[Federal Register Volume 65, Number 24 (Friday, February 4, 2000)]
[Notices]
[Pages 5686-5688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-2535]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 96-41]


Paul W. Saxton, D.O.; Denial of Application for Fees and Expenses 
Under the Equal Access to Justice Act

    On July 15, 1996, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Paul W. Saxton, D.O. (Respondent), proposing to 
revoke his DEA Certificate of Registration AS9420059, and to deny any 
pending application for renewal of such registration. The Order to Show 
Cause alleged that Respondent's continued registration would be 
inconsistent with the public interest pursuant to 21 U.S.C. 823(f) and 
824(a)(4).
    Following a lengthy hearing and post-hearing filings, 
Administrative Law Judge Gail A. Randall issued her Recommended 
Rulings, Findings of Fact, Conclusions of Law and Decision on October 
6, 1998, recommending that no adverse action be taken against 
Respondent's DEA registration. On November 5, 1998, Respondent's 
counsel filed an Application for Attorney's Fees and Expenses 
(Application), under the Equal Access to Justice Act, 28 U.S.C. 2412.

[[Page 5687]]

    On November 19, 1998, Judge Randall transmitted the record, 
including Respondent's Application, to the then-Acting Deputy 
Administrator for final agency action. After a careful review of the 
entire record, the Deputy Administrator issued his final order in this 
matter on May 3, 1999, adopting, in full, the Administrative Law 
Judge's findings of fact and conclusions of law, and continuing 
Respondent's registration without taking any adverse action. See Paul 
W. Saxton, D.O., 64 FR 25073 (May 10, 1999). In his final order, the 
Deputy Administrator denied Respondent's application for attorney's 
fees finding that Respondent's Application was premature because ``such 
a request may only be filed after a party has prevailed in an action 
brought by DEA.'' Id. at 25074.
    On May 18, 1999, after issuance of the final order, Respondent's 
counsel filed a letter requesting to renew his Application filed on 
November 5, 1998, since the agency's final order had now been entered. 
On June 17, 1999, the Government filed an Answer in Opposition to 
Respondent's Application for Attorneys' Fees and Expenses Under the 
Equal Access to Justice Act. Judge Randall then provided Respondent an 
opportunity to respond to the Government's submission, and on July 19, 
1999, Respondent filed a Response to the Government's Answer.
    On September 22, 1999, Judge Randall issued her Supplemental 
Decision: Recommended Decision, Findings and Conclusions of the 
Administrative Law Judge Concerning the Respondent's Application for 
Fees and Expenses Under the Equal Access to Justice Act (Supplemental 
Decision), recommending that Respondent's Application be denied. 
Neither party filed exceptions to Judge Randall's Supplemental Decision 
and on October 25, 1999, the record concerning Respondent's Application 
was forwarded to the Deputy Administrator.
    Pursuant to 28 CFR 24.307, the ``decision of the adjudicative 
officer will be reviewed to the extent permitted by law by the 
Department in accordance with the Department's procedures for the type 
of proceeding involved. The Department will issue the final decision on 
the application.'' ``Department'' is defined as ``the relevant 
departmental component which is conducting the adversary adjudication 
(e.g., Drug Enforcement Administration * * *.) '' See 28 CFR 24.102. 
Therefore, the Deputy Administrator hereby issues his final order based 
upon findings of fact and conclusions of law as hereinafter set forth. 
This final order replaces and supersedes the final order issued on 
December 22, 1999. The Deputy Administrator adopts, in full, the 
Supplemental Decision: Recommended Decision, Findings and Conclusions 
of the Administrative Law Judge Concerning the Respondent's Application 
for Fees and Expenses Under the Equal Access to Justice Act. His 
adoption is in no manner diminished by any recitation of facts, issues 
and conclusions herein, or of any failure to mention a matter of fact 
or law.
    The Deputy Administrator finds that a party may file a claim for 
attorney's fees and other expenses under the Equal Access to Justice 
Act (EAJA), 28 U.S.C. 2412. Pursuant to 5 U.S.C. 504(a)(1), which 
incorporates the EAJA into the Administrative Procedure Act, an agency 
that conducts adversary adjudications shall award fees and expenses if: 
(1) The claimant is a prevailing party in the underlying action; (2) 
the position of the Government was not substantially justified; and (3) 
there were no special circumstances that would make an award against 
the Government unjust. An administrative hearing to revoke a DEA 
Certificate of Registration to dispense controlled substances is 
considered an ``adversary adjudication'' covered by the EAJA. See 28 
CFR 24.103(a)(1).
    The Deputy Administrator concludes that Respondent is a prevailing 
party and has therefore met the initial qualifying threshold for an 
award of fees and expenses under the EAJA. A ``prevailing party'' is 
one who can be found to have essentially succeeded on the claims for 
relief. See Brown v. Secretary of Health and Human Servs. 747 F.2d 878, 
883 (3rd Cir. 1984). In the underlying matter upon which this 
Application is based, Respondent contended that his continued 
registration would not be inconsistent with the public interest, and 
that his DEA registration should not be revoked. The Deputy 
Administrator agreed with Respondent and ordered that no adverse action 
be taken against Respondent's DEA registration. See Saxton, 64 FR at 
25080. Therefore, the Deputy Administrator concludes that Respondent 
has succeeded on his claims for relief.
    In addition, for a claimant to be considered a prevailing party 
eligible for an award of attorney's fees and other expenses the 
claimant must be an individual whose net worth does not exceed 
$2,000,000 at the time the adversary adjudication was initiated. See 5 
U.S.C. 504(b)(1)(B). In his Application, Respondent asserts that he has 
a net worth of less than $2,000,000. The Government does not dispute 
Respondent's assertion. Therefore, the Deputy Administrator concludes 
that Respondent has met the initial threshold that he is a prevailing 
party eligible for attorney's fees and other expenses under the EAJA.
    Next, it must be determined whether the position of the Government 
was substantially justified. A presumption exists that a prevailing 
party may recover an EAJA award, unless the position of the Government 
was substantially justified. See 28 U.S.C. 2412(d)(1)(A); 28 CFR 
24.106(a). Once alleged by the claimant that the position of the 
Government was not substantially justified, the burden of proof shifts 
to the Government to demonstrate by a preponderance of the evidence 
that its position was substantially justified and that attorney's fees 
and other expenses should not be awarded. See United States v. One 
Parcel of Real Property, 960 F.2d 200, 208 (1st Cir. 1992).
    The ``position of the United States'' is defined as being that 
position ``in addition to the position taken by the United States in 
the civil action, the action or failure to act by the agency upon which 
the civil action is based.'' 28 U.S.C. 2412(d)(2)(D). Although 
``position'' encompasses the Government's prelitigation conduct and 
subsequent litigation position, only one determination of substantial 
justification to the entire matter should be made. See Commissioner, 
INS v. Jean, 496 U.S. 154, 160-62 (1990) (``While the parties' postures 
on individual matters may be more or less justified, the EAJA--like 
other fee-shifting statutes--favors treating a case as an inclusive 
whole, rather than as atomized line-items.'') Therefore, the Deputy 
Administrator concludes that the Government's position as a whole must 
be considered in determining whether there was substantial 
justification for that position.
    The test for substantial justification is whether a reasonable 
person would find that the Government's position was reasonable in both 
fact and law. See Derickson Co. v. NLRB, 774 F.2d 229, 232 (8th Cir. 
1985); Enerhaul, Inc. v. NLRB, 710 F.2d 748, 750, reh'g denied, 718 
F.2d 1115 (11th Cir. 1983); see also H.R. Conf. Rep. No. 96-1434 at 22 
(1980). To meet its burden of demonstrating the substantial 
justification for its position, the Government must make a ``strong 
showing'' and must demonstrate that it ``had a reasonable basis for the 
facts alleged, that it had a reasonable basis in law for the theories 
it advanced, and that the former supported the latter.'' One Parcel of 
Real Property, 960 F.2d at

[[Page 5688]]

208 (quoting Sierra Club v. Secretary of the Army, 820 R.2d 513, 517 
(1st Cir. 1987)).
    Also, it is noteworthy that pursuant to 28 CFR 24.105(c), ``[n]o 
presumption arises that the agency's position was not substantially 
justified simply because the agency did not prevail.'' See also, 
Griffon v. Department of Health and Human Servs., 832 F.2d 51, 52 (5th 
Cir. 1987). As Judge Randall noted, ``the government may demonstrate 
that its position was substantially justified, even though it was a 
losing one.''
    In this case, the Deputy Administrator agrees with Judge Randall's 
conclusion that ``an evaluation of the record as a whole supports the 
position that the Government was substantially justified in initiating 
and pursuing the underlying cause of action.'' As noted by Judge 
Randall, ``the final order recognized, `[w]ithout a doubt, the 
Government had legitimate concerns as a result of its initial 
investigation of the Respondent and his prescribing practices` '' See 
Saxton, 64 FR at 25079.
    Judge Randall concluded that both the Government and Respondent 
incorrectly reargued the evidence regarding each of the five public 
interest factors in asserting whether the Government's position was 
substantially justified. The test is not whether each individual 
litigated claim was substantially justified, but rather oversell, 
whether the Government's litigation and prelitigation position was 
substantially justified. See Jean, 496 U.S. at 160-62. As further 
support, the Government's ``position,'' in the singular, suggests that 
only one finding concerning substantial justification need by made. See 
id. at 159. After evaluating the record in this matter, Judge Randall 
concluded ``that in the eyes of a reasonable person, the Government's 
position was reasonable both in fact and in law.''
    The state agency responsible for regulating health-care 
professionals had received complaints over the years regarding 
Respondent's prescribing practices. An initial evaluation of patient 
profiles showed that Respondent's prescribing practices exceeded the 
recognized prescribing standards established by the Physician's Desk 
Reference (PDR). While the PDR does not establish binding standards on 
physicians, exceeding those standards is a sufficient indicator that 
further investigation into the physician's prescribing is warranted. 
See Saxton, 64 FR at 25078; see also Margaret E. Sarver, M.D., 61 FR 
57896, 57900 (1996). An expert in pain management reviewed Respondent's 
prescribing patterns and patient charts for the Government and found 
``consistent patterns supporting the contention that [Respondent] has 
been inappropriately and excessively prescribing controlled substances, 
particularly opioids.'' See Saxton, 64 FR at 25074. Also, Respondent 
failed to inventory his controlled substances properly and failed to 
retain the required records needed to ensure accountability for the 
controlled substances maintained and dispensed in his medical practice. 
See id. at 25079. Failure to maintain proper records has previously 
been a basis for revocation of a DEA Certificate of Registration. See 
Farmacia Ortiz, 61 FR 726, 727-728 (1996); Harlan J. Borcherding, D.O., 
60 FR 28796, 28798 (1995). Finally, at the time the Government 
initiated its action against Respondent, it had evidence that 
Respondent had prescribed anabolic steroids for muscle enhancement in 
violation of state and Federal law. See Saxton, 64 FR at 25074, 25079.
    Thus, the Deputy Administrator finds that the Government was 
substantially justified in pursuing the revocation of Respondent's DEA 
Certificate of Registration. Respondent ultimately prevailed because of 
the evidence that he presented at the hearing.
    Respondent presented evidence that the medical community was in 
disagreement over the use of controlled substances in the treatment of 
chronic pain patients. Respondent's two experts testified that 
Respondent's method of pain management was a medically recognized form 
of chronic pain treatment. See id. at 25075. As Judge Randall stated, 
``[t]he Respondent prevailed only after exploring and presenting 
evidence on the split in the medical community concerning the 
prescribing of controlled substances for chronic pain. The Respondent's 
witnesses were found to be more persuasive than those of the 
Government; yet, this does not mean that the Government was not 
substantially justified in its position or its case presentation.''
    As to Respondent's recordkeeping violations, the Deputy 
Administrator concluded that revocation was not warranted not because 
the Government failed to prove its case, but because Respondent 
presented significant evidence of rehabilitation and remedial training. 
See id. at 25079. Judge Randall noted that ``this evidence does not 
eradicate the Respondent's prior wrongdoing, on which the Government's 
position was based; rather, this evidence of remedial action merely 
added weight in favor of the Respondent and enabled the Deputy 
Administrator, in his discretionary authority, to find for the 
Respondent.''
    Regarding Respondent's illegal prescribing of anabolic steroids, 
the Deputy Administrator agrees with Judge Randall that ``Respondent 
ultimately prevailed, not because the Government failed to prove its 
case, but because the Deputy Administrator, in his discretionary 
authority, found persuasive the Respondent's rehabilitation evidence 
that he had ceased his unlawful prescribing of anabolic steroids.''
    Therefore, Judge Randall found that ``the Government's actions in 
preparing and pursuing the revocation of the Respondent's DEA 
Certificate of Registration were substantially justified.'' The Deputy 
Administrator agrees. While Respondent ultimately prevailed in the 
underlying matter, the Government's position was reasonable and 
therefore substantially justified.
    The Deputy Administrator finds that neither party alleged that 
special circumstances exist that would make an award of attorney's fees 
and other expenses under the EAJA unjust.
    Judge Randall noted that the parties argued about the appropriate 
amount of attorney's fees to be awarded. However, Judge Randall found 
it unnecessary to decide this issue since she found that the 
Government's position was substantially justified and therefore 
recommended that no fees be awarded.
    The Deputy Administrator agrees. While Respondent ultimately 
prevailed and his registration was not revoked, the Government's 
position was substantially justified. Therefore, Respondent's 
application for attorney's fees and other expenses must be denied.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in him by 28 U.S.C. 
2412, 5 U.S.C. 504, and 28 CFR 24.307, 0.100(b) and 0.104 hereby orders 
that the Application for Fees and Expenses under the Equal Access to 
Justice Act submitted by Paul W. Saxton, D.O., be, and it hereby is, 
denied. This final order is considered the final agency action for 
purposes of appellate review pursuant to 5 U.S.C. 504(c)(2) and 21 
U.S.C. 877.

    Dated: January 18, 2000.
Donnie R. Marshall,
Deputy Administrator.
[FR Doc. 00-2535 Filed 2-3-00; 8:45 am]
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