Opinion ID: 186461
Heading Depth: 2
Heading Rank: 3

Heading: The Revocation Penalty

Text: 88 Even if the agency's decision were sufficiently supported, the penalty imposed—which is the harshest of possible sanctions—would be unwarranted by law. See Bluestone Energy Design, Inc. v. FERC, 74 F.3d 1288, 1294 (D.C.Cir.1996) (agency's choice of a sanction will be upheld unless the sanction is either `unwarranted in law or ... without justification in fact.' (quoting Butz v. Glover Livestock Comm'n Co., 411 U.S. 182, 185-86, 93 S.Ct. 1455, 36 L.Ed.2d 142 (1973) (ellipsis in original and internal quotation marks omitted))). 89 DEA offered no explanation for its decision to revoke Dr. Morall's registration while declining to revoke the registration of any other physician in a comparable context, or even under significantly more troubling circumstances. The decision to revoke Dr. Morall's registration, therefore, constitutes such arbitrary decisionmaking that it cannot withstand the most deferential of judicial review. See Gulf Power Co. v. FERC, 983 F.2d 1095, 1098-1100 (D.C.Cir.1993) (holding that the sanction the [agency] imposed was not rationally arrived at on this record and was wholly disproportionate to the error [petitioner] committed, where, inter alia, the agency did not explain why it had not taken the same position ... in similar circumstances in the past). Indeed, an agency's need to explain contrary precedents is particularly acute, as here, when an agency is applying a multi-factor test through case-by-case adjudication. LeMoyne-Owen Coll. v. NLRB, 357 F.3d 55, 61 (D.C.Cir. 2004). 90 Nowhere in its decision, in its brief to the court, or during the oral argument, did DEA identify a single case in which a physician's registration was revoked under analogous circumstances. The conduct at issue here does not come close to the acts in other cases in which DEA consistently declined to revoke the physician's DEA registration. For example, in Theodore Neujahr, D.V.M., Continuation of Registration, 65 Fed.Reg. 5680 (Feb. 4, 2000), DEA declined to revoke the registration of Dr. Neujahr, a veterinarian, despite findings that he had used his DEA certificate of registration to obtain controlled substances for his personal use, which he then abused; furnished false information to DEA; dispensed controlled substances for other than legitimate medical purposes; and failed to maintain adequate physical security of controlled substances. See id. at 5680-82. DEA decided to continue Dr. Neujahr's registration even though he had initially told investigators who found Dexedrine in his care that he was going to use the Dexedrine to treat obese dogs, but ultimately admitted that he had taken the Dexedrine himself. Id. at 5680. Investigators in Dr. Neujahr's case had also discovered that he had kept controlled substances in an unlocked drawer at both a registered and an unregistered location. See id. DEA determined that revocation was unwarranted, however, because of evidence that Dr. Neujahr had eventually sought help and been able to remain drug free, and because he was remorseful for his prior behavior. See id. at 5682. 91 Similarly, in Karen A. Kruger, M.D., Grant of Restricted Registration, 69 Fed. Reg. 7016 (Feb. 12, 2004), DEA declined to revoke the physician's registration even though she had unlawfully issued prescriptions over a one-year period resulting in the aggregate dispensing of approximately 5,500 dosage units of a particular controlled substance. See id. at 7016. Dr. Kruger had initially told a DEA investigator that, as an anesthesiologist, she rarely had occasion to prescribe, but had prescribed Tenuate to six-to-ten friends. She ultimately admitted to investigators, however, that she had not prescribed to friends for about the last year, and instead, had issued prescriptions in fictitious names and then picked up the medications from the dispensing pharmacies for her own use. Id. Dr. Kruger also admitted that she telephoned bogus prescriptions to many ... pharmacies in Chicago and its suburbs, using approximately forty different names, and that she took as many as 40 to 60 tablets per day, even though she acknowledged that the recommended dosage of Tenuate was only one tablet daily. Id. Dr. Kruger's Illinois Controlled Substance License was placed on probation for six months and the record contained only scant evidence of her recovery from a long duration of drug abuse. Id. at 7017. 92 Despite her initial assertion that she had prescribed Tenuate to friends rather than to herself, DEA found Dr. Kruger's ready willingness to cooperate with law enforcement authorities when questioned about allegations of her improperly prescribing a significant consideration in her favor. Id. at 7017-18. DEA declined to revoke Dr. Kruger's registration, and merely restricted the registration to the authority to administer and prescribe controlled substances used in the practice of anesthesiology, removed Dr. Kruger's ability to prescribe for herself, and required that she submit to random drug testing for two years. See id. at 7018; see also, e.g., Jeffrey Martin Ford, D.D.S., Grant of Restricted Registration, 68 Fed.Reg. 10,750, 10,753 (Mar. 6, 2003) (granting limited registration despite fairly extensive history of substance abuse and inconsistent and evasive testimony during the administrative hearing, because the Deputy Administrator concluded that the dentist was now prepared to comply with laws regulating the use of controlled substances); Wesley G. Harline, M.D., Continuation of Registration with Restrictions, 65 Fed. Reg. 5665, 5668 (Feb. 4, 2000) (continuing physician's registration despite, inter alia, Government's expert testimony that physician's record keeping was grossly deficient); Paul W. Saxton, Continuation of Registration, 64 Fed.Reg. 25,073, 25,078-79 (May 10, 1999) (declining to revoke physician's registration where, inter alia, physician prescribed anabolic steroids when it was illegal to do so and failed to maintain complete and accurate records of his controlled substance handling, which rendered him unable to account for large quantities of drugs). 93 In support of its revocation of Dr. Morall's registration, DEA primarily relies on two cases, both of which arose in the context of sanctions for pharmacies (not physicians) and involved circumstances that differ from this case in critical respects. RX Returns, Inc., Revocation of Registration, 61 Fed.Reg. 37,081 (July 16, 1996), traced almost four years of ongoing discussions between a disposal company dealing with controlled substances and DEA. In 1992, a DEA inspection of RX Returns uncovered 17 violations that, among other things, prevented DEA from completing an accountability audit and left controlled substances in unsecured and improperly stored conditions. See id. at 37,082. The result of this inspection, and subsequent meetings between DEA and the disposal company, was a memorandum of understanding between DEA and RX Returns in which the company agreed to correct all 17 cited violations and comply with applicable laws and regulations. The memorandum of understanding also memorialized the precise corrective actions that needed to be taken. See id. at 37,083. 94 DEA provided RX Returns with over a year to follow this corrective course and, in 1994, conducted a second inspection. Again, DEA uncovered numerous problems in processing, record keeping, and security systems. A third inspection, in 1995, once again revealed such violations. On the heels of three years of corrective instruction by DEA, investigators found Schedule II controlled substances in the company's premises, where the company lacked the authorization to handle such substances and had not even realized that such substances where in its possession. In addition, the continued failure to account for controlled substances rendered DEA unable to effectuate an accountability audit for a period of four years. See id. at 37,083-87. Even in light of this long history of second chances, DEA resolved to stay the revocation of RX Returns' registration and impose a one-year probationary period, finding that it is in the public interest for [the company] to be given yet another opportunity to demonstrate compliance with DEA's regulatory requirements. Id. at 37,090. 95 Alexander Drug Company, Inc., Revocation of Registration, 66 Fed.Reg. 18,299 (April 6, 2001), the other case on which DEA relies, also pertained to continued noncompliance over a period of years and despite repeated inspections and interventions by DEA and the South Carolina Department of Health and Environmental Control. Moreover, the pharmacy had been convicted of a felony count of maintaining false records regarding the dispensing of controlled substances. See id. at 18,299-304. In deciding to revoke the pharmacy's registration, the Administrator expressed particular concern with the absence of evidence of remedial actions and the Respondent's demonstrated continued unwillingness or inability to comply with state and federal regulations. Id. at 18,304. 96 In contrast, Dr. Morall's record-keeping failures occurred during a relatively brief time period when, as the Deputy Administrator found, Dr. Morall was coping with her own health problems, her son's seizure and subsequent diagnosis, and the death of her father and of several friends. This was also the first time that Dr. Morall, who had almost no administrative assistance, was responsible for her own record keeping. Dr. Morall has always acknowledged that her record keeping suffered during this time, and she readily agreed to take classes to improve her record keeping in order to retain her registration. See Tr. at 331, 453-54. 97 In sum, on this record, the decision to revoke Dr. Morall's registration is a flagrant departure from DEA policy and practice. And, as the foregoing cases indicate, this policy and practice has been endorsed in a number of decisions rendered in recent years. Because the departure is not only unexplained, but entirely unrecognized in the Deputy Administrator's decision, the agency's sanction could not withstand abuse of discretion review even if the decision had been supported by substantial evidence. Although mere unevenness in the application of [a] sanction does not render its application in a particular case `unwarranted in law,' Butz, 411 U.S. at 188, 93 S.Ct. 1455, the agency's decision to revoke the registration in this case constitutes an unprecedented and unexplained departure from its consistent policy of declining to revoke a physician's DEA registration in a wide range of cases in which the record is comparable or significantly more troubling. See Gulf Power Co., 983 F.2d at 1098-1100; Wonsover v. SEC, 205 F.3d 408, 413 (D.C.Cir.2000) (`The main point is that a court should not second-guess the judgment of the [agency] in connection with the imposition of sanctions, unless the [agency] has acted contrary to law, without basis in fact or in abuse of discretion.' (quoting Svalberg v. SEC, 876 F.2d 181, 185 (D.C.Cir.1989))). We do not mean to suggest that no restrictions on Dr. Morall's registration might not have been appropriate, but only that revocation on this record and in light of DEA policy and practice is unwarranted.