[Federal Register Volume 61, Number 172 (Wednesday, September 4, 1996)]
[Pages 46664-46666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22496]


Drug Enforcement Administration
[Docket No. 95-41]

Johnson Matthey, Inc.; Termination of Proceedings

    On May 8, 1995, the Deputy Administrator of the Drug Enforcement 
Administration (DEA) issued a final order granting the September 14, 
1992, application of Johnson Matthey, Inc. (Johnson Matthey) to 
register as a bulk manufacturer of methylphenidate, subject to certain 
conditions. (Johnson Matthey I) 60 FR 26050 (May 16, 1995). On January 
2, 1996, the United States Court of Appeals for the District of 
Columbia Circuit denied a petition for review of that final order. MD 
Pharmaceutical, Inc. v. Drug Enforcement Administration, Docket No. 95-
1267, 1996 U.S. App. Lexis 1229 (D.C. Cir. 1996).
    In the meantime, on February 24, 1995, Johnson Matthey filed an 
application for calendar year 1995 for registration as a bulk 
manufacturer of various Schedule I and II controlled substances, 
including methylphenidate, notice of which was filed in the Federal

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Register. 60 FR 20751 (April 27, 1995). However, on July 27, 1995, 
Johnson Matthey withdrew its application, except as to methylphenidate. 
See 60 FR 53804 (October 17, 1995). Therefore, the only aspects of 
Johnson Matthey's February 1995 application pending is the request to 
manufacture methylphenidate. By letter dated May 10, 1995, MD 
Pharmaceutical, Inc. (MD) filed comments, objecting to Johnson 
Matthey's application with respect to methylphenidate, and by letter 
dated May 26, 1995, Ciba-Geigy Corporation (Ciba) requested a hearing, 
giving rise to the instant case.
    Also by letter dated May 26, 1995, Mallinckrodt Chemical, Inc. 
(Mallinckrodt), stated that it took no position on Johnson Matthey's 
application to manufacture methylphenidate, but that it ``wish[ed] to 
participate fully in a hearing if one is scheduled.'' The matter was 
docketed and assigned to Administrative Law Judge Mary Ellen Bittner. 
Extensive prehearing communications followed, with the Government 
filing its prehearing memorandum on July 28, 1995, and Johnson Matthey, 
Ciba, Mallinckrodt, and MD filing their prehearing memoranda on July 
31, 1995. Again, the parties engaged in extensive prehearing filings 
surrounding the issue of whether to hold in abeyance a hearing in this 
matter pending the decision of the Court of Appeals in Johnson Matthey 
    Subsequently, on October 17, 1995, the DEA published a notice in 
the Federal Register, stating, among other things, that ``[d]ue to the 
pending administrative proceeding concerning methylphenidate, Johnson 
Matthey will continue on a day-to-day registration to bulk manufacture 
methylphenidate pending resolution of Docket No. 95-41.'' 60 FR 53804 
(1995). On November 13, 1995, Johnson Matthey filed an application to 
be registered as a bulk manufacturer of various controlled substances, 
including methylphenidate, for calendar year 1996. See Notice of 
Application, 61 FR 8303 (March 4, 1996).
    Following the circuit court's decision in Johnson Matthey I, on 
February 23, 1996, Johnson Matthey filed a motion to dismiss, or in the 
alternative to terminate, the current proceeding. On March 14, 1996, 
the Government filed a Motion for Summary Disposition, seeking 
dismissal of this proceeding on various grounds. On March 18, 1996, MD 
filed an Objection to Johnson Matthey's Motion to Dismiss, and Ciba 
filed a Memorandum in Response to Motion of Johnson Matthey, Inc., to 
Dismiss and Government's Motion for Summary Disposition. Also, on March 
19, 1996, Mallinckrodt filed a Response to Johnson Matthey's Motion to 
Dismiss, and on April 8, 1996, MD filed an Opposition to the 
Government's Motion for Summary Disposition.
    By order dated May 15, 1996, Judge Bittner (1) denied the 
Government's motion for summary disposition, (2) denied Johnson 
Matthey's motion to dismiss, (3) found, however, that there was no 
longer a basis for holding a hearing in this proceeding, and (4) 
terminated the proceeding. She afforded the parties an opportunity to 
file an appeal from her ruling, and on June 3, 1996, the Government 
filed exceptions to her ruling, but agreed with her termination of the 
proceedings. No other appeals were filed.
    The Deputy Administrator finds that as of May 8, 1995, Johnson 
Matthey had a Certificate of Registration as a bulk manufacturer of 
methylphenidate. See Johnson Matthey I. As noted by Judge Bittner, both 
the Administrative Procedure Act and DEA's regulations provide that a 
timely application for reregistration operates to continue an existing 
registration until there is a determination on that application. 5 
U.S.C. Sec. 558(c)\1\ and 21 C.F.R. 1301.47.\2\ Therefore, the Deputy 
Administrator agrees with Judge Bittner's findings that (1) the 
November 1995 application for reregistration operates to continue 
Johnson Matthey's registration granted by final order on May 8, 1995, 
with respect to methylphenidate, (2) Johnson Matthey's reregistration 
cannot be denied until DEA takes further action,\3\ and (3) the 
November 1995 application is not before Judge Bittner (nor the Deputy 
Administrator) as a result of Ciba's hearing request relevant to the 
February 1995 application. See 60 FR 32099 (June 30, 1995) (amending 21 
C.F.R. 1301.43, effective July 20, 1995, by eliminating third-party 
manufacturers' hearing opportunities, pursuant to their own request). 
The Deputy Administrator also finds that the termination of these 
proceedings will not impact upon the continuation of Johnson Matthey's 
day-to-day registration to manufacture methylphenidate, given the lack 
of a resolution of its pending November 1995 application.

    \1\ 5 U.S.C. Sec. 558(c) states: ``When the licensee has made 
timely and sufficient application for a renewal or a new license in 
accordance with agency rules, a license with reference to an 
activity of a continuing nature does not expire until the 
application has been finally determined by the agency.''
    \2\ 21 C.F.R. 1301.47 provides: ``In the event that an applicant 
for reregistration (who is doing business under a registration 
previously granted and not revoked or suspended) has applied for 
reregistration at least 45 days before the date on which the 
existing registration is due to expire, and the Administrator has 
issued no order on the application on the date on which the existing 
registration is due to expire, the existing registration of the 
applicant shall automatically be extended and continue in effect 
until the date on which the Administrator so issues his order.''
    \3\ 21 U.S.C. Sec. 824(c) provides, in relevant part, that 
``[b]efore taking action pursuant * * * to a denial of registration 
under section 823 of this title, the Attorney General shall serve 
upon the applicant or registrant an order to show cause why 
registration should not be denied. * * *''

    The Deputy Administrator agrees with Judge Bittner's termination of 
the hearing procedure raised by Ciba's request in response to Johnson 
Matthey's registration application of February 1995. As Judge Bittner 
noted, ``if a hearing were held in this proceeding, whatever 
recommendation [she] would make with respect to Johnson Matthey's 
[February] 1995 application would be of no consequence.'' If Judge 
Bittner recommended granting the February 1995 application, she would 
be recommending Johnson Matthey be given a right already flowing from 
the May 1995 final order and the November 1995 reregistration 
application. If, however, Judge Bittner recommended the application be 
denied, and if the Deputy Administrator concurred with that 
recommendation, a show cause proceeding would need to be instigated. 
See 21 U.S.C. Sec. 824(c), quoted at footnote 3 supra. Therefore, since 
the hearing will have no impact upon Johnson Matthey's registration at 
this point in the registration process, the Deputy Administrator 
concurs with Judge Bittner's decision to terminate this proceeding. 
See, e.g., National Classification Comm. & Natl. Motor Freight Traffic 
Assn., Inc. v. United States, 779 F.2d 687, 693 (D.C. Cir. 1985) 
(noting that ``a hearing is required only when it would serve some 
    Judge Bittner made findings necessary to resolve the Government's 
Motion for Summary Disposition and Johnson Matthey's Motion to Dismiss. 
The Deputy Administrator has reviewed those findings, Judge Bittner's 
resolution of the two motions, and the Government's exceptions thereto. 
However, the Deputy Administrator concludes that it is unnecessary to 
address those matters here, since they do not impact upon the propriety 
of the termination decision. Therefore, the Deputy Administrator makes 
no findings concerning those issues.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in him by 21 U.S.C. 
823, and 28 C.F.R. 0.100(b) and 0.104,

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hereby orders that the request for a hearing concerning Johnson 
Matthey's February 1995 registration application, and the proceedings 
following and relevant to that request be, and they hereby are, 
    This order is effective October 4, 1996.

    Dated: August 27, 1996.
Stephen H. Greene,
Deputy Administrator
[FR Doc. 96-22496 Filed 9-3-96; 8:45 am]