[Federal Register Volume 74, Number 141 (Friday, July 24, 2009)]
[Notices]
[Pages 36758-36760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17714]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 08-59]


Roy E. Berkowitz, M.D.; Revocation of Registration

    On August 26, 2008, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Roy E. Berkowitz, M.D. (Respondent), of Slidell, 
Louisiana. The Show Cause Order proposed the revocation of Respondent's 
DEA Certificate of Registration, BB0492912, as a practitioner, and the 
denial of any pending applications to renew or modify his registration, 
on the grounds that Respondent does ``not have authority to prescribe 
controlled substances in the State of Louisiana,'' and that his 
``continued registration is inconsistent with the public interest.'' 
Show Cause Order at 1.
    More specifically, the Show Cause Order alleged that as a result of 
prescriptions for controlled substances which Respondent issued in 2006 
and 2007 that were inconsistent with State rules and regulations, 
Respondent entered into a Consent Order with the Louisiana State Board 
of Medical Examiners, which ``strips [Respondent] of authority to 
handle controlled substances in the State of Louisiana, the state in 
which [he is] registered with DEA.'' Id.
    Respondent requested a hearing on the allegations, and the matter 
was assigned to an Administrative Law Judge (ALJ), who commenced pre-
hearing procedures. Thereafter, the Government moved for summary 
disposition on the ground that Respondent ``currently lacks authority 
to handle controlled substances in the State of Louisiana--his state of 
registration.'' Gov. Mot. at 1.
    In support of its motion, the Government attached a declaration of 
a DEA Diversion Investigator (DI). Therein, the DI stated that on 
October 15, 2008, she had queried the Louisiana State Board of 
Pharmacy's Web site to determine Respondent's license status, and found 
that ``the Controlled Dangerous Substance license <greek-i>33853 of Roy 
E. Berkowitz, M.D. was delinquent, having expired on September 25, 
2008.'' Id. at Appendix I.
    The ALJ allowed the Respondent to file a response to the motion 
through October 30, 2008. Moreover, on October 29, 2008, the ALJ 
granted Respondent an extension of the due date until November 6, 2008, 
on which date Respondent filed his response.
    Therein, Respondent noted that while the Show Cause Order had 
relied on the State Board's Consent Order, the motion for summary 
disposition relied on a ``declaration * * * asserting that a license 
issued by the Louisiana Board of Pharmacy to [Respondent] expired on 
September 25, 2008.'' Resp. at 1. Respondent maintained that the 
Government was improperly changing its theory of the case, and argued 
that ``[t]he DEA without leave to amend the Order to Show Cause has 
sought to change the underlying basis of the case.'' \1\ Id. at 2-3.
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    \1\ Respondent also invoked the ``mend the hold doctrine,'' an 
obscure common law rule which prohibits a party to a contract from 
changing its position on the contract's meaning during the course of 
litigation over it. Id. at 3 (citing Utica Mut. Ins. Co. v. Vigo 
Coal Co., Inc., 393 F.3d 707, 716 (7th Cir. 2004)). Specifically, 
Respondent contended that the Government's reliance on the 
expiration of Respondent's lack of a state controlled substance 
license was ``analogous to an attempt to mend the hold,'' presumably 
because the Show Cause Order had cited the consent agreement rather 
than the expiration. Id. at 3 (citation omitted). Respondent did not 
renew this argument in his exceptions, and in any event, the analogy 
is misplaced.
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    Next, Respondent argued that the Agency lacks authority to revoke 
his registration because in his view, 21 U.S.C. 824(a)(3) requires both 
a suspension, denial or revocation of the state license or 
registration, and that the practitioner no longer be authorized by 
state law to handle controlled substances. Id. at 3-4. In support of 
his contention, Respondent attached his declaration in which he stated 
that he submitted his application for renewal of his Louisiana 
Controlled Dangerous Substance License in July 2008, and that he was 
``advised by the Louisiana Board of Pharmacy that this agency was 
unable to process'' his application. Id., Ex. A at 1. The declaration 
further asserted that the Louisiana Board of Pharmacy ``did not enter 
an order'' denying, suspending or revoking Respondent's application. 
Id. at 1-2. Thus, Respondent argued that the Government's motion should 
be denied ``[b]ased upon a failure to establish the elements required 
under 21 U.S.C. 824(a)(3) and 21 U.S.C. 824(a)(4).'' Resp. at 5.
    On January 27, 2009, the ALJ issued her Opinion and Recommended

[[Page 36759]]

Decision. Therein, the ALJ granted the Government's motion for summary 
disposition and recommended that I revoke Respondent's registration and 
deny any pending applications. The ALJ rejected Respondent's argument 
that his due process rights were violated by the Government's reliance 
on the expiration of his state's dangerous substances license, as 
Respondent was ``advised * * * of the grounds on which the Government 
relied in seeking to revoke his registration and * * * addressed those 
grounds in his response.'' ALJ at 4.
    The ALJ also rejected Respondent's argument that the Government had 
failed to show that his continued registration was inconsistent with 
the public interest, reasoning that the ``subsections of 21 U.S.C. 
824(a) are to be considered in the disjunctive.'' Id. Framing the issue 
as ``whether Respondent is currently authorized to handle controlled 
substances in Louisiana,'' the ALJ noted Respondent's contention that 
he had applied for a new state controlled substance registration, but 
that the State Board of Pharmacy had advised him that it could not act 
on his application. Id. at 5. The ALJ then rejected Respondent's 
argument, reasoning that Respondent did not dispute that his state 
registration ``is expired, and although he asserts that there should be 
a hearing on whether his filing of a renewal application extends his 
authority to handle controlled substances in Louisiana, he makes no 
showing that he has applied for and been granted the requisite 
authority.'' Id.
    The ALJ thus concluded that there was no dispute over the material 
fact ``that Respondent is currently not authorized to handle controlled 
substances in Louisiana, the State in which he is registered with the 
DEA.'' Id. Applying the Agency's settled rule that ``[b]ecause 
Respondent lacks this state authority * * * he is not currently 
entitled to a DEA registration in Louisiana,'' the ALJ granted the 
Government's motion and recommended that Respondent's registration be 
revoked and that any pending application be denied. Id.
    Thereafter, on February 13, 2008, Respondent submitted his 
Exceptions to the ALJ's decision, and on March 9, 2009, the ALJ 
forwarded the record to me for final agency action. Having considered 
the entire record including Respondent's exceptions, I adopt the ALJ's 
finding that Respondent currently lacks authority to handle controlled 
substances in Louisiana, and therefore, is not entitled to maintain his 
DEA registration. I also adopt the ALJ's recommendation that 
Respondent's registration be revoked and that any pending application 
be denied.
    I find that Respondent currently holds DEA Certificate of 
Registration, BB0492912, which authorizes him to dispense controlled 
substances in Schedules II through V, as a practitioner, at the 
registered location of 1632 Marina Drive, Slidell, Louisiana. 
Respondent's Registration does not expire until July 31, 2009. I 
further find that Respondent Louisiana Controlled Dangerous Substance 
(CDS) License expired on September 25, 2008.
    I also find that while Respondent has applied for a new State CDS 
license, he has provided no evidence that Board of Pharmacy has issued 
one to him. Moreover, Respondent cites to no authority establishing 
that under Louisiana law, his filing of the application extended his 
CDS license past its expiration date. Cf. 5 U.S.C. Sec.  558(c). I thus 
adopt the ALJ's conclusion that Respondent does not possess authority 
to dispense controlled substances under Louisiana law, and therefore 
does not meet an essential prerequisite for holding a registration 
under Federal law. ALJ at 5.
    Respondent nonetheless excepts to the ALJ's decision on various 
grounds. First, Respondent contends that the ALJ erred in granting the 
Government's motion for summary disposition because it relied on an 
issue (the expiration of his State CDS license) which was not raised in 
the Show Cause Order. In Respondent's view, a motion for summary 
disposition in an administrative proceeding should be treated 
analogously to a motion for summary judgment, and that the 
``[p]leadings may not be disregarded in ruling on a motion for summary 
judgment in Federal court.'' Exc. at 2. According to Respondent, ``if 
the pleadings, depositions, answers to interrogatories, and admissions 
on file, together with the affidavits, if any, show that there is no 
genuine issue as to any material fact and that the moving party is 
entitled to judgment as a matter of law,'' then the motion should be 
granted. Exc. at 2-3 (emphasis in original). By emphasizing, 
``pleadings,'' Respondent apparently wished to emphasize his position 
that the Show Cause Order should have contained all the grounds on 
which the revocation was ultimately based.
    This Agency's proceedings are not, however, governed by the Federal 
Rules of Civil Procedure. And while those rules (and the judicial 
decisions interpreting them) may be a useful guide, they are not 
binding on the Agency. Instead, what is binding on the Agency is the 
Due Process Clause, the Administrative Procedure Act, and the Agency's 
regulations.
    Contrary to Respondent's understanding, to decide this matter on 
the grounds asserted in the Government's motion does not violate his 
right to due process. As the Federal Courts have recognized, 
```[p]leadings in administrative proceedings are not judged by the 
standards applied to an indictment at common law.''' Citizens State 
Bank of Marshfield v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984) (quoting 
Aloha Airlines, Inc., v. CAB, 598 F.2d 250, 262 (DC Cir. 1979)). An 
agency is not required ``to give every [Respondent] a complete bill of 
particulars as to every allegation that [he] will confront.'' Boston 
Carrier, Inc. v. ICC, 746 F.2d 1555, 1560 (DC Cir. 1984); see also Paul 
H. Volkman, 73 FR 30630, 30641 n.35 (2008). Indeed, the Federal Courts 
routinely uphold agency adjudications which are based on matters which 
were not initially raised in a charging document but which were 
nonetheless litigated in a proceeding. See, e.g., Pergament United 
Sales, Inc., v. NLRB, 920 F.2d 130, 137 (2d Cir.1990) (no due process 
violation where NLRB did not cite in complaint specific provision of 
NLRA which Board ultimately relied on in its order because the employer 
``was not kept in the dark [and] was aware of and actively litigated'' 
the relevant issue); Facet Enters., Inc., v. NLRB, 907 F.2d 963, 972 
(10th Cir. 1990) (``A material issue which has been fairly tried by the 
parties * * * may be decided by the Board regardless of whether it has 
been specifically pleaded.''); Citizens State Bank, 751 F.2d at 213; 
Kuhn v. CAB, 183 F.2d 839, 842 (DC Cir. 1950)((``If it is clear that 
the parties understand exactly what the issues are when the proceedings 
are had, they cannot thereafter claim surprise or lack of due process 
because of alleged deficiencies in the language of the particular 
pleadings.'').
    Notably, in the Show Cause Order, the Agency notified Respondent 
that it was seeking the revocation because he ``do[es] not have 
authority to prescribe controlled substances in the State of 
Louisiana,'' and that as a consequence, ``DEA must revoke your DEA 
registration based upon your lack of authority to handle controlled 
substances in the State of Louisiana.'' Show Cause Order at 1. The 
Government thus provided Respondent with notice as to the legal basis 
for the proceeding.
    Moreover, even though the Government relied on the expiration of 
Respondent's State CDS license rather

[[Page 36760]]

than the Consent Order to support its motion, Respondent had an ample 
and meaningful opportunity to present evidence refuting the 
Government's evidence and creating a triable issue and/or to make 
argument (were there any viable ones to be made), regarding the legal 
effect of his filing of the State renewal application. While Respondent 
further argues that if the Agency ``was going to place in issue 
allegations that were not named in the Order to Show Cause, the proper 
course of action would have been to move to amend the Order to Show 
Cause,'' he does not identify how he has been prejudiced by the 
Government's failure to amend the Order. Exc. at 4; cf. Facet 
Enterprises, 907 F.2d at 972 (``In determining whether a respondent can 
be held liable for an unfair labor practice not charged in the 
complaint, the central inquiry is fairness: considering the 
circumstances of the case, did the respondent know what conduct was 
being alleged and have `a fair opportunity to present [its] 
defense?''') (quoting Soule Glass & Glazing Co. v. NLRB, 652 F.2d 1055, 
1074 (1st Cir. 1985)).\2\
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    \2\ Likewise, the Administrative Procedure Act requires only 
that ``[p]ersons entitled to notice of an agency hearing shall be 
timely informed of * * * the matters of fact and law asserted.'' 5 
U.S.C. 554(b). He was.
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    The rules governing DEA hearings do not require the formality of 
amending a show cause order to comply with the evidence. The 
Government's failure to file an amended Show Cause Order alleging that 
Respondent's state CDS license had expired does not render the 
proceeding fundamentally unfair.
    Respondent also argues that the ALJ's ruling on the summary 
disposition motion ``should have been stayed pending disclosure of 
evidence.'' Exc. at 5. Respondent analogizes the prehearing statements 
to civil discovery and argues that ``the usual prehearing procedures 
for exchanging information was [sic] not completed.'' Id. There is, 
however, no general right to discovery under either the APA or DEA 
regulations, but rather only a limited right to receive in advance of 
the hearing the documentary evidence and summaries of the testimony 
which the Government intends to rely upon. Nicholas A. Sychak, d/b/a 
Medicap Pharmacy, 65 FR 75959, 75961 (2000) (citing McClelland v. 
Andrus, 606 F.2d 1278, 1285 (DC Cir. 1979)); see also 21 CFR 1316.54(e) 
& 1316.57. Nor, given the narrowness of the issue upon which the motion 
for summary disposition was based--whether Respondent has authority 
under state law to dispense a controlled substance--has Respondent 
shown what material evidence he might have obtained from the Government 
which he could not have obtained from another source such as the State 
itself. The contention is therefore without merit.
    Respondent also argues that the ALJ unlawfully shifted the burden 
of proof to him. According to Respondent, ``[t]here is an issue of 
disputed fact as to whether there has been [a] suspension[,] 
revocation[,] or denial of [his] state authority to prescribe 
controlled substances or merely [a] delay in processing his renewal 
application.'' Exc. at 6. Respondent further claims that the ALJ did 
not require the DEA to show that the license was ``pending,'' and 
placed on him the burden of ``show[ing] that he had been granted the 
requisite authority.'' Id. at 7. Relatedly, Respondent maintains that 
the Government cannot revoke his registration under 21 U.S.C. 824(a)(3) 
because it has not shown that his registration has been suspended, 
revoked, or denied by competent authority. Id.
    Respondent ignores, however, that Congress has made the possession 
of state authority a prerequisite for obtaining a DEA registration. See 
id. Section 823(f) (``The Attorney General shall register practitioners 
* * * to dispense * * * controlled substances * * * if the applicant is 
authorized to dispense * * * controlled substances under the laws of 
the State in which he practices.''). In addition, the CSA defines the 
term ``practitioner'' to ``mean[] a physician * * * or other person 
licensed, registered, or otherwise permitted, by * * * the jurisdiction 
in which he practices * * * to dispense [or] administer * * * a 
controlled substance in the course of professional practice.'' 21 
U.S.C. 802(21). A physician who no longer holds authority under State 
law to dispense a controlled substance is therefore not a practitioner 
within the meaning of the CSA and cannot lawfully dispense.
    DEA has therefore consistently held that a practitioner may not 
maintain his registration if he lacks state authority to dispense 
controlled substances. This rule has been applied to revoke the 
registration of a practitioner even when the practitioner's loss of 
state authority was based on the expiration of a state license rather 
than a formal disciplinary action of a state board. See William D. 
Levitt, 64 FR 49822, 49823 (1999); see also id. at 49822 (collecting 
cases). As the Agency explained in Levitt, because

state authorization was clearly intended to be a prerequisite to DEA 
registration, Congress could not have intended for DEA to maintain a 
registration if a registrant is no longer authorized by the state in 
which he practices to handle controlled substances due to the 
expiration of his state license. Therefore, it is reasonable for DEA 
to interpret that 21 U.S.C. Sec.  824(a)(3) would allow for the 
revocation of a DEA * * * Registration where, as here, a 
registrant's state authorization has expired.

Id. at 49823. See also Chevron, Inc., v. NRDC, Inc., 467 U.S. 837, 843 
(1984) (where Congress is silent on a question, courts defer to an 
agency's reasonable interpretation of the statute it administers).
    Accordingly, in relying on the undisputed fact that Respondent's 
State CDS license had expired, the ALJ did not erroneously shift the 
burden of proof from the Government to him. Rather, she correctly 
applied the Agency's settled precedent that because Respondent clearly 
lacks authority to dispense controlled substances in the State in which 
he holds his DEA registration and practices medicine, he is not 
entitled to maintain his registration. Respondent's registration will 
therefore be revoked.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) & 
824(a), as well as by 28 CFR 0.100(b) & 0.104, I hereby order that DEA 
Certificate of Registration, BB0492912, issued to Roy E. Berkowitz, 
M.D., be, and it hereby is, revoked. I further order that any pending 
application of Roy E. Berkowitz, M.D., for renewal or modification of 
his registration be, and it hereby is, denied. This order is effective 
immediately.\3\
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    \3\ Because of the importance of the legal issues raised by 
Respondent, I conclude that the public interest necessitates that 
this Order be made effective immediately.

    Dated: July 17, 2009.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E9-17714 Filed 7-23-09; 8:45 am]
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