Court Opinion

ID: 159081
Source: CourtListenerOpinion
Date Created: 2010-08-14 06:17:36+00
Date Added: 2024-06-11T09:42:39.196308
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                             JAN 11 2000
                              FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                                Clerk

    JACQUELINE LEE PIERSON,
    doing business as Energy Outlet,

                Petitioner,
                                                         No. 99-9513
    v.                                                     (No. 98-1)
                                                     (Petition for Review)
    DRUG ENFORCEMENT
    ADMINISTRATION,

                Respondent.

                              ORDER AND JUDGMENT          *

Before EBEL , KELLY , and BRISCOE , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument.

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
       Petitioner Jacqueline Lee Pierson has filed this petition seeking review of a

decision of the Drug Enforcement Administration (DEA) denying her application        1

for registration as a retail distributor of list I chemicals pursuant to 21 U.S.C.

§ 823(h). The agency determined that the application should be denied as being

“inconsistent with the public interest.” Jacqueline Lee Pierson Energy Outlet;

Denial of Application, 64 Fed. Reg. 14269, 14272 (1999). We deny the petition.

       Ms. Pierson is the sole proprietor of the “Energy Outlet,” a store which

sells various natural products to the general public. She sought registration from

the DEA to sell ephedrine in her shop. Ephedrine has approved medical uses, but

is also used in the manufacture of   methamphetamine and, therefore, sellers of

ephedrine must comply with federal regulations.

       The concern with Ms. Pierson’s application arose from incidents which

occurred in 1991 and 1992. At that time, Ms. Pierson was an employee of The

New Connection which operated four stores. The DEA         began an investigation of

The New Connection stores after receiving information that they were receiving

large quantities of ephedrine. An undercover DEA agent made several large

purchases of ephedrine tablets from Ms. Pierson in 1991 and in 1992. At the time

1
     Applications were also filed for Ms. Pierson’s business under two names,
“The New Connection” and “Energy Outlet” both located at the same address.
Apparently, Ms. Pierson decided to change the name of The New Connection to
Energy Outlet after becoming its sole proprietor.

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of purchase, the undercover agent indicated to Ms. Pierson that the purchases

were for a motorcycle gang which would be using the ephedrine to make

methamphetamine . Ms. Pierson was later arrested along with several other

employees. She agreed to plead guilty to some of the charges against her and to

testify on behalf of the government at the trial of other employees. The

indictments against the co-defendants were later dismissed and Ms. Pierson was

allowed to withdraw her guilty plea. In her motion to withdraw her pleas,

Ms. Pierson disclosed that she suffered from mental and emotional disorders, that

she was dominated and intimidated by the owner of the store,          2
                                                                          and that she did not

want to sell the large quantities of ephedrine and did so only because the owner

insisted and assured her she was not doing anything wrong. After Mr. Carles

died, Ms. Pierson assumed ownership of one of the stores and became the sole

proprietor. In 1995, she filed the application at issue here.

      At the hearing on her application, Ms. Pierson testified that           she has panic

attacks and severe anxiety with resulting voice tremors. She is currently on

medication. She testified that she has had no problems running the business.

She stated that when the undercover agent told her that the ephedrine was to be

used to manufacturer “meth,” she did not understand what the word “meth”

2
      The owner, Michael Carles, died prior to the arrests.

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meant. Ms. Pierson stated that she has made no large sales of ephedrine since

becoming the sole proprietor of the store.

      The administrative law judge (ALJ) recommended denying the application.

She stated:

                     I find troubling Ms. Pierson’s continuing
              vulnerability to abuse. Specifically, (1) Ms. Pierson’s
              conduct in the past, (2) her credible testimony of mental
              and emotional difficulties in the present, and (3) the lack
              of current information in the record concerning her
              on-going treatment and prognosis, combine to create
              serious doubt about Ms. Pierson’s current ability to meet
              the responsibilities of a registrant handling listed
              chemicals.

Rec. Vol. III, ALJ’s Opinion and Recommended Ruling at 24.

      The ALJ noted “that the Government has not demonstrated any improper

conduct on the part of Jacqueline Pierson since 1992. This passage of time is also

significant, or it adds credence to Ms. Pierson’s assertions that her mental and

emotional difficulties do not interfere with her ability to manage the Respondent

business.” Id. However, the ALJ concluded that the preponderance of the

evidence weighed for the government and recommended denying Ms. Pierson’s

application. After considering Ms. Pierson’s exceptions to the recommended

ruling, the Deputy Administrator adopted the recommendation.

      On appeal, Ms. Pierson argues that the DEA’s decision was not supported

by substantial evidence and was arbitrary and capricious as the agency failed to

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complete the record after acknowledging that it was deficient. Ms. Pierson also

contends that the agency improperly shifted the burden to her before establishing

a prima facie case that her health caused her registration to be inconsistent with

the public interest, she was not put on notice that her current medical condition

would be an issue at the hearing, and her right to equal protection was violated.

      We may set aside the Deputy Administrator’s determination only if it is

“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law . . . [or] unsupported by substantial evidence. . . .” 5 U.S.C. § 706(2). Under

the arbitrary, capricious, or abuse of discretion standard we may not substitute our

own judgment for that of the agency; rather, “we must uphold the agency’s action

if it has articulated a rational basis for the decision and has considered relevant

factors.” Colorado Dep’t of Soc. Servs. v. United States Dep’t of Health &

Human Servs. , 29 F.3d 519, 522 (10th Cir. 1994);    see also Northwest Pipeline

Corp. v. Federal Energy Regulatory Comm’n       , 61 F.3d 1479, 1486 (10th Cir.

1995). Substantial evidence is “more than a mere scintilla. It means such

relevant evidence as a reasonable mind might accept as adequate to support a

conclusion.” Richardson v. Perales , 402 U.S. 389, 401 (1971) (quotation

omitted). Findings of fact by the DEA, if supported by substantial evidence, are

conclusive. See 21 U.S.C. § 877.

                                          -5-
      Ms. Pierson applied for registration as a retail distributor of list I chemical

as provided in 21 U.S.C. § 823(h). The DEA may deny registration if it

determines that the registration would be inconsistent with the public interest.

See id. In determining the public interest, respondent must consider

              (1) maintenance by the applicant of effective controls
             against diversion of listed chemicals into other than
             legitimate channels;

              (2) compliance by the applicant with applicable Federal, State, and
             local law;

              (3) any prior conviction record of the applicant under Federal or
             State laws relating to controlled substances or to chemicals
             controlled under Federal or State law;

              (4) any past experience of the applicant in the manufacture and
             distribution of chemicals; and

              (5) such other factors as are relevant to and consistent with the
             public health and safety.

Id.

      Upon review of the record and the parties’ briefs, we cannot say that

respondent’s decision was arbitrary, capricious, or an abuse of discretion. The

Deputy Administrator articulated a rational basis for the decision and considered

the relevant factors. Further, petitioner herself brought up her current medical

condition at the hearing. After acknowledging her current problems, she should

also have presented further evidence to demonstrate her progress. The only

medical evidence petitioner presented was a statement from her physician

                                         -6-
submitted with her motion to continue the hearing on her application. Her

physician stated that she was being treated for anxiety and panic disorder and he

thought that “testifying in a court of law would likely re-traumatize this patient

and cause a setback in her medical progress.” Rec. Vol. III, Ex. 8, attachment.

      This evidence is sufficient to support the Deputy Administrator’s

determination that Ms. Pierson had continuing mental and emotional problems.

Ms. Pierson asserted only that she now had sufficient self-esteem to resist

intimidation from customers who wished to purchase large quantities of

ephedrine. In light of her acknowledgment of ongoing problems, Ms. Pierson

bore the burden of proving her assertion.

      The petition for review is DENIED.

                                                     Entered for the Court

                                                     David M. Ebel
                                                     Circuit Judge

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