907 F.2d at 972.
---------------------------------------------------------------------------

    \7\ See Tr. 70 (``These violations of the Controlled Substances 
Act and DEA regulations are grounds for revocation of the 
Respondent's DEA registration based on the public interest pursuant 
to 21 U.S.C. 824(a)(4) as determined by 21 U.S.C. 823(f), Factor 2, 
the registrant's experience at dispensing controlled substances, and 
Factor 4, compliance with applicable state, federal or local laws 
relating to controlled substances.'').
---------------------------------------------------------------------------

    Even if Respondent had claimed prejudice, I would not find the 
argument persuasive. This is so because whether the Government's 
evidence regarding the prescriptions was considered under factor two 
(the experience factor), factor four (the compliance factor), or both 
factors together, Respondent knew `` `what conduct was being alleged 
and ha[d] a fair opportunity to present [his] defense.' '' Duane v. 
Department of Defense, 275 F.3d at 995 (quoting Facet Enterprises., 907 
F.2d at 972). The allegations that Respondent violated the CSA's 
prescription requirement and

[[Page 61597]]

unlawfully distributed controlled substances to the undercover agents, 
as well as the potential defenses to the allegations, are the same 
whether the conduct is considered under factor two or factor four. 
Accordingly, while I agree with the ALJ's conclusion that Respondent 
waived any objection to the Agency's consideration of the prescription 
evidence under factor two, I reject the ALJ's conclusion that the 
Government did not provide adequate notice of ``its intention to rely 
on Factor Two in this hearing.'' R.D. at 46.
    The Government also took exception to the ALJ's legal conclusion 
that factor two ``should not be used to determine whether Respondent's 
continued registration is inconsistent with the public interest.'' Gov. 
Exceptions, at 4-9. In support of this conclusion, the ALJ offered the 
following reasoning:

    In order to establish a basis for revoking a Certificate of 
Registration based on the provisions of 21 U.S.C. Sec.  823(f)(2) 
(Factor Two), and assuming Factor Two applies to both applicants and 
registrants, the Government must present evidence establishing, by 
at least a preponderance, that the experience of the Respondent in 
dispensing controlled substances is of such character and quality 
that his continued registration is inconsistent with the public 
interest. This requires evidence of both the qualitative and 
quantitative volume of the Respondent's experience. Where evidence 
of the Respondent's experience, as expressed through his patients 
and employees, is silent with respect to the quantitative volume of 
the Respondent's experience, and requires speculation to support an 
adverse finding under Factor Two, this Factor should not be used to 
determine whether the Respondent's continued registration is 
inconsistent with the public interest.

R.D. at 56. I reject the ALJ's analysis as it entirely ignores relevant 
precedent and is illogical.

    Earlier in his Recommended Decision, the ALJ explained that ``in 
analyzing a registrant's experience under Factor Two [that] the 
Administrator should consider the context of a registrant's entire 
dispensing practices, notwithstanding that isolated acts against the 
public interest can outweigh substantial positive experience.'' R.D. at 
43. As support for this reasoning, the ALJ cited four cases: The 
Eleventh Circuit's unpublished decision in Jayam Krishna-Iyer; as well 
as the Agency's decisions in Jeffery J. Becker, 77 FR 72387 (2012); 
T.J. McNichol, 77 FR 57133 (2012); and Rene Casanova, 77 FR 58150 
(2012). Notably, the ALJ did not discuss either the Agency's decision 
on remand in Krishna-Iyer, 74 FR 459 (2009), or its decision in Dewey 
C. MacKay, 75 FR 49956 (2010). Nor did the ALJ discuss the Tenth 
Circuit's decision in MacKay. See MacKay v. DEA, 664 F.3d 808 (10th 
Cir. 2011).
    On remand in Krishna-Iyer, I discussed at length the role of so-
called ``positive experience'' evidence in Agency proceedings where, as 
here, the Government has proved that a registrant has committed 
intentional diversion. Therein, in response to the court's instruction 
that I re-consider my findings under the experience factor, giving 
``particular attention to the entire corpus of [the physician's] record 
in dispensing controlled substances [notwithstanding that there was no 
such evidence in the record], not only the experience [with the] 
undercover officer[s],'' I assumed, without deciding, that the 
physician's ``prescribings of controlled substances to every other 
person she has treated constitute `positive experience.' '' 74 FR at 
462-63. However, I explained that the physician's ``prescribings to 
thousands of other patients do not . . . render her prescribings to the 
undercover officers any less unlawful, or any less acts which `are 
inconsistent with the public interest.' '' Id. at 463 (21 U.S.C. 
823(f)).
    Moreover, I then explained that under the CSA, only those persons 
who are authorized to dispense controlled substances under the laws of 
the State in which they practice are entitled to be registered. Id. 
Continuing, I explained that ``[b]ecause under law, registration is 
limited to those who have authority to dispense controlled substances 
in the course of professional practice, and patients with legitimate 
medical conditions routinely seek treatment from licensed medical 
professionals, every registrant can undoubtedly point to an extensive 
body of legitimate prescribing over the course of her professional 
career.'' Id.
    I then discussed several cases in which the practitioners had 
argued that the Agency should ignore their acts of intentional or 
reckless diversion because they had dispensed controlled substances to 
thousands of patients legitimately. Id. (discussing Paul J. Caragine, 
Jr., 63 FR 51592, 51599-600 (1998); Medicine Shoppe-Jonesborough, 73 FR 
at 386 & n.56). For example, in Caragine, the Agency noted in its 
discussion of factor two that the physician had practiced medicine for 
20 years and had ``seen over 15,000 patients.'' 63 FR at 51599. While 
the Agency did not dispute this, it explained that what was ``[a]t 
issue in this proceeding is Respondent's controlled substance 
prescribing to 18 patients.'' Id. After a lengthy discussion of the 
physician's prescribing practices with respect to the patients (some of 
which rejected the ALJ's findings of improper prescribing), which was 
conducted under the auspices of factor two, see id. at 51599-600, the 
Agency explained ``that even though the patients at issue are only a 
small portion of Respondent's patient populations, his prescribing of 
controlled substances to these individuals raises serious concerns 
regarding [his] ability to responsibly handle controlled substances in 
the future.'' Id. at 51600.\8\
---------------------------------------------------------------------------

    \8\ Moreover, in contrast to this case, the Agency acknowledged 
that the patients at issue all ``had legitimate medical problems 
that warranted some form of treatment.'' 63 FR at 51601. It should 
also be noted there was no evidence that the physician had knowingly 
or intentionally diverted controlled substances and the physician 
put on evidence of his rehabilitation.
---------------------------------------------------------------------------

    More recently, in Medicine Shoppe-Jonesborough, I concluded that 
notwithstanding the pharmacy's argument that it had 17,000 patients, 
the evidence that it had diverted controlled substances to twelve 
patients established that its ``experience in dispensing controlled 
substances warrants a finding that its continued registration is 
inconsistent with the public interest.'' 73 FR at 386. Noting that 
``[t]he fundamental question under the CSA is whether Respondent `has 
committed such acts as would render [its] registration inconsistent 
with the public interest,' '' I concluded that ``[n]o amount of 
legitimate dispensings can render Respondent's flagrant violations 
[acts which are] `consistent with the public interest.' '' Id. n. 56.
    In Krishna-Iyer, I also noted that DEA had revoked a practitioner's 
registration based on a physician's presentation, at the same time, of 
two fraudulent prescriptions to a pharmacy, noting that the physician 
had `` `refuse[d] to accept responsibility for his actions and does not 
even acknowledge the criminality of his behavior.' '' Id. at 463 
(discussing and quoting Alan H. Olefsky, 57 FR 928, 928-29 (1992)). I 
therefore held that ``evidence that a practitioner has treated 
thousands of patients does not negate a prima facie showing that the 
practitioner has committed acts inconsistent with the public 
interest.'' Id. And I further explained that ``[w]hile such evidence 
may be of some weight in assessing whether a practitioner has credibly 
shown that she has reformed her practices, where a practitioner commits 
intentional acts of diversion and insists she did nothing wrong, such 
evidence is entitled to no weight.'' Id.
    Thus, in Krishna-Iyer, I adhered to my previous conclusion that the 
``Respondent's dispensings to the undercover officers and her pre-
signing of prescriptions and unlawful delegation of her prescribing 
authority

[[Page 61598]]

to her nurse, establish a prima facie case that her continued 
registration is `inconsistent with the public interest.' '' Id. 
(quoting 21 U.S.C. 824(a)(4)). I also made clear that had Respondent 
not acknowledged her misconduct, I would have revoked her registration 
again.
    Subsequently, in MacKay, I found that the evidence that the 
physician had intentionally diverted controlled substances to two 
patients and did so on multiple occasions was ``sufficient to hold that 
the government had made a prima facie showing that [the physician] had 
committed acts which render his registration inconsistent with the 
public interest.'' 75 FR at 49977. Citing the Eleventh Circuit's 
unpublished decision in Krishna-Iyer, the physician argued that `` `[a] 
better assessment of [his] medical practice and habits can be 
ascertained from [his] numerous positive experiences in prescribing 
controlled substances, some of which were recounted by the patients 
themselves . . . at the hearing.' '' Id. (quoting Resp. Summation Br. 
at 3).
    Based on my decision on remand in Krishna-Iyer, I rejected 
Respondent's argument. See id. As I explained: ``even assuming, without 
deciding, that Respondent's prescribing practices to all of his other 
patients (including those whose medical records were reviewed by the 
Government's expert) fully complied with the CSA and Utah law, these 
prescribings do not refute the evidence showing that he intentionally 
diverted to [the two patients] in violation of both the CSA and Utah 
law.'' Id. I therefore rejected the physician's ``arguments and 
conclude[d] that the Government ha[d] established a prima facie case 
that his continued registration is `inconsistent with the public 
interest.' '' Id. (citing 21 U.S.C. 823(f)).\9\
---------------------------------------------------------------------------

    \9\ The physician also put on the testimony of three fellow 
physicians and introduced affidavits from sixteen other physicians. 
75 FR at 49977. I placed no weight on this evidence because none of 
the physicians had personal knowledge of the physician's prescribing 
with respect to the two patients. Id. at n.37.
---------------------------------------------------------------------------

    On review of the Agency's decision, the Tenth Circuit held ``that 
substantial evidence supports the [Agency's] findings under factors two 
and four'' that the physician had ``knowingly diverted controlled 
substances in violation of state and federal law.'' MacKay v. DEA, 664 
F.3d at 818. Addressing the physician's contention that the Agency had 
failed to consider his ``positive experience'' evidence, the Tenth 
Circuit explained:

    None of the evidence presented by Dr. MacKay undermines the 
evidence relating to [the two patients]. Although numerous patients 
and colleagues of Dr. MacKay related their positive experiences with 
him, none had any personal knowledge regarding his treatment of 
[them]. Notably, Dr. MacKay's medical expert . . . failed to 
specifically discuss and justify Dr. MacKay's treatment of [the two 
patients]. As a result, none of Dr. MacKay's evidence contradicts 
the testimony and evidence presented by the DEA relating to the 
knowing diversion of drugs to these two patients.
    Nor did the Deputy Administrator misweigh the five statutory 
factors for determining the propriety of revocation, see 21 U.S.C. 
Sec.  823(f). In light of Dr. MacKay's misconduct relating to 
factors two and four, the government made a prima facie showing that 
Dr. MacKay's continued registration is inconsistent with the public 
interest. See MacKay, 75 FR at 49,977. Although Dr. MacKay may have 
engaged in the legitimate practice of pain medicine for many of his 
patients, the conduct found by the Deputy Administrator with respect 
to [the two patients] is sufficient to support her determination 
that his continued registration is inconsistent with the public 
interest.

Id. at 819. The Tenth Circuit thus denied the physician's petition for 
review.

    As noted above, in his discussion of the experience factor, the ALJ 
entirely failed to discuss the Agency's decision on remand in Krishna-
Iyer, as well both the Agency's and Tenth Circuit's decision in MacKay. 
However, as these precedents make clear, allegations that a 
practitioner has violated the prescription requirement (21 CFR 
1306.04(a)) are properly considered--for obvious reason--under the 
experience factor. Moreover, while the respondent- practitioner in a 
proceeding brought under sections 823(f) and 824(a)(4) may put on 
evidence as to his experience as a compliant registrant, the Government 
has no obligation to put forward such evidence.
    Thus, as the Tenth Circuit's decision in MacKay demonstrates, where 
the Government proves that a registrant has violated the prescription 
requirement, its evidence is still sufficient to make out a prima facie 
case under 21 U.S.C. 824(a)(4) even where the registrant has produced 
evidence of his experience as a compliant registrant. That being the 
case, it is absolutely clear that, where, as here, the Government has 
proved that a registrant has violated the prescription requirement, the 
Government is entitled to a finding that the evidence with respect to 
the registrant's experience in dispensing controlled substances 
establishes that he ``has committed such acts as would render his 
registration . . . inconsistent with the public interest.'' 21 U.S.C. 
824(a)(4); MacKay, 664 F.3d at 819.
    This is so, even where there is no evidence ``with respect to [the 
practitioner's] overall practice history,'' and ``we do not know the 
number of patients he has served.'' R.D. at 45.\10\ Indeed, 
notwithstanding various cases which have discussed the volume of a 
practitioner's dispensing activity as a relevant consideration under 
the experience factor, no case has ever placed the burden of producing 
evidence as to the volume of a practitioner's legitimate dispensings on 
the Agency. This is for good reason, as one of the fundamental 
principles of the law of evidence is that the burden of production on 
an issue is typically allocated to the party which is ``most likely to 
have access to the proof.'' Christopher B. Mueller & Laird C. 
Kirkpatrick, 1 Federal Evidence Sec.  3:3, at 432 (3d ed. 2007).\11\
---------------------------------------------------------------------------

    \10\ The ALJ further explained that ``we do not know . . . the 
value of [the Respondent's] service to the community, or other 
similar demographic factors relevant to the issue.'' R.D. 45. 
Contrary to the ALJ's understanding, there is no need to know any of 
this, because the Agency has held that so-called ``community 
impact'' evidence is irrelevant to the public interest 
determination. See Linda Sue Cheek, 76 FR 66972, 66972-73 (2011); 
Gregory D. Owens, 74 FR 36571, 36757 (2009).
    \11\ Nor is the Agency required to calculate a ratio of a 
practitioner's lawful to unlawful dispensings.
---------------------------------------------------------------------------

    I therefore reject the ALJ's conclusion of law that ``[w]here 
evidence of the Respondent's experience, as expressed through his 
patients and employees, is silent with respect to the quantitative 
volume of the Respondent's experience, . . . this Factor should not be 
used to determine whether the Respondent's continued registration is 
inconsistent with the public interest.'' R.D. at 56. Consistent with 
Agency precedent which has long considered violations of the CSA's 
prescription requirement under factor two (as well as factor four), I 
hold that the evidence relevant to factor two establishes that 
Respondent violated 21 CFR 1306.04(a) when he dispensed controlled 
substances to the various undercover officers, and that this 
establishes a prima facie case that he has committed acts which 
``render his registration inconsistent with the public interest.'' 21 
U.S.C. 824(a)(4). See also Carriage Apothecary, 52 FR 27599, 27600 
(1987) (holding that evidence that pharmacy failed to maintain proper 
records and could not account for significant quantities of controlled 
substances was relevant under both factors two and four); Eugene H. 
Tapia, 52 FR 30458, 30459 (1987) (considering evidence that physician 
did not perform physical exams and issued medically unnecessary 
prescriptions under factor two; no evidence regarding quantity of 
physician's legitimate dispensings); Thomas Parker Elliott, 52 FR 
36312, 36313 (1987) (adopting ALJ's conclusion

[[Page 61599]]

that physician's ``experience in the handling [of] controlled 
substances clearly warrants finding that his continued registration is 
inconsistent with the public interest,'' based on physician's having 
``prescribed enormous quantities of highly addictive drugs to [ten] 
individuals'' without adequate medical justification); Fairbanks T. 
Chua, 51 FR 41676, 41676-77 (1986) (revoking registration under section 
824(a)(4) and citing factor two, based, in part, on findings that 
physician wrote prescriptions which lacked a legitimate medical 
purpose; physician's ``improper prescribing habits clearly constitute 
grounds for the revocation of his . . . [r]egistration and the denial 
of any pending applications for renewal'').
* * * * *
    In his discussion of factor two, the ALJ also explained that:

[o]n its face, Factor Two does not appear to be directly related to 
registrants like Dr. Pettinger. By its express terms, Factor Two 
applies to applicants, and calls for an inquiry into the applicant's 
``experience in dispensing, or conducting research with respect to 
controlled substances.'' Thus, it is not clear that the inquiry into 
Dr. Pettinger's experience in dispensing controlled substances is 
warranted, given the limited scope of this factor.

R.D. at 42. The ALJ nonetheless ``assum[ed] [that] Factor Two does 
indeed pertain to both registrants and applicants.'' Id. at 42; see 
also R.D. 56 (``assuming Factor Two applies to both applicants and 
registrants'').

    Contrary to the ALJ's understanding, there was no need to assume 
that Factor Two applies to registrants. As demonstrated by the several 
hundred agency decisions which have considered all five of the public 
interest factors in revocation proceedings brought against 
practitioners, it does.\12\ See, e.g., Thomas H. McCarthy, 54 FR 20936, 
20938 (1989) (revoking registration and holding that ``[a]n applicant's 
`experience in dispensing' (which includes prescribing and 
administering), made applicable to registrants by 21 U.S.C. 824(a)(4), 
is a statutory factor which `shall' be considered as set out in 21 
U.S.C. 823(f)(2)'').
---------------------------------------------------------------------------

    \12\ In addition to the cases involving practitioners, there are 
numerous published decisions of revocation proceedings brought 
against other categories of registrants (such as list I chemical 
distributors) in which the Agency considered all of the public 
interest factors applicable to the particular category of 
registrant.
---------------------------------------------------------------------------

    In section 824(a)(4), Congress provided the Agency with authority 
to suspend or revoke a registration ``upon a finding that the 
registrant . . . has committed such acts as would render his 
registration under section 823 of this title inconsistent with the 
public interest as determined under such section.'' 21 U.S.C. 824(a)(4) 
(emphasis added). In section 823, Congress set for the registration 
requirements for each category of registrant under the CSA, including 
practitioners. See 21 U.S.C. 823(f). With respect to practitioners, the 
Agency has long and consistently held that all five of the factors set 
forth in section 823(f) are to be considered in making the public 
interest determination. See, e.g., McCarthy, 54 FR at 20938.
    To be sure, factors two and three refer to ``[t]he applicant's 
experience'' and ``[t]he applicant's conviction record,'' rather than 
``the registrant's.'' Id. As for why they do, the answer is obvious: 
The purpose of section 823 is to set forth the registration 
requirements, i.e., the criteria for determining whether the granting 
of an application for registration is consistent with the public 
interest. Given that the initial determination of whether ``issuance of 
[a] registration . . . would be inconsistent with the public 
interest,'' id., is made before an applicant is ever registered, it 
would make little sense to refer to ``[t]he registrant's experience.'' 
Indeed, none of the factors applicable to any of the seven categories 
of registrant set forth in section 823 refers to ``the registrant.''
    Implicit in the ALJ's reasoning is the notion that only those 
public interest factors which do not explicitly reference ``the 
applicant'' should be considered in a proceeding brought under section 
824(a)(4). Not only does the ALJ's proposed construction place undue 
reliance on literalism while ignoring both the statute's context and 
Congress's purposes in enacting section 824(a)(4), it adoption would 
lead to strange results.
    For example, in the case of a list I chemical distributor, four of 
the five factors used in making the public interest determination refer 
to the ``the applicant.'' See 21 U.S.C. 823(h)(1)-(4). Accordingly, 
were I to adopt the ALJ's interpretation, in a revocation proceeding, 
these four factors would be rendered null and the only factor to be 
considered would be ``such other factors as are relevant to and 
consistent with the public health and safety.'' Id. Sec.  823(h)(5) 
(emphasis added). This begs the question of how the Agency would 
determine whether the factors asserted to be within this factor were 
truly ``other'' without having considered the other four factors.
    Moreover, under the ALJ's interpretation, the factors to be 
considered in a revocation proceeding brought against a practitioner 
would vary from case to case, depending upon whether the practitioner 
had filed any pending applications. Thus, where the practitioner has 
not filed a renewal application (or an application to modify his 
registration), only factors one, four, and five could be considered in 
determining whether the acts he committed render his registration 
inconsistent with the public interest. However, upon the practitioner's 
filing of a renewal application (or application to modify), he would 
once again be an applicant and the Agency would then have authority 
(and be required) to consider all five factors in determining whether 
he had committed acts which ``render his registration . . . 
inconsistent with the public interest.'' 21 U.S.C. 824(a)(4). This is 
simply a prescription for inconsistent decisionmaking.
    Notably, the Agency has never interpreted the CSA in the manner 
suggested by the ALJ. Thus, while some of the earlier decisions in 
cases brought under section 824(a)(4) did not explicitly cite factor 
two (or the other factors for that matter), the Agency has long 
considered factor two in revocation proceedings brought under section 
824(a)(4). See Tapia, 52 FR at 30459; Elliott, 52 FR at 36312; Chua, 51 
FR at 41676-77. And in McCarthy, the Agency made explicit what was 
previously implicit (but was nonetheless the Agency's practice), when 
it held that ``[a]n applicant's `experience in dispensing' . . . [is] 
made applicable to registrants by 21 U.S.C. 824(a)(4), [and] is a 
statutory factor which `shall' be considered'' in a revocation 
proceeding. 54 FR at 20938.
    The Agency's interpretation is fully supported by the legislative 
history of the Drug Enforcement Amendments to the Comprehensive Crime 
Control Act of 1984. See Public Law 98-473, Sec.  512, 98 Stat. 2068, 
2073 (1984). As the House Report explained, the ``[i]mproper diversion 
of controlled substances by practitioners is one of the most serious 
aspects of the drug abuse problem. However, effective Federal action 
against practitioners has been severely inhibited by the limited 
authority in current law to deny or revoke practitioner 
registrations.'' H.R. Rep. No. 98-1030, at 266 (1984), reprinted in 
1984 U.S.C.C.A.N. 3182, 3448. Continuing, the House Report explained 
that:

because of a variety of legal, organizational, and resource 
problems, many States are unable to take effective or prompt action 
against violating registrants. Since State revocation of a 
practitioner's license or registration is a primary basis on which

[[Page 61600]]

Federal registration may be revoked or denied, problems at the State 
regulatory level have had a severe adverse impact on Federal anti-
diversion efforts. The criteria of prior felony drug conviction for 
denial or revocation of registration has proven too limited in 
certain cases as well, for many violations involving controlled 
substances which are prescription drugs are not punishable as 
felonies under State law. Moreover, delays in obtaining conviction 
allow practitioners to continue to dispense drugs with a high abuse 
potential even where there is strong evidence that they have 
significantly abused their authority to dispense controlled 
substances.
    Clearly, the overly limited bases in current law for denial or 
revocation of a practitioner's registration do not operate in the 
public interest.

Id.
    Congress thus amended section 823(f) ``to expand the authority of 
the Attorney General to deny a practitioner's registration 
application'' based upon a finding ``that registration would be 
`inconsistent with the public interest,' '' by considering the five 
factors, which the House Report then set forth. Id. And Congress also 
amended section 824(a) ``to add to the current bases for denial, 
revocation[] or suspension of registration a finding that registration 
would be inconsistent with the public interest on the grounds specified 
in 21 U.S.C. Sec.  823, which will include consideration of the new 
factors added by section 509, as discussed supra.'' Id. at 3449 
(emphasis added). Notably, nowhere did the report suggest that the 
Agency should consider only those factors that do not use the words 
``the applicant.''
    Accordingly, consistent with the Agency's longstanding 
interpretation,\13\ in future cases brought against practitioners under 
section 824(a)(4), the ALJ should rest assured that factor two (as well 
as factor three) applies in making the public interest determination. 
So too, in any proceeding brought under section 824(a)(4), the ALJ 
shall, in making the public interest determination, consider all of the 
public interest factors set forth in the relevant provision of section 
823. To the extent the evidence submitted by either party is relevant 
under a particular factor, the ALJ shall make the appropriate findings.
---------------------------------------------------------------------------

    \13\ At the close of the hearing, the ALJ explained that while 
he had ``seen court and DEA construction that assumes that factor 2 
applies to registrants as well as applicants,'' he was ``in a 
learning curve here.'' Tr. 500. The ALJ then explained that ``I 
don't see how factor 2 applies here at all,'' even though ``I have 
seen cases that tell me that I should be construing factor 2 as 
though it's written for both the applicant and the registration 
[sic].'' Id. at 500-01. The ALJ thus asked the parties to address 
``what your take is on that.'' Id. The Government complied, yet even 
after the Government provided applicable precedent, see Gov't's 
Post-Hearing Br. 22-23 (citing Thomas H. McCarthy, 54 FR 20936, 
20938 (1989)), the ALJ was apparently still unconvinced. See R.D. at 
42.
    As stated above, there are several hundred Agency decisions 
which have applied factor two (as well as factor three) in section 
824(a)(4) proceedings brought against practitioners. Moreover, 
having seen court decisions, none of which questioned the Agency's 
longstanding construction of the statute, there was no reason to 
require the parties to brief the issue or to ruminate as to whether 
factor two even applies. It does. See Iran Air v. Kugelman, 996 F.2d 
1253, 1260 (D.C. Cir. 1993) (quoting Joseph Zwerdling, Reflections 
on the Role of an Administrative Law Judge, 25 Admin. L. Rev. 9, 12-
13 (1973) (an ALJ `` `is governed, as is the case of any trial 
court, by the applicable and controlling precedents. These 
precedents include . . . the agency's policies as laid down in its 
published decisions . . . Once the agency has ruled on a given 
matter . . . it is not open to reargument by the administrative law 
judge' '')).
---------------------------------------------------------------------------

    However, the ALJ's failure to make findings under factor two does 
not alter the outcome of this matter. Because I agree with the ALJ's 
conclusions of law that there is substantial evidence that Respondent 
issued nine prescriptions to the undercover agents in violation of 21 
CFR 1306.04(a), because he lacked a legitimate medical purpose and 
acted outside of the usual course of professional practice, and this 
conduct is also properly considered under factor four (compliance with 
applicable laws related to controlled substances), I adopt the ALJ's 
conclusion of law that ``Respondent's continued [registration] is 
inconsistent with the public interest'' and ``warrant[s] the revocation 
of'' his registration and the ``the denial of any pending 
application.'' R.D. 57. And for reasons explained earlier, I also adopt 
the ALJ's legal conclusion that Respondent authorized a prescription 
for hydrocodone after his registration had been suspended, and this 
conduct is also inconsistent with the public interest.\14\ Id. Finally, 
because Respondent has entirely failed to address the multiple acts of 
intentional diversion which he committed when he prescribed controlled 
substances to the undercover officers, I agree with the ALJ's 
conclusion of law that ``Respondent has failed to affirmatively 
acknowledge specific acts of improper prescribing,'' id. at 58, and 
that he has not put forward sufficient evidence to show why he can be 
entrusted with a registration. See MacKay, 664 F.3d at 820. 
Accordingly, I will adopt the ALJ's recommendation that I revoke 
Respondent's registration and deny any pending applications to renew or 
modify his registration.\15\
---------------------------------------------------------------------------

    \14\ While I also adopt this conclusion, Respondent's violations 
in prescribing controlled substances to the undercover agents 
provides more than sufficient evidence to support the revocation of 
his registration.
    \15\ For the same reasons that I ordered that Respondent's 
registration be immediately suspended, I conclude that the public 
interest necessitates that this Order be effective immediately. 21 
CFR 1316.67.
---------------------------------------------------------------------------

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 
824(a)(4), as well as 28 CFR 0.100(b), I order that DEA Certificate of 
Registration Number AP6572716, issued to Clair L. Pettinger, M.D., be, 
and it hereby is, revoked. I further order that any pending application 
of Clair L. Pettinger, M.D., to renew or modify the aforesaid 
Certificate of Registration, be, and it hereby is, denied. This Order 
is effective immediately.

    Dated: September 18, 2013.
Michele M. Leonhart,
Administrator.

Paul Soeffing, Esq., for the Government

Alan Kaplan, Esq., for the Respondent

Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision 
of the Administrative Law Judge

Nature of the Case

    Administrative Law Judge Christopher B. McNeil. Respondent Clair L. 
Pettinger, M.D., is registered with the Drug Enforcement Administration 
as an individual practitioner authorized to prescribe Schedule II-V 
controlled substances under DEA Certificate of Registration Number 
AP6572716, with an office at 4707 Greenleaf Court, Suite A, Modesto, 
California, 95356. His DEA Certificate of Registration expires by its 
own terms on March 31, 2015.\16\ He also is licensed to practice 
medicine as a physician and surgeon in the State of California under 
license number G29874, which will expire by its own terms on March 31, 
2015.\17\ He has been licensed to practice medicine in the State of 
California since July 1, 1975 and has, heretofore, never been the 
subject of disciplinary actions by the DEA or by the State of 
California.\18\
---------------------------------------------------------------------------

    \16\ Per stipulation of the parties, see Order of February 5, 
2013, ALJ Exhibit 13, at 1.
    \17\ Tr. at 481.
    \18\ Per stipulation of the parties, see Order of February 5, 
2013, ALJ Exhibit 13, at 1.
---------------------------------------------------------------------------

    On December 11, 2012, the DEA served Dr. Pettinger with an Order to 
Show Cause and Immediate Suspension of his DEA Registration dated 
December 10, 2012, whereby his DEA Certificate was suspended pursuant 
to 21 U.S.C. 824(d).\19\ The Government alleged Dr. Pettinger 
distributed controlled

[[Page 61601]]

substances to five undercover law enforcement officers outside the 
usual course of professional practice or for other than a legitimate 
medical purpose, in violation of 21 U.S.C. 823(f)(4) and 841(a)(1), and 
21 CFR 1306.04(a). Further, the Government alleged that Dr. Pettinger 
prescribed a high volume of controlled substances, particularly 
oxycodone through September 2012.\20\ Based on this set of conditions, 
the Administrator suspended Dr. Pettinger's Certificate effective 
immediately and provided Dr. Pettinger with the opportunity to show 
cause why this immediate suspension should end and why the 
Administrator should not permanently revoke Dr. Pettinger's DEA 
Certificate.
---------------------------------------------------------------------------

    \19\ Id.
    \20\ At the hearing, the Government did not present evidence to 
support allegations in the Order to Show Cause that referred to Dr. 
Pettinger's prescription history. Order to Show Cause and Immediate 
Suspension of Registration, at paragraphs 4(a) through 4(e), pages 
3-4. These allegations therefore are not currently before me.
---------------------------------------------------------------------------

    While this matter was pending before me, the Government alleged 
further that after the Immediate Suspension Order was issued and a 
served upon Dr. Pettinger, Dr. Pettinger issued a new prescription 
dispensing hydrocodone to a patient on December 21, 2012.\21\
---------------------------------------------------------------------------

    \21\ Government Prehearing Statement at 4.
---------------------------------------------------------------------------

Statement of the Issue

    The general issue to be adjudicated by the Administrator, with the 
assistance of this recommended decision, is whether the record as a 
whole establishes, by substantial evidence, that Dr. Pettinger's 
continued DEA registration is inconsistent with the public interest, as 
that term is used in Sections 303 and 304 of the Controlled Substances 
Act, Title 21, United States Code, Sections 823 and 824. Under this 
Act, the DEA may revoke the Certificate of Registration of a Registrant 
upon sufficient evidence establishing that the Registrant's continued 
registration is inconsistent with the public interest. Continued 
registration is inconsistent with the public interest if (among other 
bases) a Registrant who is otherwise authorized to prescribe controlled 
substances does so outside the usual course of his or her professional 
practice, or does so for other than a legitimate medical purpose. The 
specific issue is thus whether by at least a preponderance of the 
evidence the Government has established that Dr. Pettinger prescribed 
controlled substances to any of the five undercover agents outside the 
usual course of his professional practice or for other than a 
legitimate medical purpose.

Summary of the Evidence

    The evidence in this record consists of recorded proceedings 
conducted during a brief hearing held in Arlington, Virginia on 
February 5, 2013 and a two-day hearing in Sacramento, California held 
on April 2-3, 2013, along with the documents admitted into evidence 
during those hearings. Included in the admitted exhibits are five audio 
recordings and six audio-visual recordings. By agreement of the 
parties, I listened to and, where appropriate, viewed the recordings 
after the evidentiary hearing was concluded. The contents of those 
recordings thus are part of the evidence now before me.
    The Government's case is based in part on the testimony of five 
investigators who presented to Dr. Pettinger under assumed identities. 
Dr. Pettinger, who goes by Nate Pettinger, M.D., maintained a medical 
office under the name of Medical Cannabis of Northern California, or 
MCNC, at 2222 Watt Avenue Suite B1, Sacramento, California.\22\ Each of 
the five government investigators worked for federal agencies, 
including the DEA, the United States Department of Health and Human 
Services, and the FBI.
---------------------------------------------------------------------------

    \22\ Government Exhibit 25 at 1.
---------------------------------------------------------------------------

    DEA Special Agent Robert Kittrell testified regarding the overall 
scope of this investigation. Each of the participating undercover 
agents testified regarding what they heard and saw during their 
interactions with Dr. Pettinger, describing the discussion and 
examinations that preceded Dr. Pettinger's issuance of a total of nine 
prescriptions for controlled substances. The Government then presented 
testimony from an expert medical witness regarding the nature of the 
examinations that led to Dr. Pettinger prescribing controlled 
substances to these undercover agents. The Government also called Dr. 
Pettinger as a witness, but after being sworn in and acknowledging his 
identity, Dr. Pettinger refused to answer further questions and invoked 
his Fifth Amendment right to avoid self-incrimination.
    Although he did not testify on his own behalf, Dr. Pettinger 
presented testimony from an employee and two patients, with the 
intention of demonstrating that it would be improper to make 
generalizations adverse to Dr. Pettinger's regular practice based on 
the undercover activity. Without directly admitting to any violation of 
DEA diversion control regulations, Dr. Pettinger argues that the visits 
with the undercover agents are not indicative of his ordinary practice, 
urging that the Government's evidence does not establish that he has in 
any way endangered the public. Further, Dr. Pettinger urges that I find 
that he has taken remedial steps appropriate under the circumstances, 
such that further action by the DEA is not warranted.
    After carefully considering the testimony elicited at the hearing, 
examining the admitted exhibits, evaluating the arguments of counsel, 
and weighing the record as a whole, I have set forth my recommended 
findings of fact, conclusions of law, and analysis below. Because I 
find that a preponderance of the evidence establishes that the 
Respondent's continued registration would be inconsistent with the 
public interest, I recommend the Administrator revoke Dr. Pettinger's 
DEA Certificate and deny any pending application for the same.

Testimony From DEA Special Agent Kittrell

    Robert Kittrell is a DEA Special Agent with the Tactical Diversion 
Squad in the Sacramento District Office.\23\ Agent Kittrell has been a 
criminal investigator with the DEA since 1991. He attended a 14-week 
training academy at Quantico, Virginia, studying subjects that included 
a review of drug laws, tactical training, training in the use of 
firearms, training in investigations, training in the use of undercover 
agents, and training in financial investigations.\24\ He has furthered 
his studies through continuing education, including recent attendance 
at an 80-hour course in the investigation of controlled substance 
diversions involving pharmacies and doctors.\25\
---------------------------------------------------------------------------

    \23\ Transcript at 75.
    \24\ Id. at 75-6.
    \25\ Id. at 76.
---------------------------------------------------------------------------

    Agent Kittrell described two kinds of controlled substance 
diversion: One involving drug gangs that send people to doctors' 
offices with the intent to get prescriptions for controlled substances; 
and the other involving what Agent Kittrell described as ``rogue 
doctors'' who ``will prescribe controlled substances to people without 
medical necessity.'' \26\ He said that characteristics of such rogue 
doctors include prescribing the controlled substances that patients ask 
for, with little or no medical evaluation. He explained that these 
doctors ``will not ask for a lot of medical records'' and are ``just 
getting the patients in, writing them the script and getting them 
out.'' \27\
---------------------------------------------------------------------------

    \26\ Id. at 76-7.
    \27\ Id. at 77.

---------------------------------------------------------------------------

[[Page 61602]]

    Agent Kittrell said that he served as the Case Agent--the agent in 
charge of the DEA's investigation of Dr. Pettinger. He explained that 
an undercover investigator for the Department of Health and Human 
Services, Rob Breeden, approached him after Agent Breeden was able to 
obtain controlled substances without medical necessity.\28\ In 
response, the team supervised by Agent Kittrell began investigating Dr. 
Pettinger.
---------------------------------------------------------------------------

    \28\ Id. at 77-8.
---------------------------------------------------------------------------

    According to Agent Kittrell, agents in these cases are trained to 
approach the Certificate holder equipped with recording devices. The 
agents will sometimes simply ask for pills and may speak vaguely about 
medical problems. ``They'll try to avoid answering questions. They 
won't provide any medical records or, if they do, they'll be falsified. 
. . . They won't complain of any immediate pain. They won't complain of 
any pain at all sometimes. They'll basically give every indication they 
can that the drugs are going to be diverted or that they're going to be 
abused or that there's no medical need for it.'' \29\
---------------------------------------------------------------------------

    \29\ Id. at 78-79.
---------------------------------------------------------------------------

    On cross examination, Agent Kittrell elaborated on this approach, 
stating that undercover agents can be ``vague'' about whether they have 
any actual pain.\30\ When asked whether the agents were instructed to 
attempt to divert the doctor's attention during these examinations, 
Agent Kittrell stated that ``[w]e leave a lot of those things up to the 
undercovers themselves in each individual case because a lot of it has 
to do with what's going on at the time. You know, is it possible for an 
undercover agent to try to be friendly with the doctor when it happens? 
Absolutely. Does that include extraneous conversations? Absolutely.'' 
\31\ He agreed with the premise that during their preparation for 
undercover assignments, agents are ``instructed to not act like a 
legitimate patient,'' but instead are to act the way a drug-seeking 
patient would act.\32\
---------------------------------------------------------------------------

    \30\ Id. at 95.
    \31\ Id.
    \32\ Id. at 96.
---------------------------------------------------------------------------

    Supporting the actions of the undercover agents were medical 
records and patient questionnaires prepared by the undercover officers 
and identified as Exhibits 25, 26, and 27.\33\ According to Agent 
Kittrell, Agent Breeden completed Exhibit 25, which encompasses the 
patient questionnaire for a fictional patient named Danny Daly, when he 
visited Dr. Pettinger.\34\ Similarly, FBI Special Agent Neeki Bianchi 
completed the patient questionnaire for a fictional patient named 
Nichole Hancock, shown as Exhibit 26.\35\ DEA Special Agent Bob 
Ghazanfari completed the patient questionnaire for a fictional patient 
named Reza Soltani, shown as Exhibit 27.\36\ Each of these records was 
submitted to Dr. Pettinger by the undercover agents, and was then 
recovered after Agent Kittrell obtained a search warrant to seize 
evidence from the doctor's office and residence.\37\ According to Agent 
Kittrell, similar false medical files compiled for use by the other two 
undercover agents had been delivered to Dr. Pettinger in the course of 
the agents' visits, but were not located during subsequent searches of 
Dr. Pettinger's office or home.\38\ They were, however, provided by Dr. 
Pettinger after Agent Kittrell requested them.\39\
---------------------------------------------------------------------------

    \33\ Id. at 80.
    \34\ Id. at 81.
    \35\ Id.
    \36\ Id. at 82.
    \37\ Id.
    \38\ Id.
    \39\ Id. at 103, and Respondent's Exhibits C and D.
---------------------------------------------------------------------------

    Upon execution of the search and arrest warrants Agent Kittrell 
participated in questioning Dr. Pettinger. According to Agent Kittrell, 
Dr. Pettinger said that when presented with a pain management patient, 
``he does a complete physical workup and that includes blood pressure, 
heart rate, respiration, height, weight, and a complete physical 
exam.'' \40\ Dr. Pettinger told Agent Kittrell that in these cases he 
would request the patient's medical records, including any MRIs or x-
rays, to evaluate the basis for the prescription being requested by the 
patient.\41\ Dr. Pettinger told Agent Kittrell he would perform a 
complete physical exam again on follow-up visits.\42\ According to 
Agent Kittrell, Dr. Pettinger stated ``that he knew that he had a soft 
heart and that he was probably prescribing too much. He stated that 
about 20 percent of his patients were pill seekers and that 50 percent 
were probably receiving too many meds. He stated to me that he had 
received a lot of complaints from pharmacies, but if he was guilty of 
anything, he was guilty of not calling the pharmacies back, but he had 
been taking steps to correct that and trying to work with pharmacies so 
that they would accept his prescriptions.'' \43\
---------------------------------------------------------------------------

    \40\ Tr. at 85-6.
    \41\ Id. at 86.
    \42\ Id.
    \43\ Id.
---------------------------------------------------------------------------

    According to Agent Kittrell, during this questioning Dr. Pettinger 
stated that if a patient came to him for pain medication and did not 
have any medical records, ``he would only prescribe Norcos 
[hydrocodone] to begin with, which is a Schedule III narcotic.'' \44\ 
Further, he told Agent Kittrell that he was ``taking steps to try to 
wean out or weed out problem patients . . . [and] if a patient came to 
him and stated that they were selling the pills, that he wouldn't write 
a prescription.'' \45\ Agent Kittrell stated that, in addition to these 
efforts, Dr. Pettinger told him he was trying to identify patients who 
were ``double dipping,'' in that they were obtaining controlled 
substances from more than one doctor at the same time.\46\ According to 
Agent Kittrell, Dr. Pettinger reported that he was ``really clamping 
down'' on patients who appeared to be misusing medication and that as 
of July 2011 he had stopped accepting new patients.\47\ Asked on cross 
examination whether that is exactly what the DEA expects doctors to do, 
Agent Kittrell agreed that if there is abuse of prescription 
medication, double-dipping, or the use of fraudulent medical records, a 
doctor should discharge the patient.\48\ When asked whether this 
constitutes ``remediation'' by the doctor, Agent Kittrell stated, 
``Yes, it's like that,''--but clarified that this was ``kind of like 
shutting the barn door after the cow got out[.]'' \49\
---------------------------------------------------------------------------

    \44\ Id. at 86.
    \45\ Id. at 87.
    \46\ Id. at 104.
    \47\ Id. at 105.
    \48\ Id. at 106-7.
    \49\ Id. at 108.
---------------------------------------------------------------------------

    On cross examination Agent Kittrell agreed with the proposition 
that one way to verify whether Dr. Pettinger had engaged in remediation 
and reduced his prescribing would be to obtain patient activity reports 
from the California Substance Utilization Review and Evaluation (CURES) 
tracking system.\50\ Agent Kittrell said he obtained ``some'' reports 
on Dr. Pettinger's patients from the CURES system, but he acknowledged 
that these reports were ``not part of the evidence packages here.'' 
\51\
---------------------------------------------------------------------------

    \50\ Id. at 109.
    \51\ Id. at 110-1.
---------------------------------------------------------------------------

    Agent Kittrell stated that he served an order of immediate 
suspension on Dr. Pettinger, telling him that ``he was unable to 
dispense, prescribe, or otherwise issue controlled substances from that 
point on.'' In response, Dr. Pettinger ``stated that he understood 
that.'' \52\ Despite acknowledging this bar

[[Page 61603]]

to further prescribing, Dr. Pettinger did not stop writing 
prescriptions, according to Agent Kittrell.
---------------------------------------------------------------------------

    \52\ Id. at 87.
---------------------------------------------------------------------------

    According to Agent Kittrell, the order of immediate suspension was 
delivered to Dr. Pettinger on December 11, 2012.\53\ Exhibit 24 is a 
photocopy of a prescription for patient B.D., directing dispensation of 
180 units of Norco 10/325 (indicating 10 mg of hydrocodone and 325 mg 
of acetaminophen). This prescription predates the December 11, 2012 
order, and it allows for two refills. Also in Exhibit 24 is a photocopy 
of records from Safeway Pharmacy 2242, located in Sacramento, 
California. The Medical Expenses record (page 4 of Exhibit 24) reflects 
that the prescription was first filled on October 22, 2012, and then 
again on November 12, 2012, and on December 3, 2012. Thus, by December 
3, 2012, all of the authorized dispensations under this prescription 
had been filled. According to Agent Kittrell, at this point if a 
pharmacy were to dispense any additional narcotics, the patient would 
need to produce a new prescription.\54\
---------------------------------------------------------------------------

    \53\ Id. at 80.
    \54\ Id. at 92.
---------------------------------------------------------------------------

    According to Agent Kittrell, despite being prohibited from 
prescribing controlled substances as of December 11, 2012, Dr. 
Pettinger authorized B.D. to receive an additional 180 units of Norco 
on December 21, 2012. Agent Kittrell identified a faxed Prescription 
Refill Request, shown at page 3 of Exhibit 24, and stated that this was 
a prescription issued by Dr. Pettinger after the effective date of the 
suspension order he received on December 11, 2012.\55\ Agent Kittrell 
stated that while doing routine follow-up work regarding Dr. Pettinger, 
he contacted the pharmacist responsible for dispensing the Norco 
equivalent to B.D. He testified that the pharmacist told B.D. that 
there were no remaining refills on the initial prescription, so the 
pharmacist sent a fax to Dr. Pettinger's office. In response, the 
pharmacist received what has been marked as page 3 of Exhibit 24, 
through which Dr. Pettinger authorized the pharmacy to dispense 180 
units of Norco to this patient.\56\ To support his contention that this 
dispensation was the result of a new prescription and not simply the 
refilling of the earlier one, Agent Kittrell stated that a pharmacist 
would have no obligation to contact the prescribing source if the 
prescription had valid refills that had not yet been dispensed. Given 
that the pharmacist here did see the need to contact Dr. Pettinger, it 
follows that the earlier prescription could no longer serve as a basis 
for dispensing another 180 units of Norco--and that the faxed sheet 
constitutes a new prescription.\57\
---------------------------------------------------------------------------

    \55\ Id. at 89.
    \56\ Id. at 91.
    \57\ Id. at 92.
---------------------------------------------------------------------------

    Agent Kittrell added that, about four days after he spoke with the 
Safeway pharmacist, he got a call from Dr. Pettinger, who asked if he 
could authorize a new prescription for a patient to whom he had 
previously prescribed narcotics. Agent Kittrell said he told Dr. 
Pettinger no, that only prescriptions that were written prior to 
December 11, 2012 could be filled or refilled, but that Dr. Pettinger 
could not authorize any new prescriptions.\58\
---------------------------------------------------------------------------

    \58\ Id. at 93.
---------------------------------------------------------------------------

    On cross examination, Agent Kittrell agreed with the premise that 
there is nothing in Exhibit 24 that establishes that Dr. Pettinger knew 
D.B. had already filled and refilled the earlier prescription to its 
limit.\59\ There is handwriting on page three of Exhibit 24 that uses 
the word ``refill,'' which Agent Kittrell agreed appears to have been 
written by Dr. Pettinger.\60\ This page, captioned ``Prescription 
Refill Request,'' appears to have been faxed from Dr. Pettinger's 
office on December 21, 2012 (as it bears that designation on the bottom 
of the page). At the signature block, we see ``N Pettinger MD--Can fill 
current refill No New Refill.'' Above that, with an arrow pointing to 
the ``No New Refill'' language, there are two circles, one with ``MD'' 
and the other with ``OK x 1'', indicating that the pharmacist contacted 
Dr. Pettinger and was told it was okay to dispense 180 generic Norco 
tablets, despite the fact that the pharmacy had already dispensed all 
of the medication authorized by the prescription written by Dr. 
Pettinger on October 22, 2012.\61\ Despite the fact that the 
pharmacists would not have contacted Dr. Pettinger if refills remained 
on this prescription as of December 21, 2012, and despite the fact that 
the December 21, 2012 fax shows the pharmacist did contact Dr. 
Pettinger and was told it was okay to issue another 180 units of 
generic Norco, when Agent Kittrell was asked ``You can't state sitting 
here today that Dr. Pettinger knowingly issued a new prescription on 
December 21, 2012, in violation of the suspension order?'' he responded 
``Knowingly? No.'' \62\ While this evidence does not establish that the 
pharmacist told Dr. Pettinger that B.D. filled this prescription three 
times already, it does establish that Dr. Pettinger knowingly 
authorized another 180 unit dispensation after being called by the 
pharmacist, a condition that would not have existed had there been a 
refill available under the original prescription.
---------------------------------------------------------------------------

    \59\ Id. at 115.
    \60\ Id. at 116.
    \61\ Government Exhibit 24 at 3.
    \62\ Tr. at 116.
---------------------------------------------------------------------------

    Agent Kittrell also agreed with the proposition that persons who 
lie to doctors in order to get prescription medications are committing 
crimes and that in such cases the doctors are, to a certain degree, 
victims of those crimes.\63\ He agreed also that the five undercover 
agents who presented to Dr. Pettinger were engaged in acts that would 
be crimes if committed by private citizens.\64\ Consistent with this 
theory, but after the close of the hearing and after the time set for 
offering evidence had passed, counsel for the Respondent submitted a 
copy of a letter sent to GreenLeaf Urgent Care dated April 2, 2013, 
from the U.S. Department of Justice. The letter is addressed to Dr. 
Pettinger and contains information provided pursuant to the 
Department's Victim Notification System. The letter states that Dr. 
Pettinger had been identified as a victim during an investigation 
involving twelve defendants, all of whom were named in the letter. The 
letter itself is silent with respect to the nature of the charges 
against these defendants, and does not indicate why or how Dr. 
Pettinger is regarded as a victim. The nexus between the letter and 
this administrative hearing is uncertain, but Respondent's counsel in 
his cover letter states that ``[w]e believe that the individuals listed 
in the letter received or obtained controlled substances in Dr. 
Pettinger's name by means of criminal conduct for which they are now 
being prosecuted and which may also be relevant to the current DEA 
proceeding.'' While not properly before me, this letter will be 
maintained as a proffer, identified in the record as ALJ Exhibit 22.
---------------------------------------------------------------------------

    \63\ Id. at 118.
    \64\ Id.
---------------------------------------------------------------------------

Evidence From the Undercover Operatives

    Robb Breeden works as a Special Agent for the United States 
Department of Health and Human Services in its Office of the Inspector 
General, out of the Sacramento, California field office.\65\ He has 
worked there since 2007, and his training includes attendance at a 
fifteen week training course at the Federal Law Enforcement Training 
Center in Glencoe, Georgia, which included 120 hours of specialized 
tactical training and 120 hours of undercover training

[[Page 61604]]

that included the identification of pills and drug diversion.\66\
---------------------------------------------------------------------------

    \65\ Id. at 122.
    \66\ Id. at 123.
---------------------------------------------------------------------------

    According to Agent Breeden, after receiving an initial complaint 
regarding Dr. Pettinger, he made the first of four visits to the 
doctor's office using the fictitious name of Daniel Joseph Daly on 
November 10, 2011, using an audio recorder. The recording from that 
visit appears in the record as Government Exhibit 5, and is accompanied 
by a transcript of the conversations recorded during that visit.\67\
---------------------------------------------------------------------------

    \67\ Id. at 123-4.
---------------------------------------------------------------------------

    Acting as Mr. Daly, Agent Breeden appeared for an appointment at 
Dr. Pettinger's medical office on Watt Avenue in Sacramento.\68\ He 
stated that upon his arrival at the office, he found the office was 
locked and that Dr. Pettinger was not present.\69\ He stated that he 
then called Dr. Pettinger's cell phone and reached the doctor, who told 
him he would be at the office in a moment. Upon Dr. Pettinger's 
arrival, Agent Breeden greeted him while holding in one hand a small, 
travel-sized bottle of scotch whiskey.\70\ Agent Breeden accompanied 
Dr. Pettinger into the doctor's office, where Agent Breeden gave the 
doctor some medical records, some paperwork, and an MRI report.\71\ 
According to Agent Breeden, Dr. Pettinger noticed the bottle of scotch, 
commenting that it was easier to buy alcohol than cannabis.\72\
---------------------------------------------------------------------------

    \68\ Id. at 124.
    \69\ Id. at 126.
    \70\ Id. and Government Exhibit 5, transcript at 1 (``let me get 
rid of my lunch here'').
    \71\ Tr. at 126.
    \72\ Id. and Government Exhibit 5, transcript at 2 (Agent 
Breeden: ``But I can't buy marijuana. It's stupid.'' Dr. Pettinger: 
``Right. Well, I mean, that that's [unintelligible] you know, take 
the scotch and you can do that, but you can't end up getting 
marijuana. It seems crazy, doesn't it? The thing about it is you 
can't even kill a baby with marijuana unless you stuff their mouth 
so full they can't breathe; I mean you can't get enough into 'em to 
kill 'em.'')
---------------------------------------------------------------------------

    Agent Breeden identified Government Exhibit 25 as a copy of the 
patient questionnaire form filled out at Dr. Pettinger's request. The 
first five pages of this form appear to be designed for a patient to 
provide identifying data and a medical history. As Agent Breeden noted 
in his testimony, the first page of Government Exhibit 25 (captioned 
``The California Compassionate Use Act of 1996, Eligibility 
Questionnaire'') includes a statement requiring the applicant to state 
whether he or she is a ``law enforcement officer, undercover officer or 
investigator for the Federal Government, State of California, county, 
city, or any other organization therein here today with the intent of 
investigating Medical Cannabis of Northern California or Nate 
Pettinger, M.D.''
    Pages 6 through 9 of Government Exhibit 25 are labeled ``For 
Physician's Use Only,'' and consist of a single-page form apparently 
filled out by Dr. Pettinger on each of the four visits referred to by 
Agent Breeden: November 10, 2011, December 6, 2011, January 13, 2012, 
and May 9, 2012. Page 10 of this exhibit is a copy of a Physician 
Statement and Recommendation dated November 10, 2011 on which is also a 
copy of a California Driver License issued to Daniel Joseph Daly, 
identifying Mr. Daly as ``a patient whose possession and/or cultivation 
of medical cannabis is permissible'' under California law, signed by 
Dr. Pettinger and Agent Breeden as Daniel Daly. Accompanying this 
Physician's Statement is a form captioned ``Consent to Assume Risk for 
Medical Marijuana,'' dated November 10, 2011, and signed by both Agent 
Breeden as Daniel Daly and Dr. Pettinger.
    Also included in Government Exhibit 25 are photocopies of four 
prescriptions, whose dates match the dates of Agent Breeden's four 
office visits. In each instance, the prescriptions are signed by Dr. 
Pettinger under his office letterhead, and are for Oxycodone 30 mg IR 
[Instant Release]. In the prescription issued on the initial visit 
(November 10, 2011), Dr. Pettinger prescribed 120 units of this 
controlled substance. He prescribed 200 units in the prescription dated 
December 6, 2011, and 220 units for those dated January 13, 2012 and 
May 9, 2012.
    After Agent Breeden completed the requested paperwork, he met with 
Dr. Pettinger in the doctor's office. He described the office as 
lacking things he would normally associate with a doctor's office: 
there was no examination table, no eye chart, no scale--only a cuff for 
taking blood pressure and a stethoscope.\73\ Subsequent records, 
notably the video recordings at Exhibits 15, 17, 20 and 22, established 
further that the office that served for these examinations consisted of 
the doctor's office desk and two upholstered office chairs.
---------------------------------------------------------------------------

    \73\ Tr. at 127.
---------------------------------------------------------------------------

    Agent Breeden explained that during this initial visit, he and Dr. 
Pettinger spoke for quite a while about the use of cannabis.\74\ He 
said at one point in the meeting, Dr. Pettinger did conduct a very 
brief physical examination, one that lasted ``a couple of minutes'' and 
consisted of Dr. Pettinger asking ``a dozen or two health history 
questions very quickly'' and then feeling along his spine, and took a 
reading of his blood pressure.\75\ Although Agent Breeden complained of 
knee pain on his patient questionnaire,\76\ Agent Breeden expressly 
denied that Dr. Pettinger ever actually saw either of his knees--as he 
never removed his pants during this office visit.\77\ He said the only 
other physical contact with Dr. Pettinger came in the form of frisking 
the agent: ``he patted me down. I think in my report at the time I 
thought he was patting me down for a weapon. He didn't focus on the 
knee. It was basically like a frisk like a law enforcement officer 
would do.'' \78\
---------------------------------------------------------------------------

    \74\ Id.
    \75\ Id. at 127-8.
    \76\ Government Exhibit 25 at 3.
    \77\ Tr. at 162-3.
    \78\ Id. at 163.
---------------------------------------------------------------------------

    The recording of this office visit confirms the substance of Agent 
Breeden's testimony: Dr. Pettinger spent a substantial percentage of 
this visit discussing how cannabis can be used medicinally. Although 
Agent Breeden told Dr. Pettinger he was experiencing knee pain, this 
subject did not come up in the conversation until 59 minutes had 
passed, and even then the topic was only briefly addressed by Dr. 
Pettinger. There is no evidence suggesting that Dr. Pettinger palpated 
the knee, checked for range of motion, or in any other way examined 
either of Agent Breeden's knees during this visit. Agent Breeden 
testified that at no time did Dr. Pettinger actually look at his 
knees.\79\
---------------------------------------------------------------------------

    \79\ Id. at 133.
---------------------------------------------------------------------------

    Further, although the initial prescription written by Dr. Pettinger 
based on this visit including both oxycodone and cough syrup with 
promethazine and codeine, there is nothing in this record indicating 
the patient was experiencing a cough or needed cough syrup. In 
addition, the ``For Physician's Use Only'' notes for the initial visit 
reflect clear respiration and full range of motion in the 
musculoskeletal system, indicating no medical basis for prescribing 
either pain medication or a cough suppressant.\80\ The record does show 
that in the medical records he presented to Dr. Pettinger, Mr. Daly 
reportedly had told a Dr. Fazeri that he was experiencing esophageal 
problems, as a basis for obtaining cough syrup.\81\ There is, however, 
no evidence indicating there were any complaints of cough presented 
during this initial meeting with Dr. Pettinger.
---------------------------------------------------------------------------

    \80\ Government Exhibit 25 at 6.
    \81\ Tr. at 155.
---------------------------------------------------------------------------

    Further, the record shows Agent Breeden mentioned having been 
treated for a possible plantar wart, which Dr.

[[Page 61605]]

Pettinger agreed could result in back or knee problems.\82\ There is, 
however, no evidence in the Daly records or in the patient interview by 
Dr. Pettinger establishing the patient actually had back problems--
whether caused by plantar warts or by any other condition.
---------------------------------------------------------------------------

    \82\ Id.
---------------------------------------------------------------------------

    Agent Breeden was asked about the use of an MRI report in support 
of his request for pain medication. He said the MRI report is genuine 
and was based on an MRI he had taken at the Open Advantage MRI company, 
although instead of having his own name on the original report he 
altered it so that it appeared to refer to the fictitious Dan Daly.\83\ 
He said he did not actually have anything wrong with his knees, but 
that the results indicated he had a medial meniscus tear--something he 
was not aware of, but later learned that ``if you take anybody over the 
age of 30 almost all of them are going to have a torn meniscus.'' \84\ 
He testified that during the initial visit he presented this altered 
report to Dr. Pettinger, who received it and noted its receipt in the 
physician's note page (Government Exhibit 25, page 6).\85\ Agent 
Breeden stated that at the start of each of the three subsequent visits 
to Dr. Pettinger's office, he was asked to produce the MRI, suggesting 
that the office had lost or misplaced the report.\86\ Notwithstanding 
the fact that the MRI was not found in these records, Dr. Pettinger 
proceeded to prescribe oxycodone to Agent Breeden after each office 
visit.
---------------------------------------------------------------------------

    \83\ Id. at 164.
    \84\ Id. at 166.
    \85\ Tr. at 133.
    \86\ Id.
---------------------------------------------------------------------------

    During cross examination, Agent Breeden was asked whether he had 
deliberately attempted to divert attention during the initial office 
visit with Dr. Pettinger, out of a concern that ``the record was 
starting to show that Dr. Pettinger was genuinely trying to give you 
medical treatment[.]'' \87\ That does not, however, appear to be the 
case. In my review of the record and after listening to all of the 
audio recordings and watching all of the video recordings, I found the 
more persistent pattern was that Dr. Pettinger paused for significant 
periods of time during all of his patient visits, that he tended to 
speak slowly, quietly, and with deliberation; that the pauses were 
sometimes prompted by his need to write down observations or other 
notes in the patient medical files; and that the patients (not just 
Agent Breeden, but all of the undercover investigators) filled in these 
gaps by chatting with the doctor, typically discussing extraneous 
matters to which Dr. Pettinger had earlier referred. Examples of these 
include Dr. Pettinger's repeated references to notable football coaches 
Sandusky and Paterno; his description of using tinctures as a way of 
ingesting concentrated forms of cannabis; and the negative and hostile 
feelings he was experiencing after finding that someone had stolen the 
catalytic converter off of his car.
---------------------------------------------------------------------------

    \87\ Id. at 156.
---------------------------------------------------------------------------

    I cannot conclude that the conversations engaged in by these agents 
were designed to divert Dr. Pettinger's attention or keep him from 
performing a proper, adequate physical examination. To the contrary, 
most of the extraneous dialogue recorded here was occasioned by Dr. 
Pettinger himself. The record does, however, make it clear that each of 
the undercover agents tried to act like drug-seeking patients--a point 
Agent Breeden acknowledged in cross examination.\88\
---------------------------------------------------------------------------

    \88\ Id. at 157.
---------------------------------------------------------------------------

    The record reflects that Agent Breeden's second visit to Dr. 
Pettinger's Watt Avenue office on December 6, 2011 was substantially 
the same as the first visit.\89\ Notable in this context is the absence 
of evidence demonstrating that Dr. Pettinger performed any kind of 
physical examination of Agent Breeden's knee prior to Dr. Pettinger 
writing a prescription for oxycodone, and that most of the examination 
was spent discussing the medicinal use of cannabis. Agent Breeden 
stated that Dr. Pettinger asked no questions about his pain level, made 
no attempt to palpate Agent Breeden's knee, ``did a quick palpation of 
my abdomen,'' measured his blood pressure, and then ended the exam.\90\ 
Also notable was that at this meeting, after discussing the versatility 
of cannabis for medicinal purposes, Dr. Pettinger issued a prescription 
for Marinol as a means for justifying the presence of the active 
ingredients in cannabis in Agent Breeden's bloodstream, should he ever 
have to submit to urinalysis or other drug screening after consuming 
products containing cannabis.\91\
---------------------------------------------------------------------------

    \89\ Id. at 134-6 and Government Exhibit 7.
    \90\ Id. at 138.
    \91\ Id. at 137.
---------------------------------------------------------------------------

    HHS Special Agent David Kvach accompanied Agent Breeden on his 
second visit to Dr. Pettinger's office. Agent Kvach has been a Special 
Agent for HHS since 2006. He has been trained at the Federal Law 
Enforcement Center and completed the Inspector General's investigative 
training course.\92\ In 2008 he also completed the internal special 
agent course provided by HHS; he completed electronics and technical 
surveillance training in 2009; he completed advanced undercover and 
survival techniques training in 2010; he completed undercover school in 
2012; and he completed training in the narcotics, vice, and street 
crimes supervisor course in 2013.
---------------------------------------------------------------------------

    \92\ Id. at 178.
---------------------------------------------------------------------------

    In many respects, his initial visit to Dr. Pettinger's office 
resembled that of Agent Breeden. Using audio recording equipment and 
under the assumed name of Alex Gonza, Agent Kvach presented as a 
patient seeking medication for back pain.\93\ Agent Kvach identified 
Respondent's Exhibit C, pages 3 through 7, as forms he filled out at 
this first visit.\94\ The recording revealed a meeting that lasted more 
than an hour, although here again, as was the case with the initial 
meeting between Agent Breeden and Dr. Pettinger, most of the time was 
spent discussing medicinal uses of cannabis.\95\ Agent Kvach described 
meeting with Dr. Pettinger after filling out some parts of these forms, 
and stated parts of the forms he left blank had later been filled in, 
although he could not say by whom.\96\ In both Agents Breeden's and 
Kvach's reports, they noted that although they left unanswered those 
questions regarding cannabis use, the forms now show someone 
(presumably Dr. Pettinger) filled in answers to these questions, 
presumably based on what was discussed during these initial visits--
although I find this was not always the case, and find substantial 
evidence that Dr. Pettinger included complaints and diagnoses 
(including insomnia and back pain) that were never raised by the 
undercover agents or that were flatly denied by the agents.
---------------------------------------------------------------------------

    \93\ Id. at 181.
    \94\ Id. at 182.
    \95\ Government Exhibit 9, audio recording and transcript.
    \96\ Tr. at 183-4.
---------------------------------------------------------------------------

    Agent Kvach confirmed Agent Breeden's description of Dr. 
Pettinger's office, noting the absence of an examination table and the 
very limited amount of examination equipment, which included a blood 
pressure cuff and a stethoscope, and little else.\97\ Unlike Agent 
Breeden, Agent Kvach brought no medical records with him for this first 
visit.\98\ Agent Kvach noted that Dr. Pettinger wrote on the patient 
history form that the patient ``will be bringing MRI,'' but that never 
actually happened.\99\ He explained further, on cross examination, that 
while Dr. Pettinger did not seek any x-rays, he did

[[Page 61606]]

ask Agent Kvach to obtain an MRI report: ``He informed me that even if 
the MRI read out normal, he needed my MRI.''\100\
---------------------------------------------------------------------------

    \97\ Id. at 185.
    \98\ Id. at 187.
    \99\ Id.
    \100\ Id. at 201.
---------------------------------------------------------------------------

    Agent Kvach described Dr. Pettinger's examination as ``a cursory 
check'' that included taking his blood pressure and putting a 
stethoscope under the agent's jacket, possibly to listen to his heart 
and lungs.\101\ After this examination, Dr. Pettinger recommended 
medical marijuana and issued Agent Kvach a prescription for 120 units 
of oxycodone 30 mg IR, dated December 6, 2011.\102\
---------------------------------------------------------------------------

    \101\ Id. at 185-6.
    \102\ Id. and Government Exhibit 8.
---------------------------------------------------------------------------

    Agent Breeden returned for a third visit to Dr. Pettinger's office 
on January 13, 2012, the substance of which was recorded by audio 
recording and is transcribed at Government Exhibit 11. I would note 
that the first 38 minutes of this recording have not been transcribed. 
From my review of the audio recording, I understand that this part of 
the recording was not transcribed because it represents the time Agent 
Breeden was in Dr. Pettinger's waiting room, waiting for his 
appointment with Dr. Pettinger. The discussion recorded on the audio 
disc but not transcribed appears to be between Agent Breeden and Sean 
Ledford, the receptionist working in Dr. Pettinger's office. As Agent 
Breeden correctly stated, all interactions between himself and Dr. 
Pettinger have been transcribed.\103\ Having listened to the discussion 
between Agent Breeden and Mr. Ledford, I note only that while the 
exchanges between Agent Breeden and Mr. Ledford have not been included 
in the written transcript, their absence is not legally significant.
---------------------------------------------------------------------------

    \103\ Id. at 141.
---------------------------------------------------------------------------

    During this third visit, Agent Breeden introduced Dr. Pettinger to 
DEA Special Agent Daniel Patrick Moriarty, who was using the fictional 
name of Jason Kelly.\104\ Agent Moriarty has worked as a DEA Special 
Agent since 2004. He completed basic and advanced training at Quantico, 
Virginia, on subjects including firearms and enforcing narcotics 
laws.\105\ He testified about the one visit he made to Dr. Pettinger's 
office on January 13, 2012, and identified the video recording and 
transcript of that visit.\106\
---------------------------------------------------------------------------

    \104\ Id. at 146, 241.
    \105\ Id. at 241.
    \106\ Id. at 242 and Government Exhibit 13.
---------------------------------------------------------------------------

    Agent Moriarty testified that he presented to Dr. Pettinger as a 
patient seeking medication for pain relating to ``knee issues.'' \107\ 
Agent Moriarty said he presented the same MRI report that Agent Breeden 
had presented at his initial visit with Dr. Pettinger (save for the 
fact that when Agent Moriarty presented it, the document had been 
altered using Photoshop to show the name of Jason Kelly instead of Dan 
Daly).\108\ Agent Moriarty identified pages 2 through 6 of Respondent's 
Exhibit D as the questionnaire he filled out at his visit to Dr. 
Pettinger's office.\109\ As was the case with Agents Breeden and Kvach, 
Agent Moriarty described filling out parts of these forms, and later 
finding answers that he himself did not provide--including a claim of 
insomnia, which he stated he did not make either when filling out the 
form or during the patient interview that followed.\110\
---------------------------------------------------------------------------

    \107\ Tr. at 247.
    \108\ Id. at 248, 276.
    \109\ Id. at 269.
    \110\ Id. at 270.
---------------------------------------------------------------------------

    Agent Moriarty described his initial visit with Dr. Pettinger in 
terms similar to those presented by Agents Breeden and Kvach. He said 
Dr. Pettinger's exam included taking his blood pressure and pulse, and 
that he then ``walked around his desk to where I was seated and kind of 
I guess pushed my shoulders or touched my shoulders. He had a reflex 
tool and tapped each knee. That's kind of it. I think he looked in my 
ears.'' \111\ He said the entire exam was performed while he was seated 
in the office chair next to the doctor's desk, and that the doctor 
never required the agent to remove his jeans in the course of this 
exam.\112\ Based on this examination, Agent Moriarty was able to obtain 
a prescription for 180 units of oxycodone 30 mg IR.\113\
---------------------------------------------------------------------------

    \111\ Id. at 271.
    \112\ Id. at 272.
    \113\ Id. at 273 and Government Exhibit 12.
---------------------------------------------------------------------------

    Agent Kvach returned to Dr. Pettinger's office on January 24, 2012, 
for a second visit, this time accompanied by FBI Special Agent Neeki 
Bianchi.\114\ Agent Bianchi has been a Special Agent with the FBI for 
nine years.\115\ She stated that during this service, she trained for 
four months in Quantico, Virginia, and has subsequently been trained in 
counterterrorism, healthcare fraud, and undercover operations.\116\ She 
said she made one undercover visit to Dr. Pettinger's office using the 
name Nicole Hancock, and identified Government Exhibit 17 as a video 
recording and transcript of that visit.\117\
---------------------------------------------------------------------------

    \114\ Tr. at 189.
    \115\ Id. at 221.
    \116\ Id.
    \117\ Id. at 222, 224.
---------------------------------------------------------------------------

    According to Agent Bianchi, she and HHS Special Agent Kvach 
represented to be boyfriend and girlfriend for this visit and met 
jointly with Dr. Pettinger, with Agent Kvach returning in his role as 
Alex Gonza.\118\ Both Agent Bianchi and Agent Kvach recorded this 
meeting, although for approximately ten minutes Agent Kvach absented 
himself from the office visit so that he could use the men's restroom 
and smoke a cigarette. Regrettably, both of those events are part of 
the video recording offered by the Government as Exhibit 15, although 
they lend no substance to this report. On the other hand, the recording 
created by Agent Bianchi (found at Government Exhibit 17) captured 
without interruption the entire office visit she and Agent Kvach had 
with Dr. Pettinger on January 24, 2012.
---------------------------------------------------------------------------

    \118\ Id. at 224.
---------------------------------------------------------------------------

    In her testimony, Agent Bianchi summarized her meeting with Dr. 
Pettinger. She recalled telling Dr. Pettinger she used cannabis 
recreationally, but that she was meeting with him in order to get a 
prescription for pain medication.\119\ During the joint interview, 
Agent Kvach in his role as Alex Gonza told Dr. Pettinger that Ms. 
Hancock had been using his oxycodone, and Agent Bianchi did not dispute 
this, but instead stated she was there to obtain an oxycodone 
prescription for her own use.\120\ When Dr. Pettinger asked whether she 
was experiencing pain, she said no; and she gave the same answer when 
he asked whether she was having difficulty sleeping.\121\ When he asked 
why she needed pain medication, Agent Bianchi responded by saying the 
medication makes her talkative and happy.\122\ In response, Dr. 
Pettinger told Agent Bianchi that in order to obtain a prescription for 
oxycodone, she would need to arrange to have an MRI taken and have the 
results filed with his office.\123\ When Agent Bianchi asked Dr. 
Pettinger how to go about getting an MRI, specifically asking him what 
kind of pain she needed to report in order to justify getting an MRI 
that would serve this purpose, Dr. Pettinger told her to report pain in 
her back that radiates down to her leg.\124\ Before ending this office 
visit, Dr. Pettinger checked Agent Bianchi's blood pressure and ``ran 
his hand from [her] lower back to [her] upper back[.]'' \125\ At that 
point, Dr. Pettinger wrote a prescription authorizing an MRI, 
recommended her for medical marijuana, and issued a

[[Page 61607]]

prescription for 90 units of oxycodone 30 mg IR.\126\
---------------------------------------------------------------------------

    \119\ Id. at 225 and Government Exhibit 17.
    \120\ Tr. at 225.
    \121\ Id. at 226-7 and Government Exhibit 17.
    \122\ Tr. at 226 and Government Exhibit 17.
    \123\ Tr. at 226.
    \124\ Id.
    \125\ Id.
    \126\ Id. at 227 and Government Exhibit 16 at 1-2, Government 
Exhibit 26 at 8-9.
---------------------------------------------------------------------------

    As was the case when Agents Breeden and Kvach first met with Dr. 
Pettinger, Agent Bianchi testified that although she left many of the 
questions unanswered in the initial patient questionnaire, Dr. 
Pettinger appears to have filled in answers that had been left blank--
in any event, the agent stated she herself did not answer these 
questions, and assumed the answers were written in by Dr. Pettinger. 
She expressly denied any complaint of insomnia or back pain, although 
these ailments were listed as medical complaints in her patient 
questionnaire.\127\
---------------------------------------------------------------------------

    \127\ Tr. at 230 and Government Exhibit 17.
---------------------------------------------------------------------------

    DEA Special Agent Babak Ghazanfari testified about his visit to Dr. 
Pettinger's office. Agent Ghazanfari has worked for the DEA for 
approximately five years, and is currently assigned to the Tactical 
Diversion Squad in the Sacramento District Office.\128\ His training 
includes completion of approximately nineteen weeks of training at the 
Justice Training Center in Quantico, Virginia on all aspects of drug 
enforcement, including surveillance techniques, defensive tactics, and 
arrest procedures.\129\
---------------------------------------------------------------------------

    \128\ Tr. at 279.
    \129\ Id.
---------------------------------------------------------------------------

    Agent Ghazanfari said he went to Dr. Pettinger's Modesto, 
California office on March 20, 2012, and identified Government Exhibit 
20 as the audiovisual recording of that visit. Using the fictional name 
of Reza Babak Soltani, Agent Ghazanfari completed the patient 
questionnaire shown in Government Exhibit 27, and met with Dr. 
Pettinger shortly thereafter.\130\ Agent Ghazanfari testified that 
although Dr. Pettinger's physician notes indicate a complaint of left 
knee pain, the agent never made any such complaint to Dr. Pettinger--a 
point that is confirmed by the recording made during this office visit. 
To the contrary, when Dr. Pettinger asked ``so the knee is what's 
bothering you?'' Agent Ghazanfari responded ``well, used to, used to'' 
and when the doctor followed that with ``so the weather gets to you a 
little bit with it?'' the agent responded ``nah, it's not really 
bothering me all that much.'' \131\
---------------------------------------------------------------------------

    \130\ Id. at 284.
    \131\ Government Exhibit 20, audio-video recording and 
transcript at 7.
---------------------------------------------------------------------------

    The record establishes that Nikki, who was Dr. Pettinger's 
assistant at the Modesto office, took Agent Ghazanfari's blood 
pressure,\132\ and Dr. Pettinger himself used an otoscope to examine 
the agent's ears, and used a stethoscope to examine heart and lung 
sounds.\133\ According to Agent Ghazanfari, Dr. Pettinger conducted ``a 
patdown, touched certain parts of my body, rubbed my neck, kind of felt 
around me, tapped on my knees a little bit, and then he put his 
stethoscope up to my heart or the area of my heart and began to tell me 
that I had some irregular heart beat or something to that effect,'' all 
while the agent remained seated.\134\ Dr. Pettinger also had the MRI 
Agent Breeden referred to, this time altered to reflect that it 
referred to Reza Soltani.\135\ When Dr. Pettinger inquired about the 
medication Agent Ghazanfari was currently taking, he responded by 
saying he was taking Percocets, Norcos, and oxys, and that ``oxys are 
the ones that do it for me,'' but that he was obtaining them from the 
street, not through any valid prescriptions.\136\ At the conclusion of 
this meeting, Dr. Pettinger presented the agent with a prescription for 
150 units of oxycodone 30 mg IR.\137\
---------------------------------------------------------------------------

    \132\ Tr. at 286.
    \133\ Government Exhibit 20, audio-video recording and 
transcript at 17.
    \134\ Tr. at 288.
    \135\ Tr. at 285.
    \136\ Id. at 292 and Government Exhibit 20, audio-video 
recording and transcript at 12.
    \137\ Tr. at 289 and Government Exhibit 19.
---------------------------------------------------------------------------

    Agent Breeden made one final visit to Dr. Pettinger's office, on 
May 9, 2012.\138\ During this visit, much of the time the doctor spent 
with Agent Breeden was dedicated to discussing problems Dr. Pettinger 
was having with pharmacists, who were starting to reject his 
prescriptions.\139\ Dr. Pettinger made the point that he ``wrote more 
prescriptions [for oxycodone] than 50 doctors combined,'' and was 
irritated by questions presented to him by pharmacists, some of which 
arose because his first name is Clair, which leads on occasion to 
uncertainty about whether the prescribing doctor is male or female, 
resulting in a lot of unnecessary questions. \140\
---------------------------------------------------------------------------

    \138\ Tr. at 147.
    \139\ Id. at 149 and Government Exhibit 22.
    \140\ Id.
---------------------------------------------------------------------------

    Agent Breeden described Dr. Pettinger performing a medical exam 
that was similar to previous exams, in that it was short and involved 
only a blood pressure check and stethoscope monitoring of the chest 
area.\141\ At one point in this meeting, Agent Breeden told Dr. 
Pettinger that he had used some of the prior oxycodone prescription to 
``pay back'' a third person, at which point Dr. Pettinger told him that 
he would not continue to issue prescriptions for oxycodone if the 
patient was selling or giving pills away.\142\ When Agent Breeden 
assured Dr. Pettinger he would no longer give away or sell his pills, 
Dr. Pettinger wrote a prescription for 220 units of oxycodone 30 mg 
IR.\143\
---------------------------------------------------------------------------

    \141\ Id.
    \142\ Id.
    \143\ Tr. at 150 and Government Exhibit 21.
---------------------------------------------------------------------------

    When asked on cross-examination whether he ever felt in danger 
while in Dr. Pettinger's presence, Agent Breeden said he did indeed 
feel in danger, noting first that the doctor told him he possessed a 
.357 handgun and hollow point bullets, and then noting the doctor's 
agitation when describing how he would use the weapon.\144\
---------------------------------------------------------------------------

    \144\ Tr. at 153.
---------------------------------------------------------------------------

Testimony From the Government's Expert Medical Witness

    The Government's expert witness was Barbara Neyhart, M.D. Dr. 
Neyhart has been a physician for 35 years, and currently works at the 
University of California--Davis Medical Center.\145\ After completing 
medical school at Rush Medical College in Chicago, Dr. Neyhart 
completed residencies in internal medicine and family medicine, and has 
been a clinical professor at the School of Medicine at the University 
of California--Davis since 1984.\146\ She also maintained a family 
medical practice in both office and clinical settings.\147\ Through 
this course of practice, Dr. Neyhart has often encountered drug-seeking 
patients as well as patients with legitimate chronic pain 
symptoms.\148\ She has experience treating persons with chronic pain 
and with prescribing medication for persons with chronic pain.\149\ She 
has provided medical testimony as an expert for the Licensing Division 
of the State of California for more than ten years, and was a general 
medical consultant for the Division prior to her service as an 
expert.\150\ In order to prepare for this hearing, Dr. Neyhart read the 
exhibits presented to her, and reviewed the recordings that are part of 
our record, spending approximately 16 hours doing so.\151\
---------------------------------------------------------------------------

    \145\ Id. at 312.
    \146\ Id. at 314.
    \147\ Id.
    \148\ Id. at 314-5.
    \149\ Id. at 315.
    \150\ Id. at 316.
    \151\ Id. at 451-2.
---------------------------------------------------------------------------

    After presenting her curriculum vitae (Government Exhibit 28), the 
Government offered Dr. Neyhart as an expert medical witness in the 
standard of care for patients with pain complaints who are being 
treated by general

[[Page 61608]]

practitioners.\152\ During voir dire of the witness, Respondent's 
counsel established that Dr. Neyhart believes she is ``no less [an 
expert in pain management medicine] than [Dr. Pettinger].'' \153\ She 
stated that while she has not testified in medical board cases that 
focus on the long-term use of opiates for the management of chronic 
non-cancer pain, she has reviewed such cases.\154\ The record shows 
that Dr. Neyhart currently staffs the Breast Health Clinic, serving 
women who have recently been diagnosed with a newly manifested breast 
mass, a position that does not call upon her to decide whether or not 
to embark on long-term opioid therapy.\155\ That being said, however, 
she stated in the last five years she has been called upon to decide 
whether to embark on long-term opioid therapy for non-cancer pain 
between one and five times a week, until she took her most recent 
position eighteen months ago.\156\
---------------------------------------------------------------------------

    \152\ Id. at 317.
    \153\ Id. at 318.
    \154\ Id. at 320.
    \155\ Id. at 321.
    \156\ Id. at 322.
---------------------------------------------------------------------------

    Dr. Neyhart said within the subset of cases where she was called 
upon to make such determinations, she has prescribed oxycodone possibly 
one or two times weekly.\157\ As such, Dr. Neyhart established she had 
significant clinical experience treating persons with chronic pain, 
including experience using oxycodone in those treatment plans. Based on 
the answers provided during this part of the examination, the 
Respondent made no objection to my finding Dr. Neyhart to be an expert, 
asking only that the limitations presented during voir dire be taken 
into account when weighing any opinions rendered by the witness.\158\ 
As a result, I granted the Government's motion to have Dr. Neyhart 
regarded as a medical expert, under the scope presented by the 
Government.\159\
---------------------------------------------------------------------------

    \157\ Id. at 323.
    \158\ Id. at 324.
    \159\ Id. at 325.
---------------------------------------------------------------------------

    Dr. Neyhart began by describing in general terms what the standard 
of care calls for when a patient presents with a complaint of pain. In 
these cases, the physician must take a complete medical history with 
respect to the pain complaint, including ``when did it start; was there 
a trauma that caused this to start; what is the degree of pain that is 
currently being suffered.'' \160\ She noted that doctors will sometimes 
use a numeric scale of one to ten when questioning about the degree of 
pain at issue.\161\ Beyond these metrics, Dr. Neyhart said the history 
must also include information about the character of the pain (sharp or 
dull); the frequency of the pain (constant, periodic, or intermittent); 
the degree of interference with day-to-day activities and with the 
ability to seek gainful employment and engage in intimate and non-
intimate relationships; and whether there is a psychological impact 
occasioned by the pain. She said the doctor also needs to inquire about 
the different modalities of relief sought to date: what have other 
doctors said and done, what surgeries have been proposed, and what 
physical therapy has been undertaken? \162\ Equally important, 
according to Dr. Neyhart, is the history of medications used thus far: 
what medications were used, were the medications effective, were there 
side effects of note? \163\
---------------------------------------------------------------------------

    \160\ Id.
    \161\ Id.
    \162\ Id. at 325-6.
    \163\ Id. at 326.
---------------------------------------------------------------------------

    Dr. Neyhart examined the patient questionnaires presented in the 
exhibits. She noted that generally, the patient questionnaires she 
encounters do not call for the prospective patient to disclose whether 
he or she is a law enforcement officer, and she saw no reason to 
inquire about the birth order of the patient. Nevertheless, Dr. Neyhart 
did not describe these forms as deficient.\164\ She acknowledged that 
the forms are designed for use in cases involving medicinal cannabis 
use under the California Compassionate Use Act, and stated she has 
testified in cannabis cases and found these forms to be similar to 
those she has seen in those cases, but that such forms would be 
considered nonstandard in the course of a family practice.\165\
---------------------------------------------------------------------------

    \164\ Id. at 326-7.
    \165\ Id. at 328.
---------------------------------------------------------------------------

    Dr. Neyhart next examined the Physician Notes form found in these 
patient records, describing the form itself as ``a fairly standard 
document on which a physician would record elements of the history that 
were not recorded in the questionnaire and also the objective physical 
exam findings.'' \166\ Each of these lines has a specific significance, 
according to Dr. Neyhart. She explained the role each plays in the 
examination, noting the significance of objective findings--findings 
not dependent on the stated history, but on objectively determined 
data. These include vital sign measurements--blood pressure, pulse 
rate, respiration rate, and weight.\167\ They also include physical 
examination of the head, eyes, ears, nose and throat; the respiratory 
system including the lungs; the cardiovascular system including the 
heart and peripheral pulses; the abdomen, the musculoskeletal system, 
and the integumentary system (skin surfaces).\168\
---------------------------------------------------------------------------

    \166\ Id. at 329.
    \167\ Id. at 332-3.
    \168\ Id. at 333-4.
---------------------------------------------------------------------------

    According to Dr. Neyhart, the objective exam calls for the use of 
objective measurements: blood pressure would be taken by a standard 
blood pressure cuff; pulse counts would be taken by counting the pulse 
bounds; and weight would be taken by a scale.\169\ She said that a 
cursory exam could be taken in as little as five minutes, while a more 
thorough exam could take as long as half an hour.\170\
---------------------------------------------------------------------------

    \169\ Id. at 334.
    \170\ Id.
---------------------------------------------------------------------------

    Next on the form is ``Impression,'' which affords the physician an 
opportunity to take the history and physical exam information and 
render a diagnosis or, more commonly, a range of diagnoses.\171\ Thus, 
an impression is not a recapitulation of the chief complaint--instead, 
it is the result of the physician digesting both the subjective history 
and objective facts, resulting in a diagnosis.\172\ Later, Dr. Neyhart 
explained that ``[t]he `chief complaint' is really and truly what the 
patient says. It's not what is determined after an extensive history is 
taken. Most of the time actually the chief complaint is determined by a 
medical assistant, not by a highly trained clinical professional such 
as a physician.'' \173\
---------------------------------------------------------------------------

    \171\ Id. at 334.
    \172\ Id. at 335.
    \173\ Id. at 432.
---------------------------------------------------------------------------

    The Recommendation line provides a place for the physician to 
describe the plan for this patient: ``so, for a complaint of pain . . . 
there are many ways to relieve pain. They can involve physical therapy. 
It can involve application of ice, the change in the activity that is 
causing the pain. There are many different things. But it can also 
involve the prescribing of therapeutics and there is a range of 
therapeutics that can be prescribed.'' \174\
---------------------------------------------------------------------------

    \174\ Id. at 336.
---------------------------------------------------------------------------

    Addressing next the records she reviewed, Dr. Neyhart said she read 
the patient records and listened to and watched the recordings obtained 
by the undercover agents in preparation for her testimony. Based on 
this, Dr. Neyhart was asked a series of questions about the events 
depicted in these recordings.
    In her review of the first visit by Agent Breeden to Dr. 
Pettinger's office, Dr. Neyhart noted first the language used by the 
agent in offering his MRI to

[[Page 61609]]

Dr. Pettinger. She observed that in a ``standard medical visit,'' a 
patient would offer a complaint of pain, saying something like ``I hurt 
my knee,'' whereas here, the agent said words to the effect that he was 
giving the doctor a copy of his MRI because ``I knew you needed 
something for your records.'' \175\ Dr. Neyhart explained that 
ordinarily a history of present illness ``would tend to go along the 
lines of `Have you had any previous testing? May I review that previous 
testing so I can use it in the course of formulating the diagnosis?' 
Not in order of justifying a later prescription.'' \176\
---------------------------------------------------------------------------

    \175\ Id. at 336-7.
    \176\ Id. at 337.
---------------------------------------------------------------------------

    Dr. Neyhart next considered Agent Breeden's discussion with Dr. 
Pettinger regarding sleep. She described sleep difficulty as ``a very 
common complaint,'' and one that ``doesn't really stand out as a unique 
thing.'' \177\ According to Dr. Neyhart, if sleep disorder is a 
``dominant complaint, a physician operating within the standard of care 
would inquire [in] more detail what strategies had been employed by 
this individual to solve their sleep problems that did not involve the 
use of medication.'' \178\ This would include questions such as ``[d]o 
they calm down at the end of the day? Do they not eat huge meals at the 
end of the day? Alcohol commonly can interfere with sleep, and [the 
character Agent Breeden was playing] was of a misuser of alcohol. So 
alcohol would factor rather significantly into any inquiry into 
sleep.'' \179\
---------------------------------------------------------------------------

    \177\ Id.
    \178\ Id. at 338.
    \179\ Id.
---------------------------------------------------------------------------

    Dr. Neyhart next considered the colloquy between Agent Breeden and 
Dr. Pettinger regarding the putative patient's admission that he 
``basically uses whatever opioids he can get his hands on rather than a 
more systematic fashion as would customarily be used for somebody who 
is under treatment for chronic pain condition.'' \180\ Such a patient 
presentation would, in Dr. Neyhart's opinion, constitute a red flag for 
abuse.\181\ She said another red flag arose when the agent was vague 
about treatment in the past, locations for such treatment, and 
providers of such treatment. She explained that such vagueness gives 
rise to a concern for doctor shopping.\182\ Similarly, where the agent 
told Dr. Pettinger words to the effect that he could not recall whether 
he had knee pain or back pain, she was ``not very clear from this 
exchange whether or not the pain is driving the clinical encounter or 
the desire for a preconceived prescriptive opioid is driving that 
encounter.'' \183\
---------------------------------------------------------------------------

    \180\ Id.
    \181\ Id.
    \182\ Id. at 339.
    \183\ Id.
---------------------------------------------------------------------------

    During the initial medical examination, Dr. Pettinger asked Agent 
Breeden if he had any of the following conditions: nosebleeds, sore 
throat, difficulty swallowing, respiratory problems, asthma, 
bronchitis, pneumonia, irregular heartbeat, chest pain, [something that 
was unintelligible], fever, scarlet fever, GI problems, nausea, 
vomiting, diarrhea, hepatitis, pancreatitis, urinary difficulties, 
kidney stones, or blood in the urine.\184\ I listened to this 
recitation, and found it to be presented with such great speed and lack 
of interest as to be almost a sham. Dr. Neyhart was more charitable in 
her description, stating that, ``I listened to this recording and what 
was impressive to me was how rapidly this particular array of symptoms 
was recited by Dr. Pettinger. I would not have been able to follow it 
myself, and I consider myself a person who is familiar with medical 
language.'' \185\ The words followed one to the next without pause and 
without distinction. As Dr. Neyhart explained, ``[t]he standard 
practice would be to separate it out. Do you have any problems with 
your eyes, nose or throat? Pause for response. Do you have any problems 
with lumps or bumps in your neck or problems with your thyroid? Pause 
for response. Do you have any problems with breathing or shortness of 
breath or asthma or wheezing? Pause for response.'' \186\ Having 
listened to this presentation of symptoms, I too found Dr. Pettinger's 
questions to have been perfunctorily presented in a manner not designed 
to elicit a meaningful response.
---------------------------------------------------------------------------

    \184\ Government Exhibit 5, recording and transcript at 33.
    \185\ Tr. at 340.
    \186\ Id.
---------------------------------------------------------------------------

    Next, Dr. Neyhart was asked about the exchange between Agent 
Breeden and Dr. Pettinger during which Dr. Pettinger asked whether the 
patient intended to grow cannabis. In response, the agent stated ``um, 
probably not. Really, um, I just wanted to get, ah the--my meds; that's 
the main thing I was trying, `cause we talked on the phone and you 
said, um, the discount.'' \187\ Dr. Neyhart stated that in this 
exchange, the agent ``was really getting down to his agenda, and his 
agenda was to obtain a prescription.'' \188\ This, she said, would be 
``a red flag for most clinicians for a patient to come in with a 
complaint but really direct the encounter towards obtaining the 
specific remedy for the complaint, especially if said remedy is a 
controlled substance.'' \189\
---------------------------------------------------------------------------

    \187\ Government Exhibit 5, recording and transcript at 37.
    \188\ Tr. at 341.
    \189\ Id.
---------------------------------------------------------------------------

    Dr. Neyhart next considered the exchange between Agent Breeden and 
Dr. Pettinger in which Dr. Pettinger asks ``Okay. So basically you want 
to be given oxycodone?'' \190\ Dr. Neyhart explained that after 
listening to the audio recording and reading the transcript, ``this 
seemed more of a business negotiation than a clinical encounter to me. 
A clinical encounter would be, `Let's get back to your knee pain and 
what is the best way to relieve your knee pain.' This . . . had more of 
a flavor of, `So what is it that you want from me in terms of a 
prescription?' '' \191\ She expressed a similar concern regarding the 
exchange between Agent Breeden and Dr. Pettinger in which Dr. Pettinger 
explained that prescriptions for Norco could include refills, but those 
for oxycodone cannot. She said ``[t]hat should not factor into the 
decision of what is the most appropriate treatment.'' \192\
---------------------------------------------------------------------------

    \190\ Id. at 342, quoting Government Exhibit 5, at 41 (Dr. 
Pettinger: ``ok so basically you want to end up getting the 
oxycodones. You want the IRs, the 30 IRs?'' Agent Breeden: ``ah 
yea.'')
    \191\ Tr. at 342.
    \192\ Id. at 343.
---------------------------------------------------------------------------

    Dr. Neyhart was asked to offer her impressions about the responses 
found in the patient questionnaire for this encounter. One red flag, 
according to Dr. Neyhart, is that the patient indicates he works as a 
``tile man,'' but after listening to the patient interview and exam, 
she said ``nowhere is the information that I listened to or read was 
there any conversation about how his pain condition was interfering 
with his ability to be a tile man. It seems to me that it would be very 
hard to be a tile man if you had knee pain or back pain.'' \193\ In 
addition, Dr. Neyhart observed that while the patient reported drinking 
ten drinks per week, and while that amount itself is not excessive, the 
character being portrayed by Agent Breeden ``disclosed that there was a 
much greater use of alcohol'' than was reported in the 
questionnaire.\194\ Elaborating on this point, Dr. Neyhart said that if 
a patient presented to her in her office holding a bottle of alcohol, 
as was the case with Agent Breeden, this would have caused a concern on 
her part, ``because that is so inappropriate . . . in the middle of a 
clinical

[[Page 61610]]

encounter.'' \195\ She also noted that the patient (on page five of the 
questionnaire) reported ``an array of different opioid medications that 
are listed as presently using,'' but that the patient ``had purportedly 
not seen a physician since his days in Florida except for perhaps one 
encounter with a physician in Sonoma County. So there is an 
inconsistency about how these substances would have been obtained in 
the course of a legitimate medical encounter.'' \196\
---------------------------------------------------------------------------

    \193\ Id.
    \194\ Id.
    \195\ Id. at 346.
    \196\ Id. at 344.
---------------------------------------------------------------------------

    Dr. Neyhart next described her impressions of the physician notes 
found on page six of this patient's records. She identified several 
areas of concern:

    [T]he first thing that stood out for me is there is really not 
much detail with regard to the history of present illness recorded 
there. There is no indication about how long knee pain has been 
present, no indication of whether or not other modalities of 
treatment have been employed or prior imaging or prior 
consultations. There's just not a lot of detail. I don't get the 
idea from what is recorded there, nor did I get any impression from 
the transcript or the recording of the degree of pain that was being 
suffered on a scale of one to ten, or even using such words as mild, 
moderate or severe. None of that language was employed. I also don't 
get an impression from this form of whether or not there is 
periodicity to the pain or an intermittent nature to the pain, or 
how it is interfering with occupational work. I mean, it's just not 
there. The next thing that came up for me on this is that the weight 
is recorded, and my understanding was that there was not a scale in 
Dr. Pettinger's office because there is much interchange about what 
is your weight, and then Dr. Pettinger would record whatever number 
the agent posing as a patient would state. So the weight as recorded 
here, it is implied that it was actually objectively determined, but 
actually it wasn't. It was actually a piece of history and . . . in 
the customary course of medical practice you might write up under 
review of systems `Patient states weight is X'.
    The next thing that shows up for me is a very detailed 
examination of the HEENT, although that was not really relevant to 
the pain complaint, and a very non-detailed examination of the 
musculoskeletal system, although that was quite relevant to the pain 
complaint, the pain complaint being knee pain. One would customarily 
expect to see a highly detailed knee examination and an examination 
of the joints on either side of the knee, that being the ankle and 
the hip. With a complaint of back pain, there would be a full 
examination of the back, and that would involve a palpitation of 
[the] entire spine by range of motion of the entire spine, [the] 
integrity of the nerve roots emanating from the spine. These are not 
evaluations that can be made in a fully clothed patient seated on a 
standard chair, and it was my impression of little snippets of video 
that I was able to see that there was no exam table in Dr. 
Pettinger's office, nor were the characters asked to remove their 
clothing.\197\
---------------------------------------------------------------------------

    \197\ Id. at 344-6.

    Dr. Neyhart was asked considering the recording and transcript, and 
considering the medical records presented regarding this encounter, 
whether (in her expert opinion) the issuance of prescription 
medications recorded here was legitimate. In response, Dr. Neyhart 
stated ``there is no evidence that this prescription was provided in 
the course of usual medical care for a pain condition.'' \198\ She 
explained that ``[t]he agent comes to Dr. Pettinger with a complaint of 
pain. There was a very limited history taken pertaining to the pain 
complaint. There was no examination that I could see, that I could 
discern was done in the area of the pain complaint. Thus, no diagnosis 
could be rendered beyond `patient states pain.' While `patient states 
pain' is commonly the case, there are many ways to address a complaint 
of pain that do not involve the prescribing of controlled substances.'' 
\199\
---------------------------------------------------------------------------

    \198\ Id. at 347.
    \199\ Id.
---------------------------------------------------------------------------

    In her evaluation of each of the other patient encounters presented 
her, Dr. Neyhart found similar areas of concern. These included:
     Prescribing a synthetic form of cannabis (Marinol) not for 
treatment purposes but to help the patient (Agent Breeden) avoid 
problems with employers or law enforcement personnel; \200\
---------------------------------------------------------------------------

    \200\ Id. at 349.
---------------------------------------------------------------------------

     Failing to maintain control over the MRI provided by Agent 
Breeden, and failure to request a replacement copy during the course of 
his treatment; \201\
---------------------------------------------------------------------------

    \201\ Id.
---------------------------------------------------------------------------

     Failing to adequately inquire in follow up visits, to 
determine whether prescribed medications worked as intended and whether 
they caused any adverse reactions for the patient (Agent Breeden); 
\202\
---------------------------------------------------------------------------

    \202\ Id. at 353.
---------------------------------------------------------------------------

     Describing in written physician's records a ``quite 
extensive'' physical examination, where the actual time that elapsed 
(as revealed in the audio recording) ``was very, very brief, so it's 
impossible . . . to imagine how such a complete physical examination 
had been performed''; \203\
---------------------------------------------------------------------------

    \203\ Id.
---------------------------------------------------------------------------

     Failing to resolve inconsistency in Agent Breeden's report 
that he was working out and running on the one hand, with his complaint 
of knee pain on the other hand; \204\
---------------------------------------------------------------------------

    \204\ Id. at 355.
---------------------------------------------------------------------------

     Failing to address information provided by Agent Breeden 
that he diverted some of the previously prescribed units of oxycodone 
for profit or to pay off a debt; \205\
---------------------------------------------------------------------------

    \205\ Id. at 356.
---------------------------------------------------------------------------

     Failing to address red flags associated with self-reported 
substance abuse in a patient (Agent Kvach) presented to Dr. Pettinger 
for the purpose of obtaining controlled substances for a third person; 
\206\
---------------------------------------------------------------------------

    \206\ Id. at 363.
---------------------------------------------------------------------------

     Failing to inquire further regarding prior prescriptions 
that had been issued to a patient (Agent Kvach) outside of the course 
of a medical encounter; \207\
---------------------------------------------------------------------------

    \207\ Id. at 364.
---------------------------------------------------------------------------

     Failing to resolve the red flag that arose when a patient 
asked for a particular prescription by brand name, by milligram amount, 
and by quantity (Agent Kvach); \208\
---------------------------------------------------------------------------

    \208\ Id. at 366.
---------------------------------------------------------------------------

     Requesting that a patient (Agent Kvach) obtain an MRI not 
to address or relieve suffering, but so that the doctor can justify 
providing the patient with the prescription being sought by the 
patient, and negotiating with the patient by offering to continue 
prescribing or increase the amount of controlled substances prescribed, 
provided the patient produces an MRI; \209\
---------------------------------------------------------------------------

    \209\ Id. at 366-8.
---------------------------------------------------------------------------

     Failing to resolve the red flag that arose when a patient 
(Agent Kvach) was vague about the amount of medication prescribed and 
taken in the past, in order to determine the medical validity of past 
use of controlled substances; \210\
---------------------------------------------------------------------------

    \210\ Id. at 367.
---------------------------------------------------------------------------

     Failing to obtain a sufficient medical history of 
treatment for back pain in a patient (Agent Kvach); \211\
---------------------------------------------------------------------------

    \211\ Id. at 368.
---------------------------------------------------------------------------

     Failing to examine the specific area in issue, failure to 
render a specific diagnosis, failure to inquire about alternative 
treatments, and representing to perform a complete physical examination 
during a time that was too short to permit such an exam of a patient 
(Agent Kvach); \212\
---------------------------------------------------------------------------

    \212\ Id. at 368-9, 372-3.
---------------------------------------------------------------------------

     Prescribing pain medication under conditions where the 
patient (Agent Bianchi) reported having no pain symptoms, under 
conditions where it was clear the patient intended to use the 
medication recreationally; \213\
---------------------------------------------------------------------------

    \213\ Id. at 374-5, 377.
---------------------------------------------------------------------------

     Failing to resolve medical concerns with a patient's 
possible substance abuse through the recreational use of cannabis, 
prior to prescribing pain medication for the patient (Agent Bianchi and 
Agent Ghazanfari); \214\
---------------------------------------------------------------------------

    \214\ Id. at 376-7, 406-7.

---------------------------------------------------------------------------

[[Page 61611]]

     Failing to resolve the red flag that arose when it 
appeared one patient (Agent Kvach) was sharing his controlled substance 
medication with another patient(Agent Bianchi), without any medical 
indication; \215\
---------------------------------------------------------------------------

    \215\ Id. at 378.
---------------------------------------------------------------------------

     ``Trolling for symptomatology,'' by concluding a patient 
(Agent Bianchi) had anxiety based on the fact that she feels good when 
taking cannabis or oxycodone, in order to justify prescribing 
oxycodone, and suggesting the patient claim that she has pain radiating 
from her back to her leg, in order to justify obtaining an MRI that 
would then be used to justify prescribing pain medication; \216\
---------------------------------------------------------------------------

    \216\ Id. at 378-81.
---------------------------------------------------------------------------

     Failing to resolve the red flag that arose when a patient 
(Agent Ghazanfari) who sought pain medication also abused alcohol; 
\217\
---------------------------------------------------------------------------

    \217\ Id. at 407, 409.
---------------------------------------------------------------------------

     Failing to resolve the red flag that arose when a patient 
seeking pain medication (Agent Ghazanfari) was vague about where and 
when he had knee surgery, vague about pain medication prescribed after 
that surgery, and suggested that the surgery was performed by his 
general practitioner; \218\
---------------------------------------------------------------------------

    \218\ Id. at 408-9.
---------------------------------------------------------------------------

     Failing to resolve the red flag that arose when a patient 
(Agent Ghazanfari) acknowledged selling oxycodone, prior to issuing a 
prescription for the same; \219\
---------------------------------------------------------------------------

    \219\ Id. at 411.
---------------------------------------------------------------------------

     Failing to include the examination of knees in the course 
of an examination based on a complaint of knee pain by a patient (Agent 
Ghazanfari); \220\
---------------------------------------------------------------------------

    \220\ Id. at 412.
---------------------------------------------------------------------------

     Concluding that a patient (Agent Ghazanfari) needed four 
oxycodone tablets daily, without first waiting for the patient to 
indicate what his past daily use had been, and then failing to resolve 
the red flag that arose when the patient stated that if the number was 
too high, he would be able to get rid of any excess units.\221\
---------------------------------------------------------------------------

    \221\ Id. at 413.
---------------------------------------------------------------------------

    Based on her review of each of these examination records, Dr. 
Neyhart expressed the expert medical opinion that the prescriptions for 
controlled substances reflected in this record were not rendered 
because of a determination of a legitimate medical condition.\222\ In 
one instance, however, Dr. Neyhart stated that ``an argument could have 
been made for the legitimacy'' of the prescription. She explained that 
in the case of Dr. Pettinger's treatment of Agent Moriarty (under the 
assumed name of Jason Kelly), she noted the agent's character was 
``vague on the details'' about past prescriptions and past treatment, 
both of which raised red flags the doctor should have resolved.\223\ 
Dr. Pettinger noted that the past prescriptions for oxycodone appeared 
to be ``out of proportion to the degree of disability it caused''.\224\ 
Dr. Neyhart, however, described Dr. Pettinger's questions along these 
lines to be generally sufficient: ``It was a reasonable exchange and 
there was some vagueness in terms of how disabling this particular 
condition was, but it appeared that it had been going on for some time. 
History seemed reasonable, that the pain comes and goes, and that's 
what happens with knee pain. It does come and go. This is all 
consistent with usual medical practice, this exchange.'' \225\
---------------------------------------------------------------------------

    \222\ Id. at 354 (prescription at Government Exhibit 25 at 14); 
357-8 (prescription at Government Exhibit 25 at 13); 361-2 
(prescription at Government Exhibit 25 at 12); 369-70 (prescription 
at Government Exhibit 8); 372-3 (prescription at Government Exhibit 
14); 385 (prescription at Respondent Exhibit B at 8); 406 
(Government Exhibit 12); 414 (prescription at Government Exhibit 
19).
    \223\ Id. at 402.
    \224\ Id. at 403.
    \225\ Id.
---------------------------------------------------------------------------

    Left unclear, however, was whether there had been a specific 
injury, what kinds of diagnostics were utilized, what treatment 
modalities were tried, or why those modalities were changed.\226\ Also 
of concern, according to Dr. Neyhart, was the ``rapid-fire review'' of 
possible medical conditions seen here, as in the other cases, and the 
fact that Dr. Pettinger prescribed oxycodone after recognizing that the 
patient's use was ``out of proportion to the amount of functional 
disability or pain that he was suffering.'' \227\
---------------------------------------------------------------------------

    \226\ Id. at 404.
    \227\ Id. at 405-6.
---------------------------------------------------------------------------

    Asked to summarize her findings, Dr. Neyhart stated that it was her 
expert opinion that in eight of the nine prescriptions, there was no 
medical indication that would support issuing those prescriptions, and 
that in the prescription issued to Agent Moriarty, this was a ``soft 
call.'' \228\ She expanded on this during cross examination, stating 
that the agent ``did present with a history that made sense. He 
presented with an MRI report that made sense relative to his history. 
He stated that he was using oxycodone for this medical condition. And 
so the holes in the Swiss cheese kind of lined up, and that's what made 
it a softer call than, for instance, the agent who presented herself as 
Hancock.'' \229\ She also agreed that the fact that three of the agents 
all used the same MRI (save for altering the names thereon) would not 
be something a doctor would likely notice, and that if someone were to 
give her this MRI, she would likely be fooled into believing it was 
real.\230\
---------------------------------------------------------------------------

    \228\ Id. at 415.
    \229\ Id. at 417.
    \230\ Id. at 418-9.
---------------------------------------------------------------------------

    During cross examination, Dr. Neyhart agreed that a physician, when 
presented with Agent Moriarty's claim that he took 180 oxycodone 
tablets a month, could reasonably believe such a statement; however, 
Dr. Neyhart stated that it would be ``a big assumption'' to assume such 
a prescription was medically indicated, because in her experience ``if 
somebody requires 180 oxycodone a month or more, there are more 
appropriate long-acting medications that could be used.'' \231\ When 
asked to address the premise that Dr. Pettinger was trying to ``titrate 
down'' this patient to where he used only 90 units a month, Dr. Neyhart 
stated there was no documentation in the medical record supporting such 
a premise--only documentation proposing ``a future tapering. There is 
no agreement entered into between Dr. Pettinger and this patient. Thus 
it is impossible for me to conclude that this was step one of a plan.'' 
\232\
---------------------------------------------------------------------------

    \231\ Id. at 423-4.
    \232\ Id. at 430.
---------------------------------------------------------------------------

    Also on cross examination Dr. Neyhart agreed with the premise that, 
with some patients suffering from acute intractable pain, the patient 
will sometimes take medication that is not prescribed to them, and on 
occasion will get medication from relatives or others, without waiting 
for an appointment to see a doctor. She said such behavior is ``not an 
all-in-all deal breaker, but it is a red flag.'' \233\ She also agreed 
with the premise that, after an initial diagnosis calling for pain 
medication is made, the failure to administer a physical exam in a 
follow up visit with the doctor is not in and of itself problematic, 
but here ``[w]hat is problematic is the documentation of the physical 
exam that did not occur.'' \234\
---------------------------------------------------------------------------

    \233\ Id. at 435-6.
    \234\ Id. at 437.
---------------------------------------------------------------------------

    Dr. Neyhart said she has experience treating patients who exhibit 
drug-seeking behavior. She agreed that this population of patients will 
make a great effort to try to convince physicians to prescribe 
controlled substances, and will sometimes provide false information or 
vague answers when asked about their medical history.\235\ In addition, 
while it is not a typical experience, Dr. Neyhart has had patients

[[Page 61612]]

in this population attempt to divert her attention when she was 
inquiring into the patient's medical history, to avoid answering the 
questions presented.\236\
---------------------------------------------------------------------------

    \235\ Id. at 444.
    \236\ Id.
---------------------------------------------------------------------------

Testimony by Dr. Pettinger and Evidence Regarding Remediation

    Dr. Pettinger testified briefly, on direct examination as a witness 
for the Government.\237\ After responding to questions establishing his 
identity, Dr. Pettinger declined to answer questions regarding the 
substance of the charges against him, invoking the privilege against 
self-incrimination.\238\
---------------------------------------------------------------------------

    \237\ Id. at 303-4.
    \238\ Id. at 304.
---------------------------------------------------------------------------

    On his own behalf, Dr. Pettinger offered the testimony of two 
patients and a member of his staff. Dr. Pettinger began treating Tammy 
Gouthro in December 2010.\239\ According to Ms. Gouthro, she sought Dr. 
Pettinger's help for pain management, and continued treatment with him 
through June 2012.\240\ She explained that she had a work-related back 
injury seventeen years earlier that required fusing the L4 and L5 
vertebrae.\241\ She said this fusion and damage to her right sciatic 
nerve led to a 91 percent disability rating and created significant 
chronic pain, leaving her bedridden for much of the time.\242\
---------------------------------------------------------------------------

    \239\ Id. at 252-3.
    \240\ Id. at 253.
    \241\ Id. at 254.
    \242\ Id.
---------------------------------------------------------------------------

    Due to a lack of insurance, Ms. Gouthro had no doctor at the time 
she visited Dr. Pettinger, and ``pain medicine wasn't an option for me. 
It didn't work[.]'' \243\ When asked to describe Dr. Pettinger's 
office, Ms. Gouthro said she was examined in the office where Dr. 
Pettinger has his desk and file cabinets. She said the room had a 
stethoscope and ``reflection gadgets''--possibly referring to a reflex 
hammer used to strike the patellar ligament when testing the synapses 
at the L4 level of the spinal cord. She said Dr. Pettinger took her 
blood pressure, asked her about her pain level, had her stand, ``and 
asked me if I'd walk on my heel and walk on my toes and performed 
pressure points and did the actual just the exterior of my back. That's 
all that he examined was the exterior where the injury and all that is, 
and then, like I said, he had me see how I walked forward on tippy-toes 
and walked back on my heel to see balance[.]'' \244\
---------------------------------------------------------------------------

    \243\ Id. at 255.
    \244\ Id. at 257, 260.
---------------------------------------------------------------------------

    Dr. Pettinger did not offer any medical records to support Ms. 
Gouthro's testimony. In addition, Ms. Gouthro said she told Dr. 
Pettinger she had x-rays of the areas needing treatment, but she never 
provided them because he did not require them.\245\ When asked how this 
examination was different than others she has had, Ms. Gouthro said 
``my normal doctors have a lounge, a bed that you lay on if they wanted 
further extension, but other than that this is pretty much basically 
the same as I get from my doctors.'' \246\
---------------------------------------------------------------------------

    \245\ Id. at 266.
    \246\ Id. at 257-8.
---------------------------------------------------------------------------

    Following this examination, Dr. Pettinger prescribed cannabis for 
Ms. Gouthro, and then prescribed Norco, which Ms. Gouthro said did not 
work for her.\247\ Ms. Gouthro praised Dr. Pettinger for helping her 
end her use of opiates, stating that by using cannabis she has been 
free of other pain medication since December 4, 2010.\248\
---------------------------------------------------------------------------

    \247\ Id. at 255.
    \248\ Id. at 259.
---------------------------------------------------------------------------

    Brenda Sue Martin testified on Dr. Pettinger's behalf, stating that 
Dr. Pettinger began treating her at the end of 2011 or the beginning of 
2012.\249\ She explained that she sought treatment for degenerative 
disc disease following neck surgery, in the hope that she might avoid 
back surgery.\250\ She said while she has a regular doctor, she went to 
Dr. Pettinger for pain management, understanding that he specializes in 
that field.\251\ Ms. Martin testified that during the first office 
visit, Dr. Pettinger examined ``my back, my neck, my range of motion 
with my arms, the bending over, different things like that.'' \252\ Dr. 
Pettinger did not, however, offer any medical records documenting this 
examination.
---------------------------------------------------------------------------

    \249\ Id. at 390.
    \250\ Id.
    \251\ Id. at 391.
    \252\ Id. at 392.
---------------------------------------------------------------------------

    Ms. Martin said she had already been diagnosed, so ``[i]t wasn't 
like he had to diagnose me.'' \253\ She explained that when she first 
met with Dr. Pettinger, she was taking methadone 10 mg units, 480 units 
a month, 90 Norco units, 90 Soma units, and clonazepam as needed for 
panic attacks.\254\ She said she did not want to continue taking these 
medications, and Dr. Pettinger agreed to take steps to reduce her 
dependence on these, first by reducing the amount of methadone she took 
each day.\255\ This proved effective, allowing her to reduce her daily 
dose of methadone from 480 to 360 units.\256\
---------------------------------------------------------------------------

    \253\ Id. at 393.
    \254\ Id.
    \255\ Id. at 394.
    \256\ Id.
---------------------------------------------------------------------------

    Dr. Pettinger sought to present testimony from three other 
patients: Kim Parham, Lorenzo Watkins, and Jean Kea.\257\ According to 
the Respondent's prehearing statement, these three witnesses were 
called for the same reasons Ms. Gouthro and Ms. Martin were called. All 
five, according to the prehearing statement, would testify that, 
beginning in September 2012, before becoming aware of the DEA 
investigation, Dr. Pettinger modified his medication protocols, 
drastically reduced his prescribing patterns, and instituted new 
procedures designed to minimize diversion and improper use of scheduled 
substances. They would also testify that Dr. Pettinger's actions were 
within the ordinary course of medical practice, and that his 
prescriptions were for a legitimate medical purpose.\258\ In none of 
these cases did Dr. Pettinger offer copies of his physician notes or 
medical records of treatment.
---------------------------------------------------------------------------

    \257\ Id. at 395-6.
    \258\ Respondent's Supplemental Prehearing Statement at 3-5.
---------------------------------------------------------------------------

    I sustained the Government's objection to allowing testimony from 
Ms. Parham, Mr. Wakins, and Ms. Kea.\259\ In his oral proffer of what 
these three witnesses would say, Respondent's counsel represented that 
each witness ``has a different medical condition. Some of them were 
experiencing a need to reduce dependence on pain medication. . . . 
Also, some of them have different experiences regarding history taking, 
diversion of a conversation, that type of thing[.]'' \260\
---------------------------------------------------------------------------

    \259\ Tr. at 396.
    \260\ Id.
---------------------------------------------------------------------------

    By the time this proffer was made it was clear--based on the 
testimony provided by Ms. Gouthro and Ms. Martin--that these witnesses 
lacked any knowledge about any ``new procedures designed to minimize 
diversion and improper use of scheduled substances,'' as had been 
averred in the Respondent's Prehearing Statement. It was clear Dr. 
Pettinger would offer no written documentation reflecting his treatment 
of these patients. It was also clear the witnesses were being presented 
to describe the manner in which Dr. Pettinger treated patients who were 
not engaged in drug-seeking behavior. Given the nature of the charges 
in the Order to Show Cause, the testimony of Ms. Martin and Ms. Gouthro 
was tangential at best, and of little evidentiary value. The testimony 
of three additional patients would not have contributed in a meaningful 
way to the record and was for that reason excluded.
    Dr. Pettinger's final witness was Nancy McGowan, Practice Manager 
at Greenleaf Urgent Care.\261\ She explained

[[Page 61613]]

that Greenleaf Urgent Care is a medical office owned by Jim Daniels and 
operated by Dr. Pettinger.\262\ Ms. McGowan stated that she began her 
job as the office manager at Greenleaf in August 2012, and understands 
that, prior to that time, the focus of the office had been pain 
management.\263\ She explained that when she arrived, Dr. Pettinger was 
not accepting any new patients ``because he was scaling his business 
down, scaling the pain management part of it down, and we were going to 
transition to more of an urgent care.'' \264\ There was no testimony 
regarding Dr. Pettinger's operation of the medical office known as 
Medical Cannabis of Northern California, nothing to indicate what 
happened with the two medical offices (in Sacramento and Modesto) 
visited by the five undercover agents, nor was there any testimony 
establishing that MCNC was now operating as Greenleaf Urgent Care.
---------------------------------------------------------------------------

    \261\ Id. at 459.
    \262\ Id.
    \263\ Id. at 460.
    \264\ Id. at 461.
---------------------------------------------------------------------------

    Ms. McGowan did state that Dr. Pettinger wanted to scale down the 
pain management practice because some of his patients ``were just not 
complying well, and he wanted to get out of that business.'' \265\ She 
explained that in some cases, patients were asked to produce medical 
records such as test results, MRIs, x-rays, and medication histories, 
and when a patient could not produce needed documentation, Dr. 
Pettinger would no longer treat them.\266\ She said these patients also 
needed to provide referrals from primary care physicians, indicating 
the need for pain management, along with progress notes from those 
referring doctors.\267\
---------------------------------------------------------------------------

    \265\ Id. at 462.
    \266\ Id.
    \267\ Id. at 462-3.
---------------------------------------------------------------------------

    Ms. McGowan stated that even before she began working at the 
office, Dr. Pettinger had developed a pain management consent form 
which he had his patients sign--although no such form has been 
presented in this matter.\268\ She stated that the agreement prohibits 
sharing medications and includes a requirement that the patient agree 
to use only one pharmacist, so that the patient doesn't ``doctor-
shop''.\269\ Rather than accept the patient's word about referring 
sources, the office will require enough information to permit the 
doctor or staff to contact the referring source to confirm the 
patient's diagnosis and note the existing course of treatment.\270\
---------------------------------------------------------------------------

    \268\ Id. at 463.
    \269\ Id. at 465-6.
    \270\ Id. at 464.
---------------------------------------------------------------------------

    According to Ms. McGowan, efforts to address non-compliant patients 
were being made even before she arrived in August 2012. She said she 
saw records of patients who had been discharged from Dr. Pettinger's 
practice due to noncompliance in her review of charts once she started 
working there.\271\ Further, she said she and Dr. Pettinger discussed 
applying these same standards to new patients, if at some point he 
decided to resume that part of the practice.\272\ Ms. McGowan was aware 
of instances where a pharmacist would call to inquire about customers 
who presented prescriptions from both Dr. Pettinger and another doctor, 
for the same medication. In those cases, a termination letter had been 
developed and would be used to terminate the patient from Dr. 
Pettinger's practice.\273\ She said similar steps were taken when it 
appeared that multiple prescriptions for the same controlled substances 
were being presented from people living in the same household.\274\
---------------------------------------------------------------------------

    \271\ Id. at 468.
    \272\ Id. at 469.
    \273\ Id. at 470.
    \274\ Id. at 471.
---------------------------------------------------------------------------

    According to Ms. McGowan, efforts to determine whether a patient 
was obtaining prescriptions for pain medication from more than one 
doctor could have been aided by reports under the CURES system, which 
is used by pharmacies and doctors to reflect patient prescription 
use.\275\
---------------------------------------------------------------------------

    \275\ Id. at 473.
---------------------------------------------------------------------------

    Ms. McGowan said that at this time, a patient who produced nothing 
more than an MRI would not qualify for treatment, and that during the 
time she has been with the office, Dr. Pettinger has reduced the amount 
of scheduled medications he prescribes.\276\ When asked whether the 
owner's instructions to her regarding patient noncompliance changed at 
all between August 2012 and now, Ms. McGowan said no; the only changes 
she noted were that ``we were terminating patients a lot more'' and 
``decreasing the amount of medications significantly.'' \277\
---------------------------------------------------------------------------

    \276\ Id. at 477.
    \277\ Id. at 478-9.
---------------------------------------------------------------------------

    There was, however, no evidence or other testimony establishing 
that Dr. Pettinger has ever acknowledged writing prescriptions for 
controlled substances without conducting a sufficient medical 
examination, without requiring objective medical documentation relevant 
to the patient's report of pain, or in the course of an office visit 
that resembled more a negotiation by a drug-seeker than a legitimate 
medical examination.

Analysis

    This administrative action began when the DEA's Administrator 
issued an Order suspending Dr. Pettinger's DEA Certificate of 
Registration and ordering him to show cause why that Certificate should 
not be revoked. The Order alleged that Dr. Pettinger distributed 
controlled substances by issuing prescriptions under conditions that 
violated provisions in sections 823(f)(4) and 841(a)(1) and 842 of 
Chapter 21 of the United States Code, and provisions of section 
1306.04(a) of Chapter 21 of the Code of Federal Regulations. Thus, in 
order to revoke Dr. Pettinger's Certificate of Registration, the 
Government has the burden of establishing, by at least a preponderance 
of the evidence, that allowing Dr. Pettinger to continue to issue 
prescriptions for controlled substances is contrary to the public 
interest. If the Government meets this burden, the burden of production 
then shifts to the Respondent, who has the opportunity to present 
evidence that he accepts responsibility for his misconduct, and has 
taken appropriate steps to prevent misconduct in the future.\278\
    Under the registration requirements found in 21 U.S.C. 823(f), the 
Administrator should consider five factors in determining the public 
interest when presented with the actions of a physician engaged in 
prescribing controlled substances \279\ These factors are:
---------------------------------------------------------------------------

    \279\ Government's Proposed Findings of Fact and Conclusions of 
Law at 27.

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The applicant's experience in dispensing, or conducting 
research with respect to 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.\280\
---------------------------------------------------------------------------

    \280\ 21 U.S.C. 823(f) (2005), current through Public Law 112-
207 approved 12-7-12.

    Any one of these factors may constitute a sufficient basis for 
taking action against a registrant.\281\ Any one or a combination of 
factors may be relied upon, and when exercising authority as an 
impartial adjudicator, the Administrator may properly give each factor 
whatever weight she deems appropriate in determining whether a

[[Page 61614]]

registration should be rejected.\282\ Moreover, the Administrator is 
``not required to make findings as to all of the factors[.]'' \283\ The 
Administrator is not required to discuss each factor in equal detail, 
or even every factor in any given level of detail.\284\ The balancing 
of the public interest factors ``is not a contest in which score is 
kept; the Agency is not required to mechanically count up the factors 
and determine how many favor the Government and how many favor the 
registrant. Rather, it is an inquiry which focuses on protecting the 
public interest[.]'' \285\ In this case, the Government does not 
contend there is a history of professional discipline by a licensing 
board, nor did it offer evidence of a criminal conviction pertaining to 
Dr. Pettinger. Accordingly, Factors One and Three are not presented as 
bases for revoking this Certificate.
---------------------------------------------------------------------------

    \281\ Robert A. Leslie, M.D., 68 FR 15227-01, 15230 (March 28, 
2003).
    \282\ Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005); JLB, 
Inc., d/b/a Boyd Drugs, 53 FR 43945-02, 43947 (October 31, 1988); 
see also David E. Trawick, D.D.S., 53 FR 5326-01, 5327 (February 23, 
1988).
    \283\ Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also 
Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005).
    \284\ Trawick v. DEA, 861 F.2d 72, 76 (4th Cir. 1988).
    \285\ Jayam Krishna-Iyer, M.D., 74 FR 459-01, 462 (January 6, 
2009).
---------------------------------------------------------------------------

Factors One, Two, Three and Five

    There is some question regarding whether Factors Two and Five are 
properly before me. In its post-hearing brief, the Government initially 
posits that the issue in this matter is whether the Respondent's 
registration ``is inconsistent with the public interest, as that term 
is used in 21 U.S.C. 824(a)(4) and 823(f).'' \286\ As noted above, the 
citation to section 824(a)(4) calls for the Administrator to consider 
the ``public interest'' by examining the Respondent's ``[c]ompliance 
with applicable State, Federal, or local laws relating to controlled 
substances.'' The specific federal law relied upon by the Government is 
found in 21 CFR 1306.04(a), which prohibits a practitioner from writing 
a prescription for controlled substances unless the prescription is 
``issued for a legitimate purpose by an individual practitioner acting 
in the usual course of his professional practice.''
---------------------------------------------------------------------------

    \286\ Government's Proposed Findings of Fact and Conclusions of 
Law at 1.
---------------------------------------------------------------------------

    Guided by this language, the Government contends that Dr. Pettinger 
departed from the usual course of his professional practice by 
prescribing oxycodone to the five undercover agents, and that the 
prescriptions were not issued for a legitimate purpose.\287\ As will be 
addressed below, the evidence pertaining to the issuance of these 
prescriptions does indeed lend itself to a finding that the 
prescriptions in question were not issued for a legitimate purpose and 
were not issued by a medical doctor who was acting in the usual course 
of his professional practice. Thus, an analysis under Factor Four 
appears warranted both by the express terms of the Order to Show Cause 
and by the nature of the evidence now before me.
---------------------------------------------------------------------------

    \287\ Id. at 15.
---------------------------------------------------------------------------

    In its post-hearing brief, however, the Government contends that 
the public interest issue also should include an analysis of this 
evidence under Factors Two and Five.\288\ On its face, Factor Two does 
not appear to be directly related to registrants like Dr. Pettinger. By 
its express terms, Factor Two applies to applicants, and calls for an 
inquiry into the applicant's ``experience in dispensing, or conducting 
research with respect to controlled substances.'' Thus, it is not clear 
that the inquiry into Dr. Pettinger's experience in dispensing 
controlled substances is warranted, given the limited scope of this 
Factor.
---------------------------------------------------------------------------

    \288\ Id. at 18-20.
---------------------------------------------------------------------------

    Assuming, however, that Factor Two does indeed pertain to both 
registrants and applicants, the record here does not include any 
substantial notice to Dr. Pettinger that the Government intended to 
rely on Factor Two as justification for revoking his Certificate of 
Registration. As the Respondent points out in his post-hearing brief, 
the first time the Government asserted it would seek an analysis under 
Factor Two was during the opening statement given during the hearing. 
From my review of the record, there was no clear mention of the 
Government intending to rely on the provisions of 21 CFR 823(a)(2) in 
the Order to Show Cause, nor was it brought forward in either the 
initial or supplemental prehearing statements filed by the Government. 
The same is true with respect to the Government's reliance on Factor 
Five--and in this instance the Government raised Factor Five only after 
the hearing, in its post-hearing brief.
    From this set of circumstances, Dr. Pettinger argues that I have 
``no alternative but to conclude that factors 1, 3 and 5 all militate 
in favor of respondents [sic] continued registration.'' \289\ I reach 
another conclusion, at least regarding Factor Five. I do agree that I 
should take into account, and regard as evidence favorable to Dr. 
Pettinger, the fact that the board licensing him has permitted him to 
renew that license, notwithstanding these pending administrative 
actions. Factor One calls for me to consider the ``recommendation of 
the appropriate State licensing board or professional disciplinary 
authority.'' Implicit in the fact that the California state licensing 
authority renewed Dr. Pettinger's medical license is a tacit 
endorsement by the medical board of his continuing ability to safely 
and professionally serve his community.
---------------------------------------------------------------------------

    \289\ Respondent's Post-Hearing Brief at 4.
---------------------------------------------------------------------------

    Further, and although it may be faint praise, the fact that Dr. 
Pettinger has not been charged or convicted of any crime does fall 
within the scope of Factor Three, which requires that I consider 
``[t]he applicant's conviction record under Federal or State laws 
relating to the manufacture, distribution, or dispensing of controlled 
substances.'' As is the case with Factor Two, Factor Three does not 
appear, on its face, to apply to registrants like Dr. Pettinger. 
Assuming, however, that this Factor applies with equal force to 
applicants and registrants alike, the evidence does reflect an absence 
of criminal convictions.
    As noted above, the Government did not identify Factors Two or Five 
as bases for taking action against Dr. Pettinger when it issued its 
Order to Show Cause and its Order of Immediate Suspension. Dr. 
Pettinger correctly notes that the first time Factor Two was mentioned 
was during the Government's opening statement.\290\ Apart from making 
this observation, however, the Respondent does not make any objection 
to a Factor Two analysis, and as such any issue based on lack of notice 
is waived.
---------------------------------------------------------------------------

    \290\ Id. at 4.
---------------------------------------------------------------------------

    The Administrator may consider evidence of positive experience 
under Factor Two; however, this evidence does not necessarily outweigh 
acts against the public interest, particularly where those acts are 
done intentionally. As stated in Holiday CVS: ``In some (but not all) 
cases, viewing a registrant's actions against a backdrop of how she has 
performed activity within the scope of the certificate can provide a 
contextual lens to assist in a fair adjudication of whether continued 
registration is in the public interest. In this regard, however, the 
Agency has applied principles of reason, coupled with its own expertise 
in the application of this factor. For example, the Agency has taken 
the reasonable position that this factor can be outweighed by acts held 
to be inconsistent with the public interest.'' \291\
---------------------------------------------------------------------------

    \291\ Holiday CVS, LLC, 77 FR 62316, 62340 (October 12, 2012) 
(adopting the ALJ's recommended decision).

---------------------------------------------------------------------------

[[Page 61615]]

    Assuming Factor Two applies equally to applicants and registrants, 
in analyzing a registrant's experience under Factor Two the 
Administrator should consider the context of a registrant's entire 
dispensing practices, notwithstanding that isolated acts against the 
public interest can outweigh substantial positive experience. This 
---------------------------------------------------------------------------
premise is explained as follows:

     In Krishna-Iyer, the Agency,'' `[i]n considering 
Petitioner's experience in dispensing controlled substances under 
[F]actor 2, [ ] identified only four visits by three undercover 
patient[s], who were all attempting to make a case against [the 
Respondent]. The DEA failed to consider [the Respondent's] 
experience with twelve patients whose medical charts were seized by 
the DEA, or with thousands of other patients. In short, the DEA did 
not consider any of [the Respondent's] positive experience in 
dispensing controlled substances.' '' \292\ In an unpublished 
opinion, the Eleventh Circuit found the Agency's failure to consider 
the Respondent's positive experience ``arbitrary and unfair.'' The 
Court ``vacated the [Final] Order and remanded the case for 
reconsideration, directing that `DEA should pay particular attention 
to the entire corpus of Petitioner's record in dispensing controlled 
substances, not only the experience [with the] undercover officer.' 
The Court further ordered that `[t]he five factors should . . . be 
re-balanced.' '' \293\
---------------------------------------------------------------------------

    \292\ Jayam Krishna-Iyer, M.D., 74 FR 459, 459 (January 6, 2009) 
(citing Krishna-Iyer v. DEA, No. 06-15034 (11th Cir. 2007), Slip Op. 
at 3).
    \293\ Id.
---------------------------------------------------------------------------

     But in T.J. McNichol, M.D.,\294\ the Administrator 
declined to adopt the ``positive experience'' arguments offered by 
the ALJ, ``who ignored both the Agency's subsequent decision on 
remand in Krishna-Iyer, which addressed the role of `positive 
experience' evidence in cases where the Government has proved 
intentional or knowing diversion, subsequent Agency cases applying 
this rule, and several court of appeals' decisions (including that 
of the Eleventh Circuit), which have since upheld the Agency's 
position''.
---------------------------------------------------------------------------

    \294\ T.J. McNichol, M.D., 77 FR 57133, 57144 (September 17, 
2012).
---------------------------------------------------------------------------

     Further, in Becker, the Administrator reaffirmed that 
``evidence [of a] significant level of sustained activity within the 
scope of the registration for a sustained period can be a relevant 
and correct consideration, which may be accorded due weight. The 
registrant's knowledge and experience regarding the rules and 
regulations applicable to practitioners also may be considered. . . 
. Experience which occurred prior or subsequent to proven 
allegations of malfeasance may be relevant. Evidence that precedes 
proven misconduct may add support to the contention that, even 
acknowledging the gravity of a registrant's transgressions, they are 
sufficiently isolated and/or attenuated that adverse action against 
his registration is not compelled by public interest concerns.'' 
\295\
---------------------------------------------------------------------------

    \295\ Jeffery J. Becker, D.D.S., 77 FR 72387, 72404 (December 5, 
2012) (adopting the ALJ's recommended decision, which noted that, 
``[w]hile the Respondent's level of professional achievement is 
undeniably impressive, he has offered no affirmative evidence 
regarding his experience dispensing controlled substances from 
peers, co-workers, or even himself. Still, his professional 
experience and contributions to his field have been considered in 
this recommended decision'').
---------------------------------------------------------------------------

     And most recently, in Casanova, the ALJ properly 
considered evidence of the Respondent's positive prescribing 
practices, alongside evidence of diversion to undercover agents. The 
Division Investigator testified that the Respondent's practice was 
``not a pill mill, and that aside from the absence of a biennial 
inventory . . . [the practice] appeared to be within the scope of a 
normal medical practice. . . . Additionally, Respondent offered 
testimony that he gained experience dealing with acute and chronic 
pain patients and treating them with opioids, and familiarized 
himself with the [applicable state medical standards]. . . . 
Finally, Respondent testified that . . . he turned away a large 
number of patients [who exhibited signs of drug-seeking behavior].'' 
\296\
---------------------------------------------------------------------------

    \296\ Rene Casanova, M.D., 77 FR. 58150, 58168-9 (Sept. 19, 
2012) (``carefully consider[ing] the evidence of Respondent's past 
positive experiences in dispensing controlled substances,'' yet 
``find[ing] those experiences are considerably outweighed by the 
substantial evidence of Respondent's repeated misconduct in issuing 
controlled substance prescriptions to undercover law enforcement 
officers . . . [and] diminished by Respondent's failure on the whole 
to admit or accept responsibility for any wrongdoing'').

    In the record now before me, we have evidence establishing multiple 
instances where Dr. Pettinger improperly issued prescriptions for 
oxycodone. The record, however, is silent with respect to his overall 
practice history: We do not know how long he has practiced medicine in 
the type of office reflected in this record; we do not know the number 
of patients he has served, or the value of that service to the 
community, or other similar demographic factors relevant to this issue. 
We know he was highly regarded by the two patients who testified, and 
we can assume the same can be said regarding the three patients who 
appeared and were willing to give testimony on the day of the hearing.
    We know from his office manager that by the time she began working 
for Dr. Pettinger, he was operating out of medical office using the 
name Greenleaf Urgent Care. It is not clear that this office was the 
successor to Dr. Pettinger's medical office known as Medical Cannabis 
of Northern California, but we are expected to believe this is the 
case. Assuming this is true, both practices had an active caseload of 
patients, although there is no evidence with respect to the actual 
numbers of patients treated either before or after the Order to Show 
Cause was issued. We know from his office manager that Dr. Pettinger 
reportedly no longer seeks new patients in need of pain management, and 
has taken steps to identify drug seeking patients and terminate his 
professional relationship with them. We cannot, however, point to 
substantial evidence establishing that the nine instances leading to 
the prescriptions of record are either isolated or are instead typical 
of Dr. Pettinger's past or present practice.
    To the extent the Government would have me determine Dr. 
Pettinger's experience in distributing controlled substances, it has 
given me little to permit me to compare the volume of Dr. Pettinger's 
history of compliant service with the nine incidents of record here. 
Given the lack of evidence that would permit such an analysis, and 
given the lack of notice provided by the Government regarding its 
intention to rely on Factor Two in this hearing, I conclude Factor Two 
neither supports nor contradicts a finding that Dr. Pettinger's 
continued registration is inconsistent with the public interest.
    Our record establishes that the Government did not indicate its 
reliance on Factor Five until after the hearing was over. Moreover, the 
factual allegations appearing in the Order to Show Cause do not, in and 
of themselves, suggest the Government intended to rely on theories that 
fall within the ambit of Factors Two or Five. The theories identified 
in the Order to Show Cause remained generally intact in the 
presentation of issues and summaries of witness testimony presented by 
the Government in both its initial and supplemental prehearing 
statements.
    The exception to this, as noted by the Respondent, is that fewer 
bases for action were presented during the hearing than had been 
alleged in the Order to Show Cause.\297\ In the Order to Show Cause, 
the Government noted that records provided by the California Department 
of Justice Controlled Substance Utilization Review and Evaluation 
System (CURES) suggested a pattern of prescribing a sufficiently high 
volume of oxycodone to warrant finding his continued registration with 
the DEA inconsistent with the public interest. As the Respondent 
correctly noted, the Government presented no evidence concerning data 
from the CURES system, apparently abandoning this evidence as a basis 
for action under the Order to Show Cause.
---------------------------------------------------------------------------

    \297\ Respondent's Post-Hearing Brief at 5.
---------------------------------------------------------------------------

    Action based on Factor Five requires evidence of ``[s]uch other 
conduct which may threaten the public health

[[Page 61616]]

and safety.'' \298\ Accordingly, if the conduct falls within the scope 
of Factors One through Four, it would not be ``other'' conduct and 
would be addressed by those Factors, and not through a Factor Five 
analysis.
---------------------------------------------------------------------------

    \298\ 21 CFR 823(f)(5).
---------------------------------------------------------------------------

    The Order to Show Cause and the evidence presented at the hearing 
both focused almost exclusively on the actions recorded during the nine 
occasions described by the five undercover agents. The one exception to 
this is the evidence establishing that Dr. Pettinger wrote a 
prescription for Norco after acknowledging receipt of the order that he 
issue no further controlled substance prescriptions. As will be 
discussed below, this presentation of evidence establishes by at least 
a preponderance that the prescriptions appearing as exhibits in this 
record were issued outside the usual course of professional practice 
and were issued for other than a legitimate medical purpose. As such, 
when he wrote these prescriptions Dr. Pettinger violated 21 U.S.C. 
841(a)(1). Given that the primary basis for taking action against Dr. 
Pettinger is conduct that falls within the scope of Factor Four, an 
analysis under Factor Five would be unwarranted.
    I am mindful of the evidence introduced during the hearing 
establishing that Dr. Pettinger misrepresented his office practice when 
he was questioned by DEA Special Agent Kittrell. Summarized, this 
evidence includes Agent Kittrell recalling what Dr. Pettinger told him 
during his initial inquiry into Dr. Pettinger's standard operating 
procedures. In his testimony, Agent Kittrell credibly stated that Dr. 
Pettinger assured him that he conducted a full physical examination 
prior to prescribing any controlled substances, and that he did so 
whether the patient was presenting for the first time or for a follow 
up visit. As evaluated by the Government's expert medical witness, the 
evidence establishes that this was a false statement by Dr. Pettinger. 
The evidence establishes that Dr. Pettinger failed to perform a full 
physical examination in each of the cases reported by the undercover 
agents, leading to the conclusion that (as the Government suggests in 
its post-hearing brief) Dr. Pettinger lied to Agent Kittrell when he 
described his standard operating procedures in cases involving the 
prescription of controlled substances.\299\ Similarly, the evidence 
establishes that Dr. Pettinger lied to Agent Kittrell when he 
represented that if a patient presented seeking pain medication but had 
not medical records, all Dr. Pettinger would prescribe was Norco 
(hydrocodone)--a claim that was patently contradicted during the 
initial meetings with Agent Kvach and Agent Bianchi.\300\
---------------------------------------------------------------------------

    \299\ Government's Proposed Findings of Fact and Conclusions of 
Law at 20.
    \300\ Id., and citations therein.
---------------------------------------------------------------------------

    Lying to a DEA agent in the course of the agent's investigation 
into diversion of controlled substances is not conduct that falls 
within the scope of Factors One through Four, but it does fall squarely 
within the scope of Factor Five. Of concern here, however, is the fact 
that throughout its pre-hearing notices, the Government made no mention 
of its intention to raise such a claim. I have reviewed the Order to 
Show Cause and both the initial and supplemental prehearing statements 
and find no suggestion that the Government intended to confront Dr. 
Pettinger with evidence about his statement to Agent Kittrell regarding 
his practice of performing full physical examinations. The question 
thus is whether the Administrator should take disciplinary action based 
on evidence of improper conduct that was not disclosed to the 
Respondent until the hearing had begun.
    The Government's failure to notify a responding party of the theory 
of the Government's case becomes a critical issue in cases, such as the 
present case, that are brought under the Administrative Procedure Act. 
For example, in Bendix, the FTC ``violated Sec.  5 of the 
Administrative Procedure Act, 5 U.S.C. 554, when it decided the case on 
a theory of illegality which was never charged, raised, nor tried 
during the administrative hearing; never presented for consideration by 
the Hearing Examiner; and not raised as an issue or discussed by 
Complaint Counsel in the appeal to the Commission from the order of the 
Hearing Examiner dismissing the complaint. Bendix had no notice that it 
was charged under [this] theory of illegality and was accorded no 
opportunity to present evidence in defense against this theory.'' \301\
---------------------------------------------------------------------------

    \301\ Bendix Corp. v. FTC, 450 F.2d 534, 537 (6th Cir. 1971)
---------------------------------------------------------------------------

    The court remanded the case, affording the parties a second 
opportunity to offer evidence. In Bendix, Government counsel presented 
three theories of illegality, each rejected by the Hearing Examiner. 
Thereafter, the Commission based its final decision on a wholly 
separate legal theory.\302\ ``This [was] not a case where the initial 
complaint was couched in broad generalities but subsequently was tried 
on the specific theory that ultimately justified [the Commission's] 
finding[s].'' \303\ Indeed, ``[c]ounsel for Bendix specifically asked 
both the Hearing Examiner and the [Government's] Counsel for the theory 
upon which the case would be tried.'' Government counsel expressly 
limited the legal theories at issue: ``[r]epeated statements by 
counsel, witnesses, and the [Hearing] Examiner showed that everyone 
believed [these] to be the only issue[s]'' in contention.\304\ At the 
conclusion of the hearing, Government counsel submitted a final brief 
to the Commission, which omitted any mention of alternative legal 
theories.\305\ ``Bendix's case was prepared and presented in response 
to certain enumerated theories. . . . The witnesses were questioned and 
cross-examined in terms of these issues. The documentary proof was 
keyed to these theories.'' \306\ Because ``different defenses and 
proofs would be used in defending'' the Commission's alternate legal 
theory, Bendix was entitled to a remanded hearing.\307\
---------------------------------------------------------------------------

    \302\ Id. at 537.
    \303\ Id. at 541.
    \304\ Id.
    \305\ Id.
    \306\ Id. at 542.
    \307\ Id. at 541-2.
---------------------------------------------------------------------------

    Similarly, the court remanded where it found on review that the 
NLRB did not afford the respondent a full and fair opportunity to 
litigate the issues comprising the final decision.\308\ After an 
administrative law judge conducted a hearing on the charges set forth 
in the Board's complaint, the Board adopted the ALJ's decision, but did 
so based on an ``alter-ego'' theory of corporate liability.\309\ 
Although the NLRB found ``sufficient connection to the complaint for 
Respondent to anticipate'' the newly-articulated legal theory, the 
Court of Appeals determined that the respondent was not accorded his 
due process rights as to the alter ego claim.\310\ ``Respondent was 
unaware that the [ ] alter ego claim was raised in the proceeding. Even 
during the course of the evidentiary hearing, Respondent received no 
notice of the claim that [its subsidiary] was an alter ego[,]'' and 
``[t]he ALJ never advised the parties that he would consider an alter 
ego claim.'' \311\ Because the respondent never received notice of the 
alter ego claim through the pleadings, the Court of Appeals determined 
that first time the respondent was informed that an

[[Page 61617]]

alter ego claim was alleged was in the post hearing brief filed prior 
to the ALJ's decision.\312\
---------------------------------------------------------------------------

    \308\ NLRB v. I.W.G., Inc., 144 F.3d 685 (10th Cir. 1998)
    \309\ Id. at 687.
    \310\ Id.
    \311\ Id. at 688.
    \312\ Id.
---------------------------------------------------------------------------

    During the review by the Court of Appeals, the NLRB argued that the 
alter ego claim was fully and fairly litigated because ``considerable 
evidence relevant to'' the claim was presented and challenged at the 
hearing.\313\ However, the Court of Appeals noted that ``the simple 
presentation of evidence important to an alternative claim does not 
satisfy the requirement that any claim at variance from the complaint 
be `fully and fairly litigated' in order for the Board to decide the 
issue without transgressing [Respondent's] due process rights.'' \314\
---------------------------------------------------------------------------

    \313\ Id.
    \314\ Id. (internal citations omitted). See also Soule Glass and 
Glazing Co. v. NLRB, 652 F.2d 1055 (1st Cir. 1981) (noting that 
``even if such an argument appeared explicitly in the General 
Counsel's post-hearing brief, such post-hoc characterizations of the 
case would not be relevant in determining whether the employer had 
notice of the issue and a meaningful opportunity to defend against 
it at the hearing'').
---------------------------------------------------------------------------

    Given the substantial evidence of Dr. Pettinger's violation of 
regulations controlling the distribution of oxycodone under Factor Four 
(thereby rendering a Factor Five analysis superfluous), given Dr. 
Pettinger's failure to rebut the Government's prima facie case (as will 
be addressed below), and given the Government's failure to disclose in 
advance of the hearing its intention to rely on a Factor Five analysis, 
I cannot recommend relying on a Factor Five analysis, even as an 
alternative theory of the case.

Factor Four

    Although it is unfortunately blended with a discussion of Factor 
Two, the Government's post-hearing brief discussing Factor Four 
cogently summarizes the facts and the legal issues that lead me to 
conclude the Government has met its prima facie responsibilities in 
this case.\315\ While the overarching question is whether Dr. 
Pettinger's continued certification is inconsistent with the public 
interest, the specific question under Factor Four is whether the 
behavior captured by the undercover agents reveals action by the 
Certificate holder that violates drug diversion laws. I find that it 
does.
---------------------------------------------------------------------------

    \315\ Government's Proposed Findings of Fact and Conclusions of 
Law at 14-19.
---------------------------------------------------------------------------

    The specific instances of misconduct cited by the Government at 
pages 15 through 20 of its brief have been established by at least a 
preponderance of the evidence. Without attempting an exhaustive 
inventory here, these included failing to conduct a sufficient physical 
examination of each of the five undercover agents on each of their 
office visits; prescribing oxycodone without first resolving material 
medical issues suggesting the putative patients had serious alcohol, 
cannabis, and addictive painkiller problems; prescribing oxycodone to 
patients who were diverting oxycodone to help pay off debts and to 
share with friends; prescribing oxycodone to patients who had presented 
no medical records that would support their self-reported medical 
histories; and prescribing oxycodone to patients based on complaints of 
pain and sleep disorders despite the fact that those complaints were 
absent from the patient's self-reported medical histories. The 
Government in its post-hearing brief aptly notes that in her review of 
these nine patient encounters with the five undercover agents and Dr. 
Pettinger, it appeared to the medical expert that Dr. Pettinger was 
more interested in negotiating the amount of oxycodone and related 
controlled substances that would be dispensed through his 
prescriptions, than he was in actually diagnosing the medical 
conditions of the agents.
    As the Respondent correctly notes, it is clear from the evidence 
that Dr. Pettinger encouraged these patients to avoid the use of 
oxycodone and other highly addictive painkillers. Both in his 
presentation to the Government's undercover agents and in his treatment 
of his own patients, it is clear Dr. Pettinger sought to wean his 
patients off of oxycodone, and sought to discourage resorting to 
oxycodone wherever possible. That being said, however, it is also clear 
that he abandoned his own professed requirements when he issued the 
prescriptions at issue, by authorizing the dispensation of oxycodone 
without first requiring medical records and without ever evaluating 
treatment modalities that did not include narcotics.
    The testimony of the Government's medical expert, Dr. Neyhart, 
provides substantial credible evidence establishing that the 
prescriptions shown in our record were not ``issued for a legitimate 
medical purpose,'' and were not issued ``by an individual practitioner 
in the usual course of his professional practice.'' \316\ In his post-
hearing brief, Dr. Pettinger notes that Dr. Neyhart's credentials do 
not include operating a pain management clinic and asserts that the 
weight to be given to her opinions should be tempered by the fact that 
the expert ``is not a pain management specialist and had not even 
practiced primary care for at least eighteen months.'' \317\ This can 
be duly noted, but from the presentation of Dr. Neyhart's credentials 
and from her very credible testimony, I find substantial evidence 
establishing that the actions recorded during these nine patient visits 
did not constitute the ``usual course'' of the professional practice of 
medicine, irrespective of whether the practitioner has or has not 
limited his practice to pain management.
---------------------------------------------------------------------------

    \316\ See Sun & Lake Pharmacy, 76 FR 24,530, 24523 (quoting 21 
CFR 1306.04(a)).
    \317\ Respondent's Post-Hearing Brief at 7.
---------------------------------------------------------------------------

    On the point of such limitation, I note that Dr. Pettinger's 
cannabis practice, M.C.N.C., appears not to be a pain management 
clinic, but rather a clinic specializing in dispensing prescriptive 
cannabis. One of Dr. Pettinger's patients stated she saw nothing that 
would indicate the office specialized in pain management, and the 
letterhead and signage in our record indicates Dr. Pettinger used the 
name ``Medical Cannabis of Northern California'' or the initials 
``M.C.N.C.'' The impression I got from the evidence as a whole is that 
the practice focused not on pain management but on the medicinal use of 
cannabis. This is not to be critical of the practice but only to state 
that the practice bore few of the markings found in practices dedicated 
exclusively to the management of pain.
    This impression is primarily based on what I observed as I listened 
to the undercover patient visits and on the testimony of Dr. 
Pettinger's three witnesses. A consistent pattern in the recorded 
visits by undercover agents was the thorough explanation Dr. Pettinger 
gave regarding the medicinal use of cannabis, along with his very clear 
exhortation that the patients do all they can to avoid the use of 
oxycodone and similar narcotic painkillers. That being said, however, 
the record also establishes a factual basis for Dr. Neyhart's 
observation that Dr. Pettinger failed to engage in medical examinations 
of the type needed to diagnose these patients' medical conditions or to 
explore treatment modalities other than the use of either cannabis or 
oxycodone.
    In his closing brief, Dr. Pettinger argues that ``the undercover 
agents conduct is highly atypical and therefore cannot be extrapolated 
to the general population of drug seeking patients and therefore cannot 
demonstrate that Respondent's prescribing constituted a danger to the 
general public (as opposed to the miniscule subset of hypothetical 
patients represented by the undercover

[[Page 61618]]

agents).'' \318\ The evidence from Dr. Neyhart did establish that drug 
seeking patients will attempt to divert attention and to ingratiate 
themselves with their potential prescribing sources. Agent Kittrell 
confirmed the same in his very credible testimony on this point. 
Further, nothing in the behavior of these undercover agents was so 
clearly incredible or outlandish as to warrant dismissing their actions 
as being ``atypical''. To the contrary, testimony from Dr. Neyhart and 
Special Agent Kittrell establishes that the means by which these agents 
sought to procure controlled substances were well within those employed 
by persons seeking to illegally divert controlled substances through 
this kind of office visit.
---------------------------------------------------------------------------

    \318\ Id. at 9.
---------------------------------------------------------------------------

    It also should be noted that, even if I were to accept the premise 
that this was either outlandish or atypical behavior, I would 
nonetheless reach the conclusion that such behavior should have 
prompted a more studied response by Dr. Pettinger, rather than his 
capitulation or accommodation when the agents asked him to prescribe 
oxycodone. His failure to resolve the many red flags shown here compels 
the conclusion that his decision to prescribe dangerous narcotics put 
the public at risk and constitutes action ``outside the usual course of 
his professional practice.'' \319\
---------------------------------------------------------------------------

    \319\ 21 CFR 1306.04(a).
---------------------------------------------------------------------------

    Because it was thorough, internally consistent, consistent with the 
evidence presented generally, and not contradicted by any professional 
opinion to the contrary, I place great weight in the medical expert's 
opinions regarding Dr. Pettinger's practice. I find that the failure to 
resolve the multiple red flags present with each of the five undercover 
agents constitutes action outside the usual course of medical practice, 
and I find Dr. Pettinger's decision to issue prescriptions based on a 
negotiation with these five patients, rather than based on a properly 
rendered medical diagnosis, compels the conclusion that the 
prescriptions in evidence here were not issued for a legitimate medical 
purpose. Upon these findings, the Government has met its burden of 
establishing a prima facie case in support of the Order to Show Cause.
    In his discussion about remediation, Dr. Pettinger posits that his 
decision to stop treating pain patients should be taken into account, 
and that he should be credited for improving his approach to drug 
seekers.\320\ First, as aptly pointed out by the Government in its 
post-hearing brief, the significant drop in prescriptions issued by Dr. 
Pettinger was doubtlessly precipitated, in part at least, by the fact 
that the Administrator suspended his Certificate.\321\ Beyond this, 
however, Dr. Pettinger did present evidence through his office manager, 
who testified that Dr. Pettinger has implemented measures to reduce 
``double dipping,'' is accepting no new patients, is discharging 
problematic patients, refuses to prescribe to patients who appear to be 
trafficking, and is discharging patients who appear to be providing 
falsified records.\322\
---------------------------------------------------------------------------

    \320\ Respondent's Post-Hearing Brief at 11.
    \321\ Government's Proposed Findings of Fact and Conclusions of 
Law at 21.
    \322\ Respondent's Post-Hearing Brief at 11 and citations to the 
transcript therein.
---------------------------------------------------------------------------

    As Dr. Pettinger correctly notes, all of these steps are steps that 
every practitioner should undertake when operating under a DEA 
Certificate. The record does not, however, include an express or 
implied acknowledgement by Dr. Pettinger that his actions with respect 
to the five undercover agents put the public at risk. The practices 
described by Dr. Pettinger's office manager do not establish remedial 
efforts taken to correct the mistakes that have been revealed by the 
undercover action. Instead, they suggest Dr. Pettinger tired of having 
to negotiate with patients who came to know that he was willing to 
prescribe oxycodone without requiring medical justification.
    As noted above, Dr. Pettinger elected not to give sworn testimony 
on the issue of remediation, depriving the Administrator and the public 
with a clear demonstration of contrition and remediation. His silence 
also permits a negative inference to be drawn with respect to factual 
issues presented, as noted by the Government in its post-hearing 
brief.\323\ Instead of hearing from Dr. Pettinger, we have the 
testimony of his office manager, who stated that many of the steps she 
described had been in place for some time, making it impossible to 
determine whether any of the steps were actually remedial in nature. It 
also must be noted that most of the measures listed as remedial in Dr. 
Pettinger's post-hearing brief require him to act in a specific 
manner,\324\ but as we have only Ms. McGowan's testimony on this point 
we have no clear record from Dr. Pettinger himself to confirm that he 
will in fact do what his office manager says he will do. Accordingly, I 
find insufficient evidence of remediation as to counter the 
Government's prima facie case.
---------------------------------------------------------------------------

    \323\ Government's Proposed Findings of Fact and Conclusions of 
Law at 20-1.
    \324\ Id. at 12.
---------------------------------------------------------------------------

Findings of Fact

    1. Respondent is registered with DEA as an individual practitioner 
in Schedules II-V under DEA Certificate of Registration Number 
AP6572716, at 4707 Greenleaf Court, Suite A, Modesto, California, 
95356. Respondent's Certificate of Registration expires by its own 
terms on March 31, 2015.
    2. The Respondent's DEA Certificate of Registration expires by its 
own terms on March 31, 2015. He is licensed to practice medicine as a 
physician and surgeon in the State of California under license number 
G29874, which will expire by its own terms on March 31, 2015.
    3. On December 12, 2012, DEA served Respondent with an Order to 
Show Cause and Immediate Suspension of Registration dated December 10, 
2012, whereby Respondent's DEA Certificate of Registration Number 
AP6572716 was suspended.
    4. Between November 10, 2011 and May 9, 2012, undercover agents 
employed by the DEA, the FBI, and the U.S. Department of Health and 
Human Services represented to be patients seeking controlled substances 
from the Respondent at the Respondent's medical offices in Sacramento 
and Modesto California. In each of nine instances reported here, the 
Respondent wrote prescriptions for controlled substances regulated by 
the DEA, including oxycodone, promethazine with codeine, and 
hydrocodone.
    5. Prior to issuing these nine prescriptions, the Respondent did 
not conduct sufficient medical examinations to be able to diagnose the 
medical conditions for which these controlled substances were sought. 
In addition, the Respondent inappropriately counseled a patient on how 
to obtain a prescription for oxycodone where there were no objective 
signs or findings that would support such a prescription; counseled a 
patient on the use of Marinol as a means by which the patient could 
avoid adverse legal consequences if found to have the active 
ingredients of cannabis in his blood or urine; and failed to resolve 
issues arising when the undercover agents presented facts in the course 
of the medical examinations that warranted further inquiry, including 
the failure to produce objective signs and findings through MRIs and 
other medical sources to substantiate the need for pain medication; the 
failure to inquire into abuse of alcohol, opioids and cannabis when 
presented with evidence of the same; the illegal acquisition, 
diversion, and distribution of controlled substances; the failure to

[[Page 61619]]

make appropriate inquiries and take appropriate action when presented 
with drug-seeking behavior by these five agents; the failure to follow 
his own reported diagnostic and treatment procedures when presented 
with patients who lacked objective medical evidence supporting pain 
diagnoses; and the failure to reconcile inconsistencies between 
symptoms being reported by the undercover agents and reports of 
symptoms and conditions appearing in the physician's notes from these 
patient visits.
    6. On December 11, 2012, Special Agent Robert Kittrell served upon 
the Respondent the Administrator's Order to Show Cause and Immediate 
Suspension of DEA Registration. After receiving this Order, the 
Respondent was prohibited from dispensing controlled substances under 
his DEA Certificate of Registration. Despite acknowledging this 
prohibition, the Respondent thereafter issued a prescription for 
hydrocodone for a patient who had exhausted an earlier prescription for 
the same.

Conclusions of Law

    1. When it proposes to revoke a DEA Certificate of Registration or 
deny any pending applications for such a Certificate, the Government is 
required to establish by at least a preponderance of the evidence that 
the holder's continued registration is inconsistent with the public 
interest. 21 U.S.C. 823(f) and 824; and 21 CFR 1301.36 and 1301.37.
    2. Five factors must be considered when determining the public 
interest in this case:
    (1) The recommendation of the appropriate state licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing, or conducting 
research with respect to 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. 21 U.S.C. 823(f).
    3. Under 21 U.S.C. 23(f)(1) (Factor One), where the evidence 
establishes the Respondent's California medical credentials were 
renewed by the state medical authority while DEA administrative 
proceedings were pending, the renewal of those credentials constitutes 
evidence that is consistent with continued Registration by the DEA. 
Such evidence is not, however, dispositive of the question whether the 
Respondent's continued DEA Certification is or is not consistent with 
the public interest.
    4. In order to establish a basis for revoking a Certificate of 
Registration based on the provisions of 21 U.S.C. 823(f)(2) (Factor 
Two), and assuming Factor Two applies to both applicants and 
registrants, the Government must present evidence establishing, by at 
least a preponderance, that the experience of the Respondent in 
dispensing controlled substances is of such character and quality that 
his continued registration is inconsistent with the public interest. 
This requires evidence of both the qualitative manner and quantitative 
volume of the Respondent's experience. Where evidence of the 
Respondent's experience, as expressed through his patients and 
employees, is silent with respect to the quantitative volume of the 
Respondent's experience, and requires speculation to support an adverse 
finding under Factor Two, this Factor should not be used to determine 
whether the Respondent's continued registration is inconsistent with 
the public interest.
    5. In order to establish a basis for revoking a Certificate of 
Registration based on the provisions of 21 U.S.C. 823(f)(3) (Factor 
Three), and assuming Factor Three applies to both applicants and 
registrants, the Government must present evidence of the Respondent's 
conviction record under federal or state laws relating to the 
manufacture, distribution, or dispensing of controlled substances. As 
this Factor is neither alleged by the Government nor suggested by the 
evidence, and as there is evidence that the applicable licensing 
authority renewed the Respondent's license while these administrative 
proceedings were pending, the Factor may be considered as supporting 
the Respondent's continued registration.
    6. Under 21 U.S.C. 823(f)(4) (Factor Four), the Administrator must 
consider the Respondent's compliance with applicable state, federal, or 
local laws relating to controlled substances. A prescription for a 
controlled substance is unlawful unless it has been issued for a 
legitimate medical purpose by an individual practitioner acting in the 
usual course of his professional practice.\325\
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    \325\ Sun & Lake Pharmacy, 76 FR 24520, 23523 (May 2, 2011) 
(quoting 21 CFR 1306.04(a)).
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    7. Under the conditions presented in the record, the Respondent 
issued nine prescriptions for controlled substances regulated by the 
DEA that were not for a legitimate medical need and were not issued in 
the ordinary course of a professional medical practice. Upon such 
evidence, the Government has established by at least a preponderance 
that the Respondent's continued DEA Certification is inconsistent with 
the public interest, warranting the revocation of that Certification 
and the denial of any pending application for such a Certification.
    8. Under the conditions presented in the record, the Government has 
established by at least a preponderance of the evidence that the 
Respondent issued a prescription for hydrocodone on December 21, 2011, 
at a time when his DEA Certificate had been suspended. Because such 
prescription activity requires a DEA Certificate, the actions 
attributed to the Respondent constitute noncompliance with applicable 
federal laws relating to controlled substances. Upon such proof, the 
Government has established by sufficient evidence that the Respondent's 
continued DEA Certification is inconsistent with the public interest, 
warranting the revocation of that Certification and the denial of any 
pending application for such a Certification.
    9. Under 21 U.S.C. 823(f)(5) (Factor Five), the Government may base 
its determination to revoke a DEA Certification on ``such other conduct 
which may threaten the public health and safety.'' Such a determination 
thus may not be based on circumstances falling within the scope of 
Factors One through Four, but rather must be based on circumstances not 
otherwise addressed in this section of the regulation. In this matter, 
the Government presented evidence that the Respondent falsely reported 
to Special Agent Kittrell that prior to dispensing controlled 
substances, the Respondent conducted appropriate medical examinations. 
This contention was raised for the first time in the Government's post-
hearing brief, and the Respondent has objected to the late introduction 
of this Factor as a basis for revocation. Under the Due Process Clause 
of the Fifth Amendment to the United States Constitution, the 
Government must provide adequate notice of the factual allegations it 
intends to prove.\326\ Where the Order to Show Cause and all prehearing 
statements provided to the Respondent did not include notice that the

[[Page 61620]]

Government intended to apply Factor Five in these proceedings, and 
where such intention was not made known to the Respondent until after 
the end of the evidentiary hearing, the provisions of Factor Five 
should not be used as a basis for taking adverse action against the 
Respondent.
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    \326\ CBS Wholesale Distribs., 74 FR 36746, 36749 (2009) (``The 
Agency must provide a Respondent with notice of those acts which the 
Agency intends to rely on in seeking the revocation of its 
registration so as to provide a full and fair opportunity to 
challenge the factual and legal basis for the Agency's Action.'').
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    10. Upon such evidence as is now before the Administrator, the 
Government has under Factor Four met its burden and has made a prima 
facie case in support of the proposed order revoking the Respondent's 
DEA Certificate of Registration.
    11. Upon a review of the record as a whole, including all claims 
made in the Respondent's post-hearing brief, where the Respondent has 
failed to affirmatively acknowledge specific acts of improper 
prescribing of controlled substances and failed to establish by 
credible and substantial evidence effective steps taken in remediation, 
there is insufficient evidence of remediation. Accordingly, the 
Government has established cause to revoke the Respondent's DEA 
Certification.

Recommendation

    As the Government has established its prima facie case by at least 
a preponderance of the evidence, and the Respondent has failed to rebut 
that case through a demonstration of sufficient remediation, the 
Respondent's DEA Certificate of Registration should be REVOKED and any 
pending application for the renewal or modification of the same should 
be DENIED.

    Dated: June 5, 2013.
Christopher B. McNeil,
Administrative Law Judge.
[FR Doc. 2013-24052 Filed 10-2-13; 8:45 am]
BILLING CODE 4410-09-P