[Federal Register Volume 77, Number 113 (Tuesday, June 12, 2012)]
[Notices]
[Pages 35027-35028]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14291]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Serenity Caf[eacute]; Decision and Order

    On December 2, 2011, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Serenity Caf[eacute] (Applicant), of Chicago, Illinois. 
The Show Cause Order proposed the denial of Serenity Caf[eacute]'s 
application for a DEA Certificate of Registration as a Maintenance 
Narcotic Treatment Program, on the grounds that the Applicant does 
``not have authority to handle controlled substances in the state of 
Illinois,'' and because its registration would be inconsistent with the 
public interest. Show Cause Order, at 1 (citing 21 U.S.C. 824(a)(3) and 
21 U.S.C. 823(f)).
    Specifically, the Show Cause Order alleged that on January 26, 
2011, Applicant, while doing business as Recovery Caf[eacute], had 
voluntarily surrendered its DEA Certificate of Registration for cause. 
Id. at 1. The Order alleged that an investigation of Recovery 
Caf[eacute] found that it ``failed to maintain the mandatory records 
required to be kept for controlled substances, had an unexplained 
shortage of approximately 199,476 mg of methadone, and left controlled 
substances in an open safe unattended.'' Id.
    The Show Cause Order further alleged that Applicant had failed to 
disclose on its application that Recovery Caf[eacute] had voluntarily 
surrendered for cause its DEA registration. Id. at 2 (citing 21 U.S.C. 
824(a)(1)). Next, the Order alleged that Applicant does not have a 
valid Illinois Department of Human Services Alcoholism and Substance 
Abuse Treatment and Intervention License as required by state law. Id. 
(citing 20 Ill. Comp. Stat. 301/15-5; Ill. Admin. Code tit. 77, 
2060.201). Finally, the Order also notified Applicant of its right to 
request a hearing on the allegations or to submit a written statement 
in lieu of a hearing, the procedure for doing either, and the 
consequence for failing to do either. Id. (citing 21 CFR 1301.43).
    On December 8, 2011, Diversion Investigators (DIs) personally 
served the Show Cause Order on Mr. Derrick Arna, who, according to the 
affidavit of a DI, is the Chief Executive Officer and owner of Serenity 
Caf[eacute]. GX 1, at 3; GX 6. Since the date of service of the Order, 
thirty days have now passed and neither Applicant, nor anyone 
purporting to represent it, has requested a hearing or submitted a 
written statement in lieu of a hearing. I therefore find that Applicant 
has waived its right to a hearing or to submit a written statement in 
lieu of a hearing, and issue this Decision and Final Order based on 
relevant evidence contained in the record submitted by the Government. 
21 CFR 1301.43(d) & (e). I make the following findings of fact.

Findings

    Serenity Caf[eacute] is owned by Mr. Derrick Arna. GX 1, at 3. Mr. 
Arna is also the authorized agent of Recovery Caf[eacute], a former 
Opioid Treatment Program in Chicago, Illinois, which, on January 26, 
2011, voluntarily surrendered its DEA Registration for cause following 
a January 6, 2001 on-site inspection which found numerous violations. 
Id. at 1; GX 3. More specifically, during the on-site inspection, DEA 
DIs found that Recovery Caf[eacute] had multiple record-keeping 
violations. Id. at 2. These included, inter alia, that it: (1) Failed 
to record on DEA Form 222s, the date of receipt and quantity of 
schedule II controlled substances it received; (2) failed to maintain 
accurate and complete controlled substance records; and (3) failed to 
maintain dispensing records for the methadone it dispensed, including 
the date of the dispensing and the name of the patient receiving the 
drug. Id.
    In addition, the DIs performed an audit of its handling of 
methadone hcl (5mg & 40mg) for the period from October 19, 2009 to 
January 6, 2011. Id. The audit found that the clinic was short 
approximately 199,476 mg of methadone. Id. Finally, on January 25, 
2011, the DIs found that controlled substances were left unattended in 
an open safe. Id. The next day, Mr. Arna executed a voluntary surrender 
of Recovery Caf[eacute]'s DEA registration.
    On February 14, 2011, Mr. Arna filed an application under the name 
of Serenity Caf[eacute] for registration as a Narcotic Treatment 
Program--Maintenance, at the proposed address of 110 E. 78th Street, 
Chicago, Illinois. GX 2, at 1. Mr. Arna sought authorization to handle 
methadone, a schedule II narcotic controlled substance, and 
buprenorphine, a schedule III narcotic controlled substance. Id.
    In Section 4 of the application, Mr. Arna was required to list 
Applicant's state of licensure, license number and its expiration date. 
GX 2, at 2. Mr. Arna completed only the state of licensure block, 
writing ``Illinois'' and the word ``pending.'' Id. at 2.
    In Section 5 of the application, Mr. Arna was required to answer 
four liability questions. Among them was question 2, which asked: ``Has 
the

[[Page 35028]]

applicant ever surrendered (for cause) or had a federal controlled 
substance registration revoked, suspended, restricted, or denied, or is 
any such action pending?'' Mr. Arna marked ``NO,'' and in the area 
provided for explaining any ``YES'' answer, wrote ``None.'' Id.
    On February 17, 2012, following a hearing before a state 
Administrative Law Judge (ALJ), the Secretary of the Illinois 
Department of Human Services issued a Final Order on Applicant's 
application for state licensure. See In the Matter of Serenity 
Caf[eacute] at 1, 11 DASA 001 (Ill. Dep't Hum. Servs., Feb. 17, 2012). 
Adopting the ALJ's findings and report, the Final Order denied 
Applicant's application for a state license to provide both Level I 
Adult and Adolescent Outpatient Treatment and Level II Adult and 
Adolescent Intensive Outpatient Treatment, DUI Evaluation, DUI Risk 
Education, and Methadone as Adjunct Services. Id.
    Accordingly, because Applicant does not possess a valid Illinois 
license to provide substance abuse treatment, I find that Applicant is 
not currently authorized to dispense controlled substances in the State 
of Illinois, the State in which it seeks registration. See 20 Ill. 
Comp. Stat. 301/15-5 (it is ``unlawful for any person to provide 
treatment for alcoholism and other drug abuse or dependency . . . 
unless the person is licensed to do so by the Department''); Ill. 
Admin. Code tit. 77, 2060.201 (``Substance abuse treatment and 
intervention services * * * shall be licensed by the Department.'').

Discussion

    Under section 303(g) of the Controlled Substances Act (CSA), 
``practitioners who dispense narcotic drugs [in schedule II] to 
individuals for maintenance treatment * * * shall obtain annually a 
separate registration for that purpose.'' 21 U.S.C. 823(g)(1) (emphasis 
added). Moreover, this provision imposes as a requirement of 
registration, that the applicant meet three conditions, including that 
``the applicant is a practitioner who is determined by the Secretary to 
be qualified * * * to engage in the treatment with respect to which 
registration is sought.'' Id. 823(g)(1)(A) (emphasis added). Thus, it 
is clear that in order to obtain a registration authorizing the 
dispensing of schedule II narcotics such as methadone for maintenance 
treatment, the applicant must be (among other things), a practitioner 
within the meaning of the CSA.\1\
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    \1\ Likewise, the requirements of section 303(g)(1) ``are waived 
in the case of the dispensing (including the prescribing), by a 
practitioner, of narcotic drugs in schedule III, IV, or V or 
combinations of such drugs if the practitioner meets the conditions 
specified in subparagraph (B). 21 U.S.C. 823(g)(2)(A) (emphasis 
added). This provision requires that the ``the practitioner submit 
to the Secretary [of HHS] a notification of the intent of the 
practitioner to begin dispensing the drugs or combinations for'' 
maintenance or detoxification treatment, ``as well as to certify 
that ``[t]he practitioner is a qualifying physician,'' that ``the 
practitioner has the capacity to refer the patients for appropriate 
counseling and other appropriate ancillary services,'' and that 
``[t]he total number of such patients of the practitioner at any one 
time will not exceed the applicable number.'' Id. 823(g)(2)(B) 
(emphasis added). Moreover, a practitioner's notification to the 
Secretary must ``identif[y] the registration issued for the 
practitioner pursuant to subsection (f) of this section.'' Id. 
823(g)(2)(D)(i)(II). See also 21 CFR 1301.28.
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    The CSA defines the term ``practitioner' to mean ``a physician * * 
* pharmacy, hospital or other person licensed, registered, or otherwise 
permitted, by * * * the jurisdiction in which he practices * * * to 
distribute, dispense, [or] administer * * * a controlled substance in 
the course of professional practice.'' 21 U.S.C. 802(21). Likewise, in 
the case of practitioners, the CSA imposes, as a condition of 
registration, that it be currently authorized to dispense controlled 
substances under the laws of the State in which it engages in 
professional practice. See id. 823(f) (``The Attorney General shall 
register practitioners * * * if the applicant is authorized to dispense 
* * * controlled substances under the laws of the State in which he 
practices.''). Thus, DEA has long held that the possession of authority 
under state law to dispense controlled substances is an essential 
condition for obtaining and maintaining a DEA registration. See David 
W. Wang, 72 FR 54297, 54298 (2007); Sheran Arden Yeates, 71 FR 39130, 
39131 (2006); Dominick A. Ricci, 58 FR 51104, 51105 (1993); Bobby 
Watts, 53 FR 11919, 11920 (1988).
    As found above, the Illinois Department of Human Services has 
issued a final order denying Applicant's application for the state 
licenses required to dispense controlled substances for the purpose of 
providing maintenance treatment. Therefore, Applicant is not a 
``practitioner'' within the meaning of the CSA, and thus, it is not 
entitled to be registered. See 21 U.S.C. 802(21); 823(f); 823(g). 
Accordingly, its application will be denied.\2\
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    \2\ Because it is clear that Applicant is not entitled to be 
registered, it is not necessary to decide whether denial of its 
application is warranted under the public interest standard of 21 
U.S.C. 823(f).
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Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 
823(g)(1) & (2), as well as 28 CFR 0.100(b), I order that the 
application of Serenity Caf[eacute] for a DEA Certificate of 
Registration as a Narcotic Treatment Program, be, and it hereby is, 
denied. This Order is effective July 12, 2012.

    Dated: June 4, 2012.
Michele M. Leonhart,
Administrator.
[FR Doc. 2012-14291 Filed 6-11-12; 8:45 am]
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