Source: https://www.deadiversion.usdoj.gov/fed_regs/actions/2015/fr0520.htm
Timestamp: 2019-04-21 04:41:00+00:00

Document:
On October 7, 2014, Administrative Law Judge (ALJ) Christopher B. McNeil issued the attached Recommended Decision (hereinafter, R.D.). Therein, the ALJ found it undisputed that Respondent no longer holds a Texas Pharmacy License and is thus not authorized to dispense controlled substances in the State in which it seeks registration under the Controlled Substances Act (CSA). R.D. at 6. The ALJ thus concluded that Respondent is not a "practitioner" within the meaning of the CSA and is therefore not entitled to be registered. R.D. at 7 (citing 21 U.S.C. 802(21) & 823(f)). Accordingly, the ALJ granted the Government's Motion for Summary Disposition and recommended that I deny its application.
The ALJ did not, however, address the Government's further contention that it was also entitled to summary disposition because Respondent's proposed business model of shipping filled controlled substance prescriptions to a patient's prescribing physician rather than directly to the patient, violates federal law. See generally R.D.; see also Mot. for Summ. Disp., at 5-6. The Government takes exception to the ALJ's failure to address the issue,\1\ arguing that the ALJ "should have also reached the merits of this case and granted summary disposition to the Government on the additional basis that Respondent intends to dispense controlled substances to non-ultimate users in violation of the [CSA] and its implementing regulations." Gov. Exceptions, at 1.
\1\ Following the issuance of the Recommended Decision, Respondent's counsel filed a pleading entitled: "Notice of Appeal." Therein, Respondent requests that the record be prepared and forwarded "to the appropriate Appeals Court." Notice of Appeal, at 1. Respondent did not, however, file exceptions to the ALJ's decision as provided for in the Agency's regulations. See 21 CFR 1316.66. As for its "Notice of Appeal," the ALJ's Recommended Decision is not a final decision of the Agency and thus, the filing of the record in "the appropriate" court, whatever that maybe, is premature. In the event Respondent files a Petition for Review of this Decision and Order, which is the final decision of the Agency, the Agency will comply with Rule 17 of the Federal Rules of Appellate Procedure.
As support for its contention, the Government argues that I should reach the issue because it "was fully briefed by the parties," "there is no dispute as to any material fact," and "the issue is likely to recur with the Respondent" because its "owner has stated his intent to reapply for a state license and pursue opening the pharmacy." Id. at 2. Finally, the Government argues that "requiring the parties to revisit this issue as part of a future case would be a waste of resources, given that this issue has been briefed and is now ripe for disposition." Id.
contentions. Here, even assuming that further factual development is not necessary and that the parties have fully briefed the issue, Respondent's professed intent to reapply for a state license remains speculative, and until such time as Respondent obtains a new state license (and a new Texas DPS registration), it is not authorized to handle controlled substances under state law and cannot obtain a DEA registration. See Texas v. United States, 523 U.S. 296, 300 (1998) ("A claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.") (int. quotations and citations omitted). Thus, were I to adopt Respondent's position, it would still not be entitled to a registration.
\2\ Respondent asserts that the issue of its proposed business model is ripe for review because "[e]very time [it] applies for a State license all [the Government] has to do is to sit on the application for a period of six months or more and Respondent will have to close [the] Pharmacy. [The Government] can then assert that Respondent has no State license and should be barred from going forward and hence evade review." Resp. Answer to Movant's Mot. for Summ. Disp., at 3.
Respondent's position apparently stems from the Texas Pharmacy Act and a regulation of the Texas Board of Pharmacy which authorize disciplinary action against the holder of a pharmacy license if the Board finds that the holder has "failed to engage in or ceased to engage in the business described in the application for a license." Tex. Occ. Code Sec. 565.002(7); see also 22 Tex. Admin. Code Sec. 291.11(a)(1) (" 'Failure to engage in the business described in the application for a license' means the holder of a pharmacy license has not commenced operating the pharmacy within six months of the date of issuance of the license.").
However, Respondent does not explain why it could not have opened for business and dispensed non-controlled drugs while it challenged the denial of its application.
Moreover, were I to adopt the Government's position, so long as the Respondent does not hold the requisite state authority and is not entitled to be registered, my decision would be an advisory opinion.\3\ While an administrative agency is not subject to the case or controversy requirements of Article III, relevant authority suggests that in the event Respondent sought judicial review of the decision, the federal courts would lack jurisdiction to review that part of the decision. It is settled, however, that where the federal courts lack the power to review an agency decision because of intervening mootness, the court vacates the agency's order. See A.L. Mechling Barge Lines, Inc. v. United States, 368 U.S. 324, 329 (1961) (vacating administrative orders which had become unreviewable in federal court); see also American Family Life Assurance Co. v. FCC, 129 F.3d 625, 630 (D.C. Cir. 1997) ("Since Mechling, we have, as a matter of course, vacated agency orders in cases that have become moot by the time of judicial review."). See also Samuel H. Albert, 74 FR 54851, 54852 (2009). Thus, it is unclear how ruling on the issue would preserve the Agency's resources.
\3\ This is not a case where an applicant, that lacks state authority, has also previously engaged in actionable misconduct under the public interest factors. Under those circumstances, denying an application on both grounds does not present an issue of either mootness or ripeness as it relies on acts that have been committed and not speculation as to a future course of conduct.
Whether this is deemed to be an issue of mootness, because Respondent once held the requisite state license but chose to surrender it, or ripeness, because Respondent has not obtained a new state license (which is a prerequisite to registration, see 21 U.S.C. 802(21), 823(f)), the same result would likely obtain on judicial review. Under these circumstances, the issue raised by Respondent's proposed business model is not suitable for adjudication in this proceeding.
I therefore adopt the ALJ's Recommended Decision \4\ and will deny Respondent's application.
\4\ I note, however, that the Order to Show Cause was issued by the Deputy Assistant Administrator, Office of Diversion Control.
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 The Main Pharmacy, for a DEA Certificate of Registration as a Retail Pharmacy, be, and it hereby is, denied. This Order is effective immediately.
Nemuel Pettie, Esq., for the Respondent.
\1\ Order to Show Cause dated Aug. 18, 2014 at 1.
\2\ Respondent's Request for Hearing dated Sept. 9, 2014 at 1.
\5\ Order to Show Cause at 1.
\8\ Respondent's Request for Hearing dated Sept. 9, 2014 at 1, received by DEA Sept. 10, 2014.
\9\ Respondent's Request for Hearing at 2.
\11\ Order to Show Cause at 2.
\12\ Government's Motion for Summary Disposition dated Sept. 10, 2014 at 1-2.
\13\ Order Authorizing Briefs Regarding Summary Disposition dated Sept. 10, 2014 at 1.
\15\ Respondent's Answer to Movant's Motion for Summary Disposition dated Sept. 22, 2014 at 1.
\16\ Government's Reply to Respondent's Answer to Government's Motion for Summary Disposition dated Sept. 25, 2014 at 1.
before me there is a material issue regarding Respondent's authority to handle controlled substances in Texas, the application must be denied summarily, without a hearing.
\17\ Government's Motion for Summary Disposition at 6-8.
\18\ See 21 U.S.C. 801(21), 823(f), 824(a)(3); see also House of Medicine, 79 FR 4959, 4961 (DEA 2014); Deanwood Pharmacy, 68 FR 41662-01 (DEA July 14, 2003); Wayne D. Longmore, M.D., 77 FR 67669-02 (DEA November 13, 2012); Alan H. Olefsky, M.D., 72 FR 42127-01 (DEA August 1, 2007); Layfe Robert Anthony, M.D., 67 FR 15811 (DEA May 20, 2002); George Thomas, PA-C, 64 FR 15811-02 (DEA April 1, 1999); Shahid Musud Siddiqui, M.D., 61 FR 14818-02 (DEA April 4, 1996); Michael D. Lawton, M.D., 59 FR 17792-01 (DEA April 14, 1994); Abraham A. Chaplan, M.D., 57 FR 55280-03 (DEA November 24, 1992). See also Bio Diagnosis Int'l, 78 FR 39327-03, 39331 (DEA July 1, 2013) (distinguishing distributor applicants from other "practitioners" in the context of summary disposition analysis).
\19\ Respondent's Answer to Movant's Motion for Summary Disposition at 2.
\21\ Id. See Herstein, Ori J. "A Normative Theory of the Clean Hands Defense." (2001) Cornell Law Faculty Publications. Paper 210. http://scholarship.law.cornell.edu/facpub210, p.3.
\22\ Respondent's Answer to Movant's Motion for Summary Disposition at 2. See Tex. Admin. Code 291.9 (2012).
\23\ Respondent's Answer to Movant's Motion for Summary Disposition at 2.
\25\ Respondent's Answer to Movant's Motion for Summary Disposition at 3.
\26\ Order to Show Cause at 1.
\27\ See Abraham A. Chaplan, M.D., 57 FR 55280-03, 55280 (DEA November 24, 1992), and cases cited therein. In Chaplan, DEA Administrator Robert C. Bonner adopts the ALJ's opinion that "the DEA lacks statutory power to register a practitioner unless the practitioner holds state authority to handle controlled substances." Id.
\28\ Respondent's Answer to Movant's Motion for Summary Disposition at 2.
\30\ James Dell Potter, M.D., 49 FR 9970-01 (DEA Mar. 16, 1984).
Therefore, the protection of the public is preeminent, and the Agency is limited in its authority to direct relief under equitable principles.
\32\ Saihb S. Halil, M.D., 64 FR 33319-01 (DEA June 22, 1999).
\36\ Respondent's Answer to Movant's Motion for Summary Disposition at 3.
\38\ Government's Motion for Summary Disposition dated September 25 at 2.
The Government does not directly address the premise that The Main Pharmacy is intended to "cater to accident victims only." \39\ Presumably, a pharmacy catering exclusively to accident victims would likely face substantial limitations if it was unable to deliver critical medication to its customers. Nonetheless, The Main Pharmacy chose this business model, doing so while being subject to the regulatory environment established under the Controlled Substances Act. Despite these limitations, there is no factual basis for finding the pharmacy could not have conducted a legally "sufficient" \40\ number of transactions while it waited for its DEA Registration.
\39\ Respondent's Request for Hearing at 2.
\40\ Respondent's Answer to Movant's Motion for Summary Disposition, Exhibit 1.
The reasons for withdrawal are not material, given the statutory language set forth above.
\41\ See Michael G. Dolin, M.D., 65 FR 5661 (DEA February 4, 2000); see also Philip E. Kirk, M.D., 48 FR 32887 (DEA July 19, 1983), aff'd sub nom. Kirk v. Mullen, 749 F.2d 297 (6th Cir. 1984).
\42\ Government's Motion for Summary Disposition at 6.
\43\ NLRB v. International Assoc. of Bridge, 549 F.2d 634, 638 (9th Cir. 1977) (quoting United States v. Consolidated Mines & Smelting Co., Ltd., 455 F.2d 432, 453 (9th Cir. 1971)).
In this context, I am further guided by prior decisions before the DEA involving certificate holders who lacked licenses to distribute or dispense controlled substances. On the issue of whether an evidentiary hearing is required, "it is well settled that when there is no question of material fact involved, there is no need for a plenary, administrative hearing." \44\ Under this guidance, the Government's motion must be sustained unless a material fact question has been presented.
\44\ See Michael G. Dolin, M.D., 65 FR 5661 (DEA February 4, 2000); Jesus R. Juarez, M.D., 62 FR 14945 (DEA March 28, 1997); see also Philip E. Kirk, M.D., 48 FR 32887 (DEA July 19, 1983), aff'd sub nom. Kirk v. Mullen, 749 F.2d 297 (6th Cir. 1984).
As cited by the Government in its Motion for Summary Disposition, there is substantial authority both through agency precedent and through decisions of courts in review of that precedent, holding that an application for a retail pharmacy DEA registration is dependent upon the applicant having a state license to dispense controlled substances.\48\ Under the doctrine before me, the Government meets its burden of establishing grounds to deny an application for registration upon sufficient proof establishing the applicant does not possess a state pharmacy license. That proof is in the record before me, and it warrants the summary denial of Respondent's application for a DEA Certificate of Registration.
\48\ Government's Motion for Summary Disposition at 7 and cases cited therein.
I am mindful of the arguments raised by Respondent in its Answer to Movant's Motion, including the fact that Respondent's lack of a pharmacy license is based on Respondent's voluntary withdrawal of its pharmacy license to avoid state sanctions as a result of delays by the DEA.\49\ These difficulties do not, however, change the fact that without a state pharmacy license, Respondent is not a "practitioner" and cannot be granted a Certificate of Registration. Equitable principles, even were they available in this forum, fail to lead to a different outcome. As made clear in Potter and Halil, the lack of timeliness in processing an application for a DEA Certificate of Registration does not overcome the public interest.
\49\ Respondent's Answer to Movant's Motion for Summary Disposition at 2.
Some care should be taken to assure the parties that the actions taken in this administrative proceeding conform to constitutional requirements. I have examined the parties' contentions with an eye towards ensuring all tenets of due process have been adhered to. There is, however, no authority for me to evaluate the facts that underlie Respondent's contentions. In the proceedings now before me, the only material question was answered by Respondent in its Request for Hearing. Further, while the Order to Show Cause sets forth a non-exhaustive summary of facts and law relevant to a determination that granting this application would be inconsistent with the public interest under 21 U.S.C. 823(f), the conclusion, order and recommendation that follow are based solely on a finding that Respondent is not a "practitioner" as that term is defined by 21 U.S.C. 802(21), and I make no finding regarding whether granting this application would or would not be inconsistent with the public interest.
I find there is no genuine dispute regarding whether Respondent is a "practitioner" as that term is defined by 21 U.S.C. 802(21), and that based on the record the Government has established that Respondent is not a practitioner and is not authorized to dispense controlled substances in the state in which it seeks to operate under a DEA Certificate of Registration. I find no other material facts at issue, for the reasons set forth in the Government's Motion for Summary Disposition. Accordingly, I GRANT the Government's Motion for Summary Disposition.
Upon this finding, I ORDER that this case be forwarded to the Administrator for final disposition and I RECOMMEND the Administrator DENY Respondent's application for a DEA Certificate of Registration.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.