Odette L. Campbell, M.D.; Decision and Order, 41062-41079 [2015-17310]

Agencies

• Drug Enforcement Administration
• Department of Justice

[Federal Register Volume 80, Number 134 (Tuesday, July 14, 2015)]
[Notices]
[Pages 41062-41079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17310]


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 DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 09-62]


Odette L. Campbell, M.D.; Decision and Order

    On October 26, 2010, an Agency Administrative Law Judge issued the 
attached Recommended Decision.\1\ Therein, the ALJ rejected, as 
unsupported by substantial evidence, the Government's allegations that: 
(1) Respondent had unlawfully prescribed methadone to a patient for the 
purpose of treating the patient's opioid addiction; (2) Respondent had 
issued a controlled substance prescription to an employee for the 
purpose of obtaining the controlled substance for her own use; and (3) 
Respondent could not account for 13 bottles or 390 dosage units of 
Suboxone. R.D., at 32-43.
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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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    However, the ALJ also found that the Government had proved several 
allegations. These included that: (1) Respondent possessed controlled 
substances at an unregistered location when she moved her office 
without obtaining a modification of her registration; (2) Respondent 
occasionally allowed patients to return controlled substances to her if 
they did not like the medication or had an adverse reaction to it; and 
(3) Respondent failed to keep required records (including DEA Form-
222s) for her receipts of Demerol, a schedule II controlled substance, 
as well as both inventories and dispensing logs for Ambien (zolpidem) 
and Provigil (modafinil), both being schedule IV controlled 
substances.\2\ Id. at 30-32; 44; 46-49.
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    \2\ The ALJ also noted that ``the evidence indicates that 
Respondent did not follow adequate security procedures'' in that the 
controlled substance were not stored ``in a securely locked, 
substantially constructed cabinet'' and ``Respondent did not 
maintain control over the key.'' R.D. at 45. However, the ALJ 
declined to consider the evidence on the ground that the Government 
did not provide adequate notice in either the Show Cause Order or 
its Prehearing Statement, notwithstanding that Respondent did not 
object to the testimony. While the record arguably support a finding 
that the issue was litigated by consent, see CBS Wholesale 
Distributors, 74 FR 36746, 36750 (2009), the Government did not take 
exception to the ALJ's ruling. I therefore do not consider the 
evidence.
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    With respect to the latter finding, the ALJ noted that while 
recordkeeping violations alone can support an order of revocation, 
Respondent's violations ``occurred over a comparatively short period of 
time, with substantially fewer controlled substances [than in those 
cases where revocation was ordered], and with no evidence of actual 
diversion of any controlled substances.'' Id. at 52. The ALJ thus 
concluded that while ``Respondent's errors and conduct clearly were 
neglectful and serious during the relevant time period,'' he then 
reasoned that they were ``likely due in part to ongoing issues 
including eviction from her registered office, employee problems, and 
an office break-in and theft'' and that an order of revocation would be 
disproportionate to the misconduct which was proved. Id.

[[Page 41063]]

The ALJ did not explain why these issues prevented Respondent from 
maintaining proper records for all of the controlled substances she 
obtained and dispensed or for ensuring that she obtained a new 
registration after she moved into her new office.
    The ALJ further found that ``Respondent's testimony as a whole 
demonstrates that she has sufficiently accepted responsibility for her 
actions and omission with regard to a revocation penalty.'' Id. 
However, he then found that her ``explanation of past errors and 
demonstrated plan to avoid future violations is insufficient to support 
an unconditional registration.'' Id.
    The ALJ thus recommended that Respondent's registration not be 
revoked and that she be granted a registration subject to the 
conditions that she submit, no later than one year after issuance of a 
new registration, documentation reflecting that she had successfully 
completed ``accredited training . . . in the proper maintenance, 
inventory, and recordkeeping requirements for controlled substances.'' 
Id. at 52-53. The ALJ also recommended that Respondent's registration 
be subject to the condition that for one year after the issuance of a 
new registration, she submit a log of all controlled substances 
``received, maintained and dispensed'' by her each quarter. Id. at 53.
    The Government filed an Exception to the ALJ's decision. 
Thereafter, the record was forwarded to this Office for final agency 
action.
    On review, it was noted that Respondent's registration was due to 
expire on August 31, 2010, one week after the hearing in this matter 
was conducted. GX 1. Moreover, at the hearing, the Government argued 
that the proceeding was moot because under an agency regulation, 
Respondent was required to file her renewal application at least 45 
days before her registration expired in order for her registration to 
remain in existence past its expiration date. Tr. 9. The Government 
further argued that Respondent had not filed a renewal application for 
a Texas Controlled Substances Registration with the Texas Department of 
Public Safety (DPS), and thus, even if Respondent prevailed in the DEA 
hearing, she would not be entitled to be registered because she lacked 
state authority as a result of her failing to file for a renewal of her 
DPS registration.\3\ Id. at 9-10. Respondent disputed the Government's 
contention, asserting that she had filed an application with DPS six 
months earlier as well as the day before the hearing; she also asserted 
that she could not obtain a new DPS registration without a DEA 
registration. Id. at 10.
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    \3\ This proceeding commenced with the issuance of an Order to 
Show Cause and Immediate Suspension of Registration. Thereafter, 
both the Texas Medical Board and the Texas Department of Public 
Safety suspended Respondent's medical license and state controlled 
substance registration. Accordingly, the Government moved for 
summary disposition on the ground that because she lacked state 
authority, she could not be registered with DEA, and thus, her DEA 
registration should be revoked. The ALJ granted the Government's 
motion, recommended that her DEA registration be revoked, and 
thereafter forwarded the then-existing record to this Office for 
final agency action.
     While the matter was under review, Respondent submitted a 
letter to the ALJ (which was then forwarded to this Office) 
asserting that the medical board had reinstated her medical license. 
The Government argued, however, that Respondent was still without 
state authority because her DPS registration had been revoked and 
she had not filed a new application. Respondent then submitted a 
letter in which her counsel asserted that she could not be 
reinstated by the DPS unless DEA reinstated her registration.
     While the parties had engaged in an exchange of letters with 
each other and the ALJ, neither party filed a motion seeking relief 
from this Office notwithstanding that the record had since been 
forwarded to it. The Administrator therefore ordered that if the 
Government still sought a final order based on Respondent's lack of 
state authority, it should file a properly supported motion seeking 
such relief and serve it on Respondent.
     Thereafter, the Government filed a request for final agency 
action, noting that Respondent's DPS registration had not been 
reinstated, which it supported with appropriate evidence. In 
opposition, Respondent argued that it was fundamentally unfair and a 
denial of due process to revoke her DEA registration based on the 
DPS's action, because the DPS's action was based on the 
unsubstantiated allegations of the DEA Immediate Suspension Order.
     On review, the Administrator noted that it appeared that under 
Texas law and regulations, Respondent was not entitled to a hearing 
before the DPS to challenge either the DPS's suspension or the 
denial of her application for a new registration. See Tex. Health & 
Safety Code Sec.  481.063(e)(3) & (h); id. Sec.  481.066(g); see 
also Tex. Admin Code Sec.  13.272(h). Because, if this was so, 
revoking her registration based on her lack of state authority would 
preclude her from ever being able to challenge the basis of the 
Immediate Suspension Order, the Administrator remanded the case to 
the ALJ with the instruction to first determine whether the DPS 
would provide her with a hearing on the allegations. The 
Administrator further instructed that if the DPS had provided or 
would provide a hearing, the Government could renew its motion for 
summary disposition; however, in the event DPS would not provide a 
hearing, the ALJ was to conduct a hearing on the allegations of the 
Order to Show Cause and Immediate Suspension of Registration.
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    The Government then noted that Respondent had not even attempted to 
submit a renewal application. Id. The Government further argued that 
because Respondent would still not possess a state license after the 
DEA proceeding was concluded, there were no collateral consequences 
which would preclude a finding of mootness. Id. at 11. Respondent then 
offered to ``file a DEA application today after the hearing.'' Id. at 
12. The ALJ then denied the Government's motion and proceeded to 
conduct a hearing.
    Several months later, Respondent's counsel faxed to the ALJ a copy 
of a printout from the DPS's Web site which showed that on November 15, 
2010, Respondent had been granted a new DPS registration. However, 
because there was no evidence that Respondent had filed a renewal 
application, the Administrator ordered the parties to address whether 
the case was moot. Order, at 2. (June 28, 2011).
    Also, having taken official notice that on August 27, 2010, the 
Texas Medical Board had issued a formal complaint against Respondent 
charging her with multiple violations of Texas laws based on her 
prescribing of controlled substances to 19 patients,\4\ the 
Administrator ordered the parties to address the status of the Board 
proceedings. Id. Thereafter, the Government notified this Office that 
Respondent had, in fact, finally filed a renewal application on 
November 19, 2010, seven days after it filed its Exception and before 
the ALJ forwarded the record. Gov. Submission in Response to Order, at 
2. The Government further notified this Office that the Medical Board 
matter was still pending and had gone to mediation, but that further 
mediation had been postponed and that a date had not been set for 
further mediation. In her filing, Respondent denied having engaged in 
non-therapeutic prescribing and asserted that the State's allegation 
were ``unsubstantiated.''
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    \4\ While the Medical Board had restored Respondent's medical 
license in October 2009, on August 30, 2010, the Board had filed a 
formal complaint against her which charged her, inter alia, with 
engaging `` `in a pattern of non-therapeutic prescribing of 
controlled substances and/or dangerous drugs.' '' Respondent's Resp. 
to the Govt's Req. for Status Update, at 6 (quoting Complaint at 2, 
In re Campbell, No 10-6060.MD (Tex. Med. Bd., Aug. 27, 2010)). This 
proceeding was, however, resolved through mediation and dismissed on 
the motion of the Texas Medical Board. See Order No. 3, In re 
Campbell (Tex. SOAH. Mar 19, 2012).
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    In its filing, the Government further notified this Office that 
Respondent had been indicted for health care fraud and was schedule to 
go to trial in October 2011. Gov.'s Submission at 2 n.1. This Office 
subsequently determined that on August 19, 2010--approximately one week 
before the DEA hearing--Respondent was indicted on 30 counts of Health 
Care Fraud, as well as five counts of altering records during a federal 
investigation. See Docket Sheet at 1, United States v. Campbell, No. 
4:10cr182 (E.D. Tx.).\5\
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    \5\ This Office has also taken Official Notice of the Docket 
Sheet Entries in this proceeding, as well as Document #27, which 
sets forth the disposition of an October 6, 2011 hearing conducted 
by the district court on Respondent's violation of the conditions of 
her pretrial release, wherein the Court modified the conditions of 
her release to prohibit her from writing any controlled substance 
prescriptions.

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[[Page 41064]]

    Under 42 U.S.C. 1320a-7(a)(3), had Respondent been convicted of 
even a single count of Health Care Fraud, she would have been subject 
to mandatory exclusion ``from participation in any Federal health care 
program.'' Moreover, just as a mandatory exclusion is a ground to 
suspend or revoke an existing registration, it is also ground to deny 
an application. See 21 U.S.C. 824(a)(5) (authorizing suspension or 
revocation of a registration ``upon a finding that the registrant . . . 
has been excluded (or directed to be excluded) from participation in a 
program pursuant to section 1320a-(7)(a) of Title 42''); see also 
Pamela Monterosso, 73 FR 11146, 11148 (2008) (noting that ``the various 
grounds for revocation or suspension of an existing registration that 
Congress enumerated in section 304(a), 21 U.S.C. 824(a), are also 
properly considered in deciding whether to grant or deny an application 
under section 303'') (citing cases). Accordingly, this case was held in 
abeyance pending the final disposition of the Health Care Fraud charges 
against Respondent.
    On March 27, 2013, the United States Attorney offered Respondent a 
pre-trial diversion agreement, pursuant to which prosecution of the 
charges would be deferred for a period of 12 months provided she 
complied with the agreement. The United States Attorney further agreed 
that upon her ``fulfilling all the terms and conditions of the 
Agreement'' for the 12-month period, the charges would be dismissed. 
The Government does not dispute that Respondent complied with the 
agreement and even submitted a copy of the Certification of Completion 
of Pretrial Diversion Program, which recommended that the charges 
against her be dismissed when the diversion agreement expired on March 
26, 2014. However, months later, the case still remained open according 
to the district court docket sheet.
    Moreover, during the preparation of this decision, this Office 
determined that on September 19, 2014, the Texas Medical Board filed a 
new formal complaint against Respondent seeking the revocation of her 
medical license. The complaint was based in part on the 2010 indictment 
for health care fraud and her subsequent entrance into the pre-trial 
diversion agreement, as well as the results of a July 2013 Lifeguard 
assessment which found that she ``lacked the fitness to safely practice 
medicine'' in that she ``displayed a less than adequate knowledge base 
with many of the practice-based competencies tested, as well as 
deficiencies in prescriptive practices.'' Mediated Agreed Order, at 1 & 
4; In re Campbell, (Tx. Med. Bd. Feb. 13, 2015). Because possessing 
state authority to dispense controlled substances is a prerequisite for 
holding a DEA registration, see 21 U.S.C. 802(21) & 823(f), this 
proceeding was again held in abeyance pending the resolution of the 
Board proceeding.
    Thereafter, the matter was referred to mediation, and on February 
13, 2015, the Board and Respondent entered into a Mediated Agreed 
Order. Id. Therein, the Board found that Respondent has successfully 
completed the pre-trial diversion agreement, that she had ``complied 
with all recommendations made as a result of the Lifeguard 
assessment,'' and that she had ``produced evidence of her ongoing 
efforts to advance her medical knowledge.'' Id. Respondent was thus 
allowed to retain her state license.

The Government's Exception

    As noted above, the Government filed an Exception to the ALJ's 
Recommended Decision. Because Respondent had allowed her registration 
to expire and had not filed a renewal application, the Government 
argued that the Agency should reject the ALJ's ultimate recommendation 
that Respondent's registration should not be revoked and that she 
should be granted a restricted registration. Exception, at 2. Noting 
that the ALJ cited no precedent for maintaining a DEA registration 
beyond its expiration date where the registrant failed to file a timely 
renewal application, the Government argued that ``the only possible 
recommendation to be made by the ALJ is whether the Deputy 
Administrator should affirm the Immediate Suspension Order issued 
simultaneously with the Order to Show Cause.'' Id. at 1-2. However, as 
found above, Respondent filed an application for a new registration 
prior to the ALJ's forwarding of the record to this Office. Thus, 
notwithstanding that Respondent's registration expired on August 31, 
2010, there is an application to act upon.
    The Government further contended that ``the issuance of the 
Immediate Suspension Order'' should be affirmed ``for the reasons 
discussed in the Government's Post-Hearing Brief.'' Exception, at 2. 
While Respondent did not file her application until after she received 
the ALJ's largely favorable decision and the Government filed its 
Exception, I assume that the Government would likewise seek denial of 
the application ``for the reasons discussed in the Government's Post-
Hearing Brief.'' Id.
    However, the Agency regulation on Exceptions is quite specific in 
requiring that a ``party shall include a statement of supporting 
reasons for such exceptions, together with evidence of record 
(including specific and complete citations of the pages of the 
transcripts and exhibits) and citations of the authorities relied 
upon.'' 21 CFR 1316.66(a). The purpose of Exceptions is to allow a 
party to identify the specific factual findings and legal conclusions 
of the ALJ which it believes to be erroneous. Cf. The Attorney 
General's Manual on the Administrative Procedure Act 87 n.5 (1947) 
(quoting Final Report of the Attorney General's Committee on 
Administrative Procedure, at 52) (``Too often . . . exceptions are 
blanket in character, without reference to pages in the record and 
without in any way narrowing the issues. They simply seek to impose 
upon the agency the burden of complete reexamination. Review of the 
hearing commissioner's decision should in general and in the absence of 
clear error be limited to grounds specified in the appeal.'').
    Here, the ALJ previously considered the Government's post-hearing 
brief and found its evidence unpersuasive on several critical issues, 
including the allegations that Respondent had issued a prescription to 
an employee that was actually for her own use and that Respondent was 
prescribing methadone to treat opioid addiction. With respect to each 
allegation, the Government relied on unsworn hearsay statements, which 
the ALJ found were not sufficiently reliable when weighed against the 
testimony of witnesses which he found credible and the documentary 
evidence. Because the Government has failed to identify in its 
Exception why the ALJ erred in reaching these findings, I adopt the 
ALJ's findings.
    As noted above, the ALJ also rejected the Government's evidence 
regarding the accountability audit. Here again, the Government has 
failed to identify in its Exception why the ALJ erred in reaching his 
finding. Indeed, the Government did not even submit the audit 
computation chart, let alone such documentation as the closing 
inventory taken by the Investigator. Thus, I must reject the 
Government's contention.
    The ALJ did, however, find that Respondent relocated her practice 
and possessed and distributed controlled substances at her new location 
without

[[Page 41065]]

being registered there. R.D. at 30-32. The ALJ found that this conduct 
constituted a violation of 21 U.S.C. 822(e) and 827(g), as well as 21 
CFR 1301.51. Id. at 32. The ALJ found, however, that there was evidence 
that mitigated the violations as Respondent had notified the Texas DPS 
that she had changed her practice location and concluded that her 
failure to notify the Agency of her address change was not 
``intentionally deceitful'' but the result of an ``omission.'' Id.
    The ALJ further found that Respondent admitted that she 
occasionally accepted controlled substances from patients which she 
then destroyed, notwithstanding that no provision in the CSA or DEA 
regulations permits this. R.D. at 44. However, the ALJ also found that 
there was no evidence that this was a frequent occurrence or evidence 
that the drugs were diverted; rather, ``the un-rebutted testimony was 
that the drugs were destroyed.'' Id. Be that as it may, it is still a 
violation of the CSA. See 21 U.S.C. 844(a) (``It shall be unlawful for 
any person knowingly or intentionally to possess a controlled substance 
unless such substance was obtained directly, or pursuant to a valid 
prescription or order, from a practitioner, while acting in the course 
of his professional practice, or except as otherwise authorized by this 
subchapter or subchapter II of this chapter.'').
    Next, the ALJ found that Respondent failed to keep proper 
controlled substance records. Specifically, the ALJ credited the 
testimony of the Diversion Investigators that Respondent's records 
showed that she had dispensed Demerol, a schedule II controlled 
substance. R.D. at 47. Because it is a schedule II drug, Respondent was 
required to document her purchases and receipts of the drug on DEA Form 
222. 21 CFR 1305.04(a); id. Sec.  1305.12; id. Sec.  1305.13(a) & (e). 
She was also required to retain a copy of the form for at least two 
years from the date of the order. Id. Sec.  1305.17; 21 CFR 1304.04(a). 
However, during a search of Respondent's registered and non-registered 
locations (as well as her home), no Form 222s were found. R.D. at 47. 
Nor were there any invoices for the Demerol.
    Moreover, while the Investigators found that Respondent was 
dispensing other controlled substances, including Ambien (zolpidem) and 
Provigil (modafinil), each of which is a schedule IV drug, see 21 CFR 
1308.14 (c) & (e); there were no inventories or dispensing logs for 
either drug. R.D. at 47.
    In mitigation, the ALJ credited Respondent's testimony that she had 
never been the subject of a prior DEA investigation; that she had been 
evicted from her office at the time of the events at issue; that she 
also had issues with employees, ``to include alleged misuse of 
prescription pads, theft, and related financial matters''; and that she 
was a workaholic. R.D. at 49. While finding her testimony to be 
generally credible, the ALJ concluded that the Government had made out 
a prima facie case, noting that ``[o]n balance . . . Respondent's 
recordkeeping violations, handling of returned controlled substances 
and failure to properly change her registered address weigh 
significantly in favor of revocation'' or the denial of her 
application. Id. at 50.\6\
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    \6\ As explained above, as of the date of the hearing, 
Respondent had not filed a timely renewal application and her 
registration expired one week after the hearing and before the 
record was forwarded.
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    Turning to whether Respondent had produced sufficient evidence to 
rebut the Government's prima facie case, the ALJ noted that under the 
Agency's rule, ``where a registrant has committed acts inconsistent 
with the public interest, a registrant must accept responsibility for 
his or her actions and demonstrate that he or she will not engage in 
future misconduct.'' Patrick W. Stodola, 74 FR 10083, 10094 (2009). 
Moreover, in setting the appropriate sanction, the Agency also 
considers the egregiousness of the proven misconduct and the need to 
deter future violations by both the Applicant and members of the 
regulated community. Fred Samimi, 79 FR 18698, 18713 (2014) (citing 
Jacobo Dreszer, 76 FR 19386, 19387-88 (2011)).
    As for her failure to update her registered address, the ALJ noted 
that Respondent had updated her address with the Texas DPS and had 
``made various efforts to do so with DEA.'' R.D. at 51. However, the 
ALJ found that Respondent's explanation for her recordkeeping 
violations was ``less specific.'' Id. Noting her testimony that 
Respondent ``believed she `had very effective oversight' of controlled 
substances,'' the ALJ found that her ``belief is contradicted by [her] 
own testimony.'' Id. Specifically, the ALJ noted that ``Respondent 
testified that she relied heavily on her staff with regard to inventory 
and maintenance of controlled substances and . . . did very little 
herself.'' Id. While the ALJ concluded that her ``testimony as a whole 
demonstrated that she understood the seriousness and importance of 
recordkeeping requirements,'' id., at no point in her testimony did she 
acknowledge that as a DEA registrant, she was the person ultimately 
responsible for maintaining the required records.
    Noting that Respondent's recordkeeping violations ``occurred over a 
comparatively short period of time, with substantially fewer controlled 
substances, and with no evidence of actual diversion,'' the ALJ 
rejected the Government's contention that revocation was the 
appropriate sanction, reasoning that it was disproportionate to her 
misconduct. Id. at 52. However, he also found that while ``Respondent's 
testimony as a whole demonstrates that she has sufficiently accepted 
responsibility for her actions and omissions . . . [her] explanation of 
past errors and demonstrated plan to avoid future violations is 
insufficient to support an unconditional registration.'' Id.
    Indeed, Respondent offered no plan to avoid future recordkeeping 
violations. And while I agree that the proven misconduct would not 
support a sanction of revocation (in the event she had not allowed her 
registration to expire), consistent with other cases it does support a 
period of outright suspension. See Kenneth Harold Bull, 78 FR 62666, 
62676 (2013) (imposing six-month suspension based on physician's 
failure to maintain records where his dispensing activity appeared to 
be limited and there was no evidence of diversion); see also Paul Weir 
Battershell, 76 FR 44359, 44368-69 (2011). Moreover, while the ALJ 
explained that ``[t]he Respondent's errors were neglectful and serious 
during the relevant time period, and likely due in part to ongoing 
issues including eviction from her registered office, employee 
problems, and an office break-in and theft,'' R.D. at 52, none of these 
explain why she was missing records documenting her controlled 
substance activities even months after her eviction and when she was 
continuing to possess and dispense controlled substances.\7\
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    \7\ While Respondent maintained that she was locked out of her 
first location (4851 I-35 East, Denton, TX.), she also testified 
that her staff had packed up the medical records prior to her 
eviction. Tr. 200. Moreover, in her testimony, Respondent stated 
that the judge in the eviction case granted her ``a brief period of 
time'' to retrieve her medications. Id. Unexplained is why she would 
not have also retrieved any controlled substance records at this 
time.
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    The ALJ recommended that Respondent be granted a restricted 
registration subject to the conditions that: (1) ``no later than one 
(1) year after issuance'' of a registration, she provide documentation 
that she has successfully completed a course in controlled substance 
recordkeeping, and (2) that she submit to the nearest DEA Field 
Division Office, on a quarterly basis, a

[[Page 41066]]

log of all controlled substances received, maintained and dispensed.
    I reject these conditions as insufficient to protect the public 
interest. As explained above, Respondent offered no plan to address the 
recordkeeping violations that were proved on the record. In the absence 
of evidence that Respondent has successfully completed a course in 
controlled substance recordkeeping, allowing Respondent to possess, 
dispense and administer controlled substance would be ``inconsistent 
with the public interest.'' 21 U.S.C. 823(f).
    Accordingly, while I will grant Respondent's application, upon the 
issuance of her registration, it shall be suspended for a period of six 
months. I will further order that her registration be restricted to 
authorize her to engage in only the prescribing of controlled 
substances. Respondent shall not be allowed to possess any controlled 
substance unless she obtains it pursuant to the lawful order of a 
practitioner to treat a legitimate medical condition. Moreover, 
Respondent may not accept any manufacturer's or distributor's sample of 
any controlled substance other than those provided to her by a duly 
authorized medical professional in the course of treating her for a 
legitimate medical condition.\8\
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    \8\ In the event Respondent provides evidence that she has 
completed a course in controlled substance recordkeeping, these 
conditions will be removed from her registration one year from the 
effective date of this Order. However, in the event Respondent is 
granted authority to possess, administer and dispense controlled 
substances, she shall provide, on a quarterly basis, a log of all 
controlled substances she receives, possesses, dispenses, or 
otherwise disposes of, to the nearest DEA Field Division Office. 
Said log shall be submitted no later than ten (10) calendar days 
following March 31st, June 30th, September 30th, and December 31st. 
This requirement shall remain in effect for the duration of the 
initial period of re-registration. However, if Respondent fully 
complies with this condition, this requirement shall be removed upon 
the renewal of her registration.
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Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 
CFR 0.100(b), I order that the application of Odette L. Campbell, M.D., 
for a DEA Certificate of Registration as a practitioner, be, and it 
hereby is, granted subject to the conditions set forth above. I further 
order that upon the granting of the application, the registration shall 
be suspended for a period of six months. This Order is effective August 
13, 2015.

    Dated: July 6, 2015.
Chuck Rosenberg,
Acting Administrator.

Larry P. Cote, Esq., for the Government.
Jeffrey C. Grass, Esq., for Respondent.

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

Introduction

    Timothy D. Wing, Administrative Law Judge. This proceeding is an 
adjudication governed by the Administrative Procedure Act, 5 U.S.C. 
551 et seq., to determine whether Respondent's Certificate of 
Registration (COR) with the Drug Enforcement Administration (DEA) 
should be revoked and any pending applications for renewal or 
modification of that registration should be denied. Without this 
registration, Respondent, Odette L. Campbell, M.D., of Denton, 
Texas, would be unable to lawfully possess, prescribe, dispense or 
otherwise handle controlled substances.
    On August 4, 2009, the Deputy Administrator of the DEA 
immediately suspended Respondent's registration on grounds that 
Respondent had failed to comply with a standard referenced in 21 
U.S.C. 823(g)(1) and that her continued registration during the 
pendency of these proceedings would constitute an immediate danger 
to the public health and safety. The Deputy Administrator 
simultaneously issued an Order to Show Cause (OSC) why DEA should 
not revoke Respondent's DEA COR as a practitioner pursuant to 21 
U.S.C. 824(a)(4) because her continued registration would be 
inconsistent with the public interest as that term is defined in 21 
U.S.C. 823(f) and (g)(2)(E)(i). The OSC further alleged, in 
substance, that:

    1. Respondent is currently registered with the DEA as a 
practitioner in Denton, Texas. Respondent is also authorized to 
treat no more than thirty narcotic-dependant patients at any one 
time with Schedule III through V narcotic controlled substances that 
are approved by the Food and Drug Administration for that 
indication. Respondent's current DEA registration was set to expire 
by its own terms on August 31, 2010.
    2. Respondent moved her practice to another location in Denton 
without notifying the DEA and possessed and dispensed controlled 
substances at an unregistered location in violation of Federal 
law.\1\
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    \1\ Citing 21 U.S.C. 841(a)(1), 822(3) and 827(g).
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    3. On January 30, 2009, Respondent prescribed the Schedule II 
controlled substance methadone to an individual to treat opioid 
addiction.\2\
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    \2\ Citing 21 U.S.C. 823(g)(1); 21 CFR 1306.04(c).
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    4. In March 2009 Respondent prescribed controlled substances to 
an employee for other than legitimate medical purposes.\3\ At 
Respondent's request a local pharmacy filled the prescription and 
the controlled substances were returned to Respondent for her 
personal use.\4\
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    \3\ Citing 21 CFR 1306.04.
    \4\ Citing 21 U.S.C. 843(a)(3).
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    5. An accountability audit conducted at Respondent's medical 
office in April 2009 revealed an unexplained shortage of 
approximately thirteen bottles, or 390 dosage units, of Suboxone. 
Respondent's dispensing log indicated that she dispensed other 
controlled substances, such as Demerol, but she was unable to 
provide investigators with records showing receipt of these 
controlled substances.\5\
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    \5\ Citing 21 CFR 1304.21.

    The Order to Show Cause and Immediate Suspension of Registration 
(OSC/IS) advised Respondent of her right to a hearing in this 
matter, and further advised that if she requested a hearing, it 
would be held on September 21, 2009, at DEA headquarters in 
Arlington, Virginia. Respondent timely filed a request for a hearing 
on the issues identified in the OSC/IS and referred all future 
correspondence to counsel.
    On September 8, 2009, counsel for the Government filed a motion 
for summary disposition, asserting, in substance, that Respondent 
currently lacked authority to handle controlled substances in Texas, 
the jurisdiction in which she is licensed to practice medicine and 
in which she holds a DEA registration, and that the DEA does not 
have statutory authority to maintain a registration if the 
registrant does not have state authority to handle controlled 
substances in the state in which she conducts business.\6\ Counsel 
for the Government further asserted that even if the suspension of 
Respondent's Texas medical license is temporary or there is the 
potential for Respondent's state controlled substance privileges to 
be reinstated, ``summary disposition is warranted because revocation 
is also appropriate when a state license has been suspended, but 
with the possibility of future reinstatement.'' \7\ Counsel for the 
Government attached to his motion a copy of an Order of Temporary 
Suspension (Without Notice of Hearing) dated August 19, 2009, in 
which a Disciplinary Panel of the Texas Medical Board suspended 
Respondent's medical license. (ALJ Ex. 10.)
---------------------------------------------------------------------------

    \6\ Citing Roy Chi Lung, M.D., 74 FR 20,346 (DEA 2009); Michael 
Chait, 73 FR 40,382 (DEA 2008); Shahi Musud Siddiqui, M.D., 61 FR 
14,818 (DEA 1996); Michael D. Lawton, M.D., 59 FR 17,792 (DEA 1994); 
and Abraham A. Chaplan, M.D., 57 FR 55,280 (DEA 1992).
    \7\ ALJ Ex. 10 at 2 (citing Stuart A. Bergman, M.D., 70 FR 
33,193 (DEA 2005); Roger A. Rodriguez, M.D., 70 FR 33,206 (DEA 
2005)).
---------------------------------------------------------------------------

    On September 11, 2009, counsel for Respondent \8\ entered his 
appearance in this matter and filed a response to the Government's 
motion. Counsel for Respondent asserted that the Texas Medical Board 
action required that Respondent's DEA registration be suspended, but 
requested a stay in the instant proceedings pending resolution of 
the state proceedings.
---------------------------------------------------------------------------

    \8\ Richard Alley, Esq.
---------------------------------------------------------------------------

    On September 14, 2009, Administrative Law Judge (ALJ) Mary Ellen 
Bittner \9\ issued an Opinion and Recommended Ruling, Findings of 
Fact, Conclusions of Law and Decision of the Administrative Law 
Judge (Recommended Decision), which granted the Government's motion 
for summary disposition and recommended that Respondent's DEA 
registration be revoked and any pending applications denied on the 
basis that Respondent's state medical license had been suspended and 
she was therefore

[[Page 41067]]

without state authority to handle controlled substances. (ALJ Ex. 
3.)
---------------------------------------------------------------------------

    \9\ ALJ Bittner was designated the presiding officer in this 
matter from August 28, 2009, until June 8, 2010.
---------------------------------------------------------------------------

    On October 29, 2009, Government counsel submitted a letter to 
the ALJ noting Respondent's request that the matter be set for 
hearing because Respondent's medical license had been restored by 
the Texas Medical Board. While the Government conceded the medical 
license had been restored, the Government maintained that Respondent 
``nonetheless still does not have authority to prescribe controlled 
substances in Texas'' because ``Respondent's state controlled 
substance registration was revoked by the Texas Department of Public 
Safety on August 4, 2009, and that there are no applications 
currently pending for Respondent.'' (ALJ Ex. 12.)
    On November 3, 2009, Counsel for Respondent again requested a 
hearing, noting that ``in speaking with the Texas Department of 
Public Safety (DPS) . . . attorneys, they have stated that Dr. 
Campbell cannot be reinstated unless DEA reinstates her license . . 
. [o]bviously this reasoning is a tautological chicken and the egg 
quandary and denies Dr. Campbell her due process rights.'' (ALJ Ex. 
13.)
    On January 19, 2010, the Deputy Administrator issued an Order 
outlining the procedural history of the matter and inviting the 
parties to submit a motion, properly supported, that seeks the 
particular relief requested. (ALJ Ex. 4.)
    On January 29, 2010, Government filed a Request for Final Agency 
Action and on February 8, 2010, Respondent filed her Response. (ALJ 
Exs. 14, 15.)
    On May 11, 2010, the Deputy Administrator remanded the matter to 
the ALJ for further proceedings. The Deputy Administrator found that 
although Respondent's Texas medical license had been restored, 
Respondent's state controlled substance registration was terminated 
on August 4, 2009, and Respondent was therefore without state 
authority to handle controlled substances. The Deputy Administrator 
further found that the applicable Texas statutes and regulations may 
not permit Respondent to challenge the termination of her state 
controlled substance registration because the termination was based 
on the immediate suspension of Respondent's DEA registration. If 
that is the case, Respondent will be denied the opportunity to 
challenge the revocation of her DEA registration and her state 
controlled substance registration, which will effectively deny 
Respondent her right to due process. The Remand Order therefore 
directed the ALJ to determine what action the Texas Department of 
Public Safety (DPS) has taken on Respondent's application for a 
state registration and whether the DPS has provided or will provide 
Respondent with a hearing; if not, Respondent is entitled to an 
expedited hearing on the allegations of the OSC/IS. (ALJ Ex. 5.)

I. Procedural Issue

    What action the Texas Department of Public Safety (DPS) has 
taken on Respondent's application for state registration to handle 
controlled substances and whether the DPS has provided or will 
provide Respondent with a hearing; and, if the DPS has determined 
that Respondent is not entitled to a hearing, to conduct an 
expedited hearing on the allegations of the OSC/IS served on 
Respondent on August 4, 2009.

A. The Government's Contentions

    The Government first contends that Respondent's alleged due 
process violations and the failure of the Texas DPS to provide 
Respondent with a hearing regarding the revocation of her state 
controlled substance license are beyond the jurisdiction of this 
agency to adjudicate and would properly be heard by the Texas courts 
and the DPS.
    The Government further argues that because Respondent currently 
lacks authority to handle controlled substances in Texas, the 
jurisdiction in which she is licensed to practice medicine and in 
which she holds a DEA registration, ``any fact-finding proceeding 
regarding the original basis for the Order to Show Cause [is] 
moot.'' \10\ Citing 37 Tex. Admin. Code Sec.  13.274(b), the 
Government contends that the DPS will not automatically restore 
Respondent's controlled substances registration even if Respondent 
prevails in these proceedings because the DPS will not reinstate a 
revoked registration sooner than one year from the date of the final 
revocation and upon filing of a new application for registration. 
According to the Government, these proceedings are therefore moot 
because, if Respondent's DEA registration is reinstated, the 
Government would have to immediately reinitiate proceedings by 
issuing an OSC on the ground that Respondent lacks authority to 
handle controlled substances in Texas.
---------------------------------------------------------------------------

    \10\ (ALJ Ex. 18 at 3.)
---------------------------------------------------------------------------

    The Government also asserts that Texas law does provide 
Respondent a mechanism to seek reinstatement of her DPS registration 
under Texas Health & Safety Code Sec.  481.066(j) but Respondent has 
failed to seek a reinstatement under that authority. Under Texas 
Health & Safety Code Sec.  481.066(j), the Governments contends that 
Respondent should be able to show good cause for reinstatement of 
her DPS registration based on the Texas Medical Board finding that 
``rejected the Government's allegations serving as the basis of the 
suspension of Respondent's DEA registration.'' (ALJ Ex. 18.)

B. Respondent's Contentions

    Respondent first contends that the allegations contained in the 
OSC/IS are untrue and, therefore, her DEA registration should not be 
``permanently revoked.'' Respondent argues that 37 Tex. Admin. Code 
Sec.  13.274(b)(1)(B) provides that within one year after a DPS 
revocation becomes final, the DPS will consider a request for 
reinstatement if Respondent demonstrates by a preponderance of the 
evidence that Respondent's DEA registration has not been permanently 
revoked. Respondent further contends, however, that it will be 
pointless to request a DPS hearing on the matter until after the DEA 
has issued a final order because the sole basis for the DPS 
revocation is the fact that the DEA suspended Respondent's DEA 
registration.
    Respondent similarly contends that the DPS will not provide a 
hearing on the matter of reinstatement one year after revocation 
under 37 Tex. Admin. Code Sec.  13.274(b)(2)(A) because there is no 
question of fact regarding whether DPS has taken adverse action 
against Respondent. Again, Respondent argues that such a hearing 
request will not be granted because the only issue pertains to the 
status of Respondent's DEA registration. Respondent contends that 
the restoration of her DEA registration is the only evidence 
necessary or sufficient to negate the basis of the revocation of her 
DPS registration and, therefore, only a DEA hearing can result in 
the resolution of the matter with Texas and with the DEA.
    Respondent also argues that Respondent has exhausted her 
attempts at reinstatement of her DPS registration under a showing of 
good cause. (ALJ Ex. 19.)

C. Discussion and Conclusions

    The parties' contentions and the Remand Order essentially 
concern two procedural issues: (1) whether Respondent has been 
afforded due process under federal law; and (2) whether the fact 
that Respondent does not possess state authority to handle 
controlled substances renders this proceeding moot.

(1) Federal Due Process and Mootness Doctrine

    The Supreme Court of the United States has held that the ``Due 
Process Clause of the Fifth Amendment prohibits the United States, 
as the Due Process Clause of the Fourteenth Amendment prohibits the 
States, from depriving any person of property without `due process 
of law.' '' Dusenbery v. United States, 534 U.S. 161, 167 (2002). 
``The fundamental requirement of due process is the opportunity to 
be heard `at a meaningful time and in a meaningful manner.' '' 
Mathews v. Eldridge, 424 U.S 319, 333 (1976) (citations omitted).
    In analyzing procedural due process issues, courts have 
generally engaged in a ``two-step inquiry: (1) Did the individual 
possess a protected interest to which due process protection was 
applicable? (2) Was the individual afforded an appropriate level of 
process?'' Ward v. Anderson, 494 F.3d 929, 934 (10th Cir. 2007) 
(citations omitted).
    As to the first step, a license has consistently been held to be 
a property interest entitled to due process protection. Barry v. 
Barchi, 443 U.S. 55, 64 (1979).
    The second step of the analysis in this case rests significantly 
on the interrelationship between the DEA-initiated OSC/IS and the 
relevant Texas statutes and regulations pertaining to the regulation 
of controlled substances by practitioners. The United States Court 
of Appeals for the Fifth Circuit has held that the DEA's revocation 
of a registration based on a state agency action ``would only be 
invalid if the alleged state agency errors rose to the level of a 
federal due process violation . . . .'' Maynard v. DEA, 117 Fed. 
App'x 941, 945 (5th Cir. 2004). The DEA's revocation of a COR 
amounts to the deprivation of a property interest and therefore must 
comport with the requirements of federal due process. See Mathews, 
424 U.S. at 333. At a minimum,

[[Page 41068]]

federal due process requires that a respondent be afforded adequate 
notice and opportunity to be heard ``at a meaningful time and in a 
meaningful manner.'' Id.; see also Mullane v. Central Hanover Bank & 
Trust Co., 339 U.S. 306, 313 (1950).
    Agency precedent has consistently held that where, for example, 
a state action precedes a DEA OSC or OSC/IS, the DEA need not 
inquire into the validity of a state licensing agency's decision. 
George S. Heath, M.D., 51 FR 26,610 (DEA 1986). Similarly, where 
there is an independent basis for the state action, the DEA has 
relied on the state authority without further inquiry. See Joseph 
Baumstarck, M.D., 74 FR 17,525 (DEA 2009); Michael D. Lawton, M.D., 
59 FR 17,792 (DEA 1994); George S. Heath, M.D., 51 FR 26,610 (DEA 
1986); Hezekiah K. Heath, M.D., 51 FR 26,612 (DEA 1986). Summary 
disposition based on suspension of a respondent's state authority, 
of even a temporary nature, has been consistently upheld. E.g., 
Roger A. Rodriquez, M.D., 70 FR 33,206 (DEA 2005). The Controlled 
Substances Act (CSA) requires that a practitioner be currently 
authorized to handle controlled substances in ``the jurisdiction in 
which he practices'' in order to maintain a DEA registration.\11\ 
Therefore, because ``possessing authority under state law to handle 
controlled substances is an essential condition for holding a DEA 
registration,'' the DEA has repeatedly held that ``the CSA requires 
the revocation of a registration issued to a practitioner whose 
State license has been suspended or revoked.'' See Scott Sandarg, 
D.M.D., 74 FR 17,528 (DEA 2009) (citing David W. Wang, M.D., 72 FR 
54,297 (DEA 2007); Sheran Arden Yeates, M.D., 71 FR 39,130 (DEA 
2006); Dominick A. Ricci, M.D., 58 FR 51,104 (DEA 1993); and Bobby 
Watts M.D., 53 FR 11,919 (DEA 1988)).
---------------------------------------------------------------------------

    \11\ See 21 U.S.C. 802(21).
---------------------------------------------------------------------------

    A review of agency precedent, however, reveals no instance where 
a respondent's registration has been the subject of a final 
revocation by summary disposition where state action was triggered 
solely by the DEA suspension process, and the respondent was 
afforded no opportunity to be heard ``at a meaningful time and in a 
meaningful manner.'' Mathews v. Eldridge, 424 U.S 319, 333 (1976) 
(citations omitted). To the contrary, the DEA has recently rejected 
a due process argument by a respondent claiming the state action was 
based on the DEA's order immediately suspending his registration, 
stating: ``Respondent ignores, however, that the State's suspension 
order did not rely solely on my Order. Rather, the State Board also 
relied on Respondent's indictment by a federal grand jury . . . . 
[T]he board clearly conducted its own independent evaluation of the 
evidence against him and did not simply piggyback on my Order of 
Immediate Suspension.'' Joseph Baumstarck, 74 FR 17,525, 17,527 (DEA 
2009) (internal citations omitted); see also Oakland Medical 
Pharmacy, 71 FR 50,100, 50,102 (DEA 2006) (rejecting the contention 
that it is circular for DEA to rely on a state suspension order to 
revoke a registration where the State did not rely solely on the DEA 
order in suspending a practitioner's state license).
    The Texas authorities in the instant case did ``piggyback'' 
solely on the OSC/IS to suspend Respondent's state registration on 
August 4, 2009, and relied exclusively on the DEA action to suspend 
Respondent's state authority.\12\
---------------------------------------------------------------------------

    \12\ (See Gov't Ex. 5; Gov't Ex. 6; Gov't Ex. 7; Resp't Ex. 2.)
---------------------------------------------------------------------------

    The Government also argues in substance that the ultimate issue 
in this case is ``moot'' given Respondent's current lack of state 
authority.\13\ Additionally, as of the hearing date, Respondent's 
registration was due to expire by its terms on August 31, 2010, and 
there is no evidence of record indicating that Respondent has 
submitted an application for renewal.\14\ The Government's mootness 
argument with regard to Respondent's current application status is 
misplaced because this proceeding began as an immediate suspension. 
To find otherwise would be contrary to the applicable regulation and 
agency precedent.\15\
---------------------------------------------------------------------------

    \13\ (ALJ Ex. 18 at 3.)
    \14\ At hearing, the Government represented that ``there's no 
indication in the DEA system that an attempt was even made to submit 
a renewal application.'' The Respondent questioned the requirement 
``to do meaningless acts if it's going to be kicked back,'' but 
indicated she would file a DEA application immediately. (Tr. 10-12.)
    \15\ 21 CFR 1301.36(h) states that ``[a]ny suspension shall 
continue in effect until the conclusion of all proceedings upon the 
revocation or suspension, unless sooner withdrawn by the 
Administrator or dissolved by a court of competent jurisdiction.'' 
This section is distinguishable from the extension requirements for 
an ``applicant . . . who is doing business under a registration . . 
. not revoked or suspended . . . .'' 21 CFR 1301.36(i).
---------------------------------------------------------------------------

    In William R. Lockridge, M.D., 71 FR 77,791 (DEA 2006), the 
agency declined to apply the mootness doctrine to a case in which 
the respondent's registration had expired several months before the 
hearing and a renewal application had not been timely filed. In that 
decision, the Agency concluded that

a case remains a live dispute when `collateral consequences' attach 
to a proceeding which otherwise would be moot . . . . As several 
courts have noted in cases involving sanctions against licensed 
professionals such as attorneys, even a temporary suspension 
followed by a reinstatement does not moot a challenge to the initial 
suspension because the action `is harmful to a [professional's] 
reputation, and `the mere possibility of adverse collateral 
consequences is sufficient to preclude a finding of mootness.'

Id. at 77,797 (internal citations and formatting omitted). 
Additionally, ``the issuance of an immediate suspension creates 
collateral consequences beyond those that are present when the 
Government serves a Show Cause Order but allows the registrant to 
continue to handle controlled substances throughout the 
litigation.'' Id.
    Consistent with the rationale set forth in Lockridge, I find 
that application of the mootness doctrine to Respondent's case is 
unwarranted and would deny both Parties an opportunity to resolve 
the evidentiary issues, as well as prejudice the public interest. 
Additionally, there is no indication that Respondent intends to 
suspend her medical practice or not seek restoration of her 
registration. See Meetinghouse Community Pharmacy, Inc., 74 FR 
10,073 (DEA 2009). Absent an opportunity to be heard ``at a 
meaningful time and in a meaningful manner'' under the Texas 
statutory scheme, reliance on agency precedent, including the 
mootness doctrine, to support summary disposition in this instance 
is entirely misplaced.

(2) The Texas Statutory and Regulatory Scheme

    The Texas Controlled Substances Act (Texas CSA), Tex. Health & 
Safety Code Sec.  481.001 et. seq., governs the registration of 
practitioners to dispense controlled substances in Texas. Pursuant 
to Sec.  481.066(b), ``[t]he director may cancel, suspend, or revoke 
a registration, place on probation a person whose license has been 
suspended, or reprimand a registrant for cause described by Section 
481.063(e).'' In addition, Section 481.063(e)(3) authorizes the 
denial of an application for a state registration ``to manufacture, 
distribute, analyze, [or] dispense . . . controlled substance[s]'' 
if the applicant's DEA registration has been ``suspended, denied, or 
revoked'' under the Federal Controlled Substances Act defined as 21 
U.S.C. Section 801 et seq.\16\
---------------------------------------------------------------------------

    \16\ See Tex. Health & Safety Code Ann. Sec.  481.002(18) 
(identifying the federal Controlled Substances Act).
---------------------------------------------------------------------------

    The Texas regulatory structure for practitioners is further 
governed by the Texas Administrative Code, Title 37, Part 1, Ch 13. 
A ``registration terminates: . . . (3) when a regulatory board or 
DEA accepts a voluntary surrender, or denies, suspends, or revokes a 
license or a federal controlled substance registration. . . .'' \17\ 
Of significance, the Texas Administrative Code states that the 
``director will revoke a registration if the registrant: (1) 
violates a ground of denial described in the Act, Sec.  
481.063(e).'' \18\ The Code further provides that upon revocation 
under this section, ``the registrant may request a hearing, unless 
otherwise stated in the Act.'' \19\ The state due process 
requirements for licenses, set forth at Tex. Gov't Code Ann. Sec.  
2001.054, do not apply to suspensions and revocations pursuant to 
Texas CSA Sec. Sec.  481.063(e)(2)(A) or (B), (e)(3), (e)(4) or 
(e)(9). Maynard v. DEA, 117 Fed. App'x 941 (5th Cir. 2004); see Tex. 
Health & Safety Code Ann. Sec.  481.063(h).
---------------------------------------------------------------------------

    \17\ 37 Tex. Admin. Code Sec.  13.30 (2010).
    \18\ Id. Sec.  13.274.
    \19\ Id. Sec.  13.274(d) (emphasis added).
---------------------------------------------------------------------------

    The applicable Texas statutes and regulations contemplate a 
right to a hearing pursuant to the Texas APA in certain enumerated 
circumstances, but not where the initial suspension or revocation 
was based solely on federal action.\20\ Consistent with the 
foregoing, the Respondent has not been afforded a hearing in Texas 
nor is one contemplated. The procedural due process available to 
Respondent under Texas law

[[Page 41069]]

simply cannot support summary disposition on the facts of this case. 
Accordingly, I find that Respondent is entitled to a federal 
administrative hearing on the substantive issues alleged in the OSC/
IS.
---------------------------------------------------------------------------

    \20\ I have also carefully considered the ``informal hearing'' 
provisions pursuant to Sec.  13.301, but do not find that provision 
adequate to afford Respondent a meaningful right to a hearing, 
consistent with due process.
---------------------------------------------------------------------------

II. Substantive Issue

    Whether the record establishes that Respondent's DEA COR 
BC0181999 as a practitioner should be revoked and any pending 
applications for renewal or modification of that registration should 
be denied because her continued registration would be inconsistent 
with the public interest as that term is used in 21 U.S.C. 824(a)(4) 
and 823(f).

III. Findings of Fact

    I find, by a preponderance of the evidence, the following facts:

A. Stipulated Facts

    Respondent is registered as a practitioner in Schedules II-V 
under DEA registration number BC0181999.

B. General Overview

Respondent's State Medical License and Controlled Substance License

    The Texas Medical Board issued an Order of Temporary Suspension 
(without Notice of Hearing) on August 19, 2008, thereby rendering 
Respondent's Texas medical license temporarily suspended. (Gov't Ex. 
6; Tr. 33.) On October 16, 2009, the Texas Medical Board issued an 
Order Denying Temporary Suspension or Restriction of Texas Medical 
License, thereby reinstating Respondent's Texas medical license. 
(Gov't Ex. 7; Tr. 33.) The Texas Department of Public Safety revoked 
Respondent's Controlled Substances Registration on August 4, 2009, 
based solely on the Drug Enforcement Administration's immediate 
suspension of Respondent's Controlled Substance Registration.\21\ 
(Resp't Ex. 2.). Respondent was previously disciplined by the Texas 
Medical Board on three separate occasions between December 2000 and 
April 2009; each action resulted in a monetary fine.\22\
---------------------------------------------------------------------------

    \21\ See Tex. Health & Safety Code Sec. Sec.  481.066(b), 
481.063(e)(3); 37 Tex. Admin. Code Sec.  13.274(a).
    \22\ In December 2000, Respondent was cited for substandard 
chart documentation resulting in a monetary fine, chart monitoring 
and eight hours of continuing education in medical recordkeeping; 
Respondent received a monetary fine for failure to timely notify the 
Texas Medical Board of the relocation of her practice from Corinth 
to Denton (date not reflected in record but assumed to be prior to 
April 2009); and in March or April 2009, Respondent received a 
monetary fine in relation to missing fentanyl. (Tr. 185.)
---------------------------------------------------------------------------

Dr. Odette Louise Campbell (Respondent)

    Respondent attended the College of William & Mary in 
Williamsburg, Virginia. She received a master's degree in psychology 
from Virginia Commonwealth University and attended medical school in 
Virginia. Respondent completed internal medicine and oncology 
residency programs in Philadelphia and remained at the hospital as 
an attending physician. She relocated to Galveston, Texas, and then 
to Dallas, Texas, where she has practiced medicine since 
approximately 1991. (Tr. 110.) Between 1999 and 2002, Respondent 
built four cancer centers. She built a fifth cancer center in 2005 
at 4851 South I-35 East, Corinth, Texas. (Tr. 112.) She has been 
involved in multiple research projects regarding lymphoma, central 
nervous system lymphoma and the method of delivery of fentanyl to 
cancer patients. (Tr. 114.)

Dr. Robert James Babuji (Dr. Babuji)

    Dr. Babuji is a practicing physician. He completed his basic 
medical degree at Stanley Medical College in Madras, India in 1986; 
he completed general internal medicine training in the United 
Kingdom from 1987 until 1991; from 1991 until 1992, Dr. Babuji 
conducted basic research in cardiology; in 1994, he relocated to the 
United States and completed residency training at the University of 
Utah in Salt Lake City, Utah; he completed an advanced heart failure 
and transplantation fellowship in Salt Lake City, a cardiology 
fellowship at the University of Virginia in Charlottesville and 
Salem, Virginia, and then a cardiology fellowship in San Francisco, 
California; in 1999, Dr. Babuji returned to the United Kingdom where 
he practiced cardiology and internal medicine; in 2002, he returned 
to the U.S. to start in private practice in Florida and then later 
in Dallas, Texas, where he has practiced in cardiology, internal 
medicine, and primary care for the last three years. (Tr. 265.) Dr. 
Babuji is not certified in pain management but based on his training 
and experience is familiar with the procedures involved in pain 
management, based in part on his treatment of patients with numerous 
pain conditions. Dr. Babuji further testified that he is familiar 
with the standard of care required to treat patients with chronic 
pain syndrome. (Tr. 266.)

C. DEA Investigations

(a) DEA Diversion Investigator Joel Lynn Dunn (DI Dunn)

    DI Dunn has been a DEA Diversion Investigator for six years. He 
is assigned to the Dallas Field Division. DI Dunn received training 
as a diversion investigator at the DEA training academy. (Tr. 15.)

(b) DEA Diversion Investigator Anita Chalmers (DI Chalmers)

    DI Chalmers has been a DEA Diversion Investigator for ten years. 
She is assigned to the Dallas Field Division, where she has been 
employed for twenty years. (Tr. 91.)

(c) DEA Diversion Investigator Richard Leakey (DI Leakey)

    DI Leakey has been a DEA Diversion Investigator for 
approximately seven years. He is assigned to the Dallas Field 
Division. (Tr. 98.)

(d) Respondent's Registered Location

    Respondent's DEA-registered location is the Corinth Medical 
Group, 4851 I-35 East, Denton, Texas. Respondent was evicted from 
that location in late 2008 and moved to a temporary location 
(Collier Street) for an unknown length of time and then to a 
permanent location at 431 Mesa Drive on or about February 1, 2009. 
(Tr. 160.) Respondent did not move any controlled substances from 
the Denton location and the medications were destroyed prior to 
Respondent's eviction. (Tr. 197-98.) DI Dunn testified that 
Respondent was practicing at 431 Mesa Drive in April 2009, when the 
FBI executed a search warrant of that location; that Respondent was 
not authorized to possess controlled substances at that location; 
and that controlled substances were found there. (Tr. 52, 53.) DI 
Dunn further testified he was unaware of any requests from or 
attempts made by Respondent to modify the address of her registered 
location but that Respondent has updated her registered location in 
the past and Respondent did not have a practice at 4851 I-35 East. 
(Tr. 85, 87.)
    Respondent did update her new Mesa Drive registered address with 
the Texas Department of Public Safety and the Texas Medical Board. 
(Tr. 85, 160.) Respondent testified that she contacted the DEA 
seeking copies of records and provided her new address at that time. 
Respondent further stated that she believed she had fulfilled her 
requirement to change her registered address because she received 
documents from the DEA at 431 Mesa Drive. (Tr. 160.)
    Respondent stated in a written request for hearing dated August 
27, 2009, that

[m]y office administrator notified the Dallas office of the DEA in 
the third week of February 2009 informing them of my new office 
address. At the time of the notification, my office had requested a 
copy of a prior report of a theft which occurred in January 2009 be 
sent to our new office address. In addition, my new office address 
had been sent to the Texas Medical Board and the Texas DPS office in 
Austin, Texas. My Duplicate prescriptions reflected my new office 
address which led me to believe that I had fulfilled the Federal law 
requirements. I did not also send my new address to the Arlington, 
Virginia office. I did not know that this additional notification 
was required until August 4, 2009. I have been unable to complete my 
change of address successfully on the DEA internet site after 
multiple attempts prior hereto . . . .

(ALJ Ex. 2.)

(e) Respondent's Issuance of Methadone to Opioid-Addicted Patients

(i) [JF]

    DI Dunn testified that a physician must be registered with the 
DEA as a narcotic treatment program to prescribe methadone; 
Respondent is not registered with the DEA as a narcotic treatment 
program. (Tr. 21.) DI Dunn further testified that he did not consult 
with a physician regarding the standard of care applied when a 
physician treats a methadone patient with Suboxone but that he does 
consult the Code of Federal Regulations (CFR) which allows a 
physician to prescribe Suboxone. (Tr. 70.)
    DI Dunn further explained that he was contacted by Lori Price, 
Director of the Denton Treatment Program, a narcotic treatment 
program that is registered by the DEA to administer methadone to 
narcotic addicts; that Ms. Price was concerned because she was aware 
of a number of

[[Page 41070]]

patients who left the clinic to be treated by Respondent; and that 
he asked Ms. Price to speak with the patients to ask them to contact 
him to discuss their treatment. (Tr. 21.)
    DI Dunn related that [JF] contacted him and they spoke on 
several occasions; that [JF] went to Respondent for only one reason: 
to get off methadone and start taking Suboxone, a Schedule III 
controlled substance (Tr. 22); and that Respondent never prescribed 
Suboxone to [JF]. DI Dunn stated that he had not seen [JF]'s medical 
chart as of the time of Respondent's suspension. (Tr. 67.)
    The Government introduced at hearing an unsworn but witnessed 
statement signed ``[JF],'' \23\ indicating that [JF] received from 
Respondent prescriptions for Valium and methadone and that ``[a]s a 
result of taking these prescription [sic] I ended up on life sapport 
[sic] for 30 days. I could not walk or move any part of my body.'' 
(Gov't Ex. 12.)
---------------------------------------------------------------------------

    \23\ [JF] was not called by either party, nor is there any 
evidence of record to indicate that [JF] was not otherwise available 
as a witness.
---------------------------------------------------------------------------

    Respondent testified that the Denton Treatment Center provides 
methadone treatment for patients that have methadone addiction 
issues and that she spoke with Lori Price when she contacted the 
Center to request [JF]'s records. (Tr. 130.) Respondent further 
testified that she did prescribe to [JF] 10 mg methadone quantity 
120 with instructions to take two tablets two times per day, a 
thirty-day supply, pursuant to Respondent's instructions, and 10 mg 
diazepam quantity 90 with instructions to take one tablet every 
eight hours. (Gov't Ex. 13 & 14.) The medical record for [JF] 
indicates that [JF] initially began taking methadone to treat 
chronic pain from ``chronic arthritics pain in [the] neck, lumbar 
spine and left knee.'' (Resp't Ex. 6, at 8.)
    Respondent testified that [JF] was self-referred to Respondent, 
whose name she said she received from Lori Price, and that [JF] 
wanted to stop taking methadone and start taking Suboxone in order 
to save money because she did not have a lot of money to receive 
treatment from the methadone clinic. (Tr. 132, 141, & 220.) 
Respondent explained that in order to change a patient's medication 
from methadone to Suboxone, the physician must first counsel the 
patient regarding potential side effects and then the patient must 
detoxify from methadone before taking Suboxone. (Tr. 141.) 
Respondent further explained that Suboxone was a superior medication 
for [JF] because it has less of a respiratory depressant effect and 
[JF] was on oxygen twenty four-hours per day; the Suboxone for [JF] 
would be used for pain management and [JF] signed a pain management 
agreement; [JF] had to first detoxify from the methadone and then 
Respondent would prescribe Suboxone; and [JF] did detoxify from 
methadone. (Tr. 141; Resp't Ex. 6; Tr. 143.)
    Respondent also testified that, during an office visit, she did 
not prescribe Suboxone because [JF] determined that she was unable 
to afford the Suboxone; Respondent could not send [JF] back to the 
treatment center to resume methadone because the center had stopped 
seeing patients for the day; Respondent provided [JF] with a very 
low pain management dose of methadone: 20 mg with instructions to 
take one two times per day; Respondent previously took 120 mg of 
methadone per day; and if the methadone clinic had been open that 
day, Respondent would have sent [JF] back. (Tr. 143, 220.) 
Respondent agreed to place [JF] on a list to receive free Suboxone 
because Respondent can sponsor two Suboxone patients per year and 
agreed that Respondent would maintain [JF] on methadone in the 
interim. (Tr. 144.)
    Respondent testified that [JF] was hospitalized four days after 
[JF]'s visit with Respondent because [JF] had aspiration pneumonia 
and an upper GI bleed; that no drug screen was performed at the 
hospital; and it was impossible for [JF] to overdose from 
Respondent's prescriptions as written. (Tr. 145.)
    Dr. Babuji testified the normal course of treatment when 
starting a patient on Suboxone is to wean the patient off methadone 
first and then start prescribing Suboxone. (Tr. 267.) Dr. Babuji 
explained that Suboxone is used to treat opioid addiction and as a 
pain management tool and that Suboxone would be an appropriate 
treatment for [JF]. (Tr. 291.) Dr. Babuji further testified that, 
because [JF] was unable to afford the Suboxone, [JF] was maintained 
on a smaller dose of methadone to stop further withdrawal and allow 
a slow withdrawal of the methadone, which would be helpful for 
chronic pain syndrome, and that there was no reason for [JF] to 
return to the Denton Treatment Center because [JF] was already on 
methadone and being weaned off with the intent of starting on 
Suboxone. (Tr. 268.)
    Based on his review of [JF]'s medical records, Dr. Babuji found 
that [JF] presented to Respondent with pain in the right foot, left 
knee, the lumbar region and the neck area. (Tr. 267.) Dr. Babuji 
testified that he reviewed the discharge summary from [JF]'s 
hospital visit; that the visit was the result of the exacerbation of 
chronic obstructive pulmonary disease which led to pneumonia; and 
that there was no evidence of a drug overdose. (Tr. 269, 290.)

(ii) [MM]

    DI Dunn testified that he received [MM]'s patient file pursuant 
to a search warrant executed on the premises of Respondent's 
practice. (Tr. 43.) A review of the patient file indicated that [MM] 
was receiving methadone and that [MM]'s previous physician was a 
narcotic treatment program. (Tr. 41.)
    DI Dunn further testified that he spoke with [MM], who told him 
that [MM] was a lifelong heroin addict; [MM] was seeing Respondent 
for narcotic treatment because the methadone from Respondent was 
less expensive than what [MM] received through the narcotic 
treatment program; and that although [MM] did sign a pain management 
agreement with Respondent, [MM] was not seeing Respondent for pain 
management. (Tr. 41.)
    [MM] signed an unsworn, but witnessed statement indicating that 
[MM] was a recovering alcoholic and used heroin; [MM] relapsed and 
went to the methadone clinic ten years ago; in or around April 2009, 
after [MM] started receiving Medicaid and Social Security 
disability, [MM] heard that Respondent would accept Medicaid and 
prescribe methadone; and [MM] saw Respondent for addiction 
treatment, not pain treatment. (Gov't Ex. 18.)
    [MM]'s patient file indicates [MM] signed a pain management 
agreement on April 15, 2009; [MM] wrote that [MM]'s reason for 
visiting Respondent's office was ``methadone, osteoporosis, ativane, 
and smoking patch''; that [MM]'s previous physician was the 
Brentwood clinic where [MM] received methadone; and [MM] had 
complaints and history of back pain and leg pain. [MM]'s patient 
file also reflects that Respondent noted that [MM] suffered from 
shoulder and leg pain, opioid addiction, anxiety, depression, 
chronic back pain and arthritis. (Gov't Ex. 16.)
    Respondent testified that [MM] told her that she had been 
diagnosed with osteoporosis; that she explained to [MM] that she 
helps patients get off methadone and that she doesn't do methadone 
maintenance for patients with only addiction problems but she may 
use methadone to treat chronic pain; that [MM] said [MM] did have 
chronic pain; that Respondent reviewed the pain management contract 
with [MM]; and that [MM] presented as a dual-diagnosis patient 
suffering from both chronic pain and addiction. (Tr. 172.)

(iii) [TR]

    DI Dunn testified that [TR]'s patient file was seized pursuant 
to a search warrant executed at Respondent's practice. DI Dunn has 
not spoken with [TR]. (Tr. 46.)
    Respondent testified that [TR] described [TR]'s condition as 
back pain, sciatica and severe pain; that [TR] had been on methadone 
for pain; and that Respondent reviewed the pain management agreement 
with [TR] and subsequently placed [TR] on methadone with good 
results. (Tr. 171.)
    The patient file for [TR] indicates that [TR] signed a pain 
management agreement on June 10, 2009; that [TR] stated the reason 
for [TR]'s visits to Respondent was a need for a new doctor, to 
resolve ``a lot of female problems and back problems'' and for pain 
management of severe back and leg pain; that [TR] had a history of 
or complaints of back pain and arthritis; and that [TR] had received 
120 mg of methadone daily from a clinic. (Gov't Ex. 17.)

(f) Respondent's Possession of a Prescription Written in the Name 
of an Employee

    DI Dunn testified that [HM] was an employee of Respondent; that 
diazepam, written in [HM]'s name, was recovered when a search 
warrant was executed at Respondent's home. (Tr. 29.) DI Dunn related 
that he spoke with [HM] regarding the diazepam found in Respondent's 
home and that [HM] stated that Respondent asked if she could write a 
prescription in [HM]'s name and then take the medication back from 
[HM] because Respondent could not write prescriptions in her own 
name. (Tr. 29.)
    DI Dunn conceded that the sole basis for his conclusion that 
Respondent received a prescription written in [HM]'s name is [HM]'s 
statement and the recovery of the medication from Respondent's home. 
(Tr. 83.)

[[Page 41071]]

    DI Leakey testified to assisting in the execution of the search 
warrant at Respondent's residence; that a bottle containing 
approximately fifty tablets of diazepam was found in the master 
bedroom's bathroom medicine cabinet; and that DI Leakey participated 
in DI Dunn's interview of [HM]. (Tr. 99, 100, 105-06.) [HM] signed 
an unsworn, but witnessed statement indicating that [HM] became a 
patient of Respondent in November 2008; that [HM]worked for 
Respondent until April 2009; that in early March Respondent asked 
[HM] to fill a prescription for her for diazepam and for hormones 
because Respondent did not have time to see her own doctor; that 
[HM] filled at CVS the prescription written by Respondent and then 
provided the medication to Respondent. [HM]'s statement said ``I 
have never taken Valium ever . . . .'' (Gov't Ex. 11) (emphasis in 
original). [HM] concluded by stating, ``[a]fter the FBI did the 
search of [Respondent's] house she called me to tell me they found 
the Valium RX in my name & she told them that I kept it at work & it 
must have fallen in a box of files she brought home. She asked me to 
tell everyone that story.'' (Gov't Ex. 11 at 2.)
    A CVS pharmacy patient prescription record introduced in 
evidence by Respondent for [HM] indicates that [HM] received 10 mg 
diazepam quantity 10 on February 27, 2001, from Dr. [VS]. (Resp't 
Ex. 13.)
    Respondent testified that [HM] was initially a patient who had 
depression, generalized anxiety disorder, morbid obesity, severe 
rheumatoid arthritis and multiple back surgeries; and that [HM] was 
taking Xanax and Effexor for anxiety disorder. (Tr. 149; Resp't Ex. 
8.) Respondent also testified that [HM] was scheduled for back 
surgery, in preparation for which Respondent was transitioning [HM] 
from Xanax to Valium, which she considered to be a safer medication 
and which was the reason Respondent wrote [HM] the prescription for 
Valium. (Tr. 150.)
    Respondent further testified that [HM] brought into the office 
the Valium written to [HM] by Respondent and left the bottle sitting 
on a desk in a room that was being painted; that Respondent, upon 
seeing a painter in the room with the unsecured medication, feared 
the medication would be stolen and placed the bottle in her lab coat 
pocket; Respondent then took her lab coat home and likely placed it 
in the laundry, as she typically does; Respondent has no further 
recollection regarding the whereabouts of the medication. (Tr. 153.)
    Respondent explained that her relationship with [HM] 
deteriorated because [HM] intended to sue Respondent over a medical 
procedure performed by another doctor in Respondent's office. (Tr. 
154.)
    Debra Allinger testified that she worked in Respondent's office 
from March until August 2009; that on her second day of work she was 
asked to clean out [HM]'s belongings from an office that was to be 
painted; and that upon seeing a prescription bottle in the office, 
she told Respondent, who then put the bottle in her lab coat. (Tr. 
297.)
    Shelley Franks-Chapa testified that she was employed by 
Respondent from February 2009 to about June 2009, and began 
employment before February 14, 2009. (Tr. 310, 319.) Ms. Franks-
Chapa further testified that she was familiar with an employee named 
[HM], also known as [GM]. (Tr. 312.) Ms. Franks-Chapa recalled being 
present in Respondent's office on an unknown date but during her 
period of employment, and overheard [HM] ask that her prescription 
of Valium be faxed out. (Tr. 312.) Ms. Franks-Chapa further recalled 
on cross-examination that the conversation took place in an end 
office which was about to be painted within a few days and that [HM] 
was present in the office working. (Tr. 316-17.)

(g) The DEA's Accountability Audit of Respondent's Practice and 
Respondent's Handling of Controlled Substances

    DI Dunn testified that in May 2008, he launched an investigation 
of Respondent based on theft and loss reports related to the theft 
or loss of experimental fentanyl; the investigation revealed reports 
had not been completed properly, DI Dunn instructed Respondent as to 
the proper filing of the report form and no further action was taken 
and that investigation was unrelated to the instant matter. (Tr. 17, 
55.) DI Dunn has been trained in how to conduct an audit at a 
registered location. (Tr. 16.) DI Dunn testified that he obtained 
Respondent's Demerol log from the FBI, who seized the log pursuant 
to an April 2009 search warrant. (Tr. 48.)
    Respondent testified she believed that an employee, Marie Lopez, 
was stealing or forging prescriptions so she eventually fired Ms. 
Lopez. (Tr. 115, 116.) Respondent further testified that she 
believes that Ms. Lopez stole the fentanyl that was reported to the 
DEA as lost. (Tr. 196.)
    Respondent described how, after the first theft from her office, 
she acquired two safes for the Mesa Drive location and placed one 
under the sink in the triage room and one in Respondent's office. 
(Tr. 119.) Respondent explained that some Schedule IV controlled 
substances were stored in cabinets in the triage room and that 
Suboxone, Demerol, probably Ambien, and sometimes Provigil, were 
stored in a safe under the sink, but that some Provigil was in the 
cabinet. (Tr. 192.) Respondent further testified that she believed 
that the safe in the triage room was opened with both a combination 
and a key and that Respondent did not have a key to the safe but a 
member of her clinical staff would keep the key during the day, and 
lock the key in the triage room at night. Respondent maintained the 
key to the triage room and was always the last person out of the 
office at night. (Tr. 193.) Respondent further explained that in 
late 2008, her office was broken into and a safe containing 
triplicate prescriptions and possibly two bottles of Suboxone was 
stolen; and Respondent reported the theft to the local police and 
the DEA. (Tr. 119, 196 & 199.)
    Respondent testified her office procedure for documenting the 
receipt of controlled substances was as follows: certain employees 
were authorized to receive delivery of medications or office 
supplies; all medications were taken to the triage room, where there 
was a safe for storing controlled substances, and the delivery 
receipt was placed in the appropriate manual for the particular 
medication. (Tr. 120, 205.) Respondent further testified that 
because fentanyl was part of an investigational study, the 
medication was signed into a book upon receipt; each pill was 
counted by an independent person who was part of the investigational 
study. (Tr. 120.)
    Respondent further testified that when her safe was stolen in 
late 2008, the Suboxone manual was damaged and Respondent later 
requested that Dendrite (a pharmaceutical supply company), send 
copies of receipts of all deliveries of Suboxone to her office. (Tr. 
121, 123; Resp't Ex. 11.) Respondent then obtained from Community 
Pharmacy copies of receipts of medical supplies ordered by her 
office. (Resp't Ex. 9.)
    Respondent testified that she typically purchased Demerol 
through Community Pharmacy and she requested copies of receipts from 
Community Pharmacy in an effort to account for the Demerol in her 
office. (Tr. 125.) Respondent testified that when she moved her 
practice from 7851 South I-35 East to 431 Mesa Drive, scheduled 
medications were destroyed, not moved. (Tr. 200.)
    DI Dunn testified that an audit occurred after search warrants 
were executed on Respondent's registered and unregistered locations 
and home in April 2009, and that he did not participate in the 
execution of the search warrants. (Tr. 20, 33.) DI Dunn further 
testified that at a later time, he conducted an audit of 
Respondent's Suboxone 8 mg for the period beginning July 18, 2008, 
and ending April 9, 2009; the audit was conducted from materials 
located at DEA and FBI offices, based on Respondent's inventory 
records and dispensing logs that were seized pursuant to the 
execution of search warrants at Respondent's office; as well as from 
distributor records, ARCOS records, and a count of drugs that were 
identified during the execution of the search warrants; and 
approximately fifteen bottles of Suboxone were found to be missing. 
(Tr. 36; see Gov't Ex. 4.) DI Dunn testified that he had no 
recollection of seeing a report regarding, or being informed of, a 
break-in at Respondent's office. (Tr. 64.)
    DI Dunn testified that Respondent had records indicating the 
dispensing of Demerol but not the receipt; because Demerol is a 
Schedule II controlled substance, it can only be transferred between 
registrants pursuant to a DEA Form 222, which Respondent did not 
have; and that DI Dunn did not request Respondent's DEA Form 222 
because he was not present when the search warrant was executed. 
(Tr. 35, 65.)
    DI Chalmers testified that she was present at the execution of 
the search warrant at Respondent's practice location; she conducted 
a search in the medication room and a location in the back of that 
room that may have been Respondent's office; DI Chalmers found 
controlled substances (Suboxone, Provigil, and possibly Ambien) in 
an unlocked cabinet; she inventoried but did not seize the 
controlled substances that she found; and that drug logs were among 
the documents seized from the medication room. (Tr. 92-93.)
    Respondent further testified she did not recall having copies of 
DEA Form 222 for Demerol at the time of the April 2009 search,

[[Page 41072]]

stating ``I would guess that we did, but I'm not going to . . . .'' 
\24\ (Tr. 126-27.) Respondent explained that during the relocation 
from the Corinth office to the temporary Denton office, medications 
were not transferred, so she ``didn't have those little DEA 222s, so 
I really didn't purchase any scheduled medications during that brief 
period of time.'' After moving to the permanent office ``on Mesa, we 
had to get those little 222s, because we . . . had to order them.'' 
(Tr. 197.)
---------------------------------------------------------------------------

    \24\ Respondent's answer on direct examination was interrupted 
by Respondent's counsel, with a question on a different topic.
---------------------------------------------------------------------------

IV. The Parties' Contentions

A. The Government

    The Government first contends that there is ``no viable DEA 
registration to revoke in the matter'' because Respondent failed to 
file a renewal application and her registration expired by its terms 
on August 31, 2010. The Government argues that any discussion 
regarding revocation of Respondent's DEA registration is moot 
because Respondent does not currently possess a valid DEA 
registration. In the alternative, the Government argues that if the 
Deputy Administrator finds that collateral consequences require the 
issuance of a Final Order, then the Deputy Administrator should 
affirm the immediate suspension order on the grounds that 
Respondent's continued registration is inconsistent with the public 
interest.
    The Government argues, in substance, that Respondent's 
``experience in dispensing controlled substances and record of 
compliance with applicable controlled substances laws is abysmal.'' 
(ALJ Ex. 16, 10.) The Government supports its position with 
allegations that Respondent dispensed a controlled substance 
prescription for other than a legitimate medical purpose; Respondent 
prescribed a Schedule II controlled substance for the purpose of 
opioid addiction treatment; Respondent acted as a reverse 
distributor without proper authorization by accepting from patients 
and destroying controlled substances; Respondent illegally possessed 
controlled substances at an unregistered location; an accountability 
audit revealed that approximately fifteen bottles of Suboxone were 
missing from Respondent's office; and Respondent's substandard 
record-keeping prevented the DEA from performing audits of 
additional controlled substances.

B. Respondent

    Respondent argues, in substance, that she has never previously 
been the subject of ``an allegation related to the manufacture, 
distribution or dispensing of controlled substances'' and Respondent 
has no conviction record under State or Federal law. Respondent 
further contends that although the DEA has suggested that 
Respondent's arrest in Denton County, Texas, should be considered in 
determining whether Respondent's DEA COR should be revoked, this 
fact should not be considered because it did not result in an 
indictment or conviction and because 21 U.S.C. 824(a) was never 
meant to apply to physicians in this circumstance.\25\ (ALJ Ex. 17, 
12.)
---------------------------------------------------------------------------

    \25\ I have specifically given no weight and find no relevance 
to any references or suggestions about ``arrests,'' ``criminal 
search warrants'' or similar statements appearing in this record.
---------------------------------------------------------------------------

    Respondent next contends that Respondent did notify the local 
DEA of her change of address and was unable to complete an attempt 
to ``change the national registration database,'' and Respondent 
reasonably believed that she had complied with the DEA regulations 
regarding address changes. (ALJ Ex. 17, 14.)
    With regard to the unauthorized prescribing of a Schedule II 
controlled substance for the purpose of treating opioid addiction, 
Respondent contends that the allegation applies to only one 
prescription and that Respondent was within the standard of care for 
prescribing such medication and did not violate any laws because 
Respondent provided the methadone prescription for pain management, 
which Respondent documented.
    Respondent also contends that she did not take a patient or 
employee's Valium for her own use. Respondent asserts that she came 
into possession of the medication because she found the medication 
in the open and attempted to secure it; and that she subsequently 
forgot about the medication, which eventually ended up in her home, 
in her laundry pile.
    Respondent argues that although the DEA contends that Respondent 
failed to properly maintain logs and receipts for controlled 
substances, the DEA never asked to review her controlled substances 
logs and never asked Respondent to provide receipts.
    Respondent finally contends that a finding that Respondent's 
continued registration would be inconsistent with the public 
interest, would not be consistent with the finding of the state 
licensing authority, which refused to suspend or revoke Respondent's 
medical license, and that Respondent has at all times ``remained 
compliant with State and Federal law in her practice of medicine and 
prescribing controlled substances.'' (ALJ Ex. 17, 16.)

V. Discussion and Conclusions

A. The Applicable Statutory and Regulatory Provisions

    The Controlled Substances Act provides that any person who 
dispenses (including prescribing) a controlled substance must obtain 
a registration issued by the DEA in accordance with applicable rules 
and regulations.\26\ ``A separate registration shall be required at 
each principal place of business or professional practice where the 
applicant . . . dispenses controlled substances.'' \27\ DEA 
regulations provide that any registrant may apply to modify his 
registration to change his address but such modification shall be 
handled in the same manner as an application for registration.\28\
---------------------------------------------------------------------------

    \26\ 21 U.S.C. 822(a)(2).
    \27\ 21 U.S.C. 822(e).
    \28\ 21 CFR 1301.51.
---------------------------------------------------------------------------

    It is unlawful for any person to possess a controlled substance 
unless that substance was obtained pursuant to a valid prescription 
from a practitioner acting in the course of his professional 
practice.\29\ A registered individual practitioner is required to 
maintain records of controlled substances in Schedules II through V 
that are dispensed and received, including the number of dosage 
units, the date of receipt or disposal, and the name, address and 
registration number of the distributor.\30\
---------------------------------------------------------------------------

    \29\ 21 U.S.C. 844(a).
    \30\ 21 CFR 1304.03(b), 1304.22(a)(2)(ix), 1304.21(a), 
1304.22(c) & 1304.22(a)(2)(iv).
---------------------------------------------------------------------------

B. Statement of Law and Discussion

    The Controlled Substances Act, at 21 U.S.C. 824(a)(4), provides, 
insofar as pertinent to this proceeding, that the Deputy 
Administrator may revoke a COR if she finds that the continued 
registration would be inconsistent with the public interest as that 
term is used in 21 U.S.C. 823(f).\31\
---------------------------------------------------------------------------

    \31\ 21 U.S.C. 824(a)(4).
---------------------------------------------------------------------------

    Pursuant to 21 U.S.C. 823(f), the Deputy Administrator may deny 
an application for a DEA COR if she determines that such 
registration would be inconsistent with the public interest. In 
determining the public interest, the Deputy Administrator is 
required to consider the following factors:
    (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.

    As a threshold matter, the factors specified in Section 823 (f) 
are to be considered in the disjunctive: the Deputy Administrator 
may properly rely on any one or a combination of those factors, and 
give each factor the weight she deems appropriate, in determining 
whether a registration should be revoked or an application for 
registration denied. See David H. Gillis, M.D., 58 FR 37,507, 37,508 
(DEA 1993); see also D & S Sales, 71 FR 37,607, 37,610 (DEA 2006); 
Joy's Ideas, 70 FR 33,195, 33,197 (DEA 2005); Henry J. Schwarz, Jr., 
M.D., 54 FR 16,422, 16,424 (DEA 1989).
    Additionally, in an action to revoke a registrant's COR, the DEA 
has the burden of proving that the requirements for revocation are 
satisfied.\32\ The burden of proof shifts to Respondent once the 
Government has made its prima facie case. Medicine Shoppe--
Jonesborough, 73 FR 364 (DEA 2008); see also Thomas Johnston, 45 FR 
72,311 (DEA 1980).
---------------------------------------------------------------------------

    \32\ 21 CFR 1301.44(e) (2010).
---------------------------------------------------------------------------

C. The Factors To Be Considered

Factor 1: The Recommendation of the Appropriate State Licensing Board

    As described in the Procedural Section of these Recommended 
Rulings, Respondent does hold a valid state medical license but 
Respondent's state controlled substances

[[Page 41073]]

registration has been suspended. Respondent, therefore, does not 
possess valid authority to handle controlled substances in the 
jurisdiction in which she is registered. Given that the Texas 
authorities relied exclusively on the DEA action to suspend 
Respondent's state authority, however, Respondent's lack of such 
authority is not dispositive and has no relevance in determining 
whether Respondent's continued registration would be inconsistent 
with the public interest.
    There is evidence, however, that the Texas Medical Board has 
taken prior action against Respondent's medical license. Although 
the Government presented no evidence regarding the matter, 
Respondent did testify that she has been disciplined by the Texas 
Medical Board on three prior occasions: 1) in December 2000, 
Respondent was cited for substandard chart documentation resulting 
in a monetary fine, chart monitoring, and eight hours of continuing 
education in medical recordkeeping; 2) Respondent received a 
monetary fine for failure to timely notify the Texas Medical Board 
of the relocation of her practice from the City of Corinth to the 
City of Denton; and 3) in March or April 2009, Respondent received a 
monetary fine in relation to missing fentanyl. (Tr. 186-87.)
    Although no additional detail is available, the Texas Medical 
Board action taken against Respondent with regard to Respondent's 
failure to timely notify the Texas Medical Board of the relocation 
of her practice appears to be similar to Respondent's failure to 
notify the DEA of a subsequent change of practice location. 
Accordingly, the fact that Respondent was previously disciplined by 
the Texas Medical Board does weigh in favor of revocation.
    It is important to also note that the Texas Medical Board did 
temporarily suspend Respondent's medical license on August 19, 2009, 
and reinstate Respondent's medical license on October 16, 2009; the 
evidence indicates that Respondent's Texas medical license is 
currently active. The August 19, 2009, suspension order referenced 
the suspension action taken by the DEA; however, the order also 
referenced numerous other grounds which were apparently unrelated to 
the grounds upon which the DEA issued the OSC/IS; specifically, the 
Texas order addressed issues related to the issuance of 
prescriptions to Respondent's patients by another physician. (Gov't 
Ex. 6, 7.)
    These issues were not raised in the OSC/IS but were addressed in 
the Government's Prehearing Statement. At hearing, however, the 
Government did not elicit testimony regarding the issues related to 
prescriptions written by another physician but did submit some 
limited documentary evidence on the matter. (See Gov't Ex. 3, 6 & 
7.) The documentary evidence provided is not sufficient to warrant a 
review of an issue which the Government has failed to adequately 
pursue in the proceeding and the issue, therefore, will not be 
considered further.
    The Texas Medical Board's October 16, 2009 Order reinstating 
Respondent's Texas medical license offers little substantive insight 
with regard to its own factual findings, which were found to be 
inconclusive. ``The Panel is unable to determine from the evidence 
presented that Respondent is a continuing threat to the health of 
Respondent's patients or a continuing threat to the public. . . .'' 
(Gov't Ex. 7.) Accordingly, the action and findings of the Texas 
Medical Board do not significantly weigh for or against Respondent 
with regard to the temporary suspension and later reinstatement. The 
current active status of Respondent's Texas medical license does, on 
balance, weigh against a finding that Respondent's continued 
registration would be inconsistent with the public interest.

Factor 3: Respondent's Conviction Record

    There is no evidence that Respondent has ever been convicted 
under any federal or state laws relating to the manufacture, 
distribution or dispensing of controlled substances. I therefore 
find that this factor, although not dispositive, weighs against a 
finding that Respondent's continued registration would be 
inconsistent with the public interest.

Factors 2 and 4: Respondent's Experience in Handling Controlled 
Substances; and Compliance with Applicable State, Federal, or Local 
Laws Relating to Controlled Substances

    In this case, there is no evidence that, prior to any action 
related to this matter, Respondent has failed to remain in 
compliance with applicable federal laws relating to controlled 
substances. The testimony and evidence does reveal, however, that 
Respondent failed to properly notify the DEA that she relocated her 
practice from her registered location to a new unregistered 
location, in violation of both state and federal law.\33\ There is 
no evidence that, prior to the current circumstances, Respondent has 
failed to comply with the Controlled Substances Act. The Respondent 
has admitted to a March or April 2009, Texas Medical Board monetary 
fine in relation to missing fentanyl. There is no other independent 
evidence of record relating to the circumstances surrounding that 
issue.
---------------------------------------------------------------------------

    \33\ Any registrant may apply to modify his or her registration 
to change his or her name or address, by submitting a letter of 
request to the Registration Unit, Drug Enforcement Administration, 
Department of Justice, Post Office Box 28083, Central Station, 
Washington, DC 20005. Cf. 21 CFR 1301.14 (2010). The request for 
modification shall be handled in the same manner as an application 
for registration. 21 CFR 1301.12 et. seq.; see also 37 Tex. Admin. 
Code Sec.  13.23 (2010).
---------------------------------------------------------------------------

(a) Respondent's Registered Location

    It is undisputed that Respondent relocated her practice from her 
registered location, 4851 I-35 East, Suite 101, Denton, Texas 76210 
(I-35 office), to a new location, 4310 Mesa Drive, Denton, Texas 
76207 (Mesa office), on or around February 1, 2009. Respondent 
testified that she relocated her practice to the Mesa office because 
she was evicted from the I-35 office in late 2008.\34\ Respondent 
maintains that she did not move controlled substances or acquire 
controlled substances for use at her temporary Collier street 
location. (Tr. 197-98.) The evidence does indicate, however, that 
Respondent did possess and distribute controlled substances from the 
unregistered Mesa office during the period beginning approximately 
February 1, 2009, and ending with the issuance of the OSC/IS on 
August 4, 2009.
---------------------------------------------------------------------------

    \34\ Respondent testified that all controlled substances that 
remained at the I-35 location were destroyed, not relocated.
---------------------------------------------------------------------------

    Federal law requires every person who dispenses any controlled 
substance to obtain a registration from the Attorney General.\35\ 
Additionally, a separate registration must be obtained for each 
principal place of practice where an applicant dispenses controlled 
substances and a registrant must report any change of address by 
applying to modify his or her registration to change his/her 
address, which shall be treated as an application for 
registration.\36\ The CFR clearly states the procedures a registrant 
must follow to request a change in the registered address.\37\
---------------------------------------------------------------------------

    \35\ 21 U.S.C. 822(a)(2).
    \36\ 21 U.S.C. 822(e), 827(g); 21 CFR 1301.51 (2010).
    \37\ See 21 CFR 1301.51 (2010).
---------------------------------------------------------------------------

    In this case, the evidence indicates that Respondent failed to 
modify her registration to update her Mesa office practice address. 
Respondent testified she believed that she properly notified the DEA 
of her new address when she requested certain documents be sent to 
her new location. The evidence of record reflects that Respondent 
has previously successfully modified the address of her registered 
location at least three times \38\ and therefore Respondent was 
fully aware of the proper procedure for requesting an address 
change. (Gov't Ex. 2.) Additionally, there was no evidence presented 
at hearing confirming that Respondent has even yet successfully 
updated the address of her practice location.
---------------------------------------------------------------------------

    \38\ August 21, 2001; March 11, 2003; and September 16, 2004.
---------------------------------------------------------------------------

    The search warrant executed by the FBI and the DEA in April 2009 
reflected the presence of controlled substances from Respondent's 
unregistered Mesa Drive location. I therefore find that Respondent 
failed to properly notify the DEA of the change in address of her 
registered location and Respondent possessed and dispensed 
controlled substances from an unregistered location, in violation of 
21 U.S.C. 822(e) and 827(g) and 21 CFR 1301.51.
    In mitigation, the Respondent's actions with regard to notifying 
DEA do not appear to be intentionally deceitful, because the 
Respondent credibly testified that she notified the Texas DPS of her 
new Mesa office address, and no other evidence of record was offered 
by either party at hearing to the contrary. (Tr. 161-64.) Respondent 
also introduced as evidence prescription pads which reflected the 
address of 4310 Mesa Drive, Denton, Texas. (Resp't Ex. 5.) Clearly 
the evidence as a whole is consistent with Respondent's testimony 
that the failure to update her new address was due to an omission, 
notwithstanding the evidence of neglect by Respondent to ensure it 
had been properly done.

(b) Respondent's Issuance of Methadone to Opioid-Addicted Patients

    The Government provided evidence, which Respondent corroborated, 
that Respondent

[[Page 41074]]

prescribed methadone to three (3) opioid-addicted patients \39\ who 
were previously treated at an addiction treatment center. The 
Government, however, further alleged that Respondent's treatment of 
these patients amounted to the unauthorized treatment of narcotic-
dependent patients by prescribing Schedule II controlled substances 
for the purpose of treating opioid addiction, which is inconsistent 
with 21 U.S.C. 823(g)(1) and 21 CFR 1306.04(c).
---------------------------------------------------------------------------

    \39\ Referred to herein as [JF], [MM] and [TR].
---------------------------------------------------------------------------

    Federal law requires a separate registration for 
``[p]ractitioners who dispense narcotic drugs to individuals for 
maintenance treatment or detoxification treatment . . . .'' \40\ A 
practitioner may, however, ``lawfully prescribe methadone to a 
patient for pain management purposes under his practitioner's 
registration.'' Tony T. Bui, M.D., 75 FR 49,979 (DEA 2010) (citing 
21 U.S.C. 823(f)). The Government presented evidence indicating that 
Respondent prescribed methadone to three patients who were 
previously treated with methadone at an addiction treatment center. 
(Gov't Exs. 12-14, 16-18.) The Government contends in part that 
Respondent was providing opioid addiction treatment because each of 
the three patients were already taking methadone when they first 
became patients of Respondent, and that each patient previously 
received methadone from a methadone clinic. This alone does not 
amount to substantial evidence indicating that Respondent was 
improperly prescribing a Schedule II controlled substance for the 
purpose of opioid addiction treatment.
---------------------------------------------------------------------------

    \40\ 21 U.S.C. 823(g) (2006).
---------------------------------------------------------------------------

    Although the documentary evidence does indicate an opioid 
addiction in each of the three patients, this evidence consists of 
unsworn statements from patients [JF] and [MM], along with medical 
records relating to the three patients, which must be weighted 
accordingly. The allegation of improper prescribing of methadone is 
unsubstantiated by the documentary evidence and was, in fact, 
refuted by Respondent's expert witness; and, in each instance, 
Respondent has established an underlying purpose of pain management. 
``While methadone is approved by the FDA, and has long been used, 
for the treatment of opioid addiction . . . the drug is also 
approved for the treatment of pain.'' Bui, 75 FR at 49,988. 
Moreover, the record contains no expert evidence showing that 
Respondent's prescribing of methadone was inconsistent with accepted 
medical practice for prescribing the drug for pain management.
    The Government bears the burden on the issue of whether 
Respondent's prescribing of methadone ``was for the purpose of 
treating opioid addiction'' and not as part of an accepted medical 
practice for pain management. Similar to Bui, the Government has 
presented no expert evidence indicating such and relies solely on 
hearsay and unsworn statements. Respondent has testified that the 
treatment of the three patients in question was for pain management 
related to a number of underlying medical conditions, which are 
objectively documented in the medical records introduced at hearing 
by both parties. Additionally, the Respondent presented expert 
testimony from a medical doctor with experience treating chronic 
pain, even though not formally certified in pain management.
    In Calhoun v. Bailar, 626 F.2d 145 (9th Cir. 1980), the court 
found that to constitute substantial evidence the probative value 
and reliability of hearsay evidence may be analyzed using many 
factors, such as: a consideration regarding the independence or 
possible bias of the declarant; the type of hearsay material 
presented; whether the statements are signed and sworn or anonymous, 
oral or unsworn; whether the statements are contradicted by direct 
testimony; whether the declarant is available to testify and, if so, 
whether the objecting party subpoenas the declarant or whether the 
declarant is unavailable and no other evidence is available; the 
credibility of the witness testifying to the hearsay; and whether or 
not the hearsay is corroborated. Id. at 149; see also Richardson v. 
Perales, 402 U.S. 389, 402-06 (1971).
    DI Dunn credibly testified at hearing that his investigation 
revealed that Respondent treated several patients who previously had 
been treated for narcotic addiction at the Denton Treatment Center. 
DI Dunn obtained unsworn statements from two of those patients, [JF] 
and [MM], both indicating in substance that they did not consult 
Respondent for the purpose of pain management. That testimony and 
evidence, however, does not carry much weight based on the factors 
set forth in Calhoun.
    The written patient statements presented by the Government were 
unsworn; there is no evidence that an attempt was made to subpoena 
the witnesses, and the Government provided no indication that the 
witnesses were unavailable to testify; no evidence was offered to 
explain why the statements were unsworn; there was no evidence 
presented to indicate whether the declarant witnesses are credible; 
and the statements provided are not corroborated by other record 
evidence.
    For example, the patient files specifically refer to a number of 
objective medical findings and diagnoses that are inconsistent with 
the unsworn statements. In the case of [MM], the medical file 
reflects entries from April to August 2009, including patient 
complaints of osteoporosis left shoulder and leg; back, shoulder and 
leg pain at level seven, among other complaints; and diagnoses of 
chronic back pain; arthritis; opioid addiction; anxiety; depression; 
and weight management, among others; as well as positive physical 
findings on examination to include lumbosacral back pain. (Gov't Ex. 
16.) In the case of [TR], the medical file reflects entries from 
June to August 2009, including patient complaints of back and left 
knee pain; ``lumbosacral back pain from scoliosis for several years. 
Pain 10/10 without meds.'' (Gov't Ex. 17, at 35.) The file reflects 
diagnoses of chronic back pain; left knee arthritis; anxiety; and 
depression, among others; as well as positive physical findings on 
examination to include positive lumbosacral back pain and bilateral 
hip pain, among other findings. (Gov't Ex. 17.) In the case of [JF], 
the medical file reflects entries from January to February 2009, 
including patient complaints of chronic pain complicated by history 
of opioid dependence resulting from chronic arthritic pain in the 
neck, back and left knee. Diagnoses included arthritis in the 
cervical and lumbar spine, chronic pain syndrome, and opioid 
dependence, among other findings.
    In addition to the patient files, the unrebutted testimony and 
expert opinion of Dr. Babuji support a finding that the methadone 
was prescribed for pain management, not for opioid addiction. 
Although the Government did object to the testimony of Dr. Babuji at 
hearing on the grounds that he was not ``proffered as an expert,'' 
\41\ that objection is misplaced.\42\ The Government further argues 
in its post-hearing brief that Dr. Babuji's testimony be given no 
weight because he ``was not tendered and/or accepted as an expert 
witness . . . [and] [t]here is no indication from his testimony that 
[he] has any experience in pain management or addiction treatment.'' 
(ALJ Ex. 16, 6.) To the contrary, Respondent indicated in her 
Prehearing Statements that she was offering the witness as an 
expert, and I so find. Additionally, Dr. Babuji's testimony 
specifically included an admission that he was not certified in pain 
management, but he based his testimony in part on his experience 
treating his own patients with conditions of pain.
---------------------------------------------------------------------------

    \41\ (Tr. 288.)
    \42\ The Government offers no authority in support this 
argument. While Respondent did offer Dr. Babuji as an expert 
witness, there is no formal requirement to either ``offer'' or 
``accept'' an expert witness during hearing. See United States v. 
Johnson, 488 F.3d 690, 697-98 (6th Cir. 2007) (frowning on the 
practice of labeling the witness as an ``expert'' in the presence of 
the fact finder); see also United States v. Rice, No. ACM 30231, 
1994 WL 164477 at *1 (AFCMR Apr. 22, 1994) (noting ``no requirement 
in either military or federal practice mandating that an expert 
witness be tendered (offered) and accepted before providing expert 
testimony.'')
---------------------------------------------------------------------------

    I find that Dr. Babuji was adequately proffered as an expert and 
I have evaluated his testimony as an expert witness with regard to 
the standard of care in treating patients with pain management 
conditions. Dr. Babuji is clearly qualified to testify regarding the 
general standard of care and treatment of patients with pain 
management issues, based on his education, training, and experience 
over twenty years, including practicing cardiology, internal 
medicine and primary care for the last three years in Dallas, Texas. 
(Tr. 265.)
    Dr. Babuji's demeanor was serious and forthright throughout his 
testimony. The evidence reflected that Dr. Babuji has known the 
Respondent for between two and three years, having done cardiology 
consults in her Denton, Texas office approximately once per week. 
(Tr. 270.) Dr. Babuji's appearance and testimony at hearing was 
without benefit of financial compensation. On cross-examination the 
Government challenged the witness with regard to whether he had 
reviewed the entire [JF] file, suggesting that he had not, because 
the ``complete file . . . is approximately 700 to a thousand 
pages.'' \43\

[[Page 41075]]

While there may be some doubt as to the exact number of pages 
reviewed by Dr. Babuji with regard to the [JF] medical file, he 
credibly maintained that he had sufficient information available to 
support his conclusion, noting his review of hundreds of pages of 
the medical file including the discharge summary. There is no other 
evidence to suggest the witness had a bias or interest in the 
outcome of the case.
---------------------------------------------------------------------------

    \43\ Government counsel asked the witness: ``Would it surprise 
you to learn that the complete file regarding [JF]'s hospital visit 
is approximately 700 to a thousand pages?'' (Tr. 287.) The factual 
basis for this question remains a mystery, since no other medical 
records relating to [JF] were received in evidence other than 
Respondent's exhibit six. Respondent's exhibit seven relating to 
[JF] was withdrawn and the Government presented no case in rebuttal.
---------------------------------------------------------------------------

    I find that Dr. Babuji presented fully credible competent 
evidence within his stated area of expertise. The testimony is 
consistent with that presented by the Respondent, who credibly 
testified at hearing in detail as to the standard of care she used 
in treating the three patients at issue in this matter. The 
testimony of Dr. Babuji and the Respondent is also consistent with 
other documentary evidence of record including the relevant 
treatment records. Accordingly, I find that the Government has not 
established by a preponderance of the evidence that Respondent 
prescribed Schedule II controlled substances to patients for the 
purpose of treating opioid addiction in violation of 21 U.S.C. 
823(a)(1) and 21 CFR 1306.04(c).

(c) Respondent's Possession of a Prescription Written in the Name 
of an Employee

    The Government alleges that Respondent prescribed controlled 
substances for other than a legitimate medical purpose when she 
issued a prescription to a then-current employee and the controlled 
substance was later found in Respondent's home. Under DEA's 
regulations, a prescription for a controlled substance is unlawful 
unless it is ``issued for a legitimate medical purpose by an 
individual practitioner acting in the usual course of his 
professional practice.'' \44\
---------------------------------------------------------------------------

    \44\ 21 CFR 1306.04 (2010).
---------------------------------------------------------------------------

    At the hearing in this matter, the Government presented evidence 
consisting of photographs of a prescription bottle for diazepam 10 
mg, quantity 90, issued in the name of [HM], which DI Dunn testified 
was found in Respondent's bathroom medicine cabinet and which the 
DEA had tested; photographs of tablets; an unsworn statement by 
[HM]; and the testimony of DI Leakey, who assisted in the search of 
Respondent's residence and seizure of the [HM] prescription 
containing an estimated fifty (50) pills.\45\ Respondent provided 
evidence consisting of Respondent's medical records for [HM] and CVS 
pharmacy records for [HM] along with the testimony of Respondent, 
Debra Allinger and Shelley Franks-Chapa.
---------------------------------------------------------------------------

    \45\ (Gov't Ex. 11, 15; Tr. 29-31, 37-38, 99 & 105.)
---------------------------------------------------------------------------

    DI Dunn testified that [HM] was a patient and employee of 
Respondent and that the DEA found, in Respondent's home, a 
prescription bottle for diazepam issued in the name [HM]. (Tr. 29.) 
DI Dunn's testimony is supported by photographs of the prescription 
bottle and several loose pills along with the testimony of DI 
Leakey, and an unsworn statement from [HM].
    Respondent has not argued that the diazepam was not found in her 
home, although there may be some discrepancy regarding the last 
location where Respondent recalls seeing it; that the medication 
found was not actually diazepam; or that she did not authorize the 
prescription for [HM]. There is no dispute that the DEA did find in 
Respondent's home a prescription bottle containing diazepam issued 
in the name of [HM]. I therefore find no reason to provide less than 
full weight to the testimony of DI Dunn or DI Leakey that the 
prescription bottle of diazepam was found in a medicine cabinet in 
Respondent's home containing approximately fifty (50) pills. I do 
find reason, however, to provide less weight to the unsworn written 
statement of [HM] given the sworn testimony of Respondent, Debra 
Allinger and Shelley Franks-Chapa regarding the origin of the single 
Valium prescription at issue in this case.
    DI Dunn testified that he spoke with [HM] and that the statement 
[HM] gave him was consistent with the written statement provided by 
the Government. (Tr. 29; Gov't Ex. 11.) DI Dunn testified that [HM] 
told him that Respondent asked if [HM] could write a prescription in 
[HM]'s name and then get the medication back from [HM] because 
Respondent could not write a prescription to herself. (Tr. 29-30.) I 
find no reason to doubt the testimony of DI Dunn with regard to his 
interaction with [HM]. I do, however, find that, consistent with the 
factors set forth in Calhoun, [HM]'s statements are not reliable.
    Respondent's testimony indicated a possibility of bias of [HM] 
in that [HM] is a former patient and employee and the relationship 
between Respondent and [HM] ended badly. (Tr. 154.) Respondent 
testified that [HM] intended to initiate a lawsuit against her 
because of poor results from a medical procedure performed by 
another physician in Respondent's office. The accuracy of this 
testimony was uncontested and I find it otherwise credible. As a 
result of this prior dispute, [HM] would certainly have some 
interest or bias in the outcome of any proceeding related to 
Respondent's practice of medicine.
    [HM]'s statement is contradicted by objective evidence of 
record. [HM]'s statement asserts that [HM] has ``never taken Valium 
ever . . . .'' (Gov't Ex. 11) (emphasis in original). Respondent, 
however, submitted CVS pharmacy records for [HM] indicating that 
[HM] did fill a prescription on February 27, 2001, for 10 diazepam 
10 mg, written by Dr. [VS]. [HM] has, therefore, at least received a 
prescription for diazepam in the distant past thereby contradicting 
her statement that she has never taken Valium.\46\ The Government 
also implied that the Valium prescription for [HM] was written 
``before [Respondent] even had a patient consult with [GM].'' (Tr. 
320.) While Respondent's medical records for [HM] appear to support 
that implication, (see Resp't Ex. 8), a review of the record as a 
whole indicates otherwise.
---------------------------------------------------------------------------

    \46\ I take official notice from the 2007 edition of the 
Physicians' Desk Reference that Valium is a brand name product 
containing the Schedule IV controlled substance diazepam, a 
benzodiazepine derivative.
---------------------------------------------------------------------------

    Respondent's medical records for [HM] include a report of a 
consultation on February 6, 2009, which indicates that Respondent 
prescribed diazepam (Resp't Ex. 8.); [HM]'s prescription records, as 
provided by Respondent, indicate that the diazepam prescription was 
filled on February 8, 2009. (Resp't Ex. 13, at 3.) The Government 
has provided no evidence indicating the actual date that the 
prescription was written and is presumably relying on Respondent's 
testimony that the prescription was written on February 3, 2009. 
(See Tr. 221.) I find no need to determine the precise date upon 
which the diazepam prescription was actually written because there 
is evidence that Respondent had written prescriptions for [HM] as 
early as September 26, 2008, as evidenced by [HM]'s prescription 
records. (Resp't Ex. 13.) Given the fact that [HM] worked in 
Respondent's office and presumably had a patient-physician 
relationship with Respondent, the actual date upon which the 
prescription was written provides little or no value to the evidence 
regarding whether Respondent prescribed controlled substances for 
other than a legitimate medical purpose.
    [HM]'s statement is also contradicted by the testimony of 
Respondent, Debra Allinger and Shelley Franks-Chapa. [HM] stated 
that Respondent called her after the FBI searched her home and asked 
her to tell people that Respondent came into possession of the 
diazepam because [HM] kept the medication at work (presumably at 
Respondent's practice) and ``it must have fallen in a box of files 
she brought home.'' (Gov't Ex. 11.) Respondent and Ms. Allinger both 
credibly testified that [HM] left the medication sitting on top of a 
desk in a room that was being painted and that Respondent, after 
seeing the medication, retrieved it from the desk and placed it in 
the pocket of her lab coat. (Tr. 153, 297.) Additionally, Ms. 
Franks-Chapa testified that she witnessed [HM] requesting 
prescriptions for Valium.\47\ (Tr. 313.)
---------------------------------------------------------------------------

    \47\ It is unclear whether [HM] requested the prescription from 
Respondent or her nurse but the incident apparently occurred in 
Respondent's office. (Tr. 317.)
---------------------------------------------------------------------------

    Respondent objected at hearing to the admission of [HM]'s 
statement on the grounds that the statement was unsworn, constituted 
hearsay, and was unduly prejudicial because Respondent was not able 
to cross-examine the declarant. (Tr. 31.) Neither party has shown 
that [HM] was unavailable to testify and the Government has provided 
no explanation as to why [HM] was not made available as a witness. 
Neither party attempted to subpoena the witness. As the court 
recognized in Calhoun, however, a respondent cannot complain of an 
inability to cross-examine a witness with regard to a written report 
when the respondent has failed to exercise her right to subpoena the 
witness. That said, the absence of sworn testimony by [HM] at 
hearing, weighed against other credible sworn testimony and credible 
documentary evidence, significantly discredits the reliability and 
probative value of [HM]'s statement.

[[Page 41076]]

    I find [HM]'s unequivocal statements that [HM] had ``never'' 
taken Valium, ``ever,'' and that it was ``prescribed only this one 
time for her,'' were directly contradicted by objective uncontested 
evidence of a past prescription for Valium issued to [HM] and 
testimony by Ms. Franks-Chapa that she witnessed [HM] requesting a 
prescription for Valium. [HM]'s past adverse patient and employment 
history with Respondent also indicates [HM] had a reason to be 
biased against Respondent. In light of the foregoing, the unsworn 
statement of [HM], corroborated only by the prescription found at 
Respondent's home, is entirely discredited by the objective and 
sworn testimony to the contrary.
    Accordingly, I find that the Government has not established by a 
preponderance of the evidence that Respondent prescribed controlled 
substances for other than a legitimate medical purpose to a then-
current employee.

(d) The DEA's Accountability Audit of Respondent's Practice

    The Government alleges in the OSC/IS that an accountability 
audit ``performed at your office in April 2009, revealed . . . an 
unexplained shortage of approximately 13 bottles of Suboxone, or 390 
dosage units.'' The Government's Prehearing Statement filed on June 
15, 2010, further states that an

``accountability audit was conducted on the Suboxone 8mg for the 
period of July 1, 2008, through April 9, 2009. Respondent's records 
show dispensation of 38 bottles (1,140 dosage units) of Suboxone. 
There were 11 bottles present on-hand on the day of the search 
warrant. Therefore, Respondent could only account for 49 bottles 
(1,470 dosage units) of Suboxone, leaving a shortage of 13 bottles 
(390 dosage units unaccounted for based on the records.''

The Government's Prehearing Statement further stated in part that DI 
Chalmers would testify about the ``accountability audit conducted on 
the Suboxone . . . .''
    The Government's evidence at hearing with regard to the Suboxone 
audit consisted of a two page ARCOS \48\ Transaction History Report 
and the testimony of DI Dunn, reflecting an audit period of July 18, 
2008 to April 9, 2009. (Tr. 34-35.) DI Dunn's direct testimony 
regarding the audit is reflected in the following testimony:
---------------------------------------------------------------------------

    \48\ While neither party offered background information 
regarding ARCOS during hearing, it is noted that ``Registrants are 
also required to report records of sales or acquisitions of 
controlled substances in Schedules I and II, of narcotic controlled 
substances listed in Schedules III, IV and V, and of psychotropic 
controlled substances listed in Schedules III and IV with the DEA's 
Automation of Reports and Consolidated Orders System (ARCOS). 21 CFR 
1304.33(c); 21 U.S.C. 827(d). These reports must be filed every 
quarter not later than the 15th day of the month succeeding the 
quarter for which it is submitted. 21 CFR 1304.33(b).'' Easy Returns 
Worldwide, Inc. v. United States, 266 F. Supp. 2d 1014, 1016 (E.D. 
Mo. 2003).

    Q: Now how did you conduct your audit of Suboxone?
    A: With the Suboxone, she did have some records there that 
showed an inventory date. I used that date as a starting point from 
her own records. She had a log of dispensing of Suboxone, so I was 
able to utilize that as well. I then turned to ARCOS's subpoena and 
found out who the provider for the Suboxone was, the distributor, 
subpoenaed their records, used the ARCOS records, and then from 
account of the drugs that were on hand on the date of the search 
warrant, we were able to do an audit with those numbers on that one 
drug.

(Tr. 36.) DI Dunn testified that from the foregoing audit fifteen 
(15) bottles of Suboxone were missing, each containing thirty (30) 
pills, for a total loss of 450 pills. (Tr. 36.)
    DI Chalmers testified on direct examination that she 
participated in the FBI search of Respondent's practice location on 
Mesa Drive in April 2009, as DI Dunn was out of town and could not 
participate. DI Chalmers further testified that her responsibilities 
during the search were to speak with the Respondent and assist with 
the search warrant. DI Chalmers searched the ``medication room at 
the clinic and another location at the back of the room believed to 
be Respondent's office setting.'' (Tr. 92.) DI Chalmers testified 
that she did not conduct an audit on the Suboxone or other drugs 
found in the specific location that she searched, nor did she seize 
any of the controlled substances at that time. (Tr. 93.) DI Chalmers 
also testified that rather than conduct an audit, she did an 
inventory of the controlled substances ``that she encountered'' and 
also seized documents from the medication room, to include a drug 
log. While the evidence is clear that DI Chalmers did not seize any 
drugs, there is no evidence of record reflecting whether any drugs 
were seized from the premises or if all drugs present were 
inventoried, since DI Chalmers's role in the search was limited to a 
narrow location and purpose.
    The evidence of an audit in this case simply cannot support any 
credible findings of a shortage of Suboxone during the alleged time 
period. DI Dunn's testimony of a shortage of fifteen bottles of 
Suboxone as of the date of the April search appears to rest on the 
``account of the drugs that were on hand on the date of the search 
warrant'' compared with the data obtained from the ``ARCOS 
records,'' and records from the distributor.\49\ There was no 
documentary or testimonial evidence offered to indicate the search 
established an accurate count of the number of bottles of Suboxone 
present in Respondent's office, which is an essential component of 
the audit.\50\ The testimony by DI Chalmers clearly indicates that 
she only inventoried the controlled substances that she encountered 
and there is no evidence whatsoever as to the number of other agents 
participating in the search, what other agents encountered, the 
scope of the search or the identity and total inventory of 
controlled substances found during the search.\51\ There is no 
evidence of record to support the conclusions reached by DI Dunn 
regarding the audit, to include the details related to the search of 
Respondent's office, specific items seized or inventoried, the 
location of the items and related information as may be found in a 
search inventory.
---------------------------------------------------------------------------

    \49\ DI Dunn testified that he ``subpoenaed their records,'' 
meaning the distributor of the Suboxone. Government exhibit four 
indicates the source of the data is ARCOS rather than distributor 
records. DI Dunn was asked whether the subpoenaed distributor 
records ``matched up'' with the ARCOS report, and DI Dunn stated he 
``believed so.'' (Tr. 36-37.) Remarkably, the Government submitted 
no audit report or any other supporting documentation with regard to 
distributor records, drug inventory reports compiled at the time of 
the April 2009 search of Respondent's office, or any other related 
documentation to factually support the audit results. The only 
distributor evidence with regard to the Suboxone shipments was 
offered by the Respondent. Additionally, no testimonial or other 
evidence was offered with regard to the definition, source, or 
reliability of ARCOS data.
    \50\ It is noteworthy that the OSC/IS and Government's 
Prehearing Statement recited specifically that thirteen bottles of 
Suboxone were missing for a total dosage count of 390, differing 
from the testimony at hearing that fifteen bottles of Suboxone were 
missing for a total dosage count of 450.
    \51\ The evidence at hearing suggested that the scope of the 
April 9, 2009 search warrant did not specifically relate to the 
search and seizure of controlled substances from any of the 
premises, but rather involved the search and seizure of records. 
(Tr. 93, 105.)
---------------------------------------------------------------------------

    Additionally, the reliability of the audit results is further 
undermined by the distributer records. (See Resp't Ex. 11.) As an 
example, the ARCOS data reflected in Government exhibit four 
reflects a transaction date of October 28, 2008, for the shipment of 
three (3) bottles of Suboxone, thirty (30) dosage units each, for a 
total of ninety (90) dosage units, from the supplier Dendrite. An 
invoice from Dendrite with a process date of October 28, 2008, 
reflects a shipment of ``6 SUBOXONE SUBLINGUAL 8MG CIII TABLETS-30 
TABLETS PER BOTTLE.'' (Resp't Ex. 11, at 3 & 9.) While there may be 
an explanation for the discrepancy, none was offered at hearing nor 
is an explanation readily apparent from the limited evidence offered 
with regard to the audit. Evidence submitted by Respondent also 
indicates that some of the Suboxone shipments were returned during 
the relevant time period. (Resp't Ex. 11, at 4.)
    Other discrepancies exist but it is unnecessary to elaborate 
further. While I find the testimony of DI Dunn and DI Chalmers 
generally credible, the limited evidence offered by the Government 
at hearing related to the audit of Respondent's handling of Suboxone 
for the time period of July 18, 2008 to April 9, 2009, is so lacking 
in specificity and reliability that it cannot support any credible 
findings or constitute substantial evidence.\52\
---------------------------------------------------------------------------

    \52\ The Government's post-hearing brief (ALJ Ex. 16) states 
``DI Dunn's accountability audit of Suboxone is also uncontested.'' 
This ignores the fact that Respondent alleged in her Prehearing 
Statement discrepancies with the Suboxone audit. At hearing, 
Respondent further offered Respondent's exhibit eleven to rebut the 
audit results, which was admitted without objection. (Tr. 123.)
---------------------------------------------------------------------------

    Accordingly, I find that the Government has not established by a 
preponderance of the evidence that Respondent cannot account for 
``approximately 13 bottles of Suboxone or 390 dosage units.''

[[Page 41077]]

(e) DEA 222 Forms, Effective Controls and Disposal of Controlled 
Substances

    The Government alleges in the OSC/IS that Respondent's 
``dispensing log indicates that you dispensed other controlled 
substances, such as Demerol; however, you were unable to provide 
investigators with any records showing receipt of those controlled 
substances'' as required by 21 CFR 1304.21. The Government's 
Prehearing Statement further noticed: the absence of DEA 222 
Official Order Forms accounting for Demerol purchases, and no 
receiving or distribution records for Provigil; and the ``Narcotic 
Logbook also showed receipt of controlled substances returned to 
Respondent by patients that did not want the medication. This 
activity is not specifically authorized by Respondent's 
registration.'' \53\
---------------------------------------------------------------------------

    \53\ Gov't PHS, at 4.
---------------------------------------------------------------------------

    The DEA regulations require all applicants and registrants to 
provide ``effective controls and procedures to guard against theft 
and diversion of controlled substances.'' \54\ In determining 
whether there has been substantial compliance with the required 
security standards, the Deputy Administrator may consider a number 
of factors, including, but not limited to: the type and form of 
activity conducted; the quantity of controlled substances handled; 
the type of storage system used; the adequacy of key control 
systems; the adequacy of supervision over employees with access to 
storage areas; and the adequacy of the registrant's system for 
monitoring the receipt, distribution and disposition of controlled 
substances.\55\ A practitioner must store controlled substances 
listed in Schedules II-V in a ``securely locked, substantially 
constructed cabinet.'' \56\ Additionally, a registrant must ``notify 
the Field Division Office of the Administration in his area, in 
writing, of the theft or significant loss of any controlled 
substances within one business day of discovery of such loss or 
theft'' and complete a DEA Form 106 regarding the theft or loss.\57\
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    \54\ 21 CFR 1301.71 (2010).
    \55\ Id. 1301.71(b).
    \56\ Id. 1301.75(b).
    \57\ Id. 1301.76(b).
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    DEA regulations require a registrant to dispose of controlled 
substances consistent with procedures outlined in 21 CFR Sec.  
1307.21. There are no provisions in the regulations to allow a non-
registrant to return a controlled substance to a registrant. There 
is no factual dispute in this case, and the Respondent readily 
admitted in testimony, that on occasion controlled substances were 
returned and destroyed. An undated ``narcotic log'' introduced at 
hearing reflects the return of ``various'' medications during the 
month of December, although no year is indicated. (Gov't Ex. 10, at 
1.)
    The Respondent testified in substance that her office policy was 
that if a patient did not like the medication, or had a bad reaction 
to the medication, the patient could return it; ``we would count it, 
document it, destroy it'' and it ``didn't happen very often.'' (Tr. 
248.) There is no indication that this practice as described by 
Respondent was a frequent occurrence, and there is no evidence of 
any diversion of the controlled substances returned. In fact, the 
un-rebutted testimony of the Respondent is that they were destroyed.
    The testimony of Respondent and DI Chalmers provides evidence 
that Respondent did not properly secure all Schedule II-V controlled 
substances in a securely locked, substantially constructed cabinet. 
Although there is no evidence regarding the exact quantities of 
controlled substances maintained at Respondent's Mesa office, there 
is sufficient evidence in the form of Respondent's testimony, and 
that of DI Chalmers, to determine that Respondent did maintain 
possession of some controlled substances, including at least 
fentanyl and Suboxone. Additionally, given the credible testimony of 
both Respondent and DI Chalmers that some controlled substances were 
found in unlocked cabinets, it is apparent that Respondent did not 
store all Schedule II-V controlled substances in a securely locked, 
substantially constructed cabinet as required by applicable 
regulations. The fact that Respondent did not maintain control over 
the key to access her medication safe and was unfamiliar with the 
necessary procedure for opening the safe further indicates that 
Respondent also did not maintain an adequate key control system.
    Although the evidence indicates that Respondent did not follow 
adequate security procedures, the question remains as to whether 
that information can be considered in determining if Respondent's 
continued registration is consistent with the public interest. In 
order to comport with due process requirements, the DEA 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.'' CBS Wholesale 
Distributors, 74 FR 36,746 (DEA 2009) (citing NLRB v. I.W.G., Inc., 
144 F.3d 685, 688-89 (10th Cir. 1998); Pergament United Sales, Inc., 
v. NLRB, 920 F.2d 130, 134 (2d Cir. 1990)). The DEA has previously 
held that an issue cannot be the basis for a sanction when the 
Government has failed to ``disclose `in its prehearing statements or 
indicate at any time prior to the hearing' that an issue will be 
litigated.'' Id. at 36,750 (citing Darrell Risner, D.M.D., 61 FR 728 
(DEA 1996)). The DEA has also previously found, however, that a 
respondent may waive his objection to admission of evidence not 
noticed by the Government prior to the hearing when a respondent 
does not timely object and when the respondent also raises the issue 
himself. Gregory D. Owens, D.D.S., 74 FR 36,751, 36,755 (DEA 2009).
    In the instant matter, the Government did not raise the issue of 
security controls in the OSC or in its Prehearing Statement. In 
fact, the Government first raised the issue of Respondent's security 
controls during the direct examination of DI Chalmers. The 
Government asked DI Chalmers whether Respondent's storage cabinets 
were locked and if they were capable of being locked. (Tr. 94.) 
While it is true that Respondent did not object to the line of 
questioning, and offered some testimony on direct examination with 
regard to controlled substances kept locked in safes, Respondent's 
primary testimony regarding the issue was raised during the 
Government's cross-examination of Respondent.
    I therefore find that the Government did not provide Respondent 
with adequate notice regarding Respondent's security control 
measures and that the issue cannot serve as a basis for determining 
whether Respondent's continued registration would be inconsistent 
with the public interest.\58\
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    \58\ In this case, even assuming, arguendo, that I were to 
consider this additional evidence of security control measures with 
regard to an appropriate sanction, I would not find the additional 
facts to warrant revocation.
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    The Government also alleges that Respondent failed to 
effectively monitor the receipt and distribution of controlled 
substances because Respondent did not maintain an effective 
recordkeeping system in accordance with 21 CFR Sec. Sec.  
1304.03(b), 1304.04, 1304.11, 1304.21 and 1304.22(c). This 
substantive issue was noticed in the OSC/IS and in subsequent 
Prehearing Statements.
    Pursuant to 21 CFR Sec. Sec.  1304.03(b), 1304.22(a)(2)(ix), 
1304.21(a), 1304.22(c) and 1304.22(a)(2)(iv), a registered 
individual practitioner is required to maintain records of 
controlled substances in Schedules II-V that are dispensed and 
received, including the number of dosage units, the date of receipt 
or disposal, and the name, address and registration number of the 
distributor. It is unlawful to fail to make, keep or furnish 
required records.\59\
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    \59\ 21 U.S.C. 842(a)(5).
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    One mandatory recordkeeping vehicle is DEA Form 222, the 
``official triplicate order form[] used by physicians to order 
scheduled narcotics'' and other controlled substances.\60\ A menu of 
federal regulations specifies procedures relating to DEA Form 222, 
such as obtaining, 21 CFR Sec.  1305.11, executing, Sec.  1305.12, 
filling Sec.  1305.13, and endorsing DEA Form 222, Sec.  1305.14, 
among other procedures.\61\ In addition, 21 CFR Sec.  1305.03 
requires that a DEA Form 222 be used for each distribution of a 
controlled substance listed in Schedule I or II, and Section Sec.  
1305.13 provides that these order forms must be maintained 
separately from all other records and that they ``are required to be 
kept available for inspection for a period of 2 years.''
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    \60\ Robert L. Dougherty, Jr., M.D., 60 FR 55,047, 55,048 (DEA 
1995).
    \61\ See, e.g., 21 CFR 1305.15-.19.
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    Failing to comply with recordkeeping laws and regulations 
relating to controlled substances can justify revocation. ``[A] 
blatant disregard for statutory provisions implemented to maintain a 
record of the flow of controlled substances and to prevent the 
diversion of controlled substances to unauthorized individuals[] 
would justify revocation'' of a certificate of registration.'' \62\
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    \62\ Robert L. Dougherty, Jr., M.D., 60 FR 55,047, 55,050 (DEA 
1995) (citing George D. Osafo, M.D., 58 Fed. Reg 37,508, 37,509 
(1993) (revoking practitioner's registration where ``[r]espondent 
failed to comply with numerous recordkeeping requirements[, 
explaining that] . . . it is a registrant's responsibility to be 
familiar with the Federal regulations applicable to controlled 
substances''); see also Hugh I. Schade, M.D., 60 FR 56,354, 56,356 
(DEA 1995) (noting the inventory procedures required by Sections 
Sec. Sec.  1304.11 to 1304.13, and 1305.06).

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[[Page 41078]]

    DEA regulations state that a registered individual practitioner 
is required to keep records of controlled substances in Schedules 
II, III, IV and V which are dispensed.\63\ As a general matter, 
records are required to be kept by the registrant and must be 
available for at least two years.\64\
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    \63\ 21 CFR 1304.03(b) (2010).
    \64\ Id. Sec.  1304.04
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    The evidence at hearing on this issue included the testimony of 
DI Dunn and DI Chalmers. DI Dunn testified that he reviewed the 
records seized by the FBI during search warrants executed at the 
Respondent's registered and unregistered office locations, as well 
as her home. DI Chalmers testified that she was present at the 
search of Respondent's unregistered office on Mesa Drive in April 
2009, participating in a search of the medication room and a 
location at the back of the medication room that may have been the 
Respondent's office. DI Chalmers further testified that drug logs 
were among the items seized. (Tr. 92.) DI Dunn explained that from 
his review of the records seized he found records for the dispensing 
of Demerol, but not the receipt of that drug. He further explained 
that because Demerol is a Schedule II controlled substance, it can 
only be transferred between registrants pursuant to a DEA Form 222. 
A review of the seized documents by DI Dunn revealed no copies of 
DEA Form 222.
    DI Dunn further testified that ``there were other drugs there or 
an indication of other drugs there'' to include the controlled 
substances Demerol, Ambien, Balacet and Provigil. (Tr. 34, 36.) DI 
Dunn indicated that dispensing logs existed for Demerol but no 
invoices were found reflecting purchases of Demerol. DI Dunn also 
found no dispensing logs or inventories for Provigil and Ambien.
    The evidence at hearing further included a narcotic log seized 
from Respondent during the April 2009 FBI search, reflecting the 
administration of Demerol on numerous occasions from August 26, 
2008, to March 25, 2009. (Gov't Exs. 9, 10 at 2.)
    The Respondent testified that she was never asked for any copies 
of DEA Form 222 and was unaware of any of the audits. With regard to 
whether she possessed copies of DEA Form 222, as required, her 
testimony was equivocal. The Respondent testified on direct 
examination that she ``did not recall having DEA Form 222's for 
Demerol at the time of the April 2009 search'' but ``guessed'' that 
``we did.'' The Respondent was less equivocal in her testimony 
regarding having copies of DEA Form 222 at the Collier street 
temporary office, stating ``I didn't have those little DEA 222s, so 
I really didn't purchase any scheduled medications during that brief 
period of time.'' (Tr. 197.) Respondent also introduced records that 
Respondent obtained from a pharmacy supplier that include three 
references to Demerol purchases by Respondent. The shipping dates 
were August 26, September 24, and October 30, 2008. (Resp't Ex. 9, 
at 5-7.) None of the documents appear relevant to the presence of 
copies of DEA Form 222 at Respondent's unregistered Mesa office as 
of April 2009, because Respondent testified that no controlled 
substances were moved from her registered office in Denton, Texas to 
the temporary Collier Street office, as they were destroyed prior to 
Respondent's being evicted. (Tr. 197-98.)
    The absence of any copies of DEA Form 222 found by DI Dunn 
during his review of the seized documents related to the search of 
Respondent's office, along with Respondent's lack of certainty that 
any were present, supports a finding that Respondent did not keep 
proper records for controlled substances that were ordered and 
maintained under her registration. DI Dunn's testimony is consistent 
with the testimony of DI Chalmers regarding the seizure of documents 
during the April 2009 search warrant, including the seizure of 
Government exhibits nine and ten. While the testimony offered with 
regard to the specifics of the FBI search was limited, the evidence 
as a whole reflects that a considerable quantity of documents was 
seized from Respondent's office. The fact that no copies of DEA Form 
222 were found, independent of whether Respondent was asked to 
produce them, is persuasive proof of non-compliance.
    The Respondent's testimony on the topic is equivocal at best, 
and is fully consistent with a finding that few if any copies of DEA 
Form 222 were maintained at the Respondent's unregistered Mesa 
office during 2009. ``Recordkeeping is one of the CSA's central 
features; a registrant's accurate and diligent adherence to this 
obligation is absolutely essential to protect against diversion of 
controlled substances.'' Paul H. Volkman, M.D., 73 FR 30,630, 30,643 
(DEA 2008). The evidence of record, including the Respondent's own 
testimony, reflects that at least during the time period from in or 
about November or December 2008 until April 2009, Respondent did not 
properly maintain copies of DEA Form 222 for Demerol, a Schedule II 
controlled substance. Similarly, the Respondent's acceptance and 
documentation of returned controlled substances was not in 
compliance with applicable regulations. Nor did the Respondent 
maintain other documentation related to the controlled substances 
Ambien Balacet and Provigil.

(f) Respondent's Testimony

    In mitigation, the Respondent testified that she had never had a 
prior DEA complaint or investigation, and has been in medical 
practice for twenty-five years, practicing in Texas since 1991. (Tr. 
110, 113 & 225.) Respondent further testified that in January 2008 
she became aware of a theft of fentanyl and reported the theft to 
DEA and other law enforcement agencies. DI Dunn also testified that 
he investigated the reported theft issues in May 2008, and found 
Respondent's reporting of theft to be proper but the theft and loss 
reports submitted by Respondent were incomplete. (Tr. 55.) 
Respondent also testified at hearing to the theft of a safe from her 
office in late 2008, which possibly included Suboxone and other 
scheduled medications, as well as ``all my triplicates.'' (Tr. 119, 
196.) The Respondent also testified that in late 2008 she was 
evicted from her then-registered location and had to move to a 
temporary office (Collier office) for a short period of time, before 
moving to her permanent office location (Mesa office). During late 
2008 and 2009, Respondent also experienced employee issues, to 
include alleged misuse of prescription pads, theft and related 
financial matters. (Tr. 209-10.) At Respondent's Mesa office she has 
five active examination rooms, and relies on her staff to maintain 
logs and inventory. (Tr. 205.) Respondent has approximately thirty 
(30) patient visits per day and described herself as a 
``workaholic'' working non-stop without a lunch break. (Tr. 116.)
    I find the Respondent's testimony at hearing to be generally 
credible. The Respondent's manner throughout her testimony was 
serious and deliberate. Respondent's education, experience and 
training, which included regular continuing medical education in 
pain management, reasonably supported her opinion testimony with 
regard to patients [JF], [HM], [TR] and [MM]. This opinion testimony 
was also fully consistent with Dr. Babuji's testimony. The 
Respondent testified throughout a four hour period without reference 
to notes or other written material, unless specifically directed by 
counsel, and was accurately able to recall events with a reasonable 
level of certainty. The Respondent did not display hostility during 
testimony or other visible mannerisms that adversely impacted her 
credibility.
    On balance, however, the Respondent's record-keeping violations, 
handling of returned controlled substances and failure to properly 
change her registered address weigh significantly in favor of 
revocation.

Factor 5: Such Other Conduct Which May Threaten the Public Health and 
Safety

    As to factor five, there is no other substantial evidence of 
record demonstrating conduct by Respondent which may threaten the 
public health or safety, other than the risk of diversion inherent 
in the failure to maintain effective controls and procedures to 
guard against theft and diversion of controlled substances, which 
has been evaluated under factors two and four.

VI. CONCLUSION AND RECOMMENDATION

    I find that a balancing of the foregoing public interest factors 
supports a finding that the Government has established a prima facie 
case in support of revocation of Respondent's registration, or 
denial of an application for registration. Once DEA has made its 
prima facie case for revocation, the burden then shifts to the 
Respondent to show that, given the totality of the facts and 
circumstances in the record, revoking the registrant's registration 
would not be appropriate. Morall v. DEA, 412 F.3d 165, 174 (D.C. 
Cir. 2005); Humphreys v. DEA, 96 F.3d 658, 661 (3d Cir. 1996); Shatz 
v. United States Dep't of Justice, 873 F.2d 1089, 1091 (8th Cir. 
1989); Thomas E. Johnston, 45 FR 72, 311 (DEA 1980).
    A ``Respondent's failure to maintain accurate records . . . is 
sufficient by itself. . .'' in some cases, to conclude that granting 
a registration would be inconsistent with the public interest. 
Volkman, 73 FR at 30644.

[[Page 41079]]

The facts in Volkman pertaining to record keeping violations 
involved a doctor who ``rapidly became the largest practitioner-
purchaser in the nation of oxycodone'' which included ordering 
``hundreds of thousands of dosage units of these drugs'' over time 
periods as short as several months. Id. at 30,643. The facts in 
Volkman further reflected that no dispensing logs were maintained, 
at times exceeding an entire year. Id. at 30,645.
    Additionally, where a registrant has committed acts inconsistent 
with the public interest, a registrant must accept responsibility 
for his or her actions and demonstrate that he or she will not 
engage in future misconduct. Patrick W. Stodola, 74 FR 20,727 (DEA 
2009). Also, ``[c]onsideration of the deterrent effect of a 
potential sanction is supported by the CSA's purpose of protecting 
the public interest.'' Joseph Gaudio, 74 FR 10,083, 10,094 (DEA 
2009).
    The Respondent testified in substance that she updated her new 
registration address with Texas authorities, made various efforts to 
do so with DEA including receiving correspondence, and therefore 
thought she had satisfied her obligation. (Tr. 161-63; ALJ Ex. 2.) 
Respondent's explanation for record keeping violations is less 
specific. The Respondent's testimony as a whole demonstrated that 
she understood the seriousness and importance of record keeping 
requirements, and testified that while at the temporary Collier 
street location ``I didn't have those little DEA 222s, so I really 
didn't purchase any scheduled medications during that brief period 
of time.'' (Tr. 197.) The Respondent also testified that she 
believed she ``had very effective oversight'' of controlled 
substances.'' (Tr. 248.) This belief is contradicted by Respondent's 
own testimony. Respondent also testified that she relied heavily on 
her staff with regard to inventory and maintenance of controlled 
substances, and that Respondent did very little herself. (Tr. 205.) 
The evidence of record does demonstrate, however, that Respondent's 
errors were often due to lack of knowledge, omission or neglect, 
rather than a deliberate violation of the record keeping 
requirements.
    The alleged conduct supported by substantial evidence in this 
case centers on Respondent's record keeping violations, which have 
been documented to be deficient over a relatively short period of 
time, as well as a failure to update her registered address, and 
improper acceptance and disposal of returned controlled substances 
from patients. The Government argues in its post-hearing brief that 
revocation is the appropriate remedy in this case. An agency's 
choice of sanction will be upheld unless unwarranted in law or 
without justification in fact. A sanction must be rationally related 
to the evidence of record and proportionate to the error committed. 
See Morall v. DEA, 412 F.3d 165, 181 (D.C. Cir. 2005) (sanction will 
be upheld unless unwarranted in law or without justification in 
fact).
    In support of its recommendation for revocation, the Government 
cites Paul H. Volkman, 73 FR 30,630, 30,644 (DEA 2008), which is 
significantly distinguishable from the facts of this case. 
Respondent's conduct in this case occurred over a comparatively 
short period of time, with substantially fewer controlled 
substances, and with no evidence of actual diversion of any 
controlled substances. The Government cites no other precedent to 
support a revocation sanction on facts similar to Respondent's, nor 
does there appear to be any. The Respondent's errors and conduct 
clearly were neglectful and serious during the relevant time period, 
and likely due in part to ongoing issues including eviction from her 
registered office, employee problems, and an office break-in and 
theft, among other factors. That said, a revocation penalty is 
simply not rationally related to the evidence of record established 
by substantial evidence or proportionate to Respondent's misconduct.
    I find that Respondent's testimony as a whole demonstrates that 
she has sufficiently accepted responsibility for her actions and 
omissions with regard to a revocation penalty, but Respondent's 
explanation of past errors and demonstrated plan to avoid future 
violations is insufficient to support an unconditional registration. 
Accordingly, I recommend that Respondent's COR BC0181999 as a 
practitioner not be revoked or a pending application denied, on the 
condition that Respondent: a) within a reasonable period of time as 
set forth in the agency's final order in this matter, satisfy the 
appropriate DEA designee that Respondent has state authority to 
handle controlled substances in Texas, the state in which she is 
registered with DEA; \65\ b) submit to the nearest Field Division 
Office of DEA no later than one (1) year after issuance of a DEA 
COR, documentation reflecting successful completion of accredited 
training at Respondent's expense, in the proper maintenance, 
inventory, and record-keeping requirements for controlled 
substances, with such training to take place after the Agency issues 
a final order in this matter; and c) for one (1) year after the 
issuance of a COR, Respondent shall submit to the nearest Field 
Division Office of DEA, on a quarterly basis, a log of all 
controlled substances in Schedules II, III, IV and V received, 
maintained and dispensed by Respondent.
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    \65\ 21 U.S.C. 824(a)(3).

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Dated: October 26, 2010

s/ Timothy D. Wing,
Administrative Law Judge

[FR Doc. 2015-17310 Filed 7-13-15; 8:45 am]
BILLING CODE 4410-09-P