[Federal Register Volume 81, Number 23 (Thursday, February 4, 2016)]
[Notices]
[Pages 6045-6047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02127]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


David W. Bailey, M.D.; Decision and Order

    On September 9, 2015, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to David W. Bailey, M.D. (Registrant), of Hesperia, 
California. The Show Cause order proposed the revocation of 
Registrant's Certificate of Registration FB4421474, and the denial of 
any applications to renew or modify this registration or for any other 
registration on two grounds. GX 1, at 1.
    First, the Show Cause Order alleged on April 3, 2015, the Medical 
Board of California (MBC or Board) revoked his state medical license, 
and that therefore, Registrant is ``without authority to handle 
controlled substances in California, the [S]tate in which [he is] 
registered with the DEA. Id. (citing 21 U.S.C. 802(21), 823(f), and 
824(a)(3)). Second, the Order alleged that Registrant's registration 
``is inconsistent with the public interest'' because he failed to 
``comply with applicable state and Federal law[s]'' related to 
controlled substances. Id. at 2.
    With respect to the latter contention, the Show Cause Order alleged 
that in the MBC proceeding, the MBC Administrative Law Judge (ALJ) 
found that Registrant admitted to eighteen occasions on which he issued 
clonazepam prescriptions to his wife but had the drugs dispensed to 
himself for his ``own abuse.'' Id. at 2. The Show Cause Order also 
alleged that the MBC's ALJ found that Registrant ``started a treatment 
program for alcohol and clonazepam abuse but completed only five days 
of the thirty-day program,'' and that ``[a]n expert physician testified 
that [his] diagnosis included benzodiazepine dependence and that [he 
was] not currently undergoing any recovery. Id. The Order alleged these 
findings establish that Registrant violated 21 U.S.C. 844(a) and 
843(a)(3), as well as various provisions of the California Business and 
Professions Code. Id. The Order thus alleged that the MBC ALJ's 
findings prove that Registrant's registration ``is inconsistent with 
the public interest under 21 U.S.C. 824(a)(4) and 823(f)(4).'' Id.
    Finally, the Show Cause Order notified Registrant of his right to 
request a hearing on the allegations or to submit a written statement 
in lieu of a hearing, the procedure for electing either option, and the 
consequence for failing to elect either option. Id. at 2 (citing 21 CFR 
1301.43). On September 16, 2015, DEA Diversion Investigators (DIs) 
travelled to Registrant's address and after verifying his identity, 
personally served him with the Show Cause Order. GX 5, at 2 
(Declaration of DI).
    On December 1, the Government filed its Request for Final Agency 
Action along with with various exhibits. In its Request, the Government 
states that since the date of service of the Show Cause Order, neither 
Registrant, ``nor anyone representing him[,] has requested a hearing or 
sent any other correspondence to'' the Agency. Request for Final Agency 
Action, at 9.
    Based on the Government's submission, I find that 30 days have now 
passed since the date of service of the Show Cause Order, and neither 
Registrant, nor anyone purporting to represent him, has either 
requested a hearing on the allegations or submitted a written statement 
in lieu of a hearing. See 21 CFR 1301.43(a) and (c). Accordingly, I 
find that Registrant has waived his right to a hearing or to submit a 
written statement in lieu of hearing. Id. Sec.  1301.43(c) and (d). I 
therefore issue this Decision and Final Order based on the 
Investigative Record submitted by the Government. Id. Sec.  1301.43(e). 
I make the following findings of fact.

Findings

    Registrant is a physician authorized to dispense controlled 
substances in schedules II through V as a practitioner, at the 
registered address of LaSalle Medical Associates, 16455 Main St., Suite 
1, Hesperia, California. GX 2. His registration is not due to expire 
until July 31, 2016. Id.
    On March 6, 2015, the MBC issued an order revoking Registrant's 
Physician's and Surgeon's License to practice medicine in the State of 
California, effective April 3, 2015. GX 4. The MBC's revocation was 
based on the decision of a state ALJ who found, based on clear and 
convincing evidence, that Registrant: (1) Is alcohol and benzodiazepine 
dependent, (2) used alcohol and controlled substances in a manner 
dangerous to himself and others, (3) prescribed a controlled substance 
to another with the intention of using that substance himself, (4) 
self-administered a controlled substance that he had prescribed in the 
name of another, (5) violated the California Medical Practice Act, and 
6) engaged in unprofessional conduct.\1\ GX 3, at 1.
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    \1\ Notwithstanding that Registrant failed to appear at the MBC 
hearing, the MBC's findings of fact and conclusions of law are 
entitled preclusive effect in this proceeding. The MBC found that 
Registrant was properly served with the Accusation and, in fact, 
several days before the hearing telephoned the MBC's counsel ``and 
advised her that he was not going to appear.'' GX 3, at 2. Thus, 
notwithstanding that he defaulted, Registrant had a full and fair 
opportunity to challenge the MBC's allegations. See Jose G. 
Zavaleta, 78 FR 27431, 27434 (2013) (collecting cases holding that 
findings made in a proceeding against a party in default are 
entitled to preclusive effect if the party could have appeared and 
defended if he had wanted to); see also id. (quoting Gottlieb v. 
Kest, 141 Cal. App. 4th 110, 149 (Cal. Ct. App. 2006) (``A default 
judgment conclusively establishes, between the parties so far as 
subsequent proceedings on a different cause of action are concerned, 
the truth of all material allegations contained in the complaint in 
the first action, and every fact necessary to uphold the default 
judgment.'') (int. quotations and citations omitted).
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    More specifically, the state ALJ found, by clear and convincing 
evidence, that Registrant:

engaged in unprofessional conduct by violating state laws related to 
the prescription and use of Klonopin as follows: [he] repeatedly 
issued prescriptions for Klonopin in [his wife's] name with the 
intent of self-administering the Klonopin obtained from the 
prescriptions; he engaged in fraud and deceit in order to obtain 
Klonopin; he provided a false name to obtain Klonopin; he repeatedly 
used Klonopin in violation of the

[[Page 6046]]

law; and he repeatedly used and possessed Klonopin that was not 
obtained with a legitimate prescription.

Id. at 19 (citing Cal. Bus. & Prof. Code sec. 2238(a)).

    The state ALJ also found that Registrant ``intentionally created 
medical records--prescriptions to [his wife] for Klonopin--that were 
false because he intended to use the Klonopin obtained from the 
prescription for himself.'' Id. (citing Cal. Bus. & Prof. Code Sec.  
2262). The state ALJ further found that Registrant violated the 
California Medical Practice Act when he ``used dangerous drugs in a 
manner that was dangerous to himself, violated state laws related to 
dangerous drugs and controlled substances, knowingly made false 
representation of fact, and created false medical records with a 
fraudulent intent.'' Id. (citing Bus. & Prof. Code sec. 2234).

    The ALJ then concluded that Registrant:

suffers from alcohol dependence and benzodiazepine dependence, and 
his substance abuse presents a substantial risk of harm to himself, 
patients and the public. [H]e does not appear to be able or willing 
to become abstinent of alcohol despite his treatment with 
psychiatrists and psychologists and despite his brief participation 
in substance abuse programs.

Id. at 20. The state ALJ thus concluded that ``[u]nder all the 
circumstances, the outright revocation of respondent's certificate is 
the only disciplinary option available at this time that will protect 
the public.'' Id.
    On March 6, 2015, the MBC adopted the proposed decision, and on 
April 3, 2015, Registrant's Physician's and Surgeon's Certificate was 
revoked. GX 4. According to the online records of the MBC, Registrant's 
license remains revoked. See also www.breeze.ca.gov.

Discussion

The Loss of State Authority Ground

    Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized 
to suspend or revoke a registration issued under section 823, ``upon a 
finding that the Registrant . . . has had his State license . . . 
suspended [or] revoked . . . by competent State authority and is no 
longer authorized by State law to engage in the . . . dispensing of 
controlled substances.'' Moreover, DEA has held repeatedly that the 
possession of authority to dispense controlled substances under the 
laws of the State in which a practitioner engages in professional 
practice is a fundamental condition for obtaining and maintaining a 
practitioner's registration. See, e.g., James L. Hooper, 76 FR 71371 
(2011), pet. for rev. denied, 481 Fed Appx. 826 (4th Cir. 2012).
    This rule derives from the text of two provisions of the CSA. 
First, Congress defined ``the term `practitioner' [to] mean[] a . . . 
physician . . . 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). Second, in 
setting the requirements for obtaining a practitioner's registration, 
Congress directed that ``[t]he Attorney General shall register 
practitioners . . . if the applicant is authorized to dispense . . . 
controlled substances under the laws of the State in which he 
practices.'' 21 U.S.C. 823(f). Because Congress has clearly mandated 
that a practitioner possess state authority in order to be deemed a 
practitioner under the Act, DEA has held repeatedly that revocation of 
a practitioner's registration is the appropriate sanction whenever he 
is no longer authorized to dispense controlled substances under the 
laws of the State in which he practices medicine. See, e.g., Calvin 
Ramsey, 76 FR 20034, 20036 (2011); Sheran Arden Yeates, M.D., 71 FR 
39130, 39131 (2006); Dominick A. Ricci, 58 FR 51104, 51105 (1993); 
Bobby Watts, 53 FR 11919, 11920 (1988). See also Hooper v. Holder, 481 
Fed. Appx. at 828.
    Based on the MBC's revocation of his medical license, I find that 
Registrant lacks authority to dispense controlled substances in 
California, the State in which he holds his DEA registration. 
According, I will order that Registrant's registration be revoked and 
that any pending applications be denied. 21 U.S.C. 824(a)(3).

The Public Interest Ground

    Section 304(a) of the Controlled Substances Act (CSA) also provides 
that a registration to ``dispense a controlled substance . . . may be 
suspended or revoked by the Attorney General upon a finding that the 
registrant . . . 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)(4). With respect to a practitioner, the Act requires the 
consideration of the following factors in making the public interest 
determination:

    (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.

Id. Sec.  823(f).

    ``These factors are. . . considered in the disjunctive.'' Robert A. 
Leslie, M.D., 68 FR 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 a registration should be revoked.'' 
Id.; see also Volkman v. DEA, 567 F.3d 215, 222 (6th Cir. 2009). And 
while I must consider each factor, I ``need not make explicit findings 
as to each one and can `give each factor the weight [I] determine[] is 
appropriate.' '' MacKay v. DEA, 664 F.3d 808, 816 (10th Cir. 2011) 
(quoting Volkman v. DEA, 567 F.3d 215, 222 (6th Cir. 2009)); see also 
Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005)); see also Morall v. 
DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005) (same). In this matter, I 
concluded that the evidence with respect to Factors Two and Four 
establishes that Registrant has committed acts which render his 
registration inconsistent with the public interest.
    The Government contends that the MBC ALJ's findings of fact and 
conclusions of law establish that Registrant violated state and federal 
laws related to controlled substances.\2\ I agree that the State's 
findings establish that Registrant committed several violations of 
state laws that are actionable under Factor Four. Specifically, 
Respondent violated Cal. Bus. & Prof. Code sec. 2239(a), which provides 
that ``[t]he use or prescribing for or administering to himself. . . of 
any controlled substance; or the use of any of the dangerous drugs. . . 
to the extent, or in such a manner as to be dangerous or injurious to 
the licensee, or to any other persons or to the public, or to the 
extent that such use impairs the ability of the licensee to practice

[[Page 6047]]

medicine safely. . . constitutes unprofessional conduct.'' See also 
Cal. Bus. & Prof. Code sec. 2238 (``A violation of any federal statute 
or regulation, or any of the statutes or regulations of this state 
regulating dangerous drugs or controlled substances constitutes 
unprofessional conduct.'').
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    \2\ As for Factor One, while the State has not made a 
recommendation to the Agency, the State has revoked Respondent's 
medical license and thus, he no longer meets the CSA's requirement 
that he is authorized to dispense controlled substances in the State 
where he is registered.
    As for Factor Three, the record contains no evidence that 
Registrant has been convicted of an offense related to the 
manufacture, distribution or dispensing of controlled substances.
    As for Factor Five, even though the evidence shows that 
Respondent engaged in the self-abuse of controlled substances, the 
Government did not set forth any argument that Respondent's conduct 
is also actionable under this Factor. Thus, I make no findings under 
this Factor.
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    I further conclude that the MBC's findings establish that 
Registrant violated the CSA when he issued fraudulent prescriptions in 
his wife's name for Klonopin (clonazepam), a schedule IV controlled 
substance, which he then used and abused. See 21 U.S.C. 843(a)(3) (``It 
shall be unlawful for any person knowingly or intentionally. . . to 
acquire or obtain possession of a controlled substance by 
misrepresentation, fraud, forgery, deception or subterfuge.''); see 
also id. sec. 844(a) (``It shall be unlawful for any person knowingly 
or intentionally to possess a controlled substance unless such 
substance was obtained directly, or pursuant to a valid prescription or 
order, from a practitioner, while acting in the course of his 
professional practice.''); 21 CFR 1306.04(a) (``A prescription for a 
controlled substance. . . must be issued for a legitimate medical 
purpose by an individual practitioner acting in the usual course of his 
professional practice.''). Not only is this conduct actionable under 
Factor Four, it is also relevant in assessing Registrant's experience 
in dispensing controlled substances (Factor Two).
    Accordingly, I find that the evidence establishes Registrant ``has 
committed such acts as would render his registration. . . inconsistent 
with the public interest.'' See 21 U.S.C. 824(a)(4). Because Registrant 
failed to respond in any manner to the Show Cause Order, I will order 
that his registration be revoked and that any pending application be 
denied.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 
824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of 
Registration FB4421474, issued to David W. Bailey, M.D., be, and it 
hereby is, revoked. I further order that any pending application of 
David W. Bailey, M.D., to renew or modify his registration, be, and it 
hereby is, denied. This Order is effective March 7, 2016.

    Dated: January 18, 2016.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2016-02127 Filed 2-3-16; 8:45 am]
 BILLING CODE 4410-09-P