[Federal Register Volume 80, Number 184 (Wednesday, September 23, 2015)]
[Notices]
[Pages 57393-57395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-24126]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 15-23]


Brown's Discount Apothecary, BC, Inc., and Bolling Apothecary, 
Inc.

    On May 18, 2015, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Brown's Discount Apothecary, BC, Inc. (holder of DEA 
Certificate of Registration FB3717153), of Jasper, Alabama and Bolling 
Apothecary, Inc., (holder of DEA Certificate of Registration 
AB9375456), of Fayette, Alabama. Show Cause Order, at 1. The Show Cause 
Order proposed the revocation of each pharmacy's DEA Certificate of 
Registration, on the ground that on April 7, 2015, the Alabama State 
Board of Pharmacy issued an Emergency Suspension Order suspending each 
pharmacy's Alabama Controlled Substances Permit, and that therefore, 
each pharmacy is ``without authority to handle controlled substances in 
Alabama, the [S]tate in which each is registered with the DEA.'' Id. at 
1-2.
    On May 20, 2015, a Diversion Investigator from the Birmingham 
District Office personally served the Order to Show Cause on Bolling 
Apothecary, Inc. Notice of Service of Order to Show Cause, at 1. 
According to the Government, on June 2, 2015, an attorney ``accepted 
service by email of the Order to Show Cause on behalf of Brown's 
Discount Apothecary and its owner George Bolling, Jr. Id.
    On June 1, 2015, George R. Bolling, Sr., owner of Respondent 
Bolling Apothecary, Inc., filed a request for a hearing on behalf of 
the pharmacy with the Office of Administrative Law Judges

[[Page 57394]]

(OALJ). Letter of Bolling Apothecary, Inc., to Hearing Clerk, OALJ (May 
23, 2015). Mr. Bolling did not, however, request a hearing on behalf of 
Brown's Discount Apothecary, and at no point has any person filed a 
request for a hearing on behalf of Brown's, or in the alternative, 
filed a written statement in lieu of a hearing. See 21 CFR 1301.43(c) & 
(d).
    Both matters were nonetheless placed on the docket of the OALJ and 
assigned to Administrative Law Judge (ALJ) Christopher B. McNeil. 
Recommended Decision, at 2. On June 2, the ALJ issued an ``Order For 
Briefing On Allegations Concerning Respondents' Lack Of State 
Authority'' (hereinafter, Briefing Order).
    Therein, the ALJ found that there was ``no request for a hearing on 
behalf of Brown's Discount Apothecary.'' Briefing Order, at 2. He then 
provided the parties with the ``opportunity to establish whether 
grounds exist with respect to either [pharmacy] to advance this matter 
to hearing, or whether the two pharmacy's [sic] DEA . . . 
Registration[s] should be summarily revoked and any pending application 
summarily denied, without a hearing.'' Id. The ALJ further ordered that 
``the Government may provide evidence and arguments to support the 
allegation that Bolling Apothecary, Inc. lacks state authority to 
handle controlled substances,'' and ``may also provide evidence and 
arguments regarding the issue of whether Brown's Discount Apothecary 
has timely invoked the jurisdiction of the Office of Administrative Law 
Judges, or the issue of whether [it] lacks state authority to handle 
controlled substances, or both issues.'' Id. at 2-3. The ALJ's Order 
also offered Respondent the opportunity to file a response. Id. at 3.
    Thereafter, the Government filed a Motion for Summary Disposition 
(hereinafter, Motion). Therein, the Government sought the revocation of 
each pharmacy's registration on the ground that the Alabama State Board 
of Pharmacy had issued an Emergency Suspension Order which suspended 
each pharmacy's Alabama Controlled Substances Permit. Motion, at 2. The 
Government supported its motion with a copy of the Emergency Suspension 
Order. Id. at Exhibit A, at 7. However, the Government did not address 
whether, given the failure of Brown's Discount Apothecary to file a 
hearing request, the ALJ had jurisdiction to adjudicate the allegations 
with respect to it. See generally Motion, at 2-4.
    While Bolling Apothecary had requested a hearing, it did not file a 
response to the Government's motion. Nor did Brown's file a response.
    On July 6, 2015, the ALJ issued his Recommended Decision. 
Addressing the issue of whether he had jurisdiction to rule on the 
matter of Brown's registration, the ALJ explained that he had given 
``the Government the option of providing evidence and arguments 
regarding the issue of whether Brown's . . . has timely invoked the 
jurisdiction of this office or whether Brown's lacks state authority to 
handle controlled substances.'' R.D. at 2 n2. The ALJ then noted that 
``the Government elected to present evidence that Brown's . . . is 
currently without state authority to handle and dispense controlled 
substances.'' Id. The ALJ then proceeded to exercise jurisdiction over 
the matters involving both Brown's and Bolling, but provided no 
explanation as to why he was doing so with respect to Brown's. 
Moreover, the ALJ did not make the requisite finding as to the 
registration status of either Brown's or Bolling. See Sharad C. Patel, 
80 FR 28,693, 28,694 n.3 (2015).
    While the ALJ noted that neither Brown's nor Bolling had filed a 
response to the Government's motion, he addressed the arguments raised 
by Bolling Pharmacy in its Hearing Request. R.D. at 3-4. The ALJ noted 
that George R. Bolling, Sr. (Bolling Apothecary's owner) had filed a 
renewal application with the State Board the day after he bought the 
store and included a copy of a warranty deed executing a transfer of 
the store to him from one George R. Bolling, Jr. Id. at 3-4. The ALJ 
found, however, that ``nowhere in the request for hearing does either 
of the Respondents provide any evidence contradicting the Government's 
position that both Bolling and Brown['s] lack state authority to handle 
and dispense controlled substances.'' R.D. at 4.\1\ The ALJ thus 
concluded that the ``Respondents do not have authority to handle and 
dispense controlled substances in the State of Alabama, the 
jurisdiction where each is licensed by the DEA to handle and dispense 
such substances.'' Id. at 4. The ALJ then granted the Government's 
Motion for Summary Disposition and ``recommended that Respondents' DEA 
Certificate of Registration . . . be revoked and that any pending 
application . . . be denied.'' Id. at 5.
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    \1\ The ALJ also rejected the contention of Bolling's owner that 
the pharmacy ``ha[d] authority'' until either his state license or 
his DEA registration was physically removed by a person identified 
only as the supervisor of a DEA Diversion Investigator. R.D. at 4 
(quoting Bolling Pharmacy Request for Hearing, at 1). As the ALJ 
correctly explained, it is the Board of Pharmacy's Emergency 
Suspension Order ``and not the presence or absence of the physical 
license that supports the Government's motion.'' Id.
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    Neither party filed exceptions to the Recommended Decision. 
Thereafter, on August 3, 2015, the ALJ forwarded the record to this 
Office for Final Agency Action.
    Having reviewed the record, I adopt the ALJ's Recommended Decision 
only with respect to Bolling Apothecary. With respect to Brown's, I 
find that the Government did not establish that it properly served the 
Show Cause Order. Moreover, even if the Government had established 
service, I would reject the ALJ's decision as to Brown's, because in 
the absence of a hearing request, the ALJ had no authority to rule on 
the issue of whether its registration should be revoked.
    As for whether service was proper, 21 U.S.C. 824(c) provides that 
``[b]efore taking action pursuant to this section . . . the Attorney 
General shall serve upon the . . . registrant an order to show cause 
why registration should not be . . . revoked[] or suspended.'' 
(emphasis added). According to the Government's Notice of Service, the 
Government did not serve the Show Cause Order ``upon the . . . 
[R]egistrant,'' id., but rather on an attorney, who according to the 
Government ``accepted service by email of the Order to Show Cause on 
behalf of Brown's . . . and its owner George Bolling, Jr. on June 2, 
2015.'' Notice of Service, at 1.
    However, ``[n]umerous Federal Courts have held that `[t]he mere 
relationship between a defendant and his attorney does not, in itself, 
convey authority to accept service.' '' Harbinson v. Commonwealth of 
Virginia, 2010 WL 3655980, at *9 (E.D. Va. Aug. 11, 2010) (quoting 
Davies v. Jobs & Adverts Online, Gmbh, 94 F.Supp.2d 719, 722 (E.D. Va. 
2000)). See also United States v. Ziegler Bolt & Parts Co., 111 F.3d 
878, 881 (Fed. Cir. 1997); Grandbouche v. Lovell, 913 F.2d 835, 837 
(10th Cir. 1990); Ransom v. Brennan, 437 F.2d 5134, 518-19 (5th Cir. 
1971). ```Rather, the party seeking to establish the agency 
relationship must show ``that the attorney exercised authority beyond 
the attorney-client relationship, including the power to accept 
service.'' ' '' Harbinson, 2010 WL 3655980, at *9 (quoting Davies, 94 
F.Supp.2d at 722 (quoting Ziegler, 111 F.3d at 881)).
    While an attorney's authority to act as an agent for the acceptance 
of process ``may be implied from surrounding circumstances indicating 
the intent of'' his client, In re Focus Media Inc., 387 F.3d 1077, 1082 
(9th Cir. 2004) (other citation and internal quotations omitted), ``an 
agent's authority to act cannot be established solely from the agent's 
actions.'' Id. at 1084. ``Rather,

[[Page 57395]]

the authority must be established by an act of the principal.'' Id. 
(citing FDIC v. Oaklawn Apartments, 959 F.2d 170, 175 (10th Cir. 1992) 
(emphasis added)).
    With respect to Brown's, even assuming that the attorney it served 
with the Show Cause Order was in an attorney-client relationship with 
the pharmacy, the Government has produced no evidence establishing that 
Brown's authorized the attorney to accept service of the Order on its 
behalf. See David M. Lewis, 78 FR 36591, 36591 (2013) (holding service 
on attorney was improper where only evidence offered by Government was 
that ``the attorney requested to take possession of the Order'') 
(citing Focus Media, 387 F.3d at 1084)). Accordingly, I find that the 
Government did not accomplish service on Brown's.
    Even if I concluded otherwise, under the Agency's regulations, a 
hearing request must be submitted by the applicant/registrant to vest 
jurisdiction over the matter in the Office of Administrative Law 
Judges. See 21 CFR 1301.42 (``If requested by a person entitled to a 
hearing, the Administrator shall hold a hearing for the purpose of 
receiving factual evidence regarding the issues involved in the denial, 
revocation or suspension of any registration.''); id. Sec.  1301.43(a) 
(``Any person entitled to a hearing . . . and desiring a hearing shall, 
within 30 days after the date of receipt of the order to show cause . . 
. file with the Administrator a written request for a hearing in the 
form prescribed . . . .''); id. Sec.  1301.43(d) (``If any person 
entitled to a hearing . . . fails to file a request for a hearing . . . 
such person shall be deemed to have waived the opportunity for a 
hearing . . . unless such person shows good cause for such failure.''). 
Because in contrast to Bolling, Brown's never filed a hearing request, 
the ALJ had no authority to offer ``the Government the option of 
providing evidence and arguments regarding the issue of . . . whether 
Brown's lacks state authority to handle controlled substances,'' R.D. 
2, at n.2; and he had no authority to rule on the issue.\2\
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    \2\ According to the Show Cause Order, Brown's registration was 
due to expire on July 31, 2015, and the registration records of the 
Agency, of which I take Official Notice, see 5 U.S.C. 556(e), show 
that Brown's allowed its registration to expire on July 31, 2015 
(before the ALJ forwarded the record) and has not filed a renewal 
application. See Patel, 80 FR at 28,694 n.3. In any event, because 
the Government did not serve Brown's, the matter of its registration 
is not before me.
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    As for Bolling Discount Apothecary, its owner attached a copy of 
its registration with his Request for Hearing, which shows that his 
registration does not expire until July 31, 2017, thus rendering a 
remand to establish jurisdiction unnecessary. Having reviewed the 
Board's Emergency Suspension Order, I adopt the ALJ's finding that the 
pharmacy does not have authority to dispense controlled substances in 
Alabama, the State in which it is registered with DEA, and that 
therefore, it no longer meets the statutory definition of a 
practitioner. See 21 U.S.C. 802(21) (``The term `practitioner' means a 
. . . pharmacy . . . licensed, registered, or otherwise permitted, by . 
. . the jurisdiction in which [it] practices . . . to . . . dispense . 
. . a controlled substance in the course of professional 
practice[.]''). See also 21 U.S.C. 823(f). Accordingly, I will order 
that Respondent Bolling Discount Pharmacy's registration be revoked and 
that any pending application to renew or modify its registration be 
denied. See 21 U.S.C. 824(a)(3); see also R.D. at 4 n.10 (collecting 
cases).

Order

    Pursuant to the authority vested in me by 21 U.S.C. 824(a) and 28 
CFR 0.100(b), I order that DEA Certificate of Registration AB9375456 
issued to Bolling Apothecary be, and it hereby is, revoked. I further 
order that any application of Bolling Apothecary to renew or modify its 
registration be, and it hereby is, denied. This Order is effective 
immediately.\3\
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    \3\ For the same reasons that led the Board to order the 
emergency suspension of Respondent's pharmacy license (i.e., the 
extensive allegations that it was diverting controlled substances), 
I find that the public interest necessitates that this Order be 
effective immediately. 21 CFR 1316.67.

     Dated: September 15, 2015.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2015-24126 Filed 9-22-15; 8:45 am]
 BILLING CODE 4410-09-P