Source: https://www.deadiversion.usdoj.gov/fed_regs/actions/2015/fr0714.htm
Timestamp: 2019-04-21 04:19:30+00:00

Document:
On October 26, 2010, an Agency Administrative Law Judge issued the attached Recommended Decision.\1\ Therein, the ALJ rejected, as unsupported by substantial evidence, the Government's allegations that: (1) Respondent had unlawfully prescribed methadone to a patient for the purpose of treating the patient's opioid addiction; (2) Respondent had issued a controlled substance prescription to an employee for the purpose of obtaining the controlled substance for her own use; and (3) Respondent could not account for 13 bottles or 390 dosage units of Suboxone. R.D., at 32-43.
\1\ All citations to the Recommended Decision are to the slip opinion as issued by the ALJ.
However, the ALJ also found that the Government had proved several allegations. These included that: (1) Respondent possessed controlled substances at an unregistered location when she moved her office without obtaining a modification of her registration; (2) Respondent occasionally allowed patients to return controlled substances to her if they did not like the medication or had an adverse reaction to it; and (3) Respondent failed to keep required records (including DEA Form-222s) for her receipts of Demerol, a schedule II controlled substance, as well as both inventories and dispensing logs for Ambien (zolpidem) and Provigil (modafinil), both being schedule IV controlled substances.\2\ Id. at 30-32; 44; 46-49.
\2\ The ALJ also noted that "the evidence indicates that Respondent did not follow adequate security procedures" in that the controlled substance were not stored "in a securely locked, substantially constructed cabinet" and "Respondent did not maintain control over the key." R.D. at 45. However, the ALJ declined to consider the evidence on the ground that the Government did not provide adequate notice in either the Show Cause Order or its Prehearing Statement, notwithstanding that Respondent did not object to the testimony. While the record arguably support a finding that the issue was litigated by consent, see CBS Wholesale Distributors, 74 FR 36746, 36750 (2009), the Government did not take exception to the ALJ's ruling. I therefore do not consider the evidence.
With respect to the latter finding, the ALJ noted that while recordkeeping violations alone can support an order of revocation, Respondent's violations "occurred over a comparatively short period of time, with substantially fewer controlled substances [than in those cases where revocation was ordered], and with no evidence of actual diversion of any controlled substances." Id. at 52. The ALJ thus concluded that while "Respondent's errors and conduct clearly were neglectful and serious during the relevant time period," he then reasoned that they were "likely due in part to ongoing issues including eviction from her registered office, employee problems, and an office break-in and theft" and that an order of revocation would be disproportionate to the misconduct which was proved. Id.
The ALJ did not explain why these issues prevented Respondent from maintaining proper records for all of the controlled substances she obtained and dispensed or for ensuring that she obtained a new registration after she moved into her new office.
The ALJ further found that "Respondent's testimony as a whole demonstrates that she has sufficiently accepted responsibility for her actions and omission with regard to a revocation penalty." Id. However, he then found that her "explanation of past errors and demonstrated plan to avoid future violations is insufficient to support an unconditional registration." Id.
The ALJ thus recommended that Respondent's registration not be revoked and that she be granted a registration subject to the conditions that she submit, no later than one year after issuance of a new registration, documentation reflecting that she had successfully completed "accredited training . . . in the proper maintenance, inventory, and recordkeeping requirements for controlled substances." Id. at 52-53. The ALJ also recommended that Respondent's registration be subject to the condition that for one year after the issuance of a new registration, she submit a log of all controlled substances "received, maintained and dispensed" by her each quarter. Id. at 53.
The Government filed an Exception to the ALJ's decision. Thereafter, the record was forwarded to this Office for final agency action.
On review, it was noted that Respondent's registration was due to expire on August 31, 2010, one week after the hearing in this matter was conducted. GX 1. Moreover, at the hearing, the Government argued that the proceeding was moot because under an agency regulation, Respondent was required to file her renewal application at least 45 days before her registration expired in order for her registration to remain in existence past its expiration date. Tr. 9. The Government further argued that Respondent had not filed a renewal application for a Texas Controlled Substances Registration with the Texas Department of Public Safety (DPS), and thus, even if Respondent prevailed in the DEA hearing, she would not be entitled to be registered because she lacked state authority as a result of her failing to file for a renewal of her DPS registration.\3\ Id. at 9-10. Respondent disputed the Government's contention, asserting that she had filed an application with DPS six months earlier as well as the day before the hearing; she also asserted that she could not obtain a new DPS registration without a DEA registration. Id. at 10.
\3\ This proceeding commenced with the issuance of an Order to Show Cause and Immediate Suspension of Registration. Thereafter, both the Texas Medical Board and the Texas Department of Public Safety suspended Respondent's medical license and state controlled substance registration. Accordingly, the Government moved for summary disposition on the ground that because she lacked state authority, she could not be registered with DEA, and thus, her DEA registration should be revoked. The ALJ granted the Government's motion, recommended that her DEA registration be revoked, and thereafter forwarded the then-existing record to this Office for final agency action.
While the matter was under review, Respondent submitted a letter to the ALJ (which was then forwarded to this Office) asserting that the medical board had reinstated her medical license. The Government argued, however, that Respondent was still without state authority because her DPS registration had been revoked and she had not filed a new application. Respondent then submitted a letter in which her counsel asserted that she could not be reinstated by the DPS unless DEA reinstated her registration.
While the parties had engaged in an exchange of letters with each other and the ALJ, neither party filed a motion seeking relief from this Office notwithstanding that the record had since been forwarded to it. The Administrator therefore ordered that if the Government still sought a final order based on Respondent's lack of state authority, it should file a properly supported motion seeking such relief and serve it on Respondent.
Thereafter, the Government filed a request for final agency action, noting that Respondent's DPS registration had not been reinstated, which it supported with appropriate evidence. In opposition, Respondent argued that it was fundamentally unfair and a denial of due process to revoke her DEA registration based on the DPS's action, because the DPS's action was based on the unsubstantiated allegations of the DEA Immediate Suspension Order.
On review, the Administrator noted that it appeared that under Texas law and regulations, Respondent was not entitled to a hearing before the DPS to challenge either the DPS's suspension or the denial of her application for a new registration. See Tex. Health & Safety Code Sec. 481.063(e)(3) & (h); id. Sec. 481.066(g); see also Tex. Admin Code Sec. 13.272(h). Because, if this was so, revoking her registration based on her lack of state authority would preclude her from ever being able to challenge the basis of the Immediate Suspension Order, the Administrator remanded the case to the ALJ with the instruction to first determine whether the DPS would provide her with a hearing on the allegations. The Administrator further instructed that if the DPS had provided or would provide a hearing, the Government could renew its motion for summary disposition; however, in the event DPS would not provide a hearing, the ALJ was to conduct a hearing on the allegations of the Order to Show Cause and Immediate Suspension of Registration.
The Government then noted that Respondent had not even attempted to submit a renewal application. Id. The Government further argued that because Respondent would still not possess a state license after the DEA proceeding was concluded, there were no collateral consequences which would preclude a finding of mootness. Id. at 11. Respondent then offered to "file a DEA application today after the hearing." Id. at 12. The ALJ then denied the Government's motion and proceeded to conduct a hearing.
Several months later, Respondent's counsel faxed to the ALJ a copy of a printout from the DPS's Web site which showed that on November 15, 2010, Respondent had been granted a new DPS registration. However, because there was no evidence that Respondent had filed a renewal application, the Administrator ordered the parties to address whether the case was moot. Order, at 2. (June 28, 2011).
Also, having taken official notice that on August 27, 2010, the Texas Medical Board had issued a formal complaint against Respondent charging her with multiple violations of Texas laws based on her prescribing of controlled substances to 19 patients,\4\ the Administrator ordered the parties to address the status of the Board proceedings. Id. Thereafter, the Government notified this Office that Respondent had, in fact, finally filed a renewal application on November 19, 2010, seven days after it filed its Exception and before the ALJ forwarded the record. Gov. Submission in Response to Order, at 2. The Government further notified this Office that the Medical Board matter was still pending and had gone to mediation, but that further mediation had been postponed and that a date had not been set for further mediation. In her filing, Respondent denied having engaged in non-therapeutic prescribing and asserted that the State's allegation were "unsubstantiated."
\4\ While the Medical Board had restored Respondent's medical license in October 2009, on August 30, 2010, the Board had filed a formal complaint against her which charged her, inter alia, with engaging " 'in a pattern of non-therapeutic prescribing of controlled substances and/or dangerous drugs.' " Respondent's Resp. to the Govt's Req. for Status Update, at 6 (quoting Complaint at 2, In re Campbell, No 10-6060.MD (Tex. Med. Bd., Aug. 27, 2010)). This proceeding was, however, resolved through mediation and dismissed on the motion of the Texas Medical Board. See Order No. 3, In re Campbell (Tex. SOAH. Mar 19, 2012).
\5\ This Office has also taken Official Notice of the Docket Sheet Entries in this proceeding, as well as Document #27, which sets forth the disposition of an October 6, 2011 hearing conducted by the district court on Respondent's violation of the conditions of her pretrial release, wherein the Court modified the conditions of her release to prohibit her from writing any controlled substance prescriptions.
Under 42 U.S.C. 1320a-7(a)(3), had Respondent been convicted of even a single count of Health Care Fraud, she would have been subject to mandatory exclusion "from participation in any Federal health care program." Moreover, just as a mandatory exclusion is a ground to suspend or revoke an existing registration, it is also ground to deny an application. See 21 U.S.C. 824(a)(5) (authorizing suspension or revocation of a registration "upon a finding that the registrant . . . has been excluded (or directed to be excluded) from participation in a program pursuant to section 1320a-(7)(a) of Title 42"); see also Pamela Monterosso, 73 FR 11146, 11148 (2008) (noting that "the various grounds for revocation or suspension of an existing registration that Congress enumerated in section 304(a), 21 U.S.C. 824(a), are also properly considered in deciding whether to grant or deny an application under section 303") (citing cases). Accordingly, this case was held in abeyance pending the final disposition of the Health Care Fraud charges against Respondent.
On March 27, 2013, the United States Attorney offered Respondent a pre-trial diversion agreement, pursuant to which prosecution of the charges would be deferred for a period of 12 months provided she complied with the agreement. The United States Attorney further agreed that upon her "fulfilling all the terms and conditions of the Agreement" for the 12-month period, the charges would be dismissed. The Government does not dispute that Respondent complied with the agreement and even submitted a copy of the Certification of Completion of Pretrial Diversion Program, which recommended that the charges against her be dismissed when the diversion agreement expired on March 26, 2014. However, months later, the case still remained open according to the district court docket sheet.
Moreover, during the preparation of this decision, this Office determined that on September 19, 2014, the Texas Medical Board filed a new formal complaint against Respondent seeking the revocation of her medical license. The complaint was based in part on the 2010 indictment for health care fraud and her subsequent entrance into the pre-trial diversion agreement, as well as the results of a July 2013 Lifeguard assessment which found that she "lacked the fitness to safely practice medicine" in that she "displayed a less than adequate knowledge base with many of the practice-based competencies tested, as well as deficiencies in prescriptive practices." Mediated Agreed Order, at 1 & 4; In re Campbell, (Tx. Med. Bd. Feb. 13, 2015). Because possessing state authority to dispense controlled substances is a prerequisite for holding a DEA registration, see 21 U.S.C. 802(21) & 823(f), this proceeding was again held in abeyance pending the resolution of the Board proceeding.
Thereafter, the matter was referred to mediation, and on February 13, 2015, the Board and Respondent entered into a Mediated Agreed Order. Id. Therein, the Board found that Respondent has successfully completed the pre-trial diversion agreement, that she had "complied with all recommendations made as a result of the Lifeguard assessment," and that she had "produced evidence of her ongoing efforts to advance her medical knowledge." Id. Respondent was thus allowed to retain her state license.
As noted above, the Government filed an Exception to the ALJ's Recommended Decision. Because Respondent had allowed her registration to expire and had not filed a renewal application, the Government argued that the Agency should reject the ALJ's ultimate recommendation that Respondent's registration should not be revoked and that she should be granted a restricted registration. Exception, at 2. Noting that the ALJ cited no precedent for maintaining a DEA registration beyond its expiration date where the registrant failed to file a timely renewal application, the Government argued that "the only possible recommendation to be made by the ALJ is whether the Deputy Administrator should affirm the Immediate Suspension Order issued simultaneously with the Order to Show Cause." Id. at 1-2. However, as found above, Respondent filed an application for a new registration prior to the ALJ's forwarding of the record to this Office. Thus, notwithstanding that Respondent's registration expired on August 31, 2010, there is an application to act upon.
The Government further contended that "the issuance of the Immediate Suspension Order" should be affirmed "for the reasons discussed in the Government's Post-Hearing Brief." Exception, at 2. While Respondent did not file her application until after she received the ALJ's largely favorable decision and the Government filed its Exception, I assume that the Government would likewise seek denial of the application "for the reasons discussed in the Government's Post-Hearing Brief." Id.
However, the Agency regulation on Exceptions is quite specific in requiring that a "party shall include a statement of supporting reasons for such exceptions, together with evidence of record (including specific and complete citations of the pages of the transcripts and exhibits) and citations of the authorities relied upon." 21 CFR 1316.66(a). The purpose of Exceptions is to allow a party to identify the specific factual findings and legal conclusions of the ALJ which it believes to be erroneous. Cf. The Attorney General's Manual on the Administrative Procedure Act 87 n.5 (1947) (quoting Final Report of the Attorney General's Committee on Administrative Procedure, at 52) ("Too often . . . exceptions are blanket in character, without reference to pages in the record and without in any way narrowing the issues. They simply seek to impose upon the agency the burden of complete reexamination. Review of the hearing commissioner's decision should in general and in the absence of clear error be limited to grounds specified in the appeal.").
Here, the ALJ previously considered the Government's post-hearing brief and found its evidence unpersuasive on several critical issues, including the allegations that Respondent had issued a prescription to an employee that was actually for her own use and that Respondent was prescribing methadone to treat opioid addiction. With respect to each allegation, the Government relied on unsworn hearsay statements, which the ALJ found were not sufficiently reliable when weighed against the testimony of witnesses which he found credible and the documentary evidence. Because the Government has failed to identify in its Exception why the ALJ erred in reaching these findings, I adopt the ALJ's findings.
As noted above, the ALJ also rejected the Government's evidence regarding the accountability audit. Here again, the Government has failed to identify in its Exception why the ALJ erred in reaching his finding. Indeed, the Government did not even submit the audit computation chart, let alone such documentation as the closing inventory taken by the Investigator. Thus, I must reject the Government's contention.
being registered there. R.D. at 30-32. The ALJ found that this conduct constituted a violation of 21 U.S.C. 822(e) and 827(g), as well as 21 CFR 1301.51. Id. at 32. The ALJ found, however, that there was evidence that mitigated the violations as Respondent had notified the Texas DPS that she had changed her practice location and concluded that her failure to notify the Agency of her address change was not "intentionally deceitful" but the result of an "omission." Id.
The ALJ further found that Respondent admitted that she occasionally accepted controlled substances from patients which she then destroyed, notwithstanding that no provision in the CSA or DEA regulations permits this. R.D. at 44. However, the ALJ also found that there was no evidence that this was a frequent occurrence or evidence that the drugs were diverted; rather, "the un-rebutted testimony was that the drugs were destroyed." Id. Be that as it may, it is still a violation of the CSA. See 21 U.S.C. 844(a) ("It shall be unlawful for any person knowingly or intentionally to possess a controlled substance unless such substance was obtained directly, or pursuant to a valid prescription or order, from a practitioner, while acting in the course of his professional practice, or except as otherwise authorized by this subchapter or subchapter II of this chapter.").
Next, the ALJ found that Respondent failed to keep proper controlled substance records. Specifically, the ALJ credited the testimony of the Diversion Investigators that Respondent's records showed that she had dispensed Demerol, a schedule II controlled substance. R.D. at 47. Because it is a schedule II drug, Respondent was required to document her purchases and receipts of the drug on DEA Form 222. 21 CFR 1305.04(a); id. Sec. 1305.12; id. Sec. 1305.13(a) & (e). She was also required to retain a copy of the form for at least two years from the date of the order. Id. Sec. 1305.17; 21 CFR 1304.04(a). However, during a search of Respondent's registered and non-registered locations (as well as her home), no Form 222s were found. R.D. at 47. Nor were there any invoices for the Demerol.
Moreover, while the Investigators found that Respondent was dispensing other controlled substances, including Ambien (zolpidem) and Provigil (modafinil), each of which is a schedule IV drug, see 21 CFR 1308.14 (c) & (e); there were no inventories or dispensing logs for either drug. R.D. at 47.
\6\ As explained above, as of the date of the hearing, Respondent had not filed a timely renewal application and her registration expired one week after the hearing and before the record was forwarded.
Turning to whether Respondent had produced sufficient evidence to rebut the Government's prima facie case, the ALJ noted that under the Agency's rule, "where a registrant has committed acts inconsistent with the public interest, a registrant must accept responsibility for his or her actions and demonstrate that he or she will not engage in future misconduct." Patrick W. Stodola, 74 FR 10083, 10094 (2009). Moreover, in setting the appropriate sanction, the Agency also considers the egregiousness of the proven misconduct and the need to deter future violations by both the Applicant and members of the regulated community. Fred Samimi, 79 FR 18698, 18713 (2014) (citing Jacobo Dreszer, 76 FR 19386, 19387-88 (2011)).
As for her failure to update her registered address, the ALJ noted that Respondent had updated her address with the Texas DPS and had "made various efforts to do so with DEA." R.D. at 51. However, the ALJ found that Respondent's explanation for her recordkeeping violations was "less specific." Id. Noting her testimony that Respondent "believed she 'had very effective oversight' of controlled substances," the ALJ found that her "belief is contradicted by [her] own testimony." Id. Specifically, the ALJ noted that "Respondent testified that she relied heavily on her staff with regard to inventory and maintenance of controlled substances and . . . did very little herself." Id. While the ALJ concluded that her "testimony as a whole demonstrated that she understood the seriousness and importance of recordkeeping requirements," id., at no point in her testimony did she acknowledge that as a DEA registrant, she was the person ultimately responsible for maintaining the required records.
Noting that Respondent's recordkeeping violations "occurred over a comparatively short period of time, with substantially fewer controlled substances, and with no evidence of actual diversion," the ALJ rejected the Government's contention that revocation was the appropriate sanction, reasoning that it was disproportionate to her misconduct. Id. at 52. However, he also found that while "Respondent's testimony as a whole demonstrates that she has sufficiently accepted responsibility for her actions and omissions . . . [her] explanation of past errors and demonstrated plan to avoid future violations is insufficient to support an unconditional registration." Id.
\7\ While Respondent maintained that she was locked out of her first location (4851 I-35 East, Denton, TX.), she also testified that her staff had packed up the medical records prior to her eviction. Tr. 200. Moreover, in her testimony, Respondent stated that the judge in the eviction case granted her "a brief period of time" to retrieve her medications. Id. Unexplained is why she would not have also retrieved any controlled substance records at this time.
log of all controlled substances received, maintained and dispensed.
I reject these conditions as insufficient to protect the public interest. As explained above, Respondent offered no plan to address the recordkeeping violations that were proved on the record. In the absence of evidence that Respondent has successfully completed a course in controlled substance recordkeeping, allowing Respondent to possess, dispense and administer controlled substance would be "inconsistent with the public interest." 21 U.S.C. 823(f).
\8\ In the event Respondent provides evidence that she has completed a course in controlled substance recordkeeping, these conditions will be removed from her registration one year from the effective date of this Order. However, in the event Respondent is granted authority to possess, administer and dispense controlled substances, she shall provide, on a quarterly basis, a log of all controlled substances she receives, possesses, dispenses, or otherwise disposes of, to the nearest DEA Field Division Office. Said log shall be submitted no later than ten (10) calendar days following March 31st, June 30th, September 30th, and December 31st. This requirement shall remain in effect for the duration of the initial period of re-registration. However, if Respondent fully complies with this condition, this requirement shall be removed upon the renewal of her registration.
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 CFR 0.100(b), I order that the application of Odette L. Campbell, M.D., for a DEA Certificate of Registration as a practitioner, be, and it hereby is, granted subject to the conditions set forth above. I further order that upon the granting of the application, the registration shall be suspended for a period of six months. This Order is effective August 13, 2015.
Jeffrey C. Grass, Esq., for Respondent.
Timothy D. Wing, Administrative Law Judge. This proceeding is an adjudication governed by the Administrative Procedure Act, 5 U.S.C. 551 et seq., to determine whether Respondent's Certificate of Registration (COR) with the Drug Enforcement Administration (DEA) should be revoked and any pending applications for renewal or modification of that registration should be denied. Without this registration, Respondent, Odette L. Campbell, M.D., of Denton, Texas, would be unable to lawfully possess, prescribe, dispense or otherwise handle controlled substances.
1. Respondent is currently registered with the DEA as a practitioner in Denton, Texas. Respondent is also authorized to treat no more than thirty narcotic-dependant patients at any one time with Schedule III through V narcotic controlled substances that are approved by the Food and Drug Administration for that indication. Respondent's current DEA registration was set to expire by its own terms on August 31, 2010.
\1\ Citing 21 U.S.C. 841(a)(1), 822(3) and 827(g).
\2\ Citing 21 U.S.C. 823(g)(1); 21 CFR 1306.04(c).
\3\ Citing 21 CFR 1306.04.
\4\ Citing 21 U.S.C. 843(a)(3).
\5\ Citing 21 CFR 1304.21.
The Order to Show Cause and Immediate Suspension of Registration (OSC/IS) advised Respondent of her right to a hearing in this matter, and further advised that if she requested a hearing, it would be held on September 21, 2009, at DEA headquarters in Arlington, Virginia. Respondent timely filed a request for a hearing on the issues identified in the OSC/IS and referred all future correspondence to counsel.
\6\ Citing Roy Chi Lung, M.D., 74 FR 20,346 (DEA 2009); Michael Chait, 73 FR 40,382 (DEA 2008); Shahi Musud Siddiqui, M.D., 61 FR 14,818 (DEA 1996); Michael D. Lawton, M.D., 59 FR 17,792 (DEA 1994); and Abraham A. Chaplan, M.D., 57 FR 55,280 (DEA 1992).
\7\ ALJ Ex. 10 at 2 (citing Stuart A. Bergman, M.D., 70 FR 33,193 (DEA 2005); Roger A. Rodriguez, M.D., 70 FR 33,206 (DEA 2005)).
On September 11, 2009, counsel for Respondent \8\ entered his appearance in this matter and filed a response to the Government's motion. Counsel for Respondent asserted that the Texas Medical Board action required that Respondent's DEA registration be suspended, but requested a stay in the instant proceedings pending resolution of the state proceedings.
\9\ ALJ Bittner was designated the presiding officer in this matter from August 28, 2009, until June 8, 2010.
What action the Texas Department of Public Safety (DPS) has taken on Respondent's application for state registration to handle controlled substances and whether the DPS has provided or will provide Respondent with a hearing; and, if the DPS has determined that Respondent is not entitled to a hearing, to conduct an expedited hearing on the allegations of the OSC/IS served on Respondent on August 4, 2009.
The Government first contends that Respondent's alleged due process violations and the failure of the Texas DPS to provide Respondent with a hearing regarding the revocation of her state controlled substance license are beyond the jurisdiction of this agency to adjudicate and would properly be heard by the Texas courts and the DPS.
The Government further argues that because Respondent currently lacks authority to handle controlled substances in Texas, the jurisdiction in which she is licensed to practice medicine and in which she holds a DEA registration, "any fact-finding proceeding regarding the original basis for the Order to Show Cause [is] moot." \10\ Citing 37 Tex. Admin. Code Sec. 13.274(b), the Government contends that the DPS will not automatically restore Respondent's controlled substances registration even if Respondent prevails in these proceedings because the DPS will not reinstate a revoked registration sooner than one year from the date of the final revocation and upon filing of a new application for registration. According to the Government, these proceedings are therefore moot because, if Respondent's DEA registration is reinstated, the Government would have to immediately reinitiate proceedings by issuing an OSC on the ground that Respondent lacks authority to handle controlled substances in Texas.
Respondent first contends that the allegations contained in the OSC/IS are untrue and, therefore, her DEA registration should not be "permanently revoked." Respondent argues that 37 Tex. Admin. Code Sec. 13.274(b)(1)(B) provides that within one year after a DPS revocation becomes final, the DPS will consider a request for reinstatement if Respondent demonstrates by a preponderance of the evidence that Respondent's DEA registration has not been permanently revoked. Respondent further contends, however, that it will be pointless to request a DPS hearing on the matter until after the DEA has issued a final order because the sole basis for the DPS revocation is the fact that the DEA suspended Respondent's DEA registration.
Respondent similarly contends that the DPS will not provide a hearing on the matter of reinstatement one year after revocation under 37 Tex. Admin. Code Sec. 13.274(b)(2)(A) because there is no question of fact regarding whether DPS has taken adverse action against Respondent. Again, Respondent argues that such a hearing request will not be granted because the only issue pertains to the status of Respondent's DEA registration. Respondent contends that the restoration of her DEA registration is the only evidence necessary or sufficient to negate the basis of the revocation of her DPS registration and, therefore, only a DEA hearing can result in the resolution of the matter with Texas and with the DEA.
The parties' contentions and the Remand Order essentially concern two procedural issues: (1) whether Respondent has been afforded due process under federal law; and (2) whether the fact that Respondent does not possess state authority to handle controlled substances renders this proceeding moot.
The Supreme Court of the United States has held that the "Due Process Clause of the Fifth Amendment prohibits the United States, as the Due Process Clause of the Fourteenth Amendment prohibits the States, from depriving any person of property without 'due process of law.' " Dusenbery v. United States, 534 U.S. 161, 167 (2002). "The fundamental requirement of due process is the opportunity to be heard 'at a meaningful time and in a meaningful manner.' " Mathews v. Eldridge, 424 U.S 319, 333 (1976) (citations omitted).
In analyzing procedural due process issues, courts have generally engaged in a "two-step inquiry: (1) Did the individual possess a protected interest to which due process protection was applicable? (2) Was the individual afforded an appropriate level of process?" Ward v. Anderson, 494 F.3d 929, 934 (10th Cir. 2007) (citations omitted).
As to the first step, a license has consistently been held to be a property interest entitled to due process protection. Barry v. Barchi, 443 U.S. 55, 64 (1979).
federal due process requires that a respondent be afforded adequate notice and opportunity to be heard "at a meaningful time and in a meaningful manner." Id.; see also Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313 (1950).
Agency precedent has consistently held that where, for example, a state action precedes a DEA OSC or OSC/IS, the DEA need not inquire into the validity of a state licensing agency's decision. George S. Heath, M.D., 51 FR 26,610 (DEA 1986). Similarly, where there is an independent basis for the state action, the DEA has relied on the state authority without further inquiry. See Joseph Baumstarck, M.D., 74 FR 17,525 (DEA 2009); Michael D. Lawton, M.D., 59 FR 17,792 (DEA 1994); George S. Heath, M.D., 51 FR 26,610 (DEA 1986); Hezekiah K. Heath, M.D., 51 FR 26,612 (DEA 1986). Summary disposition based on suspension of a respondent's state authority, of even a temporary nature, has been consistently upheld. E.g., Roger A. Rodriquez, M.D., 70 FR 33,206 (DEA 2005). The Controlled Substances Act (CSA) requires that a practitioner be currently authorized to handle controlled substances in "the jurisdiction in which he practices" in order to maintain a DEA registration.\11\ Therefore, because "possessing authority under state law to handle controlled substances is an essential condition for holding a DEA registration," the DEA has repeatedly held that "the CSA requires the revocation of a registration issued to a practitioner whose State license has been suspended or revoked." See Scott Sandarg, D.M.D., 74 FR 17,528 (DEA 2009) (citing David W. Wang, M.D., 72 FR 54,297 (DEA 2007); Sheran Arden Yeates, M.D., 71 FR 39,130 (DEA 2006); Dominick A. Ricci, M.D., 58 FR 51,104 (DEA 1993); and Bobby Watts M.D., 53 FR 11,919 (DEA 1988)).
\11\ See 21 U.S.C. 802(21).
A review of agency precedent, however, reveals no instance where a respondent's registration has been the subject of a final revocation by summary disposition where state action was triggered solely by the DEA suspension process, and the respondent was afforded no opportunity to be heard "at a meaningful time and in a meaningful manner." Mathews v. Eldridge, 424 U.S 319, 333 (1976) (citations omitted). To the contrary, the DEA has recently rejected a due process argument by a respondent claiming the state action was based on the DEA's order immediately suspending his registration, stating: "Respondent ignores, however, that the State's suspension order did not rely solely on my Order. Rather, the State Board also relied on Respondent's indictment by a federal grand jury . . . . [T]he board clearly conducted its own independent evaluation of the evidence against him and did not simply piggyback on my Order of Immediate Suspension." Joseph Baumstarck, 74 FR 17,525, 17,527 (DEA 2009) (internal citations omitted); see also Oakland Medical Pharmacy, 71 FR 50,100, 50,102 (DEA 2006) (rejecting the contention that it is circular for DEA to rely on a state suspension order to revoke a registration where the State did not rely solely on the DEA order in suspending a practitioner's state license).
\15\ 21 CFR 1301.36(h) states that "[a]ny suspension shall continue in effect until the conclusion of all proceedings upon the revocation or suspension, unless sooner withdrawn by the Administrator or dissolved by a court of competent jurisdiction." This section is distinguishable from the extension requirements for an "applicant . . . who is doing business under a registration . . . not revoked or suspended . . . ." 21 CFR 1301.36(i).
Id. at 77,797 (internal citations and formatting omitted). Additionally, "the issuance of an immediate suspension creates collateral consequences beyond those that are present when the Government serves a Show Cause Order but allows the registrant to continue to handle controlled substances throughout the litigation." Id.
Consistent with the rationale set forth in Lockridge, I find that application of the mootness doctrine to Respondent's case is unwarranted and would deny both Parties an opportunity to resolve the evidentiary issues, as well as prejudice the public interest. Additionally, there is no indication that Respondent intends to suspend her medical practice or not seek restoration of her registration. See Meetinghouse Community Pharmacy, Inc., 74 FR 10,073 (DEA 2009). Absent an opportunity to be heard "at a meaningful time and in a meaningful manner" under the Texas statutory scheme, reliance on agency precedent, including the mootness doctrine, to support summary disposition in this instance is entirely misplaced.
\16\ See Tex. Health & Safety Code Ann. Sec. 481.002(18) (identifying the federal Controlled Substances Act).
The Texas regulatory structure for practitioners is further governed by the Texas Administrative Code, Title 37, Part 1, Ch 13. A "registration terminates: . . . (3) when a regulatory board or DEA accepts a voluntary surrender, or denies, suspends, or revokes a license or a federal controlled substance registration. . . ." \17\ Of significance, the Texas Administrative Code states that the "director will revoke a registration if the registrant: (1) violates a ground of denial described in the Act, Sec. 481.063(e)." \18\ The Code further provides that upon revocation under this section, "the registrant may request a hearing, unless otherwise stated in the Act." \19\ The state due process requirements for licenses, set forth at Tex. Gov't Code Ann. Sec. 2001.054, do not apply to suspensions and revocations pursuant to Texas CSA Sec. Sec. 481.063(e)(2)(A) or (B), (e)(3), (e)(4) or (e)(9). Maynard v. DEA, 117 Fed. App'x 941 (5th Cir. 2004); see Tex. Health & Safety Code Ann. Sec. 481.063(h).
\17\ 37 Tex. Admin. Code Sec. 13.30 (2010).
\19\ Id. Sec. 13.274(d) (emphasis added).
simply cannot support summary disposition on the facts of this case. Accordingly, I find that Respondent is entitled to a federal administrative hearing on the substantive issues alleged in the OSC/ IS.
\20\ I have also carefully considered the "informal hearing" provisions pursuant to Sec. 13.301, but do not find that provision adequate to afford Respondent a meaningful right to a hearing, consistent with due process.
Whether the record establishes that Respondent's DEA COR BC0181999 as a practitioner should be revoked and any pending applications for renewal or modification of that registration should be denied because her continued registration would be inconsistent with the public interest as that term is used in 21 U.S.C. 824(a)(4) and 823(f).
Respondent is registered as a practitioner in Schedules II-V under DEA registration number BC0181999.
\21\ See Tex. Health & Safety Code Sec. Sec. 481.066(b), 481.063(e)(3); 37 Tex. Admin. Code Sec. 13.274(a).
[m]y office administrator notified the Dallas office of the DEA in the third week of February 2009 informing them of my new office address. At the time of the notification, my office had requested a copy of a prior report of a theft which occurred in January 2009 be sent to our new office address. In addition, my new office address had been sent to the Texas Medical Board and the Texas DPS office in Austin, Texas. My Duplicate prescriptions reflected my new office address which led me to believe that I had fulfilled the Federal law requirements. I did not also send my new address to the Arlington, Virginia office. I did not know that this additional notification was required until August 4, 2009. I have been unable to complete my change of address successfully on the DEA internet site after multiple attempts prior hereto . . . .
\23\ [JF] was not called by either party, nor is there any evidence of record to indicate that [JF] was not otherwise available as a witness.
\24\ Respondent's answer on direct examination was interrupted by Respondent's counsel, with a question on a different topic.
The Government first contends that there is "no viable DEA registration to revoke in the matter" because Respondent failed to file a renewal application and her registration expired by its terms on August 31, 2010. The Government argues that any discussion regarding revocation of Respondent's DEA registration is moot because Respondent does not currently possess a valid DEA registration. In the alternative, the Government argues that if the Deputy Administrator finds that collateral consequences require the issuance of a Final Order, then the Deputy Administrator should affirm the immediate suspension order on the grounds that Respondent's continued registration is inconsistent with the public interest.
The Government argues, in substance, that Respondent's "experience in dispensing controlled substances and record of compliance with applicable controlled substances laws is abysmal." (ALJ Ex. 16, 10.) The Government supports its position with allegations that Respondent dispensed a controlled substance prescription for other than a legitimate medical purpose; Respondent prescribed a Schedule II controlled substance for the purpose of opioid addiction treatment; Respondent acted as a reverse distributor without proper authorization by accepting from patients and destroying controlled substances; Respondent illegally possessed controlled substances at an unregistered location; an accountability audit revealed that approximately fifteen bottles of Suboxone were missing from Respondent's office; and Respondent's substandard record-keeping prevented the DEA from performing audits of additional controlled substances.
\25\ I have specifically given no weight and find no relevance to any references or suggestions about "arrests," "criminal search warrants" or similar statements appearing in this record.
With regard to the unauthorized prescribing of a Schedule II controlled substance for the purpose of treating opioid addiction, Respondent contends that the allegation applies to only one prescription and that Respondent was within the standard of care for prescribing such medication and did not violate any laws because Respondent provided the methadone prescription for pain management, which Respondent documented.
Respondent also contends that she did not take a patient or employee's Valium for her own use. Respondent asserts that she came into possession of the medication because she found the medication in the open and attempted to secure it; and that she subsequently forgot about the medication, which eventually ended up in her home, in her laundry pile.
Respondent argues that although the DEA contends that Respondent failed to properly maintain logs and receipts for controlled substances, the DEA never asked to review her controlled substances logs and never asked Respondent to provide receipts.
\30\ 21 CFR 1304.03(b), 1304.22(a)(2)(ix), 1304.21(a), 1304.22(c) & 1304.22(a)(2)(iv).
(2) The applicant's experience in dispensing, or conducting research, with respect to controlled substances.
As a threshold matter, the factors specified in Section 823 (f) are to be considered in the disjunctive: the Deputy Administrator may properly rely on any one or a combination of those factors, and give each factor the weight she deems appropriate, in determining whether a registration should be revoked or an application for registration denied. See David H. Gillis, M.D., 58 FR 37,507, 37,508 (DEA 1993); see also D & S Sales, 71 FR 37,607, 37,610 (DEA 2006); Joy's Ideas, 70 FR 33,195, 33,197 (DEA 2005); Henry J. Schwarz, Jr., M.D., 54 FR 16,422, 16,424 (DEA 1989).
Additionally, in an action to revoke a registrant's COR, the DEA has the burden of proving that the requirements for revocation are satisfied.\32\ The burden of proof shifts to Respondent once the Government has made its prima facie case. Medicine Shoppe--Jonesborough, 73 FR 364 (DEA 2008); see also Thomas Johnston, 45 FR 72,311 (DEA 1980).
\32\ 21 CFR 1301.44(e) (2010).
registration has been suspended. Respondent, therefore, does not possess valid authority to handle controlled substances in the jurisdiction in which she is registered. Given that the Texas authorities relied exclusively on the DEA action to suspend Respondent's state authority, however, Respondent's lack of such authority is not dispositive and has no relevance in determining whether Respondent's continued registration would be inconsistent with the public interest.
Although no additional detail is available, the Texas Medical Board action taken against Respondent with regard to Respondent's failure to timely notify the Texas Medical Board of the relocation of her practice appears to be similar to Respondent's failure to notify the DEA of a subsequent change of practice location. Accordingly, the fact that Respondent was previously disciplined by the Texas Medical Board does weigh in favor of revocation.
These issues were not raised in the OSC/IS but were addressed in the Government's Prehearing Statement. At hearing, however, the Government did not elicit testimony regarding the issues related to prescriptions written by another physician but did submit some limited documentary evidence on the matter. (See Gov't Ex. 3, 6 & 7.) The documentary evidence provided is not sufficient to warrant a review of an issue which the Government has failed to adequately pursue in the proceeding and the issue, therefore, will not be considered further.
The Texas Medical Board's October 16, 2009 Order reinstating Respondent's Texas medical license offers little substantive insight with regard to its own factual findings, which were found to be inconclusive. "The Panel is unable to determine from the evidence presented that Respondent is a continuing threat to the health of Respondent's patients or a continuing threat to the public. . . ." (Gov't Ex. 7.) Accordingly, the action and findings of the Texas Medical Board do not significantly weigh for or against Respondent with regard to the temporary suspension and later reinstatement. The current active status of Respondent's Texas medical license does, on balance, weigh against a finding that Respondent's continued registration would be inconsistent with the public interest.
There is no evidence that Respondent has ever been convicted under any federal or state laws relating to the manufacture, distribution or dispensing of controlled substances. I therefore find that this factor, although not dispositive, weighs against a finding that Respondent's continued registration would be inconsistent with the public interest.
In this case, there is no evidence that, prior to any action related to this matter, Respondent has failed to remain in compliance with applicable federal laws relating to controlled substances. The testimony and evidence does reveal, however, that Respondent failed to properly notify the DEA that she relocated her practice from her registered location to a new unregistered location, in violation of both state and federal law.\33\ There is no evidence that, prior to the current circumstances, Respondent has failed to comply with the Controlled Substances Act. The Respondent has admitted to a March or April 2009, Texas Medical Board monetary fine in relation to missing fentanyl. There is no other independent evidence of record relating to the circumstances surrounding that issue.
\33\ Any registrant may apply to modify his or her registration to change his or her name or address, by submitting a letter of request to the Registration Unit, Drug Enforcement Administration, Department of Justice, Post Office Box 28083, Central Station, Washington, DC 20005. Cf. 21 CFR 1301.14 (2010). The request for modification shall be handled in the same manner as an application for registration. 21 CFR 1301.12 et. seq.; see also 37 Tex. Admin. Code Sec. 13.23 (2010).
It is undisputed that Respondent relocated her practice from her registered location, 4851 I-35 East, Suite 101, Denton, Texas 76210 (I-35 office), to a new location, 4310 Mesa Drive, Denton, Texas 76207 (Mesa office), on or around February 1, 2009. Respondent testified that she relocated her practice to the Mesa office because she was evicted from the I-35 office in late 2008.\34\ Respondent maintains that she did not move controlled substances or acquire controlled substances for use at her temporary Collier street location. (Tr. 197-98.) The evidence does indicate, however, that Respondent did possess and distribute controlled substances from the unregistered Mesa office during the period beginning approximately February 1, 2009, and ending with the issuance of the OSC/IS on August 4, 2009.
\34\ Respondent testified that all controlled substances that remained at the I-35 location were destroyed, not relocated.
\36\ 21 U.S.C. 822(e), 827(g); 21 CFR 1301.51 (2010).
\37\ See 21 CFR 1301.51 (2010).
In this case, the evidence indicates that Respondent failed to modify her registration to update her Mesa office practice address. Respondent testified she believed that she properly notified the DEA of her new address when she requested certain documents be sent to her new location. The evidence of record reflects that Respondent has previously successfully modified the address of her registered location at least three times \38\ and therefore Respondent was fully aware of the proper procedure for requesting an address change. (Gov't Ex. 2.) Additionally, there was no evidence presented at hearing confirming that Respondent has even yet successfully updated the address of her practice location.
\38\ August 21, 2001; March 11, 2003; and September 16, 2004.
The search warrant executed by the FBI and the DEA in April 2009 reflected the presence of controlled substances from Respondent's unregistered Mesa Drive location. I therefore find that Respondent failed to properly notify the DEA of the change in address of her registered location and Respondent possessed and dispensed controlled substances from an unregistered location, in violation of 21 U.S.C. 822(e) and 827(g) and 21 CFR 1301.51.
In mitigation, the Respondent's actions with regard to notifying DEA do not appear to be intentionally deceitful, because the Respondent credibly testified that she notified the Texas DPS of her new Mesa office address, and no other evidence of record was offered by either party at hearing to the contrary. (Tr. 161-64.) Respondent also introduced as evidence prescription pads which reflected the address of 4310 Mesa Drive, Denton, Texas. (Resp't Ex. 5.) Clearly the evidence as a whole is consistent with Respondent's testimony that the failure to update her new address was due to an omission, notwithstanding the evidence of neglect by Respondent to ensure it had been properly done.
prescribed methadone to three (3) opioid-addicted patients \39\ who were previously treated at an addiction treatment center. The Government, however, further alleged that Respondent's treatment of these patients amounted to the unauthorized treatment of narcotic-dependent patients by prescribing Schedule II controlled substances for the purpose of treating opioid addiction, which is inconsistent with 21 U.S.C. 823(g)(1) and 21 CFR 1306.04(c).
\39\ Referred to herein as [JF], [MM] and [TR].
Federal law requires a separate registration for "[p]ractitioners who dispense narcotic drugs to individuals for maintenance treatment or detoxification treatment . . . ." \40\ A practitioner may, however, "lawfully prescribe methadone to a patient for pain management purposes under his practitioner's registration." Tony T. Bui, M.D., 75 FR 49,979 (DEA 2010) (citing 21 U.S.C. 823(f)). The Government presented evidence indicating that Respondent prescribed methadone to three patients who were previously treated with methadone at an addiction treatment center. (Gov't Exs. 12-14, 16-18.) The Government contends in part that Respondent was providing opioid addiction treatment because each of the three patients were already taking methadone when they first became patients of Respondent, and that each patient previously received methadone from a methadone clinic. This alone does not amount to substantial evidence indicating that Respondent was improperly prescribing a Schedule II controlled substance for the purpose of opioid addiction treatment.
\40\ 21 U.S.C. 823(g) (2006).
Although the documentary evidence does indicate an opioid addiction in each of the three patients, this evidence consists of unsworn statements from patients [JF] and [MM], along with medical records relating to the three patients, which must be weighted accordingly. The allegation of improper prescribing of methadone is unsubstantiated by the documentary evidence and was, in fact, refuted by Respondent's expert witness; and, in each instance, Respondent has established an underlying purpose of pain management. "While methadone is approved by the FDA, and has long been used, for the treatment of opioid addiction . . . the drug is also approved for the treatment of pain." Bui, 75 FR at 49,988. Moreover, the record contains no expert evidence showing that Respondent's prescribing of methadone was inconsistent with accepted medical practice for prescribing the drug for pain management.
The Government bears the burden on the issue of whether Respondent's prescribing of methadone "was for the purpose of treating opioid addiction" and not as part of an accepted medical practice for pain management. Similar to Bui, the Government has presented no expert evidence indicating such and relies solely on hearsay and unsworn statements. Respondent has testified that the treatment of the three patients in question was for pain management related to a number of underlying medical conditions, which are objectively documented in the medical records introduced at hearing by both parties. Additionally, the Respondent presented expert testimony from a medical doctor with experience treating chronic pain, even though not formally certified in pain management.
In Calhoun v. Bailar, 626 F.2d 145 (9th Cir. 1980), the court found that to constitute substantial evidence the probative value and reliability of hearsay evidence may be analyzed using many factors, such as: a consideration regarding the independence or possible bias of the declarant; the type of hearsay material presented; whether the statements are signed and sworn or anonymous, oral or unsworn; whether the statements are contradicted by direct testimony; whether the declarant is available to testify and, if so, whether the objecting party subpoenas the declarant or whether the declarant is unavailable and no other evidence is available; the credibility of the witness testifying to the hearsay; and whether or not the hearsay is corroborated. Id. at 149; see also Richardson v. Perales, 402 U.S. 389, 402-06 (1971).
DI Dunn credibly testified at hearing that his investigation revealed that Respondent treated several patients who previously had been treated for narcotic addiction at the Denton Treatment Center. DI Dunn obtained unsworn statements from two of those patients, [JF] and [MM], both indicating in substance that they did not consult Respondent for the purpose of pain management. That testimony and evidence, however, does not carry much weight based on the factors set forth in Calhoun.
The written patient statements presented by the Government were unsworn; there is no evidence that an attempt was made to subpoena the witnesses, and the Government provided no indication that the witnesses were unavailable to testify; no evidence was offered to explain why the statements were unsworn; there was no evidence presented to indicate whether the declarant witnesses are credible; and the statements provided are not corroborated by other record evidence.
For example, the patient files specifically refer to a number of objective medical findings and diagnoses that are inconsistent with the unsworn statements. In the case of [MM], the medical file reflects entries from April to August 2009, including patient complaints of osteoporosis left shoulder and leg; back, shoulder and leg pain at level seven, among other complaints; and diagnoses of chronic back pain; arthritis; opioid addiction; anxiety; depression; and weight management, among others; as well as positive physical findings on examination to include lumbosacral back pain. (Gov't Ex. 16.) In the case of [TR], the medical file reflects entries from June to August 2009, including patient complaints of back and left knee pain; "lumbosacral back pain from scoliosis for several years. Pain 10/10 without meds." (Gov't Ex. 17, at 35.) The file reflects diagnoses of chronic back pain; left knee arthritis; anxiety; and depression, among others; as well as positive physical findings on examination to include positive lumbosacral back pain and bilateral hip pain, among other findings. (Gov't Ex. 17.) In the case of [JF], the medical file reflects entries from January to February 2009, including patient complaints of chronic pain complicated by history of opioid dependence resulting from chronic arthritic pain in the neck, back and left knee. Diagnoses included arthritis in the cervical and lumbar spine, chronic pain syndrome, and opioid dependence, among other findings.
In addition to the patient files, the unrebutted testimony and expert opinion of Dr. Babuji support a finding that the methadone was prescribed for pain management, not for opioid addiction. Although the Government did object to the testimony of Dr. Babuji at hearing on the grounds that he was not "proffered as an expert," \41\ that objection is misplaced.\42\ The Government further argues in its post-hearing brief that Dr. Babuji's testimony be given no weight because he "was not tendered and/or accepted as an expert witness . . . [and] [t]here is no indication from his testimony that [he] has any experience in pain management or addiction treatment." (ALJ Ex. 16, 6.) To the contrary, Respondent indicated in her Prehearing Statements that she was offering the witness as an expert, and I so find. Additionally, Dr. Babuji's testimony specifically included an admission that he was not certified in pain management, but he based his testimony in part on his experience treating his own patients with conditions of pain.
While there may be some doubt as to the exact number of pages reviewed by Dr. Babuji with regard to the [JF] medical file, he credibly maintained that he had sufficient information available to support his conclusion, noting his review of hundreds of pages of the medical file including the discharge summary. There is no other evidence to suggest the witness had a bias or interest in the outcome of the case.
\43\ Government counsel asked the witness: "Would it surprise you to learn that the complete file regarding [JF]'s hospital visit is approximately 700 to a thousand pages?" (Tr. 287.) The factual basis for this question remains a mystery, since no other medical records relating to [JF] were received in evidence other than Respondent's exhibit six. Respondent's exhibit seven relating to [JF] was withdrawn and the Government presented no case in rebuttal.
I find that Dr. Babuji presented fully credible competent evidence within his stated area of expertise. The testimony is consistent with that presented by the Respondent, who credibly testified at hearing in detail as to the standard of care she used in treating the three patients at issue in this matter. The testimony of Dr. Babuji and the Respondent is also consistent with other documentary evidence of record including the relevant treatment records. Accordingly, I find that the Government has not established by a preponderance of the evidence that Respondent prescribed Schedule II controlled substances to patients for the purpose of treating opioid addiction in violation of 21 U.S.C. 823(a)(1) and 21 CFR 1306.04(c).
\44\ 21 CFR 1306.04 (2010).
At the hearing in this matter, the Government presented evidence consisting of photographs of a prescription bottle for diazepam 10 mg, quantity 90, issued in the name of [HM], which DI Dunn testified was found in Respondent's bathroom medicine cabinet and which the DEA had tested; photographs of tablets; an unsworn statement by [HM]; and the testimony of DI Leakey, who assisted in the search of Respondent's residence and seizure of the [HM] prescription containing an estimated fifty (50) pills.\45\ Respondent provided evidence consisting of Respondent's medical records for [HM] and CVS pharmacy records for [HM] along with the testimony of Respondent, Debra Allinger and Shelley Franks-Chapa.
DI Dunn testified that [HM] was a patient and employee of Respondent and that the DEA found, in Respondent's home, a prescription bottle for diazepam issued in the name [HM]. (Tr. 29.) DI Dunn's testimony is supported by photographs of the prescription bottle and several loose pills along with the testimony of DI Leakey, and an unsworn statement from [HM].
Respondent has not argued that the diazepam was not found in her home, although there may be some discrepancy regarding the last location where Respondent recalls seeing it; that the medication found was not actually diazepam; or that she did not authorize the prescription for [HM]. There is no dispute that the DEA did find in Respondent's home a prescription bottle containing diazepam issued in the name of [HM]. I therefore find no reason to provide less than full weight to the testimony of DI Dunn or DI Leakey that the prescription bottle of diazepam was found in a medicine cabinet in Respondent's home containing approximately fifty (50) pills. I do find reason, however, to provide less weight to the unsworn written statement of [HM] given the sworn testimony of Respondent, Debra Allinger and Shelley Franks-Chapa regarding the origin of the single Valium prescription at issue in this case.
DI Dunn testified that he spoke with [HM] and that the statement [HM] gave him was consistent with the written statement provided by the Government. (Tr. 29; Gov't Ex. 11.) DI Dunn testified that [HM] told him that Respondent asked if [HM] could write a prescription in [HM]'s name and then get the medication back from [HM] because Respondent could not write a prescription to herself. (Tr. 29-30.) I find no reason to doubt the testimony of DI Dunn with regard to his interaction with [HM]. I do, however, find that, consistent with the factors set forth in Calhoun, [HM]'s statements are not reliable.
Respondent's testimony indicated a possibility of bias of [HM] in that [HM] is a former patient and employee and the relationship between Respondent and [HM] ended badly. (Tr. 154.) Respondent testified that [HM] intended to initiate a lawsuit against her because of poor results from a medical procedure performed by another physician in Respondent's office. The accuracy of this testimony was uncontested and I find it otherwise credible. As a result of this prior dispute, [HM] would certainly have some interest or bias in the outcome of any proceeding related to Respondent's practice of medicine.
[HM]'s statement is contradicted by objective evidence of record. [HM]'s statement asserts that [HM] has "never taken Valium ever . . . ." (Gov't Ex. 11) (emphasis in original). Respondent, however, submitted CVS pharmacy records for [HM] indicating that [HM] did fill a prescription on February 27, 2001, for 10 diazepam 10 mg, written by Dr. [VS]. [HM] has, therefore, at least received a prescription for diazepam in the distant past thereby contradicting her statement that she has never taken Valium.\46\ The Government also implied that the Valium prescription for [HM] was written "before [Respondent] even had a patient consult with [GM]." (Tr. 320.) While Respondent's medical records for [HM] appear to support that implication, (see Resp't Ex. 8), a review of the record as a whole indicates otherwise.
\46\ I take official notice from the 2007 edition of the Physicians' Desk Reference that Valium is a brand name product containing the Schedule IV controlled substance diazepam, a benzodiazepine derivative.
Respondent's medical records for [HM] include a report of a consultation on February 6, 2009, which indicates that Respondent prescribed diazepam (Resp't Ex. 8.); [HM]'s prescription records, as provided by Respondent, indicate that the diazepam prescription was filled on February 8, 2009. (Resp't Ex. 13, at 3.) The Government has provided no evidence indicating the actual date that the prescription was written and is presumably relying on Respondent's testimony that the prescription was written on February 3, 2009. (See Tr. 221.) I find no need to determine the precise date upon which the diazepam prescription was actually written because there is evidence that Respondent had written prescriptions for [HM] as early as September 26, 2008, as evidenced by [HM]'s prescription records. (Resp't Ex. 13.) Given the fact that [HM] worked in Respondent's office and presumably had a patient-physician relationship with Respondent, the actual date upon which the prescription was written provides little or no value to the evidence regarding whether Respondent prescribed controlled substances for other than a legitimate medical purpose.
Respondent objected at hearing to the admission of [HM]'s statement on the grounds that the statement was unsworn, constituted hearsay, and was unduly prejudicial because Respondent was not able to cross-examine the declarant. (Tr. 31.) Neither party has shown that [HM] was unavailable to testify and the Government has provided no explanation as to why [HM] was not made available as a witness. Neither party attempted to subpoena the witness. As the court recognized in Calhoun, however, a respondent cannot complain of an inability to cross-examine a witness with regard to a written report when the respondent has failed to exercise her right to subpoena the witness. That said, the absence of sworn testimony by [HM] at hearing, weighed against other credible sworn testimony and credible documentary evidence, significantly discredits the reliability and probative value of [HM]'s statement.
I find [HM]'s unequivocal statements that [HM] had "never" taken Valium, "ever," and that it was "prescribed only this one time for her," were directly contradicted by objective uncontested evidence of a past prescription for Valium issued to [HM] and testimony by Ms. Franks-Chapa that she witnessed [HM] requesting a prescription for Valium. [HM]'s past adverse patient and employment history with Respondent also indicates [HM] had a reason to be biased against Respondent. In light of the foregoing, the unsworn statement of [HM], corroborated only by the prescription found at Respondent's home, is entirely discredited by the objective and sworn testimony to the contrary.
Accordingly, I find that the Government has not established by a preponderance of the evidence that Respondent prescribed controlled substances for other than a legitimate medical purpose to a then-current employee.
"accountability audit was conducted on the Suboxone 8mg for the period of July 1, 2008, through April 9, 2009. Respondent's records show dispensation of 38 bottles (1,140 dosage units) of Suboxone. There were 11 bottles present on-hand on the day of the search warrant. Therefore, Respondent could only account for 49 bottles (1,470 dosage units) of Suboxone, leaving a shortage of 13 bottles (390 dosage units unaccounted for based on the records."
The Government's Prehearing Statement further stated in part that DI Chalmers would testify about the "accountability audit conducted on the Suboxone . . . ."
\48\ While neither party offered background information regarding ARCOS during hearing, it is noted that "Registrants are also required to report records of sales or acquisitions of controlled substances in Schedules I and II, of narcotic controlled substances listed in Schedules III, IV and V, and of psychotropic controlled substances listed in Schedules III and IV with the DEA's Automation of Reports and Consolidated Orders System (ARCOS). 21 CFR 1304.33(c); 21 U.S.C. 827(d). These reports must be filed every quarter not later than the 15th day of the month succeeding the quarter for which it is submitted. 21 CFR 1304.33(b)." Easy Returns Worldwide, Inc. v. United States, 266 F. Supp. 2d 1014, 1016 (E.D. Mo. 2003).
Q: Now how did you conduct your audit of Suboxone?
A: With the Suboxone, she did have some records there that showed an inventory date. I used that date as a starting point from her own records. She had a log of dispensing of Suboxone, so I was able to utilize that as well. I then turned to ARCOS's subpoena and found out who the provider for the Suboxone was, the distributor, subpoenaed their records, used the ARCOS records, and then from account of the drugs that were on hand on the date of the search warrant, we were able to do an audit with those numbers on that one drug.
DI Chalmers testified on direct examination that she participated in the FBI search of Respondent's practice location on Mesa Drive in April 2009, as DI Dunn was out of town and could not participate. DI Chalmers further testified that her responsibilities during the search were to speak with the Respondent and assist with the search warrant. DI Chalmers searched the "medication room at the clinic and another location at the back of the room believed to be Respondent's office setting." (Tr. 92.) DI Chalmers testified that she did not conduct an audit on the Suboxone or other drugs found in the specific location that she searched, nor did she seize any of the controlled substances at that time. (Tr. 93.) DI Chalmers also testified that rather than conduct an audit, she did an inventory of the controlled substances "that she encountered" and also seized documents from the medication room, to include a drug log. While the evidence is clear that DI Chalmers did not seize any drugs, there is no evidence of record reflecting whether any drugs were seized from the premises or if all drugs present were inventoried, since DI Chalmers's role in the search was limited to a narrow location and purpose.
The evidence of an audit in this case simply cannot support any credible findings of a shortage of Suboxone during the alleged time period. DI Dunn's testimony of a shortage of fifteen bottles of Suboxone as of the date of the April search appears to rest on the "account of the drugs that were on hand on the date of the search warrant" compared with the data obtained from the "ARCOS records," and records from the distributor.\49\ There was no documentary or testimonial evidence offered to indicate the search established an accurate count of the number of bottles of Suboxone present in Respondent's office, which is an essential component of the audit.\50\ The testimony by DI Chalmers clearly indicates that she only inventoried the controlled substances that she encountered and there is no evidence whatsoever as to the number of other agents participating in the search, what other agents encountered, the scope of the search or the identity and total inventory of controlled substances found during the search.\51\ There is no evidence of record to support the conclusions reached by DI Dunn regarding the audit, to include the details related to the search of Respondent's office, specific items seized or inventoried, the location of the items and related information as may be found in a search inventory.
\49\ DI Dunn testified that he "subpoenaed their records," meaning the distributor of the Suboxone. Government exhibit four indicates the source of the data is ARCOS rather than distributor records. DI Dunn was asked whether the subpoenaed distributor records "matched up" with the ARCOS report, and DI Dunn stated he "believed so." (Tr. 36-37.) Remarkably, the Government submitted no audit report or any other supporting documentation with regard to distributor records, drug inventory reports compiled at the time of the April 2009 search of Respondent's office, or any other related documentation to factually support the audit results. The only distributor evidence with regard to the Suboxone shipments was offered by the Respondent. Additionally, no testimonial or other evidence was offered with regard to the definition, source, or reliability of ARCOS data.
\50\ It is noteworthy that the OSC/IS and Government's Prehearing Statement recited specifically that thirteen bottles of Suboxone were missing for a total dosage count of 390, differing from the testimony at hearing that fifteen bottles of Suboxone were missing for a total dosage count of 450.
Accordingly, I find that the Government has not established by a preponderance of the evidence that Respondent cannot account for "approximately 13 bottles of Suboxone or 390 dosage units."
\53\ Gov't PHS, at 4.
\54\ 21 CFR 1301.71 (2010).
The Respondent testified in substance that her office policy was that if a patient did not like the medication, or had a bad reaction to the medication, the patient could return it; "we would count it, document it, destroy it" and it "didn't happen very often." (Tr. 248.) There is no indication that this practice as described by Respondent was a frequent occurrence, and there is no evidence of any diversion of the controlled substances returned. In fact, the un-rebutted testimony of the Respondent is that they were destroyed.
The testimony of Respondent and DI Chalmers provides evidence that Respondent did not properly secure all Schedule II-V controlled substances in a securely locked, substantially constructed cabinet. Although there is no evidence regarding the exact quantities of controlled substances maintained at Respondent's Mesa office, there is sufficient evidence in the form of Respondent's testimony, and that of DI Chalmers, to determine that Respondent did maintain possession of some controlled substances, including at least fentanyl and Suboxone. Additionally, given the credible testimony of both Respondent and DI Chalmers that some controlled substances were found in unlocked cabinets, it is apparent that Respondent did not store all Schedule II-V controlled substances in a securely locked, substantially constructed cabinet as required by applicable regulations. The fact that Respondent did not maintain control over the key to access her medication safe and was unfamiliar with the necessary procedure for opening the safe further indicates that Respondent also did not maintain an adequate key control system.
Although the evidence indicates that Respondent did not follow adequate security procedures, the question remains as to whether that information can be considered in determining if Respondent's continued registration is consistent with the public interest. In order to comport with due process requirements, the DEA must "provide a Respondent with notice of those acts which the Agency intends to rely on in seeking the revocation of its registration so as to provide a full and fair opportunity to challenge the factual and legal basis for the Agency's action." CBS Wholesale Distributors, 74 FR 36,746 (DEA 2009) (citing NLRB v. I.W.G., Inc., 144 F.3d 685, 688-89 (10th Cir. 1998); Pergament United Sales, Inc., v. NLRB, 920 F.2d 130, 134 (2d Cir. 1990)). The DEA has previously held that an issue cannot be the basis for a sanction when the Government has failed to "disclose 'in its prehearing statements or indicate at any time prior to the hearing' that an issue will be litigated." Id. at 36,750 (citing Darrell Risner, D.M.D., 61 FR 728 (DEA 1996)). The DEA has also previously found, however, that a respondent may waive his objection to admission of evidence not noticed by the Government prior to the hearing when a respondent does not timely object and when the respondent also raises the issue himself. Gregory D. Owens, D.D.S., 74 FR 36,751, 36,755 (DEA 2009).
In the instant matter, the Government did not raise the issue of security controls in the OSC or in its Prehearing Statement. In fact, the Government first raised the issue of Respondent's security controls during the direct examination of DI Chalmers. The Government asked DI Chalmers whether Respondent's storage cabinets were locked and if they were capable of being locked. (Tr. 94.) While it is true that Respondent did not object to the line of questioning, and offered some testimony on direct examination with regard to controlled substances kept locked in safes, Respondent's primary testimony regarding the issue was raised during the Government's cross-examination of Respondent.
\58\ In this case, even assuming, arguendo, that I were to consider this additional evidence of security control measures with regard to an appropriate sanction, I would not find the additional facts to warrant revocation.
The Government also alleges that Respondent failed to effectively monitor the receipt and distribution of controlled substances because Respondent did not maintain an effective recordkeeping system in accordance with 21 CFR Sec. Sec. 1304.03(b), 1304.04, 1304.11, 1304.21 and 1304.22(c). This substantive issue was noticed in the OSC/IS and in subsequent Prehearing Statements.
One mandatory recordkeeping vehicle is DEA Form 222, the "official triplicate order form used by physicians to order scheduled narcotics" and other controlled substances.\60\ A menu of federal regulations specifies procedures relating to DEA Form 222, such as obtaining, 21 CFR Sec. 1305.11, executing, Sec. 1305.12, filling Sec. 1305.13, and endorsing DEA Form 222, Sec. 1305.14, among other procedures.\61\ In addition, 21 CFR Sec. 1305.03 requires that a DEA Form 222 be used for each distribution of a controlled substance listed in Schedule I or II, and Section Sec. 1305.13 provides that these order forms must be maintained separately from all other records and that they "are required to be kept available for inspection for a period of 2 years."
\60\ Robert L. Dougherty, Jr., M.D., 60 FR 55,047, 55,048 (DEA 1995).
\61\ See, e.g., 21 CFR 1305.15-.19.
\62\ Robert L. Dougherty, Jr., M.D., 60 FR 55,047, 55,050 (DEA 1995) (citing George D. Osafo, M.D., 58 Fed. Reg 37,508, 37,509 (1993) (revoking practitioner's registration where "[r]espondent failed to comply with numerous recordkeeping requirements[, explaining that] . . . it is a registrant's responsibility to be familiar with the Federal regulations applicable to controlled substances"); see also Hugh I. Schade, M.D., 60 FR 56,354, 56,356 (DEA 1995) (noting the inventory procedures required by Sections Sec. Sec. 1304.11 to 1304.13, and 1305.06).
\63\ 21 CFR 1304.03(b) (2010).
The evidence at hearing on this issue included the testimony of DI Dunn and DI Chalmers. DI Dunn testified that he reviewed the records seized by the FBI during search warrants executed at the Respondent's registered and unregistered office locations, as well as her home. DI Chalmers testified that she was present at the search of Respondent's unregistered office on Mesa Drive in April 2009, participating in a search of the medication room and a location at the back of the medication room that may have been the Respondent's office. DI Chalmers further testified that drug logs were among the items seized. (Tr. 92.) DI Dunn explained that from his review of the records seized he found records for the dispensing of Demerol, but not the receipt of that drug. He further explained that because Demerol is a Schedule II controlled substance, it can only be transferred between registrants pursuant to a DEA Form 222. A review of the seized documents by DI Dunn revealed no copies of DEA Form 222.
DI Dunn further testified that "there were other drugs there or an indication of other drugs there" to include the controlled substances Demerol, Ambien, Balacet and Provigil. (Tr. 34, 36.) DI Dunn indicated that dispensing logs existed for Demerol but no invoices were found reflecting purchases of Demerol. DI Dunn also found no dispensing logs or inventories for Provigil and Ambien.
The absence of any copies of DEA Form 222 found by DI Dunn during his review of the seized documents related to the search of Respondent's office, along with Respondent's lack of certainty that any were present, supports a finding that Respondent did not keep proper records for controlled substances that were ordered and maintained under her registration. DI Dunn's testimony is consistent with the testimony of DI Chalmers regarding the seizure of documents during the April 2009 search warrant, including the seizure of Government exhibits nine and ten. While the testimony offered with regard to the specifics of the FBI search was limited, the evidence as a whole reflects that a considerable quantity of documents was seized from Respondent's office. The fact that no copies of DEA Form 222 were found, independent of whether Respondent was asked to produce them, is persuasive proof of non-compliance.
The Respondent's testimony on the topic is equivocal at best, and is fully consistent with a finding that few if any copies of DEA Form 222 were maintained at the Respondent's unregistered Mesa office during 2009. "Recordkeeping is one of the CSA's central features; a registrant's accurate and diligent adherence to this obligation is absolutely essential to protect against diversion of controlled substances." Paul H. Volkman, M.D., 73 FR 30,630, 30,643 (DEA 2008). The evidence of record, including the Respondent's own testimony, reflects that at least during the time period from in or about November or December 2008 until April 2009, Respondent did not properly maintain copies of DEA Form 222 for Demerol, a Schedule II controlled substance. Similarly, the Respondent's acceptance and documentation of returned controlled substances was not in compliance with applicable regulations. Nor did the Respondent maintain other documentation related to the controlled substances Ambien Balacet and Provigil.
I find the Respondent's testimony at hearing to be generally credible. The Respondent's manner throughout her testimony was serious and deliberate. Respondent's education, experience and training, which included regular continuing medical education in pain management, reasonably supported her opinion testimony with regard to patients [JF], [HM], [TR] and [MM]. This opinion testimony was also fully consistent with Dr. Babuji's testimony. The Respondent testified throughout a four hour period without reference to notes or other written material, unless specifically directed by counsel, and was accurately able to recall events with a reasonable level of certainty. The Respondent did not display hostility during testimony or other visible mannerisms that adversely impacted her credibility.
On balance, however, the Respondent's record-keeping violations, handling of returned controlled substances and failure to properly change her registered address weigh significantly in favor of revocation.
As to factor five, there is no other substantial evidence of record demonstrating conduct by Respondent which may threaten the public health or safety, other than the risk of diversion inherent in the failure to maintain effective controls and procedures to guard against theft and diversion of controlled substances, which has been evaluated under factors two and four.
I find that a balancing of the foregoing public interest factors supports a finding that the Government has established a prima facie case in support of revocation of Respondent's registration, or denial of an application for registration. Once DEA has made its prima facie case for revocation, the burden then shifts to the Respondent to show that, given the totality of the facts and circumstances in the record, revoking the registrant's registration would not be appropriate. Morall v. DEA, 412 F.3d 165, 174 (D.C. Cir. 2005); Humphreys v. DEA, 96 F.3d 658, 661 (3d Cir. 1996); Shatz v. United States Dep't of Justice, 873 F.2d 1089, 1091 (8th Cir. 1989); Thomas E. Johnston, 45 FR 72, 311 (DEA 1980).
A "Respondent's failure to maintain accurate records . . . is sufficient by itself. . ." in some cases, to conclude that granting a registration would be inconsistent with the public interest. Volkman, 73 FR at 30644.
The facts in Volkman pertaining to record keeping violations involved a doctor who "rapidly became the largest practitioner-purchaser in the nation of oxycodone" which included ordering "hundreds of thousands of dosage units of these drugs" over time periods as short as several months. Id. at 30,643. The facts in Volkman further reflected that no dispensing logs were maintained, at times exceeding an entire year. Id. at 30,645.
Additionally, where a registrant has committed acts inconsistent with the public interest, a registrant must accept responsibility for his or her actions and demonstrate that he or she will not engage in future misconduct. Patrick W. Stodola, 74 FR 20,727 (DEA 2009). Also, "[c]onsideration of the deterrent effect of a potential sanction is supported by the CSA's purpose of protecting the public interest." Joseph Gaudio, 74 FR 10,083, 10,094 (DEA 2009).
The Respondent testified in substance that she updated her new registration address with Texas authorities, made various efforts to do so with DEA including receiving correspondence, and therefore thought she had satisfied her obligation. (Tr. 161-63; ALJ Ex. 2.) Respondent's explanation for record keeping violations is less specific. The Respondent's testimony as a whole demonstrated that she understood the seriousness and importance of record keeping requirements, and testified that while at the temporary Collier street location "I didn't have those little DEA 222s, so I really didn't purchase any scheduled medications during that brief period of time." (Tr. 197.) The Respondent also testified that she believed she "had very effective oversight" of controlled substances." (Tr. 248.) This belief is contradicted by Respondent's own testimony. Respondent also testified that she relied heavily on her staff with regard to inventory and maintenance of controlled substances, and that Respondent did very little herself. (Tr. 205.) The evidence of record does demonstrate, however, that Respondent's errors were often due to lack of knowledge, omission or neglect, rather than a deliberate violation of the record keeping requirements.
The alleged conduct supported by substantial evidence in this case centers on Respondent's record keeping violations, which have been documented to be deficient over a relatively short period of time, as well as a failure to update her registered address, and improper acceptance and disposal of returned controlled substances from patients. The Government argues in its post-hearing brief that revocation is the appropriate remedy in this case. An agency's choice of sanction will be upheld unless unwarranted in law or without justification in fact. A sanction must be rationally related to the evidence of record and proportionate to the error committed. See Morall v. DEA, 412 F.3d 165, 181 (D.C. Cir. 2005) (sanction will be upheld unless unwarranted in law or without justification in fact).
In support of its recommendation for revocation, the Government cites Paul H. Volkman, 73 FR 30,630, 30,644 (DEA 2008), which is significantly distinguishable from the facts of this case. Respondent's conduct in this case occurred over a comparatively short period of time, with substantially fewer controlled substances, and with no evidence of actual diversion of any controlled substances. The Government cites no other precedent to support a revocation sanction on facts similar to Respondent's, nor does there appear to be any. The Respondent's errors and conduct clearly were neglectful and serious during the relevant time period, and likely due in part to ongoing issues including eviction from her registered office, employee problems, and an office break-in and theft, among other factors. That said, a revocation penalty is simply not rationally related to the evidence of record established by substantial evidence or proportionate to Respondent's misconduct.
I find that Respondent's testimony as a whole demonstrates that she has sufficiently accepted responsibility for her actions and omissions with regard to a revocation penalty, but Respondent's explanation of past errors and demonstrated plan to avoid future violations is insufficient to support an unconditional registration. Accordingly, I recommend that Respondent's COR BC0181999 as a practitioner not be revoked or a pending application denied, on the condition that Respondent: a) within a reasonable period of time as set forth in the agency's final order in this matter, satisfy the appropriate DEA designee that Respondent has state authority to handle controlled substances in Texas, the state in which she is registered with DEA; \65\ b) submit to the nearest Field Division Office of DEA no later than one (1) year after issuance of a DEA COR, documentation reflecting successful completion of accredited training at Respondent's expense, in the proper maintenance, inventory, and record-keeping requirements for controlled substances, with such training to take place after the Agency issues a final order in this matter; and c) for one (1) year after the issuance of a COR, Respondent shall submit to the nearest Field Division Office of DEA, on a quarterly basis, a log of all controlled substances in Schedules II, III, IV and V received, maintained and dispensed by Respondent.

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