Registrant Actions - 2011
[Federal Register Volume 76, Number 61 (Wednesday, March 30, 2011)]
[Notices]
[Pages 17694-17704]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-7393]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 09-40]
Scott C. Bickman, M.D.; Revocation of Registration
On March 27, 2009, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, issued an Order to
Show Cause to Scott C. Bickman, M.D. (Respondent), of Anaheim Hills,
California. The Show Cause Order proposed the revocation of
Respondent's DEA Certificate of Registration, BB3698632, as well as the
denial of any pending applications to renew or modify his registration,
on the ground that his "continued registration is inconsistent with
the public interest." ALJ Ex. 1, at 1.
The Show Cause Order specifically alleged that "[f]rom December
2007 through October 2008," Respondent allowed his "DEA registration
to be used to purchase at least 281,500 dosage units of hydrocodone
combination products, in exchange for $2,000 per month," in violation
of 21 U.S.C. 843(a)(2) and (3). Id. The Show Cause Order also alleged
that Respondent had materially falsified his July 25, 2008 application
to renew his registration because he failed to disclose that the
Medical Board of California had "placed limits on [his] practice and
placed [him] on probation for a period of thirty-five (35 months),
effective September 18, 2006." Id. at 1-2 (citing 21 U.S.C.
824(a)(1)).
Respondent timely requested a hearing on the allegations and the
matter was placed on the docket of the
[[Page 17695]]
Office of Administrative Law Judges (ALJ). Following pre-hearing
procedures, an ALJ conducted a hearing in Los Angeles, California on
January 26-27, 2010. At the hearing, both parties introduced
documentary evidence and called witnesses to testify. Thereafter, both
parties submitted briefs containing their proposed findings of fact,
conclusions of law, and arguments.
On May 28, 2010, the ALJ issued her recommended decision (also
ALJ). Therein, the ALJ found that Respondent had materially falsified
his July 2008 renewal application. ALJ at 31. Based on "Respondent's
inconsistent testimony about how the misstatement occurred and his
failure to take responsibility for it," the ALJ further found that
Respondent had not shown that "the omission was unintentional and that
there was no intent to deceive." Id. The ALJ thus concluded that this
act "constitutes grounds for revoking [Respondent's] registration."
Id.
The ALJ then turned to whether Respondent had committed acts
rendering his registration inconsistent with the public interest. Id.
(discussing 21 U.S.C. 823(f)). With respect to the first factor--the
recommendation of the State licensing authority--the ALJ noted that
Respondent's State medical license "is unrestricted and that he is
authorized to handle controlled substances in" the State. Id. The ALJ
thus found that this factor supports a finding that Respondent's
"continued registration would be in the public interest." Id. at 31-
32. However, the ALJ further noted that this factor is not dispositive.
Turning to the second factor--Respondent's experience in dispensing
controlled substances--the ALJ noted that this factor was "not at
issue in th[e] proceeding." Id. at 32. With respect to the third
factor--Respondent's record of convictions for offenses related to the
manufacture, distribution or dispensing of controlled substances--the
ALJ noted that there was no evidence that Respondent has been convicted
of such an offense. Id. However, the ALJ noted that this factor was
also not dispositive. Id.
Addressing the fourth factor--Respondent's compliance with
applicable Federal and State laws related to controlled substances--the
ALJ found that "between December 2007 and October 2008[,] some 120,000
dosage units of hydrocodone were ordered [by another physician who was
allowed to use his registration] and shipped from Harvard Drug using
Respondent's DEA registration number" and that "Respondent does not
deny that this happened, but urges that these orders were made without
his authorization or knowledge." Id. The ALJ further found that while
"[t]he record does not establish that Respondent had actual knowledge
of every order placed with Harvard Drug using his DEA number[,] [it]
conclusively establishes * * * that [he] had ample reason to suspect
that his registration was being misused and that he chose not to act on
those suspicions." Id. Further finding Respondent's various
explanations of his conduct implausible, the ALJ concluded that he
"knew or should have known that" his registration was being used "to
order controlled substances that were likely to be diverted." Id. at
33. The ALJ thus concluded that, by allowing another doctor to use his
DEA registration "to order controlled substances," Respondent had
unlawfully distributed controlled substances in violation of 21 U.S.C.
841(a) and that this factor supported a finding that his "continued
registration would be inconsistent with the public interest." Id.
Turning to the fifth factor--other conduct which may threaten
public health or safety--that ALJ found it "abundantly clear from
Respondent's testimony and his letters to [a DEA Investigator that he]
does not admit to any wrongdoing or accept any responsibility for the
120,000 dosage units of hydrocodone that were ordered * * * using his
DEA registration number." Id. at 33. Concluding "that Respondent's
refusal to acknowledge his wrongdoing offers little hope for the
prospect that if he retains his DEA registration he will act more
responsibly in the future," the ALJ found that this factor also
supported a finding that his continued registration would be
inconsistent "with the public interest." Id. at 34.
The ALJ thus concluded that Respondent had "at least
constructively engaged in [the] unlawful distribution of hydrocodone
and that he is unwilling or unable to accept the responsibilities
inherent in a DEA registration." Id. The ALJ thus recommended that
Respondent's "registration be revoked and that any pending
applications be denied." Id.
Thereafter, Respondent filed exceptions to the ALJ's decision. The
record was then forwarded to me for final agency action.
Having considered the entire record in this matter, including
Respondent's exceptions, I reject the ALJ's legal conclusion that
Respondent materially falsified his application. I agree, however, with
the ALJ's finding that Respondent has committed acts which render his
registration inconsistent with the public interest because he either
knew or had reason to know that his registration was being misused and
yet did nothing to prevent it. I further agree with the ALJ that
Respondent has failed to accept responsibility for his misconduct.
Accordingly, I will adopt the ALJ's recommendation that his
registration be revoked and pending application be denied. As ultimate
fact finder I make the following findings.
Findings
Respondent is an anesthesiologist who holds a physician and surgeon
license issued by the Medical Board of California (MBC). GX 7, at 1.
Pursuant to a Stipulated Settlement and Disciplinary Order (State
Order), which became effective on September 18, 2006, the MBC revoked
Respondent's license but then stayed the revocation and placed him on
probation for a period of thirty-five months subject to various
conditions. Id. at 2-3. The State Order resolved an Accusation that
Respondent had committed acts of gross negligence, negligence,
incompetence, and had failed to maintain adequate and accurate records,
based on his provision of epidural anesthesia to a patient. Id. at 21-
25. Notably, the Board did not place any restriction on Respondent's
authority to administer, prescribe or dispense controlled substances.
See id. at 5-15. It was undisputed that Respondent has satisfactorily
completed the probation.
Respondent is also the holder of a DEA Certificate of Registration,
which authorizes him to dispense controlled substances in schedules II
through V as a practitioner. GX 1. Respondent's registration was to
expire on July 31, 2008; however, on July 28, 2008, Respondent
submitted a renewal application. GX 6, at 3. On the application,
Respondent was required to answer the following question: "Has the
applicant ever had a state professional license or controlled substance
registration revoked, suspended, restricted, or placed on probation, or
is any such action pending?" GX 5, at 1. Respondent answered: "No."
Id.
On September 28, 2005, when Respondent previously renewed his
registration, he gave as his registered location his residence on
Wilshire Boulevard in Los Angeles, California. GX 6, at 3-4. However,
on August 22, 2007, an application was submitted through DEA's
registration Web site which changed his registered address from his
residence to 145 S. Chaparral Court, Suite 101, Anaheim Hills,
California. GX 6, at 3. This address was the location of an outpatient
surgery
[[Page 17696]]
center which was owned by Dr. Harrell E. Robinson, a plastic surgeon.
According to Respondent, he first met Robinson in 2005 when the
latter performed surgery at a surgery center in Beverly Hills. Tr. 471.
On some date in either late 2006 or April/May 2007, Robinson began
performing outpatient surgery at the Chaparral Court surgery center.
Id. at 475-76. Robinson told Respondent that he was going to take over
the center and asked him if he would be interested in providing
anesthesia to the patients who underwent procedures there. Id. at 476.
Respondent agreed to do so, and Robinson agreed to provide the
controlled substances (among them fentanyl and midazolam) that were
used to anesthetize the patients. Id. at 476-77. Respondent did not
order the controlled substances but would tell the clinic's nurse when
the supplies were running low, who would then order more. Id. at 477-
78. Respondent administered anesthesia to patients at the center until
sometime in late November 2007. Id. at 480, 587.
According to Respondent, the accreditation of Robinson's surgery
center, which was issued by the Joint Commission on Accreditation of
Healthcare Organizations (JCAHO), was due to expire at the end of
November 2007 and Robinson had no plans to re-accredit the center. Id.
at 480. Respondent maintained that he stopped performing anesthesia at
the center after its accreditation expired because the State Order
prohibited him from practicing at an unaccredited facility and that he
had stopped going there.\1\ Id. at 481.
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\1\ However, the State Order contains no such prohibition. See
GX 7, at 5-16.
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In mid-November 2007, Robinson asked Respondent to become the
center's medical director. Id. Respondent declined Robinson's offer.
Id. at 482. However, because Respondent knew a nurse anesthetist who
had previously assisted other surgery centers in obtaining
accreditation and who would provide him with the templates necessary to
prepare the documents required to do so, as well as because upon the
center's obtaining a new accreditation, he would then be able to work
there, Respondent offered to help Robinson get the center re-accredited
for a fee of $16,000.\2\ Id. at 482-83; see also id. at 347-48.
Robinson agreed. Id. at 482-83.
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\2\ According to Respondent, the nurse anesthetist recommended
that the center seek accreditation from a different entity, the
Institute for Medical Quality (IMQ).
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Respondent maintained that in addition to preparing the necessary
documents, he agreed to allow Robinson to use his DEA registration to
order necessary supplies and medications for performing "peri-
operative anesthesia services," which he maintained were necessary
"to get the center up and running to be accredited." Tr. 496.
According to Respondent, this included "gloves, syringes, needles,
IVs, IV bags, Bovies and drapes," as well as the drugs used prior to
surgery (such as midazolam), during surgery (fentanyl) and post-surgery
(Dilaudid and fentanyl). Id. at 496-97. Dilaudid (hydromorphone) and
fentanyl are schedule II controlled substances, see 21 CFR
1308.12(b)(1) & (c); midazolam is a schedule IV controlled substance.
See id. 1308.14(c).
Respondent also submitted into evidence a November 19, 2007 letter
which he asserted he had written to Robinson stating the terms of his
agreement for assisting Robinson with getting the center re-accredited.
RX DD. According to the letter (which is not signed by either him or
Robinson), Respondent agreed to "provide use of my DEA certificate and
DEA license for use of supplies and medications related to Peri-
operative Anesthesia services." Id. The letter further states that
"[t]his authorization does not extend to clinic and post-operative
services or oral analgesics," and that, "[i]f at any time my * * *
DEA is used for other then the narrow range specific [sic] in this
letter of understanding then this letter of understanding is nil [sic]
and void." Id.
Respondent testified that he prepared the letter because he knew
that Robinson had started dispensing hydrocodone from his office and he
"just wanted to cover [him]self to make sure that [his] DEA in the
future was not used for that purpose." Tr. 648. Respondent further
denied having written the letter after the fact. Id. at 652. However,
on either October 19 or 22, 2008, Respondent was interviewed by both a
DEA Diversion Investigator (DI) and a DEA Special Agent (S/A) and did
not mention the letter. Id. at 225, 656-57; GX 23, at 1. Moreover,
while Respondent submitted a lengthy written statement to the DI
following the interview (as well as two other statements), he did not
mention the letter in any of the statements and admitted that he never
provided it to the DI.\3\ Id. at 652, 654, 656-57; see also GX 23.
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\3\ Respondent also submitted a lengthy document, which was a
draft of a Policy and Procedure Manual he prepared for Robinson
because the Chaparral Court clinic would need it to obtain
accreditation. See RX E; Tr. 485, 492. Respondent further admitted
that this document was only "a draft * * * a rough copy," and was
"not intended to be sent in time for approval, or even to request
somebody to come [to] the center." Tr. 674. Respondent then
explained: "It's a rough draft, as a skeleton, so to speak, for him
to have in place something that when he decided * * * then that was
not for me to even know that he was going to get it ready. Then he
had a rough draft that would have been cleaned up as it needed to
be." Id. at 674-75. To similar effect, Respondent's fianc[eacute],
who helped prepare the document, acknowledged that the document was
not final "in any way, shape or form," but rather was "a work in
progress." Tr. 376.
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Respondent further maintained that he did not authorize Robinson to
use his DEA registration to order oral analgesics such as Vicodin or
other controlled substances containing hydrocodone. Id. at 644-45.
While Respondent testified that Robinson needed his DEA number to order
both non-drug supplies and controlled substances from a distributor,
id. at 496, Samir Shah, Vice-President of Regulatory Affairs for the
Harvard Drug Group (hereinafter, either Harvard or HDG), a registered
distributor, testified that his company only required a DEA
registration if a customer sought to purchase controlled substances.
Id. at 20-21. The record does not establish whose registration was used
by Robinson's clinic to obtain the controlled substances that were
needed to anesthetize patients who underwent surgery there in the
period prior to the date on which Respondent authorized Robinson to use
his registration for this purpose and why Respondent's registration was
subsequently required to order the drugs.\4\
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\4\ While B.C. testified that Robinson would place requests for
various controlled substances which she would then order, Tr. 415,
it is not clear whether the drugs were ordered under Robinson's,
Respondent's, or someone else's registration.
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According to B.C., who was the front office manager at Robinson's
clinic from July through December 3, 2007, when Robinson fired the
entire staff, id. 410-11, 413-14; in the summer of 2007, she observed
Robinson's wife Alinka change Respondent's registered address through
the DEA Web site. Id. at 416-17. B.C. testified that she asked Alinka
Robinson whether Respondent "knew that she was changing his address";
Ms. Robinson stated that Respondent had told her husband that "it was
okay." Id. at 417. Respondent subsequently denied having authorized
this and maintained that he did not become aware that his address had
been changed until he attempted to renew his registration in July 2008.
Id. at 508, 636-40.
In a declaration, B.C. testified that Alinka Robinson had used
Respondent's registration to open an account with Ready Rx, another
drug distributor, and did so without Respondent's knowledge and
consent.\5\ RX X. The evidence
[[Page 17697]]
shows that Alinka and Harrell Robinson used the account to order oral
controlled substances such as Vicodin. Tr. 433, 506, 548-49. While B.C.
testified that she did not tell Respondent about the account "at the
time that [it] was set up," she further stated that after she was laid
off she called Respondent to "let him know everything that was going
on." Id. at 445. According to B.C., Respondent "seemed very shocked
when I told him." Id. Respondent maintained, however, that while he
knew in November 2007, "before [he] left the center that [Robinson]
had actually been dispensing medicines out of the office," he had
"never even heard of [Ready Rx] until today." Id. at 506. He also
testified that he was never told by anyone at "Robinson's office that
oral controlled substances had been ordered using [his] DEA"
registration. Id. at 548.
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\5\ The Government submitted a report it compiled from DEA's
ARCOS database of hydrocodone purchases made in 2007 using
Respondent's registration and which were shipped to Robinson's
Anaheim Hills clinic. GX 18; see also 21 CFR 1304.33(a). While this
report does not list any purchases as having been made from a firm
named Ready RX, the report does list multiple distributions of
hydrocodone by Top RX, Inc., which occurred between October 8 and
November 19, 2007. GX 18, at 8-9. These distributions totaled 38,000
tablets. See id.
Respondent also submitted various documents including a Top Rx
credit application (which listed Respondent's DEA registration
number and listed "Bickman, Coleman Scott MD" as the "legal
name" and "Orange County Surg." as the "trade name") and a Top
Rx "DISPENSING PHYSICIAN QUESTIONNAIRE." RX LL, at 1, 2-4. The
latter document is dated as having been completed on "9/20/07."
Id. at 2. The DI acknowledged that the signature on the documents
did not look like Respondent's, Tr. 249, and conceded that the
documents were a fraudulent application. Id. at 255.
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The ALJ did not specifically address this factual dispute. However,
as ultimate fact finder, I find that B.C., who was called as
Respondent's witness, had no reason to testify falsely as to her having
told Respondent about the Ready Rx account following her termination in
early December 2007.\6\ I therefore credit this testimony.
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\6\ B.C. also testified that twice a week, she would be told by
one of the Robinsons not to come to the clinic because one Maggie
Annan would be coming in. Tr. 426. B.C. further testified that Annan
would pay Alinka Robinson between $9,000 and $10,000 in cash each
month to use the clinic. Id. at 427-28.
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In December 2007, Dr. Robinson, who had previously purchased
controlled substances from HDG for a clinic he owned in Santa Ana,
California, contacted the company to set up an account and obtain
controlled substances for the Anaheim Hills clinic. Tr. 21. Robinson
represented to HDG that Respondent was the medical director of the
Anaheim Hills clinic. Id. at 22; GX 10, at 1 (Jan. 25, 2008 memorandum
from Harrell Robinson to HDG).
According to Mr. Shah, HDG required three documents to open up an
account in Respondent's name and to ship controlled substances to the
Anaheim Hills clinic: 1) a copy of his medical license, 2) a copy of
his DEA registration, and 3) a document, which Mr. Shah called "the
DEA affidavit," a copy of which was submitted into evidence.\7\ Tr.
29-30; see also GX 11. The affidavit reads as follows:
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\7\ Invoices show, however, that HDG commenced filling orders
for combination hydrocodone drugs using Respondent's DEA
registration as early as December 18, 2007, nearly a month before
Respondent executed the affidavit. GX 17, at 1. The invoices also
listed Respondent and the Anaheim Hills office in the "ship to"
block. Id. According to Mr. Shah, HDG did not require a customer to
submit a credit application before it shipped controlled substances;
HDG also allowed a customer a grace period of "two to three weeks
for providing" the affidavit. Tr. 82. Thus, HDG actually only
required a copy of a customer's State license and DEA registration
before it would ship. Id. at 82-83, 87.
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(1) This is to attest that BICKMAN, SCOTT COLEMAN MD, located at
145 S. CHAPARRAL COURT, ANAHEIM HILLS, CA 92808, is not engaged in, nor
has ever engaged in conducting business as an internet pharmacy or
internet pharmacy supplier of controlled substances, nor do we dispense
prescriptions by mail to patients.
(2) DEA is BB3698632.
(3) BICKMAN, SCOTT COLEMAN MD Harvard Drug Group/Major
Pharmaceuticals Acct. is P4840.
(4) BICKMAN, SCOTT COLEMAN MD is located in an area that is
accessible to the public and walk-in customers are welcomed.
GX 11, at 1.
According to Respondent, Robinson faxed him the affidavit and asked
him to sign it and return it to HDG. Tr. 527. Upon reviewing the
affidavit, Respondent discussed it with Mr. Shah because he wanted to
know why he was being asked to sign it. Tr. 34. Mr. Shah told
Respondent that HDG was doing "due diligence to make sure that [the]
pharmaceuticals [it sold were] not being dispensed through [an]
internet pharmacy." Id. In his testimony, Respondent maintained that
he interpreted the language--"This is to attest that BICKMAN, SCOTT
COLEMAN MD, located at 145 S. CHAPARRAL COURT, ANAHEIM HILLS, CA
92808"--to mean he was "credentialed there, I'm located there," but
not to mean that it was "my clinic that I'm doing business out of."
Id. at 531.
It is undisputed that Respondent signed the affidavit and wrote
that his title was "Practitioner"; he also signed the accompanying
California Jurat with Affiant Statement, which was sworn to by him on
January 15, 2008. GX 11, at 2; Tr. 529, 585. It is undisputed that the
affidavit was faxed to HDG after Respondent's conversation with Mr.
Shah. Tr. 35.
However, on the same day that Respondent signed the affidavit, he
sent a letter to HDG which stated: "This letter is to prohibit further
use of my DEA license number unless there is a verbal confirmation from
myself, Scott, Coleman Bickman, M.D. I can be reached at the following
numbers[,]" and listed two phone numbers and a fax number. GX 12, at
1; Tr. 532-33. According to Respondent, he sent the letter because he
"was bothered by the openness of the located question and the internet
pharmacy business" and he "wanted to be very clear in [his] wording
to Harvard that anything that was going to be ordered under [his] DEA
license, [he] wanted to be notified to give confirmation, so that there
was going to be a check and balance system in place." Tr. 533.
However, the HDG invoices show that by the date Respondent signed
the affidavit, HDG had already shipped 34,500 dosage units of various
hydrocodone combination drugs to the Anaheim Hills Clinic listing his
registration number as the "Customer DEA." GX 17, at 1-13. According
to Respondent, he "had no idea that anything had ever been ordered by
any[one] via my DEA besides myself," and if he had known he would have
terminated his relationship with Robinson and "turned him in." Tr.
534.
On January 24, 2008, Robinson prepared a credit application for
HDG, which listed "Physicians and Surgeons d/b/a Scott Bickman" as
both the legal name of the business and the buyer's name. RX G, at 5.
While the document listed Robinson as the owner, it then listed
Respondent as the Guarantor of the account. Id. Robinson called
Respondent and asked him to sign the application which he then faxed to
him. Tr. 521. Respondent, however, did not sign the document because it
listed three trade references with whom he had no relationship. Id. at
521-22.
The same day, Robinson then completed a new credit application in
which he listed the legal name and buyer's name as "Physicians &
Surgeons of O.C., d/b/a Harrell E. Robinson." GX 9, at 1. Robinson
signed the application as Guarantor and faxed it to HDG the next day.
Id. Robinson also faxed a memo to HDG which stated that he was the
"owner of Physicians and Surgeons of Orange County Inc."; and that he
had
[[Page 17698]]
two clinics, one in Santa Ana and the other at 145 S. Chaparral Ct.,
Suite 101, in Anaheim Hills. GX 10, at 1. The memo also stated that
"Dr. Bickman, MD, serves at [sic] my Medical Director at the Anaheim
Hills' office[,]" that "our accounts payable office Dept covers both
offices," and that the invoices should "go through the channels
originally set up." Id.
On February 7, 2008, Respondent faxed a letter (which was dated
January 30, 2008) to HDG. GX 13. Respondent wrote that "[t]his letter
is to authorize the Physicians and Surgeons of Orange County dba
Harrell Robinson, MD to order the necessary supplies for the center
without having The Harvard Drug Group notify me for approval only for
the next sixty days." Id. According to Respondent, he wrote this
letter because Robinson had called him and said that "it was too
difficult" to order the supplies this way. Tr. 537. Respondent
maintained that he wrote the letter "not to undo my previous order,
but to say, okay, they [HDG] don't have to contact me for supplies * *
* not for the necessary supplies for the center," which he deemed to
include syringes, needles, and gloves but "absolutely not" controlled
substances. Id. at 538.
Mr. Shah testified, however, that after HDG received the letter, he
asked G.B., a salesperson, "to contact [Respondent] and notify him
that we intend[ed] to close the account as our system [was] not capable
of handling his request for [the] next 60 days for holding all
orders." Id. at 45. The salesperson called Respondent, who, upon being
told that HDG "would be closing the account," asked to speak to Mr.
Shah. Id. at 46-47. The salesperson then transferred the call to Mr.
Shah. Id. at 48.
Mr. Shah testified that during the call, he explained to Respondent
that HDG would "not be able to handle [his] request" because its
system lacked the capability of "holding orders" for a "certain time
period." Id. Mr. Shah further told Respondent that HDG could either
"continue to ship or not ship." Id. Respondent then told Mr. Shah to
"reinstate the account" and Shah stated that he could not do so until
he received "a written confirmation from" Respondent. Id.
According to Mr. Shah, during the conversation Respondent asked
"what kind of products" were being shipped. Id. Shah testified that
he told Respondent that "we are shipping hydrocodone products." Id.
Shah further testified that Respondent appeared "shocked" by this
information and asked: "Oh is that right? We are ordering hydrocodone
from you?" Id. at 49. Shah replied: "That is correct." \8\ Id.
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\8\ On cross-examination, Respondent's counsel asked Shah
whether he had ever contacted Respondent to "tell him that a very
large quantity of hydrocodone was being ordered." Tr. 88. Shah
responded: "I don't recollect having a conversation with
[Respondent] that the orders that we have been shipping has [sic]
hydrocodone in it that is being shipped. I don't remember anything
else other than what quantity and so forth." Id. Shah further
testified that he did not document the conversation in which he told
Respondent that HDG was shipping hydrocodone because "we did
receive a confirmation on February 27, 2008 signed by Dr. Bickman
[to] disregard all previous instructions and communications." Id.
at 93.
Respondent contends that Shah's testimony on cross-examination
is inconsistent with his testimony on direct. Resp. Br. 24. However,
Shah was asked two different questions; on direct, he testified that
Ms. Brooks had initially contacted Respondent to notify him that HDG
could not "continue shipping products based on his instructions,"
that Respondent asked to speak with him, and that during the ensuing
conversation, Respondent asked what HDG was shipping and Shah told
him hydrocodone. Tr. 45-48. On direct examination, Shah did not
maintain that he had contacted Respondent to tell him that his
registration was being used to order a large quantity of
hydrocodone, but rather to tell him that HDG would not comply with
his instructions. Moreover, on cross-examination, Shah maintained
that he had two conversations with Respondent, one in which HDG's
"DEA affidavit" was discussed and the second one in which he told
Respondent that HDG was going to close the account. Tr. 89-90.
In his Exceptions, Respondent notes that on June 15, 2010, DEA
immediately suspended HDG's registration based on its distributions
of oxycodone products over a two year period. Resp. Exc. at 1.
Respondent argues that Shah's testimony is tainted because the
Government knew and concealed from him that "HDG was under
investigation for massive diversion of millions of doses of
controlled oral drugs," and that the Government "posited that one
of the reasons [R]espondent should have knew [sic] or should have
know [sic] of the hydrocodone purchases is because HDG was a
responsible drug wholesaler." Exc. at 3. Respondent further argues
that because he did not have "the benefit of knowing that he [Shah]
and HDG conducted an unlawful business," he was denied "an
opportunity for impeachment." Id. Respondent thus contends that
Shah's testimony should be stricken; he also argues that "[t]he
concealment of the investigation, and the offering of Mr. Shah's
testimony may also represent the equivalent misconduct so
contumacious in degree that dismissal of the section 841(a) charge
would be an appropriate remedy." Id.
I reject Respondent's Exceptions for the reasons stated in the
ALJ's ruling. I further note that there is no support in the record
for Respondent's contention that the Government's theory was that he
should have known about the hydrocodone purchases because HDG "was
a responsible drug wholesaler." While the Government's case was
based in part on Shah's testimony that he told Respondent that HDG
was shipping hydrocodone, the Government also relied, inter alia, on
the various letters Respondent sent to HDG, as well as the material
inconsistencies in his testimony and written statements. I also note
that Respondent had ample opportunity to cross-examine Shah, who
admitted that HDG shipped large quantities of hydrocodone even
though it was "very unusual" to get a letter (such as Respondent's
Jan. 15, 2008 one) telling HDG not to ship without first getting
verbal confirmation and that this was "all the more reason" why
HDG should have then contacted Respondent. Tr. 96-97. I further note
that while Shah testified that a customer had only two to three
weeks to submit the affidavit HDG required, HDG had been shipping
controlled substances to the Chaparral Court clinic for nearly four
weeks before it obtained the affidavit from Respondent and had
already shipped more than 34,000 dosage units. Respondent thus
demonstrated several ways in which HDG did not act in a responsible
manner, and I have considered this in making my findings.
---------------------------------------------------------------------------
In his testimony, Respondent acknowledged that he had spoken to Mr.
Shah and that Shah had said that "he couldn't conduct business like
this" and that "he wasn't going to call [him] every time" because
HDG's system was not "set up * * * to handle verbally notify[ing] me
about my DEA usage." \9\ Id. at 544. However, Respondent maintained
Mr. Shah did not "mention one item of any drugs being ordered from
[HDG] on my DEA." Id. Respondent also stated that he did not
"understand why [Shah] was so adamantly violently yelling at [him] on
the phone" and that he "really was taken aback." Id. at 545.
Respondent further testified that he never asked Shah (or Ms. B., the
HDG sales rep.) what was
[[Page 17699]]
being ordered on the account. Id. at 571-72.
---------------------------------------------------------------------------
\9\ At the time of the conversation, Respondent was attending
the Physician Assessment and Clinical Education (PACE) Program at
the University of San Diego pursuant to the probation imposed by the
State Board. Tr. 542-43; GX 7, at 9.
In a letter Respondent wrote to the DI, he maintained that
while attending the PACE program, he received a phone call from both
Dr. Robinson and Harvard during which "[t]hey both complained that
they could not do business with all of this notification." GX 23,
at 8. Respondent further asserted that he "was extremely
preoccupied at the time and again Dr. Robinson pleaded with me that
he could not get orders filled for the operating room and that he
would have to cancel surgeries as a result." Id. Continuing,
Respondent wrote: "[a]gain, I trusted Dr. Robinson that he was just
ordering supplies and anesthesia drugs and wrote the second letter
to Harvard[.]" Id.
Yet earlier in the same letter, Respondent wrote that he "was
unaware of whether or not Harvard had knowledge that they were
sending drugs to a center that was unaccredited and not legally
performing surgery. In no way did it even occur to me that my
allowing Dr. Robinson to order his supplies and anesthesia related
drugs could lead to this deception because any law abiding company
would have confirmed the status of Dr. Robinson's center and
questioned why they were using my DEA to supply an unaccredited
center not performing surgery and therefore having no need for the
quantities of narcotics they were shipping to Dr. Robinson." Id. at
7.
On cross-examination, the Government asked Respondent why he had
written the letter "authorizing Dr. Robinson to place orders as
needed so he wouldn't have to cancel his surgeries at the
unaccredited center?" Tr. 625. Respondent replied that he had not
said in the letter that the center was unaccredited. Id. The
Government then asked Respondent if "the center was unaccredited?"
Id. Respondent answered: "for all I know, he took the supplies with
him to the place next door that was accredited. I have no idea. But
I did not give him authorization for him to order supplies to do
surgery in an unaccredited surgery center. I don't know [what] he
did with the supplies. He could have taken them down * * * the
street and used them." Id. at 625-26.
---------------------------------------------------------------------------
The ALJ did not resolve the factual dispute as to whether Mr. Shah
told Respondent that hydrocodone or other drugs were being ordered with
his registration. However, I credit Shah's testimony given that
Respondent admitted that the conversation concerned his "DEA usage,"
and it seems strange that Respondent would not have asked what type of
drugs were being ordered.
In addition, the ALJ generally found Respondent to be a less than
credible witness. ALJ at 34. For example, while Respondent testified
that he did not give Robinson authorization "to order supplies to do
surgery in an unaccredited surgery center," Tr. 625-26, he had
previously written to the DI that the reason he told HDG to reinstate
the account was because Robinson "pleaded with me that he could not
get orders filled for the operating room and that he would have to
cancel surgeries as a result." GX 23, at 8. Likewise, Respondent
denied that he had ever been told that his registration was being used
to order controlled substances, Tr. 534, a statement which was
contradicted by B.C., who was his own witness, and who had no reason to
testify falsely.
After the conversation, Respondent wrote a new letter \10\ which he
apparently faxed to Robinson, who then faxed it to HDG. See GX 15; Tr.
50. This letter, which is dated February 27, 2008, and which is on
stationary of the University of California San Diego Medical Center
reads: "Please Disregard All Previous Faxes Regarding Management of My
Account and Allow Dr. Robinson's Office to Place Orders as Needed.
Thank You for Reinstating the Account At This Time." GX 15. Respondent
testified that he "had no problem writing this" because "no one had
told me that there was any problem from the ordering standpoint, that
they [the Robinsons] were ordering anything" with his DEA
registration.\11\ Tr. 545.
---------------------------------------------------------------------------
\10\ The record also contains a February 21, 2008 letter which
Respondent faxed to HDG the same day. See GX 14, at 2; Tr. 541.
Therein, Respondent wrote: "Please change the previous ordering
arrangement for my account to holding all orders until I have been
notified and give verbal authorization for them to be honored by The
Harvard Group." GX 14, at 2. According to Respondent, he wrote the
letter because Robinson "had skipped a month in paying me" and he
"wasn't willing to continue any sort of a relationship at all with
him in any capacity until he was going to go ahead and honor * * *
what I was working for him for. So I wasn't going to extend the
courtesy of trying to get his center accredited with him using my
DEA * * * to get any supplies or anything without using me to
accreditate him." Tr. 541.
\11\ In his October 27, 2008 letter to the DI, Respondent stated
that he wrote the February 27 letter because both HDG and Robinson
"complained that they could not do business with all of this
notification. I was extremely preoccupied at the time and again Dr.
Robinson pleaded with me that he could not get orders filled for the
operating room and that he would have to cancel surgeries as a
result. Again, I trusted Dr. Robinson that he was just ordering
anesthesia drugs and wrote the * * * letter to Harvard." GX 23, at
8.
---------------------------------------------------------------------------
In his testimony Respondent also maintained that until he was
interviewed by a DEA Diversion Investigator,\12\ he was unaware that
"some inordinate amount of Vicodin had been ordered on my DEA through
the Harvard Drug Group," that this was "absolutely quite shocking"
because "no one had ever said to me, 'Is this okay,' when I had
actually put everything in place along the way for that not to
happen." Id. at 546. Respondent further testified that during the
relevant time period, he never "dispensed Vicodin to a patient," and
that the last time he had been to the Anaheim Hills clinic was in
"later November of 07." Id. at 547. As noted above, Respondent also
testified that he was unaware that his registration was being used to
order oral controlled substances from other companies. Id. at 548.
However, the ALJ found that Respondent knew or had reason to know that
his registration was being misused. ALJ at 34.
---------------------------------------------------------------------------
\12\ According to a DEA DI, the interview occurred on October
22, 2008. Tr. 225.
---------------------------------------------------------------------------
Regarding the events surrounding the submission of his renewal
application, Respondent testified that he knew his registration was
about to expire because several of the surgery centers where he worked
(and which required that he submit his credentials) had told him so.
Id. at 550-51. Respondent added that because he procrastinated in
renewing his registration, he asked A.R., his fianc[eacute], to go
online and fill out the form. Id. at 551. Respondent's fianc[eacute]
made several unsuccessful attempts to access the Web page (apparently
because she inputted the zip code of Respondent's registered address
before it was changed by Alinka Robinson,\13\ see id. at 382-83) at
which the renewal application is submitted. Id. at 379; 552.
---------------------------------------------------------------------------
\13\ The Chief of the DEA Registration Unit testified that in
order to log in and complete a renewal application, an applicant
must type in seven items of information including the zip code of
the registered address which must match exactly the information in
the registration database. Tr. 129-30.
---------------------------------------------------------------------------
Both Respondent and his fianc[eacute] testified that the impending
expiration of Respondent's registration prompted several phone calls
from Alinka Robinson. Id. at 380 (testimony of A.R; "Alinka Robinson
started calling * * * and saying that his DEA license is going to
expire, his DEA license is going to expire"). According to Respondent,
"we had Alinka Robinson, Harrell Robinson calling incessantly asking
why it hadn't been renewed * * * It became * * * a state of almost * *
* panic for us to get it done." Id. at 552; see also id. at 640
("Alinka was blowing up the phone night and day, 'Where's my
renewal?"'). When asked whether it concerned him that Alinka Robinson
"was in a state of panic," Respondent replied that he was "very
busy" doing anesthesia and did not think twice about it. Id. at 644.
Respondent maintained that he trusted A.R. "to be very diligent"
in completing the on-screen application and that while he did "check
it over for a second before [he] sent it," he "didn't catch" the
false answer to the question about whether his State license had been
sanctioned. Id. at 564. Respondent further testified that he was
"[a]bsolutely not" trying "to deceive anybody." Id.
As noted above, Respondent maintained that he did not learn that
his registered address had been changed until July 2008, when he
renewed his registration. Id. at 640. While Respondent maintained that
his registered address had been changed without consent, he admitted
that he did not report this to DEA, id. at 641, even though "it was
unfathomable to" him. Id. at 642. Nor, according to his own testimony,
did he visit the Anaheim Hills clinic after he authorized Robinson to
use his registration, to see what was going on there. Id. at 643.
Respondent also admitted that at the time he agreed to allow
Respondent to use his DEA number, he "absolutely" knew that Harrell
Robinson had been accused of being involved in million dollar insurance
fraud ring. Id. at 628. See also GX 23, at 5 (Respondent's Oct. 27,
2008 letter to DI; "[A]ll I knew about him was some information that I
came across on the Internet. Specifically, allegedly Dr. Robinson was
involved in some major insurance fraud ring and received more than one
million dollars illegally. However, according to the article, Dr.
Robinson has never been found guilty due to his non cooperation and
evasion of prosecutors."). According to Respondent, he did not ask
Robinson "about his fraud and all the stuff related to it" because it
did not "concern [him] when [he] did anesthesia for him." Tr. 656.
According to a report obtained from DEA's ARCOS system,\14\
approximately
[[Page 17700]]
250,000 dosage units of hydrocodone drugs were purchased under
Respondent's registration and distributed to the Anaheim Hills location
during 2007 and 2008. See GX 18, at 1 & 3 (showing 193,500 units in
2008 and 53,800 in 2007); see also Tr. 194. The ARCOS report further
shows that while most of the drugs were obtained from HDG, 20,000
dosages units were purchased from A.F. Hauser, Inc., and 38,500 units
were purchased from Top Rx. See GX 18, at 5-9; see also GX 8 (Top Rx
invoices) and GX 20 (A.F. Hauser, Inc. Invoices). Most of the drugs
were purchased after Respondent was told by B.C. that his registration
was being used to order controlled substances. See id. Moreover,
numerous purchases were made even after the February 2008 phone call
during which Mr. Shah told Respondent that the clinic was ordering
hydrocodone from HDG. See id. at 6-8; see also GX 17, at 22-52. The
purchases continued even after July 2008, when Respondent became aware
that his registered address had been changed without his consent and
Alinka Robinson was "in a state of panic" because he had not renewed
his registration. GX 17, at 40-52; GX 18, at 8.
---------------------------------------------------------------------------
\14\ Pursuant to Federal Regulations, all registered
manufacturers and distributors of various controlled substances
including schedule III narcotics such as combination hydrocodone
drugs are required to report their distributions on a quarterly
basis to DEA. 21 CFR 1304.33.
---------------------------------------------------------------------------
As part of his investigation, the DI obtained delivery information
from HDG and conducted surveillance of several deliveries that were
made to the Anaheim Hills office. Tr. 215-16. On three occasions, the
DI observed the deliveries being made, and several hours later, either
Robinson or his wife remove the packages from the office and take them
either to their home or to a parking lot. Id. at 218. According to the
DI, the drugs were eventually delivered to Maggie Annan, who was
previously identified by B.C. as an associate of the Robinsons. Id. at
426-27.
Thereafter, search warrants were obtained and executed at five
premises including Robinson's Santa Ana clinic, the Anaheim Hills
clinic, Robinson's residence in Yorba Linda, and Ms. Annan's residence
in Santa Ana. Id. at 219. While during the search of the Anaheim Hills
clinic, 6,000 hydrocodone tablets were delivered from HDG, no other
hydrocodone was found in the office and there were no records such as
invoices or a dispensing log. Id. at 220-21. However, at Ms. Annan's
house, the search party found six to ten invoices for hydrocodone
purchases of about "6,000 pills each," "as well as 6,000 tablets of
hydrocodone." \15\ Id. at 221-22. With respect to the disposition of
the drugs, the DI testified that while Robinson had claimed that Annan
asked him to order the drugs to give to poor people in Mexico, there
were no records to support this claim and the DI had no idea what Ms.
Annan did with the drugs. Id. at 223.
---------------------------------------------------------------------------
\15\ According to the DI, "[a]t Ms. Annan's house we found
about 6,000 tablets of hydrocodone. At Ms. Annan's house we found
about 10 bottles of hydrocodone in her garage." Tr. 222. The DI
then explained that each bottle contained about 500 tablets. Id. It
is not clear, however, whether the drugs found in the garage were
all of the total found in Ms. Annan's home or were in addition to
those found in her house.
---------------------------------------------------------------------------
The DI further testified that he had interviewed Harrell Robinson,
who told him that Annan had "asked him to obtain a second registration
to order these drugs," and that "he contacted Dr. Bickman and asked
him to allow him to use the registration to order drugs and supplies
for the office and [that] he would pay [Bickman] $2,000 a month to do
this." Id. at 224. However, when asked by the Government whether
Robinson had talked to Respondent "about using his DEA registration
for ordering controlled substances," the DI replied: "Yes. During the
interview it was based upon Dr. Robinson being asked by Maggie [Annan]
to order more hydrocodone products in order to get more purchase[s]
made other than the one registration so [Respondent's] license was
needed for that purpose." Id. Beyond the fact that Robinson's hearsay
statement is of dubious reliability, I find that the DI's testimony is
too vague to conclude that Respondent had knowledge that Robinson's
purpose in initially obtaining his registration was to enable Annan to
obtain more drugs.
Regarding the Robinsons' use of his registration, Respondent
testified that he was not "okay with it" and that he felt "that the
numbers that it escalated to could have been totally avoided had I been
notified even up front as early as when * * * the relationship started
with Harvard." Tr. 565. He further testified that "it's so
irresponsible to have let that happen * * * for people that knew," and
that with the amounts that were being ordered, he would have thought
that there would have been "a check and balance * * * from Shamir[sic]
Shah or whoever in a compliance role," who would "have called to
verify * * * that these amounts [were] being ordered." Id. at 566-67.
He further asked: "Where am I supposed to get the information from,
when the companies [and DEA] aren't telling me?" Id. at 567. See also
GX 23, at 6 (Resp. Ltr. to DI; "There was no mention by either Dr.
Robinson or Harvard Group about consenting for Dr. Robinson or Alinka
Robinson to knowingly order excessive quantities of oral pain
medication on a regular basis with my DEA. Furthermore, it is
incomprehensible that Harvard Drug Group would not have notified me
that another person was using my DEA in a reckless and illegal
manner.").
Respondent further maintained that he told HDG that he "wanted to
be notified" of the orders, but that HDG "didn't notify me" and
asked "what else are you supposed to do?" Id. Yet on cross-
examination, Respondent testified that he did not ask either Shah or
Ms. B., the HDG sales rep., what Robinson was ordering with his
registration. Id. at 571-72.
Finally, the Government asked Respondent whether he had designated
anyone to maintain records of Dr. Robinson's purchases. Id. at 580.
Respondent stated that he "did not," but that he assumed that
Robinson would be doing it because "he owns a surgical center and
knows the rules and regulations about how controlled substances * * *
need to be logged and receipts need to be kept for a certain amount of
time." Id.
Discussion
Section 304(a) of the CSA provides that a "registration pursuant
to section 823 of this title to * * * dispense a controlled substance *
* * may be suspended or revoked by the Attorney General upon a finding
that the registrant * * * has materially falsified any application
filed pursuant to or required by this subchapter," or "has committed
such acts as would render his registration under section 823 of this
title inconsistent with the public interest as determined under such
section." 21 U.S.C. 824(a)(1) & (4). With respect to the latter
inquiry, Congress directed that the following factors be considered:
(1) The recommendation of the appropriate State licensing board or
professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled
substances.
(3) The applicant's conviction record under Federal or State laws
relating to the manufacture, distribution, or dispensing of controlled
substances.
(4) Compliance with applicable State, Federal, or local laws
relating to controlled substances.
(5) Such other conduct which may threaten the public health and
safety.
21 U.S.C. 823(f).
"[T]hese factors are considered in the disjunctive." Robert A.
Leslie, 68 FR
[[Page 17701]]
15227, 15230 (2003). I may rely on any one or a combination of factors
and may give each factor the weight I deem appropriate in determining
whether to revoke an existing registration or to deny an application
for a registration. Id. Moreover, I am "not required to make findings
as to all of the factors." Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir.
2005); see also Morall v. DEA, 412 F.3d 165, 173-74 (DC Cir. 2005).
The Government has "the burden of proving that the requirements
for * * * revocation or suspension pursuant to section 304(a) * * * are
satisfied." 21 CFR 1301.44(e); see also 21 CFR 1301.44(d) (Government
has "the burden of proving that the requirement for [a] registration
pursuant to section 303 * * * are not satisfied"). However, where the
Government satisfies its prima facie burden, the burden then shifts to
the registrant to demonstrate why he can be entrusted with a new
registration. Medicine Shoppe-Jonesborough, 73 FR 363, 380 (2008).
The Material Falsification Allegation
The Government argues, and the ALJ found, that Respondent
materially falsified his 2008 renewal application because he provided a
"no" answer to the question: "[h]as the applicant ever had a State
professional license or controlled substance registration revoked,
suspended, denied, restricted, or placed on probation, or is any such
action pending?" Gov. Br. 24; ALJ at 31. It is undisputed that this
answer was false because Respondent's State medical license had
previously been placed on probation based on what was, in essence, a
case of malpractice. The ALJ further concluded that Respondent's false
answer was material, reasoning that "'[a]nswers to the liability
question[s] are always material because DEA relies on the answers to
these questions to determine whether it is necessary to conduct an
investigation prior to granting an application.' " ALJ at 31 (quoting
Theodore Neujahr, D.V.M., 65 FR 5680, 5681 (2000); other citations
omitted). Contrary to the ALJ's understanding, the Supreme Court (and
this Agency) have held otherwise.
"The most common formulation" of the concept of materiality is
that "a concealment or misrepresentation is material if it 'has a
natural tendency to influence, or was capable of influencing, the
decision of' the decisionmaking body to which it was addressed."
Kungys v. United States, 485 U.S. 759, 770 (1988) (quoting Weinstock v.
United States, 231 F.2d 699, 701 (DC Cir. 1956) (other citation
omitted)) (quoted in Samuel S. Jackson, 72 FR 23848, 23852 (2007)); see
also United States v. Wells, 519 U.S. 482, 489 (1997) (quoting Kungys,
485 U.S. at 770). Most significantly for this proceeding, the Supreme
Court has explained that "[i]t has never been the test of materiality
that the misrepresentation or concealment would more likely than not
have produced an erroneous decision, or even that it would more likely
than not have triggered an investigation." Kungys, 485 U.S. at 771
(emphasis added). Rather, the test is "whether the misrepresentation
or concealment was predictably capable of affecting, i.e., had a
natural tendency to affect, the official decision." Id. "'[T]he
ultimate finding of materiality turns on an interpretation of
substantive law,' " id. at 772 (int. quotations and other citation
omitted), and must be met "by evidence that is clear, unequivocal, and
convincing." \16\ Id.
---------------------------------------------------------------------------
\16\ While Kungys involved a denaturalization proceeding, in
other civil proceedings, courts have required that a party establish
that a falsification is material by "clear, unequivocal, and
convincing evidence" and not simply by a "preponderance of the
evidence." Driscoll v. Cebalo, 731 F.2d 878, 884 (1984). In any
event, the Government's evidence on materiality would not even meet
the preponderance standard.
---------------------------------------------------------------------------
As the above makes clear, the relevant decision for assessing
whether a false statement is material is not the decision to conduct an
investigation, but rather the decision as to whether an applicant is
entitled to be registered. The Government's evidence does not, however,
establish that Respondent's failure to disclose that the State Board
had placed him on probation was capable of influencing the decision to
grant his renewal application.
Notably, at the time he submitted the application, Respondent had a
current State medical license and was authorized under California law
to dispense controlled substances; he thus met the CSA's statutory
requirement for holding a registration that he be "authorized to
dispense * * * controlled substances under the laws of the State in
which he practices." 21 U.S.C. 823(f); see also id. Sec. 824(a)(3)
(authorizing the suspension or revocation of a registration upon a
finding that "the registrant * * * has had his State license or
registration suspended, revoked, or denied by competent State authority
and is no longer authorized by State law to engage in the * * *
dispensing of controlled substances"). Nor had the State Board
recommended that his State or Federal controlled substance authority be
suspended or revoked. Id. Sec. 823(f)(1).
Moreover, the conduct which was the basis of the State Board's
order does not implicate any of the other grounds provided for in the
CSA for revoking a registration or denying an application. More
specifically, the Board Order was not based on Respondent's having been
convicted of a felony related to controlled substances under either
State or Federal law, his having diverted or abused controlled
substances, his failure to comply with other State or Federal
controlled substance regulations, or his having committed an act of
health care fraud resulting in his exclusion from participating in a
program pursuant to 42 U.S.C. 1320a-7(a). See 21 U.S.C. 824(a)(2), (4),
(5); see also 21 U.S.C. 823(f).
Rather, the only evidence in the record is that Respondent failed
to properly administer anesthesia to a patient. DEA does not, however,
have authority to revoke a registration or deny an application simply
because a physician has committed an act of medical malpractice.\17\
See generally Gonzales v. Oregon, 546 U.S. 243 (2006). Short of the
Medical Board's having concluded that Respondent's conduct posed such a
risk to patients as to warrant the suspension or revocation of his
medical license (and authority to prescribe controlled substances under
State law), DEA could not have denied his renewal application. Thus,
Respondent's falsification was not "capable of influencing" the
Agency's decision and was thus not material. Kungys, 485 U.S. at 772.
Accordingly, I concluded that the Government has failed to prove this
allegation.
---------------------------------------------------------------------------
\17\ This is not to say that every case of medical malpractice
is not material to the Agency's registration decision. Where, for
example, there is evidence that a physician committed malpractice
while being under the influence of a an illegally obtained
controlled substance, the failure to disclose a State proceeding
would be a material falsification even where a State board has
imposed only a period of probation. However, here there is no
evidence that Respondent was unlawfully under the influence of a
controlled substance when he committed the acts which were the basis
of the MBC proceeding.
---------------------------------------------------------------------------
The Public Interest Allegations
The Government argues that the evidence relevant to factors two
(Respondent's experience in dispensing controlled substances), four
(Respondent's compliance with applicable laws related to controlled
substances), and five (such other conduct which may threaten public
health and safety) supports the revocation of Respondent's
registration. Gov. Br. 18, 22. Specifically, the Government argues that
Respondent unlawfully distributed several hundred thousand dosage units
of hydrocodone, a schedule III controlled substance, to
[[Page 17702]]
an unknown and unregistered person. Id. at 18-19.
The Government argues that even if Harrell Robinson and Maggie
Annan "operated without his knowledge or consent, Respondent still
violated the [CSA] by failing to supervise their activities." Id. at
20 (citing 21 CFR 1301.71(a) & (b)(14)). The Government further argues
that under agency precedent, Respondent is strictly liable for the
misuse of his registration because he entrusted his registration to
these persons. Id. at 23 (quoting Harrell Robinson, M.D., 74 FR 61370,
61377-78 (2009) (citing Rose Mary Jacinta Lewis, M.D., 72 FR 4035
(2007)). Finally, the Government argues that Respondent violated the
CSA (and California law) because he failed "to maintain dispensing
records as required by 21 CFR 1304.22(c)." Id. at 20 (also citing 21
U.S.C. 827(b) and 21 CFR 1304.04(a)); see also id. at 21 (citing Cal.
Health & Safety Code Sec. 11190(c)(1) & (G.2)).
Citing the CSA's provisions defining the terms "distribute" and
"deliver," the ALJ reasoned that the "constructive transfer of a
controlled substance is included in the meaning of distribution." ALJ
at 32 (citing 21 U.S.C. 802(8) & (10)). While acknowledging that
"[t]he record does not establish that Respondent had actual knowledge
of every order placed with Harvard Drug using his DEA number," the ALJ
found that "[t]he record conclusively establishes * * * that
Respondent had ample reason to suspect that his registration was being
misused and that he chose not to act on those suspicions." Id. Finding
that his testimony as to why he had authorized Robinson to use his DEA
registration number and his explanations of his various instructions to
Harvard lacked credibility, id. at 32-33, the ALJ further found "that
Respondent knew or should have known that Dr. Robinson was using [his]
DEA registration number to order controlled substances that were likely
to be diverted," that "Respondent engaged in [the] distribution of
those [controlled] substances," and that these distributions violated
the CSA. Id. at 33 (citing 21 U.S.C. 841(a)).
I need not decide whether the evidence is sufficient to support the
ALJ's finding that Respondent constructively transferred controlled
substances and thus distributed them in violation of 21 U.S.C.
841(a).\18\ Under the public interest standard, DEA can consider a
broader range of conduct than that which supports a finding of a
criminal violation of the CSA. See 21 U.S.C. 823(f).
---------------------------------------------------------------------------
\18\ The Government did not argue that Respondent is liable for
Robinson's unlawful conduct under either a conspiracy or aiding and
abetting theory.
---------------------------------------------------------------------------
Here, the evidence is clear that at least from November 19, 2007,
Respondent expressly authorized Robinson to use his DEA registration to
order controlled substances. Respondent offered no explanation as to
why Robinson, beginning on that date, then needed to use Respondent's
registration (as opposed to his own) to obtain controlled substances
for the clinic; indeed, Respondent's testimony that he had been
performing anesthesia at the clinic for at least four months at that
time begs the question: whose registration had been previously used to
obtain the controlled substances which Respondent used to anesthetize
patients at the clinic?\19\
---------------------------------------------------------------------------
\19\ Under a DEA regulation, "[a] separate registration is
required for each principal place of * * * professional practice at
one general physical location where controlled substances are * * *
dispensed by a person." 21 CFR 1301.12(a); see also 21 U.S.C.
822(e). While the regulation exempts from the separate registration
requirement "[a]n office used by a practitioner (who is registered
at another location) where controlled substances are prescribed but
neither administered nor otherwise dispensed as a regular part of
the professional practice of the practitioner at such office, and
where no such supplies of controlled substances are maintained," 21
CFR 1301.12(b)(3), it is clear that controlled substances were
maintained at the clinic and that someone had to have been
registered there for it to lawfully obtain the controlled substances
that were used to anesthetize patients even when it was still
accredited.
---------------------------------------------------------------------------
Moreover, were I to credit Respondent's testimony that: (1) He had
only authorized Robinson to use his registration to order controlled
substances necessary to perform anesthesia; and (2) he did not create
the November 19, 2007 letter memorializing this after the fact (as the
Government suggests); it is significant that B.C., who was his own
witness, testified that after she was terminated by the Robinsons, an
event which occurred only two weeks after he wrote the letter, she
called Respondent and told him about the Ready Rx \20\ account and
"everything that was going on," which "shocked" Respondent.
Respondent's testimony that he had never heard of this account until
the hearing or that his DEA registration was being used to order oral
controlled substances (i.e., hydrocodone drugs) is simply not credible.
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\20\ I acknowledge that B.C. testified that the account was with
Ready RX, but various documents show that the account was with Top
RX. I conclude, however, that this inconsistency is not material as
the substance of B.C.'s testimony was to relate the conduct of the
Robinsons and not to identify the specific company from which they
were purchasing controlled substances.
---------------------------------------------------------------------------
Likewise, Mr. Shah testified that during a February 2008 phone
conversation with Respondent, the latter asked Shah "what kind of
products" Harvard was shipping and Shah told him hydrocodone, which
again shocked Respondent. ALJ at 16 (citing Tr. 48-49). While
Respondent again professed that Shah said no such thing, even after
Shah told him that HDG was not able "to verbally notify me about my
DEA usage," Respondent authorized Robinson's office to "place orders
as needed."
Yet at no time thereafter did Respondent go to the Chaparral Court
clinic to determine whether Robinson was actually complying with the
Nov. 19 letter by ordering only peri-operative anesthesia drugs and not
oral analgesics, as well as whether Robinson was, notwithstanding the
clinic's lack of accreditation, still performing surgeries and had a
need for any controlled substances. Indeed, Respondent's various
statements and testimony regarding why he wrote the letter to HDG which
authorized Robinson to "place as orders as needed" are fundamentally
inconsistent.
For example, in his October 2008 letter to the DI, Respondent
initially wrote he "was unaware of whether or not Harvard had
knowledge that they were sending drugs to a center that was
unaccredited and not legally performing surgery." GX 23, at 7.
Continuing, he wrote that "[i]n no way did it even occur to me that my
allowing Dr. Robinson to order his supplies and anesthesia related
drugs could lead to this deception because any law abiding company
would have confirmed the status of Dr. Robinson's center and questioned
why they were using my DEA to supply an unaccredited center not
performing surgery." Id.
Given Respondent's statements that the center "was not legally
performing surgery," Robinson had no lawful need to order any
controlled substances.\21\
[[Page 17703]]
Moreover, even if it is the case--as contended by Respondent but
without any credible support in the record, see Resp. Exc. at 12--that
the center would have had to have stocks of anesthesia drugs on hand
prior to obtaining re-accreditation, Respondent offered no evidence
that the center was even close to obtaining re-accreditation. To the
contrary, Respondent testified that the accreditation documents had yet
to be finalized and submitted.
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\21\ In his exceptions, Respondent contends that the ALJ erred
because she concluded "that California law prohibits surgery in an
ambulatory surgery center unless it is accreditated [sic]." Exc. at
12. Respondent further contends that Cal. "Health and Safety Code
section 1204(b) applies only to ambulatory surgery centers that are
partially or totally owned by physicians," that California law does
not prohibit the performance of ambulatory surgery at a surgery
center, which is not owned by a physician but which is licensed
"pursuant to Health and Safety Code sections 1200 et seq.," and
that there is no evidence as to who was the actual owner of the
Chaparral Court clinic, even though "it was clearly operated by
Harrell Robinson." Id.
Respondent misstates California law, which clearly provides
that "[a] surgical clinic does not include any place or
establishment owned or leased and operated as a clinic or office by
one or more physicians * * * in individual or group practice,
regardless of the name used publicly to identify the place or
establishment." Cal. Health & Saf. Code Sec. 1204(b)(1) (emphasis
added). Moreover, if, as Respondent now contends in his exceptions
(and in contrast to his position he took in his October 2008
letter), it was legal to perform surgery at the Chaparral Court
clinic, because, notwithstanding its loss of accreditation, the
clinic was licensed as a specialty clinic, see id.; this begs the
question of why Respondent stopped providing anesthesia for the
surgeries that Robinson performed there and why he purportedly was
helping Robinson to obtain a new accreditation. See also Cal. Health
& Safety Code (listing criteria for operating in "an outpatient
setting"). Respondent did not address this inconsistency.
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Moreover, even if the clinic was required to have stocks of
anesthesia drugs on hand prior to obtaining re-accreditation, it is not
clear why this would have required that Robinson have authority to use
Respondent's registration for at least eight months. Indeed, given that
the controlled substances that Respondent testified were necessary to
perform anesthesia (fentanyl and midazolam) are widely available, it
seems that any drugs the clinic would have needed to have on hand as
part of the re-accreditation process could have been obtained through a
single order from HDG and at a time shortly before any inspection by
the accreditation authority.
Even were I to credit Respondent's testimony that he only
authorized Robinson to order controlled substances used as peri-
operative anesthesia drugs, because these drugs were being ordered
under his registration, Respondent was required to maintain records
showing the receipt and disposition of the drugs as well as initial
inventories of them. See 21 U.S.C. 827(a) ("every registrant * * *
shall * * * as soon * * * as such registrant first engages in the * * *
dispensing of controlled substances * * * make a complete and accurate
record of all stocks thereof on hand"); id. Sec. 827(a)(3) ("every
registrant * * * dispensing a controlled substance or substances shall
maintain, on a current basis, a complete and accurate record of each
such substance * * * received, sold, delivered, or otherwise disposed
of by him"). Yet again, Respondent never went to the Chaparral Court
clinic to determine whether the required records were being maintained.
Also, while Respondent asserted that his registered address had
been changed to the Chaparral Court address without his consent; that
he did not learn of this until July 2008, when he submitted his renewal
application; and that "it was unfathomable to him"; he did not report
this to DEA. He likewise stated that he did not think twice about the
phone calls he received from Alinka Robinson, who was in a state of
"panic" because he had yet to renew his registration.
Accordingly, I conclude that even if Respondent was initially
unaware that Robinson was using his registration for unlawful purposes,
the evidence clearly shows that at various junctures (including within
weeks of his authorizing Robinson to use the registration), Respondent
clearly had reason to know that his registration was being misused and
did nothing to prevent it. See 21 CFR 1301.71(a). In any event, under
DEA precedent, a registrant is strictly liable for the misconduct of
those persons who he authorizes to act under his registration.\22\ See
Paul Volkman, 73 FR 30630, 30644 n.42 (2008); Rose Mary Jacinta Lewis,
72 FR at 4041.
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\22\ To make clear, this is not a case where a practitioner
simply provided his DEA registration to a health care facility as
part of the credentialing process and a person at the facility
subsequently used his registration for unlawful purposes. Rather,
Respondent affirmatively authorized Respondent to use his
registration to obtain controlled substances, and is thus strictly
liable for the misuse of his registration.
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Moreover, Respondent was responsible for maintaining records for
the controlled substances and yet did nothing to ensure that the
records were being kept. Accordingly, I conclude that the evidence
pertinent to factors four (Respondent's compliance with applicable
controlled substance laws) and five (other conduct which may threaten
public health and safety), establishes that Respondent has committed
acts which render his registration inconsistent with the public
interest. 21 U.S.C. 824(a)(4).
Sanction
Under Agency precedent, where, as here, the Government has made out
a prima facie case that a registrant has committed acts which render
his "registration inconsistent with the public interest," he must "
'present[] sufficient mitigating evidence to assure the Administrator
that [he] can be entrusted with the responsibility carried by such a
registration.' " Samuel S. Jackson, 72 FR 23848, 23853 (2007) (quoting
Leo R. Miller, 53 FR 21931, 21932 (1988)). "Moreover, because 'past
performance is the best predictor of future performance,' ALRA Labs.,
Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), this Agency has
repeatedly held that where a registrant has committed acts inconsistent
with the public interest, the registrant must accept responsibility for
[his] actions and demonstrate that [he] will not engage in future
misconduct." Medicine Shoppe-Jonesborough, 73 FR 364 (2008). As the
Sixth Circuit has recognized, this Agency "properly consider[s]" a
registrant's admission of fault and his candor during the investigation
and hearing to be "important factors" in the public interest
determination. See Hoxie, 419 F.3d at 483.
The ALJ found that it "is abundantly clear from Respondent's
testimony and his letters to [the DI, that] Respondent does not admit
to any wrongdoing or accept any responsibility for the 120,000 dosage
units of hydrocodone that were ordered from [HDG] using his"
registration, and that "Respondent knew or should have known that his
* * * registration was being misused." ALJ at 33. The ALJ thus
concluded that "Respondent's refusal to acknowledge his wrongdoing
offers little hope for the prospect that if he retains his registration
he will act more responsibly in the future." Id.
I agree with the ALJ. Respondent's testimony was riddled with
material inconsistencies, including his explanation as to why Robinson
needed to use his registration to order drugs for nearly a year if the
facility was not legally authorized to perform surgery. Moreover, his
claim that he lacked knowledge that the Robinsons were misusing his
registration to obtain hydrocodone was contradicted even by his own
witness.
Finally, Respondent's attempt to shift responsibility from himself
to HDG is wholly unpersuasive. Whatever responsibility HDG bears for
the diversion which likely occurred here is irrelevant. As found above,
Respondent authorized Robinson to use his registration and then did
nothing to determine how it was being used. He did not go to the clinic
to see whether Robinson was maintaining records for even those drugs
which would be used to provide anesthesia, or to see whether Robinson
was, in fact, still performing surgery after the clinic lost its
accreditation and could no longer legally do so. And even had I
credited his testimony that HDG's personnel did not notify him that
Robinson was ordering hydrocodone with his registration, his assertion
that there was nothing else he could do to obtain this information is
patently absurd given his admission that he never asked either Mr. Shah
or Ms. B. what drugs were being ordered from HDG.
Thus, I conclude that Respondent's assertion that he was not
"okay" with
[[Page 17704]]
what happened is simply a case of crying crocodile tears. Because
Respondent has not accepted responsibility for his misconduct and that
misconduct manifests an egregious disregard for his responsibilities as
a DEA registrant, I hold that Respondent has not rebutted the
Government's prima facie showing that his continued registration is
"inconsistent with the public interest." 21 U.S.C. 824(a)(4).
Accordingly, Respondent's registration will be revoked and any pending
application will be denied.
Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f) &
824(a)(4), as well as by 28 CFR 0.100(b) & 0.104, I order that DEA
Certificate of Registration, BB3698632, issued to Scott C. Bickman,
M.D., be, and it hereby is, revoked. I further order that any
application for renewal or modification of such registration be, and it
hereby is, denied. This Order is effective April 29, 2011.
Dated: March 22, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-7393 Filed 3-29-11; 8:45 am]
BILLING CODE 4410-09-P
NOTICE: This is an unofficial version. An official version of this publication may be obtained
directly from the Government Printing Office (GPO).
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