Federal Register / Vol. 72, No. 69 / Wednesday, April 11, 2007 / Notices 18275 

1Under the Administrative Procedure Act, 

‘‘[a]gencies may take official notice of facts at any 

stage in a proceeding—even in the final decision.’’

Attorney General’s Manual on the Administrative 

Procedure Act 80 (1946) ( Wm. W. Gaunt & Sons, 

Inc., reprint 1979). In accordance with the Act, 

Respondent may ‘‘show to the contrary’’ by filing 

a request for reconsideration which includes 

supporting documentation within fifteen days of 

receipt of this order. 

2The expiration date of Respondent’s DEA 

registration is March 31, 2008. 

Examiners. Under the order, 

Respondent’s Texas medical license was 

revoked. 

Thereafter, on July 13, 2006, the ALJ 

denied Respondent’s request to stay the 

hearing until after his release from 

prison. ALJ Dec. at 2. The ALJ further 

ordered that Respondent file a response 

to the Government’s motion by August 

3, 2006. Respondent, however, failed to 

do so. 

Thereafter, the ALJ granted the 

Government’s motion. The ALJ noted 

that Respondent ‘‘acknowledges that his 

license to practice medicine in Texas is 

revoked, and will remain revoked at 

least until his release from prison on 

April 7, 2007.’’ Id. As this material fact 

was undisputed, the ALJ held that 

because ‘‘Respondent lacks state 

authority, he is not entitled to a DEA 

registration in Texas,’’ and therefore 

recommended that Respondent’s 

registration be revoked. Id. at 2–3. The 

ALJ then forwarded the record to me for 

final agency action. 

Having considered the record as a 

whole, I adopt the ALJ’s 

recommendation that Respondent’s 

registration be revoked. But in doing so, 

I decline to adopt the ALJ’s reasoning to 

the extent it relies solely on the Texas 

State Board of Medical Examiner’s 

revocation of Respondent’s medical 

license. Under Texas law, a practitioner 

must obtain a separate state registration 

to dispense a controlled substance. 

Texas Health & Safety Code § 481.061. 

The record, however, contains no 

evidence regarding the status of 

Respondent’s state registration. 

Therefore, in accordance with 5 

U.S.C. 556(e), I take official notice of the 

fact that according to the Texas 

Department of Public Safety’s 

Controlled Substances Registration 

verification search page, Respondent is 

not currently registered to dispense 

controlled substances in the State.1

Under the Controlled Substances Act 

(CSA), a practitioner must be currently 

authorized to handle controlled 

substances in ‘‘the jurisdiction in which 

he practices’’ in order to maintain a 

DEA registration. See 21 U.S.C. 802(21) 

(‘‘[t]he term ‘practitioner’ means a 

physician * * * licensed, registered, or 

otherwise permitted, by * * * the 

jurisdiction in which he practices * * * 

to distribute, dispense, [or] administer 

* * * a controlled substance in the 

course of professional practice’’). See 

also id. section 823(f) (‘‘The Attorney 

General shall register practitioners 

* * * if the applicant is authorized to 

dispense * * * controlled substances 

under the laws of the State in which he 

practices.’’). DEA has held repeatedly 

that the CSA requires the revocation of 

a registration issued to a practitioner 

who no longer possesses authority 

under state law to handle controlled 

substances. See Sheran Arden Yeates, 

71 FR 39130, 39131 (2006); Dominick A. 

Ricci, 58 FR 51104, 51105 (1993); Bobby 

Watts, 53 FR 11919, 11920 (1988). See 

also 21 U.S.C. 824(a)(3) (authorizing the 

revocation of a registration ‘‘upon a 

finding that the registrant * * * has had 

his State license or registration 

suspended [or] revoked * * * and is no 

longer authorized by State law to engage 

in the * * * distribution [or] dispensing 

of controlled substances’’). Therefore, 

Respondent’s DEA registration must be 

revoked.2

Order 

Accordingly, pursuant to the 

authority vested in me by 21 U.S.C. 

823(f) & 824(a), as well as 28 CFR 

0.100(b) & 0.104, I hereby order that 

DEA Certificate of Registration, 

AP1614800, issued to Piyush V. Patel, 

M.D., be, and it hereby is, revoked. I 

further order that any pending 

applications for renewal or modification 

of such registration be, and they hereby 

are, denied. This order is effective May 

11, 2007. 

Dated: March 30, 2007. 

Michele M. Leonhart, 

Deputy Administrator. 

[FR Doc. E7–6761 Filed 4–10–07; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

[Docket No. 05–8] 

Rick’s Picks, L.L.C.; Revocation of 

Registration 

On October 7, 2004, the Deputy 

Assistant Administrator, Office of 

Diversion Control, Drug Enforcement 

Administration, issued an Order to 

Show Cause to Rick’s Picks, L.L.C. 

(Respondent), of Moore, Oklahoma. The 

Show Cause Order proposed the 

revocation of Respondent’s DEA 

Certificate of Registration, 003949RPY, 

as a distributor of list I chemicals, on 

the ground that its continued 

registration was inconsistent with the 

public interest. Show Cause Order at 1 

(citing 21 U.S.C. 823(h)). 

The Show Cause Order incorporated 

the allegations of a show cause order 

which was initiated by the Oklahoma 

State Bureau of Narcotics and 

Dangerous Drugs Control; the latter 

order proposed the denial of 

Respondent’s application for a state 

registration to distribute 

pseudoephedrine products that are 

Schedule V drugs under State law, as 

well as the revocation of Respondent’s 

state registration to distribute 

pseudoephedrine products which are 

not scheduled under state law. Id. at 2. 

Specifically, the state show cause order 

alleged that Respondent and its owner, 

Rick D. Fowler, ‘‘have a history of 

selling very large amounts of 

pseudoephedrine under suspicious and 

questionable circumstances, and with 

great negligence and reckless disregard 

for whether this product would be used 

in the clandestine manufacture of 

methamphetamine,’’ and that 

Respondent, and its owner, had engaged 

in this activity notwithstanding 

‘‘numerous warnings from . . . DEA 

officials that Respondent’s sales were 

fueling illicit methamphetamine 

laboratories.’’ Id. 

Relatedly, the State show cause order 

alleged that from January 2002 through 

April 2004, Respondent sold more than 

$ 2.2 million of Max Brand (for a total 

of nearly 10.5 million tablets), a product 

in which pseudoephedrine is the single 

active ingredient and which is the 

‘‘preferred choice [of] 

methamphetamine cooks.’’ Id. at 4–5. 

The state show cause order also alleged 

that Respondent had brokered the sale 

of approximately 400,000 

pseudoephedrine tablets for D & E 

Pharmaceutical. Id. at 5. The DEA Show 

Cause Order then repeated ten different 

allegations made in the state show cause 

order which asserted specific instances 

in which Respondent had sold 

extraordinary quantities of 

pseudoephedrine to convenience stores, 

gas stations and other non-traditional 

retailers of this product, and that 

Respondent had failed to report any of 

these transactions to DEA. Id. at 6–8. 

The State show cause order further 

alleged that pseudoephedrine 

distributed by Respondent had been 

found at twenty-two methamphetamine 

dumpsites. Id. at 8. Finally, the DEA 

Show Cause Order alleged that in 

November 2003, DEA had conducted an 

inspection of Respondent during which 

numerous recordkeeping violations 

were observed. Id. at 9. 

Respondent requested a hearing on 

the allegations. The matter was assigned 


cprice-sewell on PRODPC61 with NOTICES
18276 Federal Register / Vol. 72, No. 69 / Wednesday, April 11, 2007 / Notices 

1 In response to the methamphetamine problem, 

effective April 6, 2004, Oklahoma made 

pseudoephedrine in tablet form a Schedule V 

controlled substance. Pseudoephedrine in liquid, 

liquid-filled capsules, and gel caps is, however, 

exempt from the requirement provided it is not the 

only active ingredient in the product. See 63 Okl. 

St. Ann. section 2–212. 

2Under the Administrative Procedure Act, 

‘‘[a]gencies may take official notice of facts at any 

stage in a proceeding-even in the final decision.’’

Attorney General’s Manual on the Administrative 

Procedure Act 80 (1946) ( Wm. W. Gaunt & Sons, 

Inc., reprint 1979). In accordance with the Act, 

Respondent may request a reopening of the 

proceeding to contest the facts of which I am taking 

official notice by filing a request with supporting 

affidavits no later than fifteen days after service of 

this order. 

to Administrative Law Judge (ALJ) Mary 

Ellen Bittner, who conducted a hearing 

in Oklahoma City, Oklahoma, on 

January 10 and 11, 2006. At the hearing, 

the Government introduced both 

testimonial and documentary evidence; 

Respondent introduced only 

documentary evidence. Both parties 

submitted post-hearing briefs. 

On August 9, 2006, the ALJ issued her 

decision. In that decision, the ALJ 

concluded that Respondent’s continued 

registration would be inconsistent with 

the public interest and recommended 

that its registration be revoked. Neither 

party filed exceptions. 

Having considered the record as a 

whole, I hereby issue this decision and 

final order. I adopt the ALJ’s findings of 

fact and conclusions of law in their 

entirety. For the reasons set forth below, 

I hold that Respondent’s continued 

registration would be inconsistent with 

the public interest and therefore revoke 

its registration and deny its pending 

application for renewal. 

Findings 

Respondent, an Oklahoma 

corporation, is a distributor of assorted 

merchandise to convenience stores, gas 

stations, and other small retailers in that 

State. Respondent’s sole owner is Mr. 

Rickey Fowler. ALJ Dec. at 15. 

Respondent currently holds DEA 

Certificate of Registration, 003949RPY, 

which authorizes it to distribute list I 

chemicals. Gov. Ex. 1. While 

Respondent’s registration certificate 

states that its registration expired on 

April 30, 2005, the record indicates that 

Respondent filed a timely renewal 

application. Tr. 24. Therefore, 

Respondent’s registration remains in 

effect until the conclusion of this 

proceeding. See 5 U.S.C. 558(c). 

Methamphetamine and the Market for 

List I Chemicals 

Pseudoephedrine is lawfully 

marketed under the federal Food, Drug 

and Cosmetic Act for over-the-counter 

use as a decongestant. Pseudoephedrine 

is, however, also regulated as a list I 

chemical under the Controlled 

Substances Act because it is easily 

extracted from non-prescription 

products and used in the illicit 

manufacture of methamphetamine, a 

Schedule II controlled substance. See 21 

U.S.C. 802(34); 21 CFR 1308.12(d). 

Methamphetamine ‘‘is a powerful and 

addictive central nervous system 

stimulant.’’ T. Young Associates, Inc., 

71 FR 60567 (2006). The illegal 

manufacture and abuse of 

methamphetamine pose a grave threat to 

this country. Methamphetamine abuse 

has destroyed numerous lives and 

families and ravaged communities. 

Moreover, because of the toxicity of the 

chemicals used in producing the drug, 

its illicit manufacture causes serious 

environmental harms. Id. 

Methamphetamine abuse has been an 

especially serious problem in the State 

of Oklahoma. In 1999, law enforcement 

authorities seized 391 illicit 

laboratories/dumpsites in the State; in 

2003 (the last full year before the State 

enacted laws restricting the distribution 

of pseudoephedrine), authorities seized 

1091 illicit laboratories/dumpsites. See 

Gov. Exs. 7 & 11. Moreover, in 2004, 

there were still 659 seizures. See Gov. 

Ex. 12. According to a senior agent for 

the Oklahoma Bureau of Narcotics, Max 

Brand in tablet form, a product in which 

pseudoephedrine (60 mg.) is the single 

active ingredient, is the preferred 

product of the State’s illicit 

methamphetamine cooks.1 See also Tr. 

46 & 180. 

In the course of adjudicating 

numerous cases, DEA has acquired 

substantial expertise pertaining to the 

market for list I chemical products 

containing pseudoephedrine. 

Accordingly, pursuant to 5 U.S.C. 

556(e), I take official notice of the 

following facts related to the market for 

pseudoephedrine.2

According to Jonathan Robbin, an 

expert in statistical analysis of 

demographic, economic, geographic and 

survey data, ‘‘over 97% of all sales of 

non-prescription drug products occur in 

drug stores and pharmacies, 

supermarkets, large discount 

merchandisers and electronic shopping 

and mail order houses.’’ T. Young, 71 

FR at 60568. Moreover, ‘‘sales of nonprescription drugs by convenience 

stores (including both those that sell 

and do not sell gasoline), account for 

only 2.2% of the overall sales of all 

convenience stores that handle the line 

and only 0.7% of the total sales of all 

convenience stores.’’ Id. 

Based on his study of U.S. 

Government Economic Census Data, 

information obtained from the National 

Association of Convenience Stores, and 

commercially available point of sale 

transaction data, Mr. Robbin has 

constructed a model of the traditional 

market for retail sales of 

pseudoephedrine. See id. According to 

Mr. Robbin, ‘‘sales of pseudoephedrine 

account for only about 2.6% of the sales 

of health and beauty care products in 

convenience stores and only 0.05% of 

total in-store (non-gasoline) sales.’’ Id. 

Moreover, ‘‘the normal expected retail 

sale of pseudoephedrine (Hcl) tablets in 

a convenience store may range between 

$ 0 and $ 40 per month, with an average 

of $ 20.60 per month.’’ Id. According to 

Mr. Robbin, a monthly retail sale at a 

non-traditional retailer of ‘‘$ 60 of 

pseudoephedrine would occur less than 

one in 1,000 times in random 

sampling.’’ Id. Moreover, a monthly 

retail sale of ‘‘$ 100 in pseudoephedrine 

would occur about once in a million 

times in random sampling.’’ Id. 

Findings Pertaining To Respondent 

Respondent first became registered to 

distribute list I chemicals in January 

1999. Prior to becoming registered, DEA 

Diversion Investigators (DIs) conducted 

a pre-registration investigation. During 

this visit, the DIs discussed with Mr. 

Fowler the recordkeeping requirements 

imposed by federal law and regulations. 

Tr. 32–33. The DIs also provided Mr. 

Fowler with DEA notices that discussed 

suspicious transactions and advised that 

certain list I chemical products 

including pseudoephedrine were being 

diverted into the illicit manufacture of 

methamphetamine. Id. at 34. One of the 

notices specifically stated that ‘‘[t]he 

exemption from certain recordkeeping 

and reporting requirements for below 

threshold transactions . . . does not 

reduce the risk of criminal liability.’’

Gov. Ex. 3. This notice also advised Mr. 

Fowler to ‘‘[r]eport all suspicious orders 

to your nearest DEA office 

immediately.’’ Id. 

The DIs, however, also gave Mr. 

Fowler a handout listing required 

reports. See Resp. Ex. 18, Tr. 64. More 

specifically, this document stated that 

reports were required for ‘‘[a]ny 

regulated transaction involving an 

extraordinary quantity of a Listed 

Chemical,’’ ‘‘[a]ny regulated transaction 

involving an uncommon method of 

payment or delivery,’’ and ‘‘[a]ny 

regulated transaction involving any 

other circumstances that the regulated 

person (supplier) believes may indicate 

that the List (sic) Chemical will be used 

in the illicit production of controlled 

substances.’’ Resp. Ex. 18. 

In September 2001, DEA DIs returned 

to Respondent for a scheduled 


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Federal Register / Vol. 72, No. 69 / Wednesday, April 11, 2007 / Notices 18277 

3On April 7, 2004, a DEA DI again returned to 

Respondent to discuss the then-recently enacted 

state legislation which scheduled pseudoephedrine 

in tablet form. During this visit, the DI conducted 

a closing inventory. ALJ Dec. at 17. 

4One of the DIs testified that her review of 

Respondent’s records showed that its sales of 

pseudoephedrine constituted eighty-five percent of 

its business. ALJ Dec. at 17. The Government also 

introduced evidence that Respondent brokered the 

sale of substantial amounts of ‘‘Bolt’’ brand 

pseudoephedrine directly from its manufacturer to 

various stores. Tr. 273–276; Gov. Ex. 24, at 5–8. 

5 During cross-examination, Respondent’s counsel 

elicited testimony from a Government witness that 

a few of the stores it sold to were located on 

highways—thus suggesting that the sales at these 

stores were to meet legitimate consumer demand. 

Tr. 201–02. This testimony does not persuade me 

that Respondent’s products were being sold to meet 

legitimate demand. The ALJ found that Respondent 

had more than 200 customers, see ALJ Dec. at 18; 

Respondent’s line of cross-examination begs the 

question: What about the other 200 plus stores? 

Indeed, the ALJ found that ‘‘some of Respondent’s 

customers were convicted of criminal charges 

involving the diversion of pseudoephedrine.’’ Id. 

6Most of these indicia were published by DEA in 

February 1999. See Suspicious Orders Task Force, 

Report to the U.S. Attorney General Appendix A 

(1999). The indicia were re-published in the June 

2002 Chemical Handler’s Manual. See DEA, 

Chemical Handler’s Manual—A Guide to Chemical 

Control Regulations 40–43 (June 2002). 

inspection. Among other things, the DIs 

determined that Respondent was storing 

list I chemicals in a trailer at a boat 

storage and not at its registered location. 

Id. at 37. The DIs also found that 

Respondent was in violation of 

recordkeeping requirements because its 

receiving invoices did not include the 

date that products were received and its 

sales invoices did not indicate package 

size. Id. at 38. Respondent’s owner was 

issued a letter admonishing him for the 

violations. Resp. Ex. 2. Subsequently, 

Mr. Fowler wrote to one of the DIs 

advising of changes Respondent would 

make in its recordkeeping; at that time, 

DEA took no further action. ALJ Dec. at 

16. 

On November 3, 2003, DEA DIs 

conducted another inspection of 

Respondent. The DIs determined that 

while Respondent was now properly 

storing its list I chemical products, it 

was still violating the recordkeeping 

requirements. See id. at 16–17. DEA 

issued Respondent an additional letter 

of admonition. Tr. 41. During this visit, 

DEA also obtained Respondent’s 

receiving and sales invoices for the 

period from January 1, 2002, through 

November 1, 2003. Id. at 261; Resp. Ex. 

25.3

In May 2004, law enforcement 

authorities obtained a warrant and 

executed a search of Respondent. Based 

on records obtained during the search, 

as well as the records obtained during 

the November 2003 inspection, DEA 

investigators compiled a spreadsheet of 

Respondent’s purchases of 

pseudoephedrine. Gov. Ex. 21; Tr. 187. 

According to this document, between 

January 28, 2002, and March 6, 2004, 

Respondent had purchased 10,062,144 

tablets of Max Brand pseudoephedrine 

at a wholesale price of $ 941,072.20. Id. 

Moreover, during the 2003 calendar 

year, Respondent purchased nearly six 

million tablets at a wholesale price of $ 

564,884.20. Id. Furthermore, between 

January 5, 2004, and March 6, 2004 

(shortly before the Oklahoma statute 

scheduling tablet-form pseudoephedrine 

became effective), Respondent 

purchased approximately 1.8 million 

tablets at a wholesale price of $ 173,004. 

Id. 

DEA investigators also compiled a 

spreadsheet of Respondent’s 

pseudoephedrine sales. See Gov. Ex. 23. 

This 102 page document lists 

Respondent’s sales to each store by 

product size and date. The document 

shows that Respondent repeatedly made 

monthly sales of a $ 1,000 or more of 

pseudoephedrine products to the great 

majority of the stores.4 See generally id. 

For example, from January 2002 

through April 6, 2004, Respondent sold 

$ 62,658.00 (and brokered the sale of $ 

7,013) of pseudoephedrine to 

Bernhardt’s, a convenience store in 

Pharoah, Oklahoma. Gov. Ex. 24, at 5. 

During the same period, Respondent 

sold $ 50,256 (and brokered the sale of 

$ 7,015) of pseudoephedrine to Dock’s 

General Store in Council Hill, 

Oklahoma, and sold $ 44,640 (and 

brokered the sale of $ 7,015) of the 

chemical to Dock’s General Store in 

Leonard, Oklahoma. Id. at 6–7. Both of 

these establishments were bait and 

tackle shops. Tr. 269–71. Respondent 

also sold $ 37,116 (and brokered the sale 

of $ 4,676) of the chemical to Kern’s 

Korner Grocery in Henryetta, Oklahoma. 

Gov. Ex. 24, at 8. Furthermore, from 

January 2002 through December 2002, 

Respondent sold $ 11,880 of 

pseudoephedrine to the Funky Munky, 

a head shop located in McAlester, 

Oklahoma. Id. at 9; see also Tr. 273. 

The record also establishes that 

between February 2002 and March 

2004, Respondent sold $ 97,026 (and 

468,144 tablets) of pseudoephedrine to 

five stores in Poteau, a small city in 

eastern Oklahoma. Of significance 

among these customers, Respondent 

sold $ 30,672 to Babe’s Place and $ 

37,590 to the Tote-A-Poke # 1. Gov. Ex. 

24, at 3. It also sold $14,040 to Burkes 

Friendly Store; all of the sales to Burkes 

occurred between February 2002 and 

March 2003. Gov. Ex. 23, at 15–16. 

The above per-store figures are based 

on Respondent’s wholesale prices. 

Several of Respondent’s exhibits 

indicate that the suggested retail price 

was typically twice the wholesale price. 

See Resp. Exh. 20, at 19; Resp. Ex. 19. 

Ultimately, even if Respondent’s 

customers sold the products at far less 

than the suggested retail prices, their 

sales of these products so greatly 

exceeded the monthly expected sales 

range of $ 0 to $ 40, with an average of 

$ 20.60, that the probability that the 

products were being purchased to meet 

legitimate consumer demand for use as 

a decongestant is infinitesimal. Indeed, 

as DEA’s expert has testified, a monthly 

retail sale of $ 100 in pseudoephedrine 

to meet legitimate demand would occur 

about once in a million times in random 

sampling. Here, where there are 

numerous stores to which Respondent 

sold repeatedly $ 1,000 or more per 

month at wholesale prices, the only 

plausible explanation is that the 

products were being diverted into the 

illicit manufacture of 

methamphetamine.5 I thus find that 

substantially all of Respondent’s 

products were being diverted. 

The ALJ further credited the 

testimony of a DEA investigator that 

‘‘some of Respondent’s customers 

engaged in practices that the DEA 

considers suspicious.’’ ALJ at 18. More 

specifically, these practices included: 

(1) Ordering only single-entity 

pseudoephedrine rather than a variety 

of pseudoephedrine and other over-thecounter drug products, (2) selling singleentity products that are marketed in 

large quantities and not in blister packs, 

(3) selling products that have only been 

on the market for a few years and which 

receive little advertising, and (4) 

purchasing large quantities of 

pseudoephedrine throughout the year 

by establishments that traditionally do 

not sell large quantities of these 

products and do little or no marketing 

of them.6 ALJ at 18, Tr. 349–51. 

The ALJ further found that 

‘‘Respondent never sold more than the 

[1000 grams] threshold amount to any 

one customer in a calendar month.’’ ALJ 

at 20. The ALJ also found that 

Respondent’s owner twice ‘‘reported a 

suspicious sale to’’ DEA. Id. According 

to the record, on October 8, 2003, Mr. 

Fowler reported that while servicing a 

store the previous day, ‘‘the store clerk 

made a comment that she needed 

products that Methamphetamine is 

made from.’’ Resp. Ex. 6, at p. 2. Mr. 

Fowler further wrote that he had 

‘‘suspended sales of all pseudo 

ephedrine products to this store due to 

this comment,’’ and that he would ‘‘not 

service this store in the future with any 

cold medications containing pseudo 

ephedrine.’’ Id. Approximately, a month 


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7While Respondent introduced several form 

letters to customers purporting to impose 

requirements for the sale of pseudoephedrine, Resp. 

Exs. 11–13, as the ALJ noted, ‘‘Respondent did not 

call any witnesses at the hearing, and there is no 

evidence as to whether such letters were mailed to 

Respondent’s customers.’’ ALJ Dec. at 19. 

later Mr. Fowler also reported that he 

had been contacted by a person who 

wanted to come to his premises to 

purchase products but Mr. Fowler 

advised him that his firm ‘‘did not do 

business this way.’’ Id. at 3. Mr. Fowler 

further stated that the address given by 

this person was non-existent and that he 

had determined that the business was 

not legitimate.7 Id. 

On November 14, 2005, the Cleveland 

County, Oklahoma, District Attorney 

filed a felony information charging Mr. 

Fowler with criminal racketeering under 

Oklahoma law. Gov. Ex. 42. More 

specifically, the information alleged that 

‘‘between January 2002 and April 

2004,’’ Fowler ‘‘was willfully, 

knowingly and criminally associated 

with an enterprise,’’ which consisted of 

himself, ‘‘individually, and as the owner 

of Rick Picks,’’ the affairs of which 

‘‘were to distribute pseudoephedrine, a 

precursor in the manufacturing of 

methamphetamine, with reckless 

disregard for how the product was going 

to be used in violation of 63 O.S. 2–

333(A).’’ Id. I further take official notice 

of the fact that on October 16, 2006, the 

State filed a second amended felony 

information charging Respondent with 

the ‘‘unlawful distribution of 

pseudoephedrine with reckless 

disregard for how it was going to be 

used.’’ Finally, I take official notice of 

the fact that on February 9, 2007, a jury 

found Mr. Fowler guilty of the crime 

charged in the second amended 

information. See Docket Sheet, State v. 

Fowler, No. CF–2005–1651, Cleveland 

County, Oklahoma, District Court. 

Discussion 

Section 304(a) of the Controlled 

Substances Act provides that a 

registration to distribute a list I chemical 

‘‘may be suspended or revoked * * * 

upon a finding that the registrant * * * 

has committed such acts as would 

render his registration under section 823 

of this title inconsistent with the public 

interest as determined under such 

section.’’ 21 U.S.C. 824(a)(4). In making 

this determination, Congress directed 

that I consider the following factors: 

(1) Maintenance by the [registrant] of 

effective controls against diversion of listed 

chemicals into other than legitimate 

channels; 

(2) compliance by the applicant with 

applicable Federal, State, and local law; 

(3) any prior conviction record of the 

applicant under Federal or State laws relating 

to controlled substances or to chemicals 

controlled under Federal or State law; 

(4) any past experience of the applicant in 

the manufacture and distribution of 

chemicals; and 

(5) such other factors as are relevant to and 

consistent with the public health and safety. 

Id. section 823(h). 

‘‘These factors are considered in the 

disjunctive.’’ Joy’s Ideas, 70 FR 33195, 

33197 (2005). I may rely on any one or 

a combination of factors, and may give 

each factor the weight I deem 

appropriate in determining whether a 

registration should be revoked or an 

application for renewal of a registration 

should be denied. See, e.g., David M. 

Starr, 71 FR 39367, 39368 (2006); 

Energy Outlet, 64 FR 14269 (1999). 

Moreover, I am ‘‘not required to make 

findings as to all of the factors.’’ Hoxie 

v. DEA, 419 F.3d 477, 482 (6th Cir. 

2005); Morall v. DEA, 412 F.3d 165, 

173–74 (D.C. Cir. 2005). In this case, I 

hold that factors one, two, four, and five 

overwhelmingly establish that 

Respondent’s continued registration 

would be ‘‘inconsistent with the public 

interest.’’ 21 U.S.C. 823(h). Accordingly, 

I further hold that Respondent’s 

registration should be revoked and its 

pending application for renewal should 

be denied. 

Factor One—Maintenance of Effective 

Controls Against Diversion 

I concur with the ALJ’s conclusion 

that the record does not establish that 

Respondent fails to provide adequate 

physical security for list I chemicals. 

However, ‘‘’[p]rior agency rulings have 

applied a more expansive view of factor 

one than mere physical security.’’ ’ D & 

S Sales, 71 FR 37607, 37610 (2006) 

(quoting OTC Distribution Co., 68 FR 

70538, 70542 (2003)). Relatedly, I have 

previously held that a registrant is 

‘‘required to exercise a high degree of 

care in monitoring its customers’

purchases.’’ D & S Sales, 71 FR at 37610. 

Respondent argues that he maintains 

effective controls against diversion 

because he obtained proof of identity 

from his customers and only distributed 

to ‘‘legitimate store[s],’’ Resp. Statement 

of Supporting Reasons 9 [hereinafter 

Resp. Br.], he maintained adequate and 

retrievable records, id., and he ‘‘did not 

fail to report suspicious sales because he 

was only required to report suspicious 

regulated transactions,’’ i.e., 

transactions that exceeded the 1,000 

grams threshold. Id. at 11 (citing 21 

U.S.C. 830(b)(1) and 21 CFR 

1310.05(a)(1)). 

Respondent apparently believes that 

as long as he sold under threshold 

amounts he could distribute 

pseudoephedrine without taking any 

further steps to determine the ultimate 

disposition of his products. 

Respondent’s understanding is 

mistaken. Congress’s imposition of 

recordkeeping and reporting 

requirements for regulated transactions 

does not mean that one can engage in 

below-threshold transactions without 

any further obligation to determine 

whether the products are likely to be 

diverted. Indeed, DEA has found that 

products which have been distributed to 

non-traditional retailers in subthreshold transactions are routinely 

diverted. Contrary to Respondent’s 

view, the threshold provisions 

pertaining to regulated transactions do 

not create a safe harbor which allows a 

registrant to sell list I chemicals without 

any further duty to investigate how the 

products are being used. 

Respondent further contends that 

‘‘[t]here was no evidence presented that 

[it] had actual knowledge [that] any 

customer was diverting 

pseudoephedrine for the manufacture of 

methamphetamine.’’ Id. at 10. In short, 

Respondent raises the ostrich defense. 

Congress, however, has rejected the 

ostrich defense in creating criminal 

liability under 21 U.S.C. 841(c)(2), and 

I have previously rejected this defense 

as incompatible with the purpose of 

proceedings under 21 U.S.C. 823 and 

824, which are brought to protect the 

public interest. See D & S Sales, 71 FR 

at 37612; T. Young Associates, 71 FR at 

60572. As D & S Sales explained: 

‘‘Burying one’s head in the sand while 

his firm’s products are being diverted 

may allow one to maximize profits. But 

it is manifestly inconsistent with public 

health and safety.’’ 71 FR at 37612. 

More recently, I revoked a registration 

holding—albeit in the context of 

analyzing factors four and five—that a 

registrant’s lack of ‘‘any intent to divert 

or to sell to customers who were 

diverting to the illicit manufacture of 

methamphetamine is irrelevant.’’ T. 

Young, 71 FR at 60572. See also Joy’s 

Ideas, 70 FR at 33198 (revoking 

registration notwithstanding that 

distributor was ‘‘an unknowing and 

unintentional contributor to [the] 

methamphetamine problem.’’). 

Respondent’s owner also contends 

that he maintained adequate controls 

because he ‘‘reported suspicious 

activities to the DEA in the past.’’ Resp. 

Br. at 9. According to the record, Mr. 

Fowler reported an encounter he had 

during which a store clerk informed him 

‘‘that she needed products that 

Methamphetamine is made from.’’ Resp. 

Ex. 6. at 2. Mr. Fowler then stated that 

he would stop servicing the store. Id. 

A review of the compilation of 

Respondent’s sales records indicates, 


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Federal Register / Vol. 72, No. 69 / Wednesday, April 11, 2007 / Notices 18279 

however, that this store—the 66 Lake 

Stop in Arcadia, Oklahoma—was 

actually one of the smaller volume 

purchasers of its pseudoephedrine 

products. See Gov. Ex. 23, at 2. For 

example, on May 24, 2003, the store 

purchased $ 270 of products; on July 11, 

2003, the store purchased $ 105: and on 

August 13, 2003, the store purchased $ 

252. Id. The fact that this store ‘‘needed 

more products that Methamphetamine 

is made from,’’ begs the question of 

what Mr. Fowler thought was the likely 

disposition of the products he sold to 

the numerous customers that were 

repeatedly buying more than $ 1,000 a 

month of the chemical from his firm. 

Relatedly, Mr. Fowler contends that 

‘‘the DEA did not warn him that he was 

making suspicious sales, [or] that he 

was making excessive sales’’ before 

November 3, 2003. Resp. Br. at 10. See 

also id. at 2 (‘‘Between September, 2001 

and November 3, 2003, the DEA never 

formally warned Mr. Fowler that he was 

selling excessive amounts of 

pseudoephedrine.’’). The suggestion that 

Respondent would have stopped its 

excessive sales if it had been warned is 

absurd. As the Government’s 

compilation of Respondent’s sales 

invoices establishes, Mr. Fowler 

continued to sell extraordinary 

quantities of pseudoephedrine to 

numerous stores for months following 

the November 3, 2003 warning. Indeed, 

it appears that the only reason that the 

sales eventually stopped was because 

Respondent’s customers ceased 

purchasing the products in anticipation 

of the effective date of the new 

Oklahoma law which restricted the sale 

of tablet-form pseudoephedrine. See 

generally Gov. Ex. 23. In short, it is clear 

that DEA’s warning did not register with 

Mr. Fowler. I thus conclude that 

Respondent lacks effective controls 

against diversion and that this factor is, 

by itself, sufficient to conclude that 

Respondent’s continued registration 

would be inconsistent with the public 

interest. 

Factors Two and Three—Respondent’s 

Compliance With Applicable Laws and 

Record of Criminal Convictions 

As noted by the ALJ, Respondent has 

previously been admonished for several 

violations of DEA regulations pertaining 

to security and recordkeeping 

requirements. Moreover, while Mr. 

Fowler has not been formally convicted 

of a crime (because a final judgment has 

yet to be entered in the state criminal 

case), a jury recently found him guilty 

of the state law offense of distributing 

pseudoephedrine ‘‘with reckless 

disregard as to how the product will be 

used.’’ 63 Okl. St. Ann. section 2–

333(A). I also hold that Respondent’s 

distributions of pseudoephedrine 

violated 21 U.S.C. 841(c)(2) (prohibiting 

the possession or distribution of ‘‘a 

listed chemical knowing, or having 

reasonable cause to believe, that the 

listed chemical will be used to 

manufacture a controlled substance’’). 

Accordingly, while Mr. Fowler has not 

been formally convicted of a crime, I 

conclude that Respondent’s record of 

compliance with applicable federal and 

state laws further demonstrates that 

Respondent’s continued registration 

would be inconsistent with the public 

interest. 

Factors Four and Five—Respondent’s 

Experience in the Distribution of 

Chemicals and Other Factors Relevant 

to and Consistent With Public Health 

and Safety 

As explained above, Respondent’s 

experience in the distribution of listed 

chemicals is characterized by the 

egregious and criminal misconduct of 

its owner, Mr. Fowler. But even if there 

was no such evidence, I would still 

conclude—consistent with DEA 

precedent—that Respondent’s excessive 

sales to non-traditional retailers would 

support a finding under factor five that 

its continued registration would be 

inconsistent with the public interest. 

While pseudoephedrine has a 

legitimate medical use as a 

decongestant, its diversion into the 

illicit manufacture of methamphetamine 

has had pernicious effects on families 

and communities throughout the nation. 

Cutting off the supply source of 

methamphetamine traffickers is thus of 

critical importance in protecting the 

public from the devastation wreaked by 

this drug. 

DEA orders have established that 

convenience stores and gas-stations 

constitute the non-traditional retail 

market for legitimate consumers of 

products containing this chemical. See, 

e.g., Tri-County Bait Distributors, 71 FR 

52160, 52161–62; D & S Sales, 71 FR at 

37609; Branex, Inc., 69 FR 8682, 8690–

92 (2004). DEA has further found that 

there is a substantial risk of diversion of 

pseudoephedrine into the illicit 

manufacture of methamphetamine when 

these products are sold by nontraditional retailers. See, e.g., Joy’s 

Ideas, 70 FR at 33199 (finding that the 

risk of diversion was ‘‘real’’ and 

‘‘substantial’’); Jay Enterprises, 70 FR 

24620, 24621 (2005) (noting 

‘‘heightened risk of diversion’’ should 

application be granted). See also TNT 

Distributors, 70 FR 12729, 12730 (2005) 

(establishing that ‘‘80 to 90 percent of 

ephedrine and pseudoephedrine being 

used [in Tennessee] to manufacture 

methamphetamine was being obtained 

from convenience stores’’); Joey 

Enterprises, 70 FR 76866, 76867 (2005) 

(‘‘[w]hile there are no specific 

prohibitions under the Controlled 

Substances Act regarding the sale of 

listed chemical products to [gas stations 

and convenience stores], DEA has 

nevertheless found that [these entities] 

constitute sources for the diversion of 

listed chemical products’’). 

The record here likewise establishes 

that there is a substantial nexus between 

the sale of non-traditional list I chemical 

products by non-traditional retailers and 

the diversion of these products into the 

illicit manufacture of 

methamphetamine. Here, testimony 

establishes that Max Brand 

pseudoephedrine was the preferred 

product of Oklahoma meth. cooks and 

that this product was found in about 

eighty percent of the illicit laboratories 

seized by law enforcement authorities. 

Tr. 180–82. The Government also 

established that Max Brand pseudo was 

not found in traditional retailers and 

that it was distributed to non-traditional 

retailers such as convenience stores and 

gas stations from which meth cooks 

obtained the product. See id. 

Furthermore, the Government also 

showed that ‘‘the vast majority of 

pseudoephedrine diversion’’ in 

Oklahoma occurs in the non-traditional 

retail market. Id. at 216. 

To protect the public from the harms 

caused by methamphetamine abuse, 

DEA has repeatedly revoked the 

registrations of list I chemical 

distributors who supplied the nontraditional market for selling quantities 

of products that clearly exceeded 

legitimate demand and were likely 

diverted into the illicit manufacture of 

methamphetamine. See T. Young 

Associates, Inc., 71 FR at 60572–73; D 

& S Sales, 71 FR at 37611–12; Joy’s 

Ideas, 70 FR at 33198–99; Branex, Inc., 

69 FR at 8693–96. Here, the record 

clearly establishes that Respondent 

distributed pseudoephedrine products 

in quantities that grossly exceeded 

legitimate consumer demand for these 

products as a decongestant. As found 

above, the only plausible explanation 

for these extraordinary sales is that 

Respondent’s products were being 

diverted into the illicit manufacture of 

methamphetamine. See T. Young, 71 FR 

at 60572, D & S Sales, 71 FR at 37611 

(finding diversion occurred ‘‘[g]iven the 

near impossibility that * * * sales were 

the result of legitimate demand’’); Joy’s 

Ideas, 70 FR at 33198 (finding diversion 

occurred in the absence of ‘‘a plausible 

explanation in the record for this 

deviation from the expected norm’’). 


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18280 Federal Register / Vol. 72, No. 69 / Wednesday, April 11, 2007 / Notices 

8To the extent mens rea is relevant, it is 

accounted for in factor three, which directs the 

consideration of a registrant’s prior conviction 

record. See 21 U.S.C. 823(h)(3). 

While in this case, there is substantial 

evidence that Mr. Fowler distributed 

pseudoephedrine with a reckless 

disregard for its eventual use, such 

proof is not essential to sustain the 

revocation of Respondent’s registration. 

A proceeding under section 304 of the 

CSA is not a criminal prosecution. 

Rather, its purpose is to protect the 

public interest. See Leo R. Miller, 53 FR 

21931, 21932 (1988). 

‘‘ ‘In determining the public interest,’

Congress granted the Attorney General 

broad discretion to consider any other 

factor that is ‘relevant to and consistent 

with the public health and safety.’’ ’ T. 

Young, 71 FR at 60572 (quoting 21 

U.S.C. 823(h)(5)). The statutory text of 

factor five does not require that the 

Government prove that a registrant or its 

key employees acted with any particular 

mens rea.8 As I have previously 

explained, ‘‘the diversion of list I 

chemicals into the illicit manufacture of 

methamphetamine poses the same 

threat to public health and safety 

whether a registrant sells the products 

knowing they will be diverted, sells 

them with a reckless disregard for the 

diversion, see D & S Sales, 71 FR at 

37610–12, or sells them being totally 

unaware that the products were being 

diverted.’’ T. Young, 71 FR at 60572 

(citing Joy’s Ideas, 70 FR at 33198) 

(revoking registration notwithstanding 

that distributor was ‘‘an unknowing and 

unintentional contributor to [the] 

methamphetamine problem’’). 

Accordingly, Respondent’s excessive 

sales of pseudoephedrine also provide 

reason alone to conclude that its 

continued registration would be 

inconsistent with the public interest. 

In sum, four of the five factors 

conclusively demonstrate that 

Respondent’s continued registration is 

inconsistent with the public interest. 

Furthermore, in accordance with 21 

CFR 1316.67, I find that Respondent’s 

owner engaged in egregious misconduct 

and is responsible for the diversion of 

massive amounts of pseudoephedrine 

into the illicit manufacture of 

methamphetamine. There, I conclude 

that the public interest requires that 

Respondent’s registration be revoked 

effective immediately. 

Order 

Accordingly, pursuant to the 

authority vested in me by 21 U.S.C. 

823(h) & 824(a), as well as 28 CFR 

0.100(b) & 0.104, I order that DEA 

Certificate of Registration, 003949RPY, 

issued to Rick’s Picks, L.L.C., be, and it 

hereby is, revoked. I further order that 

the pending application of Rick’s Picks, 

L.L.C., for renewal of its registration be, 

and it hereby is, denied. This order is 

effective immediately. 

Dated: March 30, 2007. 

Michele M. Leonhart, 

Deputy Administrator. 

[FR Doc. E7–6759 Filed 4–10–07; 8:45 am] 

BILLING CODE 4410–09–P 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

[Notice: 07–030] 

Notice of Information Collection 

AGENCY: National Aeronautics and 

Space Administration (NASA). 

ACTION: Notice of information collection. 

SUMMARY: The National Aeronautics and 

Space Administration, as part of its 

continuing effort to reduce paperwork 

and respondent burden, invites the 

general public and other Federal 

agencies to take this opportunity to 

comment on proposed and/or 

continuing information collections, as 

required by the Paperwork Reduction 

Act of 1995 (Pub. L. 104–13, 44 U.S.C. 

3506(c)(2)(A)). 

DATES: All comments should be 

submitted within 60 calendar days from 

the date of this publication. 

ADDRESSES: All comments should be 

addressed to Mr. Walter Kit, National 

Aeronautics and Space Administration, 

Washington, DC 20546–0001. 

FOR FURTHER INFORMATION CONTACT: 

Requests for additional information or 

copies of the information collection 

instrument(s) and instructions should 

be directed to Mr. Walter Kit, NASA 

PRA Officer, NASA Headquarters, 300 E 

Street SW., JE000, Washington, DC 

20546, (202) 358–1350, Walter.Kit1@nasa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Abstract 

This is an online application form for 

the Exploration Systems Mission 

Directorate—Space Grant Consortia 

Faculty Project. NASA must select 

candidates via a competitive process, 

and in order to do so must collect 

personal information in an application. 

The voluntary respondents will be fulltime professors that are employed at a 

university in the United States or Puerto 

Rico. 

II. Method of Collection 

This information collected on the 

application is needed to competitively 

select faculty to participate in the 10 

week Fellowship. 

III. Data 

Title: Exploration Systems Mission 

Directorate—Space Grant Consortia 

Faculty Project. 

OMB Number: 2700–XXXX. 

Type of review: New Collection. 

Affected Public: Individuals or 

households. 

Number of Respondents: 156. 

Responses Per Respondent: 0.5 hour. 

Annual Responses: 156. 

Annual Burden Hours: 80. 

IV. Request for Comments 

Comments are invited on: (1) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the functions of NASA, including 

whether the information collected has 

practical utility; (2) the accuracy of 

NASA’s estimate of the burden 

(including hours and cost) of the 

proposed collection of information; (3) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (4) ways to minimize the 

burden of the collection of information 

on respondents, including automated 

collection techniques or the use of other 

forms of information technology. 

Comments submitted in response to 

this notice will be summarized and 

included in the request for OMB 

approval of this information collection. 

They will also become a matter of 

public record. 

Gary Cox, 

Deputy Chief Information Officer (Acting). 

[FR Doc. E7–6772 Filed 4–10–07; 8:45 am] 

BILLING CODE 7510–13–P 

NUCLEAR REGULATORY 

COMMISSION 

[Docket Nos. 050–00315, 050–00316; 

License Nos. DPR–58 & DPR–74 EA–06–

295] 

In the Matter of Indiana Michigan 

Power Company D.C. Cook Nuclear 

Power Plant; Confirmatory Order 

Modifying License (Effective 

Immediately) 

I 

Indiana Michigan Power Company 

(I&M or Licensee) is the holder of 

Facility Operating License Nos. DPR–58 

and DPR–74 issued by the U.S. Nuclear 

Regulatory Commission (NRC or 

Commission) pursuant to 10 CFR Part 

50 on October 25, 1974 and December 

23, 1977, respectively. The licenses 

authorize the operation of the D.C. Cook 

nuclear power plant units 1 & 2 in 


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