[Federal Register Volume 76, Number 209 (Friday, October 28, 2011)]
[Notices]
[Pages 66965-66968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-27927]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 11-68]
Treasure Coast Specialty Pharmacy Decision and Order
On September 14, 2011, Administrative Law Judge (ALJ) Gail A.
Randall issued the attached recommended decision. There were no
exceptions filed to the ALJ's decision.
Having reviewed the record in its entirety including the ALJ's
[[Page 66966]]
recommended decision, I have decided to adopt the ALJ's rulings,
findings of fact, conclusions of law, and recommended decision to grant
the Government's Motion for Summary Decision.
Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and
824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of
Registration, BT9856002, issued to Treasure Coast Specialty Pharmacy,
be, and it hereby is, revoked. I further order that any pending
application of Treasure Coast Specialty Pharmacy, to renew or modify
his registration, be, and it hereby is, denied. This Order is effective
immediately.
Dated: October 7, 2011.
Michele M. Leonhart,
Administrator.
Scott Lawson, Esq., for the Government
Richard K. Alan, II, Esq., for the Respondents
Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision
of the Administrative Law Judge
I. Facts
Gail A. Randall, Administrative Law Judge. On June 27, 2011, the
Administrator, Drug Enforcement Administration (``DEA'' or
``Government''), issued an Order to Show Cause and an Immediate
Suspension of Registration (``Order''), immediately suspending the DEA
Certificate of Registration, No. BT9856002, of Treasure Coast Specialty
Pharmacy (``Treasure Coast''), as a retail pharmacy pursuant to 21
U.S.C. 824(d) (2006), because Treasure Coast's continued registration
constitutes an imminent danger to the public health and safety. The
Order also proposed to deny any pending DEA registration applications
by Treasure Coast and to deny the pending application for DEA
registration by Pappy's Drugs d/b/a Prima Vista Pharmacy (``Pappy's
Drugs'') because their registrations would be inconsistent with the
public interest, as that term is used in 21 U.S.C. 823(f).
Specifically, the Order alleged that Treasure Coast ``has dispensed
and continues to dispense controlled substances, primarily Schedule III
anabolic steroids and Schedule II narcotics under circumstances
demonstrating that [Treasure Coast] knew or should have known'' that
those prescriptions were not issued for a legitimate medical purpose.
[Order at 2]. The Order explains that this knowledge must be inferred
from Treasure Coast's association with and filling of prescriptions
issued by physicians who have pled guilty in federal court to
unlawfully distributing steroids, and who market themselves as
providing ``hormone replacement therapy'' and ``anti-aging'' services.
[Id.]. In addition, the Order alleges that Treasure Coast dispensed
controlled substances based on invalid prescriptions where the
prescribing practitioners were not licensed to prescribe controlled
substances in the various states where their patients were located.''
[Id.]. Further, the Government alleges that despite Treasure Coast
being apprised that it is illegal for it to practice in North Carolina
without a license, the pharmacy continued to ship anabolic steroids to
customers located in that state. [Id. at 3-4].
Next, the Government alleged that Treasure Coast filled
prescriptions for Schedule II controlled substances prescriptions
``under circumstances indicating that the drugs are diverted from
legitimate channels, misused, or abused.'' [Id. at 4].
On July 28, 2011, counsel for Treasure Coast and Pappy's Drugs
(collectively, ``Respondents'') timely filed a request for a hearing in
the above-captioned matter.
On July 29, 2011, the Government filed its Motion For Summary
Disposition And Motion to Stay Proceedings (``Government's Motion'').
Therein, the Government moved for summary disposition of the portion of
these proceedings that relate to Treasure Coast's registration. The
Government based its motion on the fact that the State of Florida
suspended Treasure Coast's registration as a community pharmacy and,
therefore, Treasure Coast currently lacks state authority to handle
controlled substances.
On August 1, 2011, I ordered the Respondents to file a response to
the Government's Motion, if any, on or before August 5, 2011.
On August 5, 2011, counsel for the Respondents filed their
Respondents' Response to DEA's Motion For Summary Disposition And
Motion To Stay Proceedings (``Respondents' Response''). Therein, the
Respondents argued that the Government is precluded from using Treasure
Coast Pharmacy's lack of state licensure as a basis for revocation of
its DEA registration, through summary disposition or otherwise, as the
Government failed to state those grounds in its Order to Show Cause.
Consequently, the Respondents' aver that Treasure Coast's due process
rights require the Government ``to serve an Order to Show Cause * * *
stating the DEA's new or substituted basis for revocation and calling
upon [Treasure Coast] to appear at the time and place stated in the
Order to Show Cause, but in no event less than thirty days after the
date of receipt of this order.'' [Resp. Response at 2]. In addition,
the Respondents argue that under applicable Florida law the owner of a
pharmacy need not be licensed as such, yet must designate a managerial
pharmacist that is so licensed. Further, citing Federgo v. Department
of Professional Regulation, 452 So.2d 1063 (Fla. 3rd DCA 1984), the
Respondents state that alleged wrongdoing of a pharmacist does not
trigger nor support the suspension of the pharmacy's state license.
[Id. at 3].
On August 5, 2011, I ordered the Government to reply to the
Respondents' Response no later than August 12, 2011.
On August 9, 2011, counsel for Treasure Coast filed its
Respondents' Supplemental Response to DEA's Motion For Summary
Disposition And Motion To Stay Proceedings. Therein, the Respondents
argue that Treasure Coast has a valid Florida retail pharmacy drug
wholesale distribution license, and on that basis summary disposition
is inappropriate.
On August 12, 2011, counsel for the Government filed its
Government's Reply To Respondent's Initial And Supplemental Responses
To Government's Motion For Summary Disposition (``Government's
Reply''). In its Reply the Government argues that its Motion for
Summary Disposition remains valid. First, the Government addresses the
Respondents' due process argument in stating
The Administrative Procedures Act (APA), 5 U.S.C. 551 et seq,
does not * * * mandate * * * an inelastic application of the
strictures of administrative due process: ``[p]leadings in
administrative proceedings are not judged by the standards applied
to an indictment at common law.'' Citizens State Bank of Marshfield
v. FDIC, 751 F.2d 209, 213 (8th Cir. 1984) (quoting Aloha Airlines
v. Civil Aeronautics Bd., 598 F.2d 250, 262 (DC Cir. 1979), cited in
Liddy's Pharmacy, L.L.C., 76 FR 48887, 48896, fn 15. As noted in
Liddy's, ``the failure of the Government to disclose an allegation
in the Order to Show Cause is not dispositive, and an issue can be
litigated if the Government otherwise timely notifies a respondent
of its intent to litigate the issue.'' Id. Due process is
traditionally measured by the notice accorded respondents not by the
contents of the OTSC but by subsequent prehearing statements. Id.
citing Darrell Risner, DMD, 61 FR 728, 730 (1996); Nicholas A.
Sychak, d/b/a Medicap Pharmacy, 65 FR 75959, 75961 (2000); John
Stafford Noell, 59 FR 47359, 47361 (1994).
[Government's Reply at 3-4]. Therefore, the Government argues that it
accorded
[[Page 66967]]
the Respondent due process when it notified Treasure Coast of its basis
for summary disposition in the Government's prehearing Motion for
Summary Disposition [Id. at 4].
Next, the Government addresses the substantive basis for its
Motion. Specifically, the Government argues that Treasure Coast's
possession of a wholesale distributor permit is meaningless, as the
loss of its community pharmacy license renders that permit useless.
[Id. at 5-6]. The Government points to Florida Statute Sections
499.01(2)(f) and 499.003(51) for the proposition that a pharmacy's
possession of a wholesale distributor permit is conditioned on that
pharmacy's maintenance of a community pharmacy license. [Id. at 5]. The
Government buttresses this argument via provision of a letter from the
Chief Legal Counsel for the Emergency Action Unit of the Florida
Department of Health, stating ``[b]ecause Treasure Coast's community
pharmacy permit is presently suspended, Treasure Coast may not operate
under either its community pharmacy permit or its wholesale distributor
permit.'' [Id.]. Hence, the Government argues that the Respondent
currently lacks state authority to handle controlled substances and,
therefore, summary revocation of its DEA registration is appropriate.
For the reasons set forth below, I will grant the Government's
Motion and recommend that the Deputy Administrator revoke Treasure
Coast's DEA Certificate of Registration and deny any currently pending
applications to renew its registration.
II. Discussion
a. Procedural Due Process
First, I reject Treasure Coast's argument that it will not be
afforded procedural due process if its registration is revoked due to
its lack of state licensure, as that basis was not noticed in the
Government's Order. As correctly stated by the Government, the confines
of this administrative proceeding are not defined by the Government's
Order to Show Cause, but rather the Government's prehearing
disclosures, in toto. [See George Mathew, M.D., 75 FR 66,138, 66146
(DEA 2010)]. Further, the DEA has consistently followed Goldberg v.
Kelly, 397 U.S. 254, 270 (1970), by writing: ``In Goldberg, the Supreme
Court held that `where governmental action seriously injures an
individual, and the reasonableness of the action depends on fact
findings, the evidence used to prove the Government's case must be
disclosed to the individual so that he has an opportunity to show that
it is untrue.' '' [Beau Boshers, M.D., 76 FR 19,401, 19,403 (DEA 2011)
(citing Goldberg, 397 U.S. at 270 (quoting Greene v. McElroy, 360 U.S.
474, 496 (1959))]. The Court has further explained that ``[a] party is
entitled * * * to know the issues on which [the] decision will turn and
to be apprised of the factual material on which the agency relies for
decision so that he may rebut it. Indeed, the Due Process Clause
forbids an agency to use evidence in a way that forecloses an
opportunity to offer a contrary presentation.'' [Id. (citing Bowman
Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 288
n.4 (1974))].''
Here, the Government put the Respondent on notice through its
Motion for Summary Disposition. Accordingly, Treasure Coast's due
process rights are not violated because the Government, through its
prehearing Motion, timely notified Treasure Coast of its intent to
pursue revocation of its registration on the basis of the pharmacy's
lack of state licensure. In its Response, Treasure Coast had the
opportunity to rebut the factual basis upon which the Government based
its Motion. For this reason, Treasure Coast's due process argument
fails.
b. Wholesale Distribution Permit and State Authority
The DEA will not maintain a controlled substances registration if
the registrant is without state authority to handle controlled
substances. The Controlled Substances Act (``CSA'') provides that
obtaining a DEA registration is conditional on holding a state license
to handle controlled substances. [See 21 U.S.C. 823(f) (``the Attorney
General shall register practitioners (including pharmacies * * *) * * *
if the applicant is authorized to dispense * * * controlled substances
under the laws of the State in which he practices''). See also
824(a)(3) (stating ``a registration may be suspended or revoked by the
Attorney General upon a finding that the registrant has had his State
license or registration suspended, revoked or denied by competent State
authority'')]. The DEA, therefore, has consistently held that the CSA
requires the DEA to revoke the registration of a registrant who no
longer possesses a state license to handle controlled substances. [See
e.g. Joseph Baumstarck, 74 FR 17,525, 17,527 (DEA 2009) (stating the
``ALJ applied the Agency's long-settled ruled [sic] that a practitioner
may not maintain his DEA registration if he lacks authority to handle
controlled substances under the laws of the state in which he
practices''); Roy Chi Lung, M.D., 74 FR 20,346 (DEA 2009); Gabriel
Sagun Orzame, M.D., 69 FR 58,959 (DEA 2004); Alton E. Ingram, Jr.,
M.D., 69 FR 22,562 (DEA 2004); Graham Travers Schuler, M.D., 65 FR
50,570 (DEA 2000); Dominick A. Ricci, M.D., 58 FR 51,104 (DEA 1993)].
The parties do not dispute that the State of Florida suspended
Treasure Coast's retail pharmacy registration. Therefore, Treasure
Coast no longer possesses authority under that license to handle
controlled substances. However, Treasure Coast argues that it currently
possesses other state authority to handle controlled substances,
through its maintenance of a wholesale distributor permit.
Nevertheless, I am persuaded by the Government's argument that the
State of Florida did not intend a pharmacy, who lacks authority to
handle controlled substances under a retail pharmacy registration, to
be permitted to handle controlled substances under a wholesale
distribution permit. Not only is the alternative plainly inconsistent
with Florida law, it renders an absurd interpretation of those laws.
[See Fla. Stat. 499.01(2)(f) (2010) (only permitting a retail pharmacy
to obtain a wholesale distribution permit); 499.003(51) (defining
``retail pharmacy'' as ``a community pharmacy licensed under chapter
465''); Durr v. Shinseki, 638 F.3d 1342, 1348 (11th Cir. 2011)
(``[b]ecause the legislature is presumed to act with sensible and
reasonable purpose, statute should, if at all possible, be read so as
to avoid unjust or absurd conclusion.'')].
This interpretation is consistent with the letter from the Chief
Legal Counsel, Emergency Action Unit, Florida Department of Health, who
wrote that, ``[b]ecause Treasure Coast's community pharmacy permit is
presently suspended, Treasure Coast may not operate under either its
community pharmacy permit or its wholesale distributor permit.''
[Government's Reply, attachment 3]. Therefore, because, as a matter of
law, Treasure Coast no longer possesses state authority to handle
controlled substances, its DEA registration must be revoked.
c. Respondents' Other Arguments
Treasure Coast's other arguments for denial of the Government's
Motion are irrelevant to this proceeding. First, the Respondent's
argument that Florida law does not require the owner of a retail
pharmacy to be registered as a pharmacist, but instead permits a
pharmacy to designate managerial authority to a registered pharmacist,
is irrelevant because despite the truth or
[[Page 66968]]
falsity of that assertion, the DEA registers pharmacies, not
pharmacists,\1\ and Treasure Coast as a retail pharmacy currently lacks
state authority to operate.
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\1\ 21 U.S.C. 823(f).
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In addition, the Respondents' argument that the State of Florida
may not revoke a pharmacy's registration on the basis of its
pharmacist's wrongdoing is equally irrelevant. Upon a motion for
summary disposition due to lack of state licensure, the DEA will not
consider whether the State has a valid basis for revoking the
Respondent's registration; it will only consider whether the Respondent
currently possesses state authority. As Treasure Coast does not, its
registration must be revoked.
III. Conclusion, Order, and Recommendation
It is well-settled that when no question of fact is involved, or
when the material facts are agreed upon, a plenary, adversarial
administrative proceeding is not required under the rationale that
Congress does not intend administrative agencies to perform meaningless
tasks. [See Layfe Robert Anthony, M.D., 67 FR 35,582 (DEA 2002);
Michael G. Dolin, M.D., 65 FR 5,661 (DEA 2000); see also Philip E.
Kirk, M.D., 48 FR 32,887 (DEA 1983), aff'd sub nom. Kirk v. Mullen, 749
F.2d 297 (6th Cir. 1984); Puerto Rico Acqueduct & Sewer Auth. v. EPA,
35 F.3d 600, 605 (1st Cir. 1994)]. Consequently, there is no genuine
dispute of material fact as the Respondent currently lacks state
authority to handle controlled substances. Therefore, summary
disposition for the Government is appropriate.\2\
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\2\ This opinion does not reach the other factual issues made in
the Order to Show Cause. Rather, this opinion solely addresses
Treasure Coast's loss of ability to handle controlled substances in
the State of Florida, and, thus, ability to maintain a DEA
registration.
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Accordingly, I hereby grant the Government's Motion for Summary
Disposition.
I also forward the portion of this case that relates to Treasure
Coast's registration to the Deputy Administrator for final disposition.
I recommend that Treasure Coast's DEA Certificate of Registration,
Number BT9856002, be revoked and any pending renewal applications for
this registration be denied.
Dated: August 16, 2011.
Gail A. Randall,
Administrative Law Judge.
[FR Doc. 2011-27927 Filed 10-27-11; 8:45 am]
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