[Federal Register Volume 82, Number 127 (Wednesday, July 5, 2017)]
[Notices]
[Pages 31070-31075]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14070]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 16-31]


Phong Tran, M.D.; Decision and Order

    On June 29, 2016, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (hereinafter, DEA or 
Government), issued an Order to Show Cause to Phong Tran, M.D. 
(hereinafter, Respondent), the holder of 19 Certificates of 
Registration.\1\ Order to Show Cause, at 1-3. Citing 21 U.S.C. 823(f) 
and 824(a)(3), the Show Cause Order proposed the revocation of 
Respondent's 19 Certificates of Registration on the ground that 
Respondent does not have authority to dispense controlled substances in 
the State of California, the State in which he is registered. Id. at 4.
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    \1\ The 19 Certificates of Registration referenced in the Order 
to Show Cause are: FT4325242 in Vista, California (expiration date: 
November 30, 2016); FT4123422 in Garden Grove, California 
(expiration date: November 30, 2016); FT4086888 in Chula Vista, 
California (expiration date: November 30, 2016); FT4086876 in 
Escondido, California (expiration date: November 30, 2016); 
FT4086698 in San Diego, California (expiration date: November 30, 
2016); FT4086686 in San Bernardino, California (expiration date: 
November 30, 2016); FP4086864 in Long Beach, California (expiration 
date: November 30, 2016); FT4046707 in Van Nuys, California 
(expiration date: November 30, 2018); FT3965540 in Anaheim, 
California (expiration date: November 30, 2018); FT4046543 in 
Temecula, California (expiration date: November 30, 2018); BT3239945 
in Westminster, California (expiration date: November 30, 2018); 
FT4083111 in Downey, California (expiration date: November 30, 
2016); FT4932097 in Rialto, California (expiration date: November 
30, 2017); FT4946957 in Indio, California (expiration date: November 
30, 2017); FT4946971 in Palmdale, California (expiration date: 
November 30, 2017); FT4963117 in Pasadena, California (expiration 
date: November 30, 2017); FT4963129 in Pomona, California 
(expiration date: November 30, 2017); FT4963131 in Hemet, California 
(expiration date: November 30, 2017); and FT3933593 in San 
Bernardino, California (expiration date: November 30, 2018). Order 
to Show Cause, at 1-3.
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    As the jurisdictional basis for the proceeding, the Show Cause 
Order alleged that each of Respondent's 19 Certificates of Registration 
``are current and unexpired.'' Order to Show Cause, at 4. Respondent's 
registrations authorize him to dispense controlled substances in 
Schedules II through V. Government's Motion for Summary Disposition, 
Attachment 1, at 5-23.
    As the substantive grounds for the proceeding, the Show Cause Order 
alleged that on or about December 9, 2015, Respondent was criminally 
charged in the County of San Diego Superior Court (hereinafter, 
Superior Court) with 45 counts related to unlawful billing under the 
California Workers' Compensation System and that the charges were 
pending resolution. Id. at 4. The Show Cause Order further alleged 
that, in response to the criminal charges, the Medical Board of 
California (hereinafter, MBC) petitioned the Superior Court for an 
order suspending Respondent's medical license during the pendency of 
the criminal proceedings. Id. The Show Cause Order alleged that, on May 
13, 2016, the Superior Court issued an Order granting the MBC's 
petition ``and thereby . . . indefinitely suspended . . . 
[Respondent's] California medical license effective June 3, 2016.'' Id. 
The Order to Show Cause alleged that Respondent's medical license 
remained suspended and, ``therefore, DEA must revoke . . . 
[Respondent's] DEA . . . [registrations] based upon . . . [his] lack of 
authority to handle controlled substances in the State of California.'' 
Id. (citing 21 U.S.C. 802(21), 823(f)(1), and 824(a)(3)).
    The Show Cause Order notified Respondent of his right to request a 
hearing on the allegations or to submit a written statement while 
waiving his right to a hearing, the procedure for electing either 
option, and the consequences for failing to elect either option. Id. at 
4-5 (citing 21 CFR 1301.43). It also notified Respondent of his right 
to submit a corrective action plan. Id. at 5 (citing 21 U.S.C. 
824(c)(2)(C)).
    By letter dated August 25, 2016, Respondent requested a hearing 
stating that ``Dr. Tran's medical license is still active and valid, 
and not suspended as alleged.'' Hearing Request (August 25, 2016), at 
1.
    On August 29, 2016, Chief Administrative Law Judge John J. 
Mulrooney, II (hereinafter, CALJ) issued an order setting September 9, 
2016 as the date for the Government to submit evidence supporting the 
lack of state authority allegation and for any party's motion for 
summary disposition to be due. Order Directing the Filing of Proof of 
Service, Evidence of Lack of State Authority Allegation, and Briefing 
Schedule, at 2.\2\
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    \2\ The Order also set the date and time for the Government to 
furnish proof of when it served the Order to Show Cause on 
Respondent. Id. at 1.
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    On September 9, 2016, the Government filed its proof of service 
evidence and Motion for Summary Disposition. Government's Proof of 
Service Evidence and Motion for Summary Disposition (hereinafter, 
Government's Motion). The Government's Motion argued that Respondent 
was ``without state authorization to handle controlled substances in 
California, and as [sic] result, is not entitled to maintain his DEA 
Certificates of Registration.'' Id. at 1.
    As support for its Motion, the Government provided a sworn 
Certification by the Chief of DEA's Registration and Program Support 
Section concerning each of Respondent's DEA registrations in 
California. Government's Motion, at Attachment 1 (Certification of 
Registration History dated June 29, 2016). The Certification attached a 
copy of each of Respondent's DEA registrations. Id. at 5-23. The 
Government also provided the MBC's Notice ``to recommend that the 
[Superior] Court issue an Order prohibiting . . . Phong Hung Tran, M.D. 
. . . from practicing or attempting to practice medicine as a physician 
in the State of California, as a condition of any bail or own 
recognizance release, during the pendency of . . . criminal 
proceedings.'' Government's Motion, at Attachment 2 (Notice of PC23 
Appearance and Recommendation at PC1275 Bail Hearing dated April 12, 
2016) (hereinafter, MBC Notice), at 2. The Government's Motion also 
attached the MBC's brief in support of the MBC Notice. Government's 
Motion, at Attachment 3 (Memorandum in Support of Penal Code Section 23 
Appearance

[[Page 31071]]

and Recommendation to the Court dated April 12, 2016) (hereinafter, MBC 
Memorandum).
    Attached to the Government's Motion were two Orders of the Superior 
Court. The first Order concerned Respondent's Condition of Bail Release 
and the second denied reconsideration of the first Order. Government's 
Motion, Attachment 4 (Conditions of Bail Order dated May 13, 2016) 
(hereinafter, Conditions of Bail Order) and Government's Motion, 
Attachment 5, (Denial of Reconsideration of Conditions of Bail Order 
dated August 17, 2016). Also attached to the Government's Motion were a 
``Public Document List'' and ``Notification of Court Order'' concerning 
Respondent's license from the California Department of Consumer 
Affairs. Government's Motion, Attachment 6. The September 8, 2016 
Declaration of a DEA Diversion Investigator from the San Diego Field 
Division, also attached to the Government's Motion, described the 
status of Respondent's license as ``indefinitely suspended'' by the 
Superior Court. Government's Motion, Attachment 8 (Declaration of Drug 
Enforcement Administration Diversion Investigator, dated September 8, 
2016) (hereinafter DI Declaration), at 2.\3\
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    \3\ The seventh attachment to the Government's Motion was a 
Declaration of a DEA Diversion Investigator from the Los Angeles 
Field Division concerning service of the Show Cause Order on 
Respondent.
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    As further support for the Government's Motion, the Government 
provided the Declaration of a California Deputy Attorney General who 
represented the MBC. Government's Motion, Attachment 9 (hereinafter, 
MBC Attorney Declaration).\4\ The MBC Attorney Declaration's heading, 
``United States Department of Justice Drug Enforcement 
Administration,'' and docket number, ``16-31,'' suggested that it was 
created specifically for this proceeding. Id. at 1.
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    \4\ The MBC Attorney Declaration referenced five attachments. 
None, however, was provided.
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    The last attachment to the Government's Motion was Respondent's 
request for a hearing. Government's Motion, Attachment 10 (Hearing 
Request dated August 25, 2016). Attached to the Hearing Request was a 
two-page printout from the California Department of Consumer Affairs 
(``https://www.breEZe.ca.gov'') titled ``License Details'' and dated 
August 25, 2016 (hereinafter, BreEZe License Details). The printout 
showed Respondent's license status as ``License Renewed & Current'' and 
secondary status as ``Limits On Practice.'' The document did not, 
however, state what limits were imposed on Respondent's practice.
    On September 27, 2016, Respondent filed his opposition to the 
Government's Motion (hereinafter, Respondent's Opposition). Attached to 
Respondent's Opposition were the transcripts of two Superior Court 
hearings. Respondent's Opposition, Exhibits 11 and 12 (Reporter's 
Transcript of Proceedings for the April 8, 2016 and May 13, 2016 
hearings) (hereinafter, April Transcript and May Transcript, 
respectively).\5\
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    \5\ The cover sheet for the May Transcript mistakenly attributed 
its contents to the hearing on April 8, 2016. The first page of the 
May transcript, however, noted the actual May date of the 
transcribed proceedings.
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    Respondent stated that the MBC had not suspended his medical 
license. He asserted that, ``The limitation on his practice arises from 
a Court Order issued by Judge Eyherabide on May 13, 2016, prohibiting 
respondent from practicing medicine during the pendency of his criminal 
matter as a condition of his bail.'' Respondent's Opposition, at 1.
    By Order dated October 4, 2016, the CALJ denied the Government's 
Motion. Order Denying the Government's Motion for Summary Disposition 
(hereinafter, Order Denying Government's Motion). The Order stated that 
``the . . . [Superior Court] clearly imposed the prohibition on 
practice as a condition of bail release--not as a suspension or 
restriction on the Respondent's professional license itself.'' Order 
Denying Government's Motion, at 5. The Order cited ``[v]erification 
information available on the California Department of Consumer Affairs 
BreEZe Web site'' as providing ``further support for the proposition 
that the Superior Court's proscription against practicing medicine did 
not change . . . [Respondent's] medical licensure status.'' Id. at 5-6 
(footnote omitted). The Order concluded that, ``Respondent (albeit at 
the peril of his release conditions) maintains the state authority 
requisite to retain his DEA . . . [registrations]'' and ``the 
Government has not met its burden to prove that the Respondent lacks 
state authority to handle controlled substances in California, the sole 
basis for its Motion.'' Id. at 8. Thus, it denied the Government's 
Motion for Summary Disposition noting that ``the Respondent has 
(inexplicably) not filed a motion for summary disposition.'' Id. at 8 
n.20.\6\
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    \6\ The CALJ also granted leave to the Government, ``to the 
extent it is inclined to do so,'' to file and serve on Respondent a 
superseding Order to Show Cause no later than October 14, 2016 ``to 
allow the Government to pursue administrative enforcement in these 
proceedings.'' Id. at 8 n.21 (emphasis in original). By its filing 
dated October 14, 2016, the Government stated that it was not 
issuing a superseding Order to Show Cause concerning Respondent. 
Government's Notice Regarding the Filing of Superseding Order to 
Show Cause, at 1.
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    On October 17, 2016, the CALJ conducted a status conference by 
telephone with the Government and counsel for Respondent. Order 
Granting Respondent's Request for a Continuance, at 1. During the 
status conference, counsel for Respondent sought, and was granted with 
the consent of the Government, a continuance until the afternoon of 
October 20, 2016 to file a motion for summary disposition. Id. at 1.
    By motion dated October 17, 2016, Respondent requested dismissal of 
the Order to Show Cause. Respondent's Motion for Summary Disposition 
(hereinafter, Respondent's Motion), at 1. Attached to the Respondent's 
Motion were the April and May Superior Court hearing transcripts, an 
updated but substantively identical version of the BreEZe License 
Details, and ``License Details--Public Record Actions--Court Order'' 
from the California Department of Consumer Affairs concerning 
Respondent's license (hereinafter, BreEZe License Details--Court 
Order). The ``Description of Action'' section of the BreEZe License 
Details--Court Order stated that the ``Superior Court of California, 
County of San Diego, issued an Order . . . . Dr. Tran shall not 
practice medicine during the pendancy [sic] of this case beginning 06/
03/16.''
    In further support of his Motion, Respondent stated that, ``The 
Superior Court of California's Order of May 13, 2016 prohibited 
Respondent from practicing medicine as a condition of bail release 
pursuant to Penal Code Sec.  1275, and not as a suspension or 
restriction on his professional medical license.'' Respondent's Motion, 
at 1. Respondent's Motion also stated that ``Respondent's professional 
medical license itself is currently active and is not restricted by the 
Court's Order,'' and alleged that his medical license ``entitles him to 
handle controlled substances in California.'' Id.
    The Government opposed the Respondent's Motion. Government's 
Response to Respondent's Motion dated October 27, 2016 (hereinafter, 
Government's Opposition). In its Opposition, the Government admitted 
that ``Respondent currently retains his state authority to practice 
medicine.'' Id. at 2. Referencing the second prong of 21 U.S.C. 
824(a)(3), the Government posited that ``DEA is authorized to revoke a 
DEA . . . [registration] even `. . . where suspension or revocation of 
a practitioner's state license or

[[Page 31072]]

registration has merely been recommended by state authority,' and that 
DEA is not `. . . required to await a final decision from the State 
before acting to revoke' '' a DEA registration. Id. at 2 (citing Joseph 
Giacchino, M.D., 76 FR 71,374 (2011)); see also id. at 4.
    The Government's Opposition further stated that ``the State of 
California (on behalf of the Board) not only sought to have the 
criminal court suspend Respondent's medical license during pendency of 
criminal proceedings, but by the express wording of its April 12, 2016 
court filing recommended that the court take this course of action.'' 
\7\ Id. at 6. The Government's Opposition concluded that ``[t]he 
Board's recommendation of licensure suspension as a condition of bail 
clearly fits within the recommendation of `competent State authority' 
wording of section 824(a)(3).'' Id.
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    \7\ The Government's Opposition did not provide the page number 
on which this ``express wording'' appeared. I carefully reviewed the 
document the Government referenced multiple times and did not locate 
the ``express wording.''
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    On November 7, 2016, the CALJ granted the Respondent's Motion and 
recommended that the Government's petition for revocation of 
Respondent's certificates of registration be denied. Order Granting the 
Respondent's Motion for Summary Disposition (hereinafter, Order 
Granting Respondent's Motion), at 15. In the Order Granting 
Respondent's Motion, the CALJ, among other things, noted the 
Government's acknowledgement that Respondent had state authority to 
practice medicine, stated that the Order to Show Cause was insufficient 
to notice revocation of Respondent's registrations based on the second 
prong of 21 U.S.C. 824(a)(3), concluded that the ``recommendation'' in 
the second prong of 21 U.S.C. 824(a)(3) relates only to a 
practitioner's DEA registration, and determined that the MBC had not 
recommended a ``suspension'' of Respondent's registrations. Id. at 3, 
10, 12-13, and 13, respectively.
    On November 25, 2016, the Government filed Exceptions to the Order 
Granting Respondent's Motion. Government's Exceptions to Order Granting 
Summary Disposition Motion (hereinafter, Exceptions). In its 
Exceptions, the Government addressed whether the Order to Show Cause 
sufficiently noticed action against Respondent based on the second 
prong of 21 U.S.C. 824(a)(3),\8\ whether a prerequisite to invocation 
of the second prong of 21 U.S.C. 824(a)(3) is a recommendation 
concerning a ``DEA registration,'' and whether the California State 
Medical Board recommended that the Superior Court ``suspend'' 
Respondent's medical license. Id. at 1-9.
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    \8\ ``. . . has had the suspension, revocation, or denial of his 
registration recommended by competent State authority . . .''
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    On December 2, 2016, the record was forwarded to my Office for 
Final Agency Action. Having considered the record and the Order 
Granting Respondent's Motion in light of all relevant statutory, 
regulatory, and case law authorities, I conclude that there is no basis 
for revoking Respondent's registration on the record before me.\9\ 
Thus, I agree with the CALJ's ultimate conclusions that Respondent 
continues to have the State authority required for his registrations, 
and that the Government has not established the predicates under 21 
U.S.C. 824(a)(3) to warrant revocation of Respondent's 
registrations.\10\
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    \9\ It is noted, however, that the issuance of a new Order to 
Show Cause would be appropriate if the MBC were to suspend or revoke 
Respondent's state license, or if Respondent's plea to, or 
conviction of, criminal charges resulted in mandatory exclusion 
under 42 U.S.C. 1320a-7(a). Further, the issuance of a new Order to 
Show Cause based on 21 U.S.C. 824(a)(4) would be appropriate if 
properly supported by evidence, including evidence gleaned from the 
criminal proceedings against Respondent.
    \10\ This matter raises novel issues, and my analysis differs 
from the analysis in the Order Granting Respondent's Motion. Thus, I 
do not adopt the Order Granting Respondent's Motion.
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    I make the following factual findings.

Findings of Fact

Respondent's DEA Registrations

    The Order to Show Cause alleged that Respondent has held 19 
registrations, all with addresses in California. Order to Show Cause, 
at 1-3. Based on the evidence submitted by the Government, I find that 
at least one of Respondent's registrations, FT3933593 in San 
Bernardino, California (expiration date November 30, 2018), is 
currently active. Government's Motion, at Attachment 1, at 10.

Indictment of Respondent

    On January 28, 2016, Respondent was criminally charged with 45 
felony counts related to kickbacks, including 21 counts of workers' 
compensation fraud and 24 counts of insurance fraud. MBC Memorandum, at 
2, 3; May Transcript, at 4-5, lines 23-2; DI Declaration, at 2. 
According to a State prosecutor, Respondent paid kickbacks for access 
to patients on a per patient basis. May Transcript, at 5, lines 12-28; 
at 6, lines 9-10; at 7, lines 24-26. At the May Superior Court hearing, 
the prosecutor represented that the individual to whom Respondent paid 
the kickbacks was a chiropractor working off Federal charges. Id. at 5, 
lines 12-20. One of Respondent's Physician's Assistants, the prosecutor 
further alleged, would see up to 100 patients a day, once a month, and 
provide the patients with prescription medications and compound creams. 
Id. at 6, lines 2-9. Respondent would bill the insurance companies for 
the visits and for the prescription medications and compound creams, 
according to the prosecutor. Id. at 6, lines 2-9, 16-25. The prosecutor 
explained that billing for compound creams was particularly lucrative 
because there was no limit on how much could be billed for a compound 
cream. Id. at 7, lines 1-20.

The Evidence Offered by the Parties in Support of Their Respective 
Motions

The Superior Court Hearing in April, 2016
    On April 8, 2016, the Superior Court held a hearing at the request 
of the MBC. Attendees included State prosecutors and attorneys for the 
MBC and Respondent. According to its attorney, the MBC ``provided 
notice to Respondent back in February that they will be appearing at 
the . . . [California Penal Code] 23 to make a recommendation to 
provide information . . ., not to ask for suspension, but to place a 
condition on . . . [Respondent's] bail O.R. release.'' \11\ April 
Transcript, at 30, lines 21-28 (emphasis added). A prosecutor explained 
that the California Attorney General decided, on behalf of the MBC, 
that ``this is so important to public safety that they are literally 
putting their reputation on the line.'' Id. at 23, lines 19-22. 
According to the prosecutor, ``the Medical Board is basically here 
telling you look, we may have to go through a certain number of 
procedures to do this, but we are asking you, in the interim, tell this 
individual not to practice medicine.'' \12\ Id. at 23, lines 22-26; see 
also id. at 30, lines 16-18 (Respondent's counsel stating that ``the

[[Page 31073]]

Medical Board has never once independently tried to suspend . . . 
[Respondent's] license.'').
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    \11\ The MBC's February Notice to Respondent was not put in the 
record of this proceeding.
     California Penal Code 23 states, in pertinent part, ``In any 
criminal proceeding against a person who has been issued a license 
to engage in a business or profession by a state agency pursuant to 
provisions of the Business and Professions Code . . ., the state 
agency which issued the license may voluntarily appear to furnish 
pertinent information, make recommendations regarding specific 
conditions of probation, or provide any other assistance necessary 
to promote the interests of justice and protect the interests of the 
public, or may be ordered by the court to do so, if the crime 
charged is substantially related to the qualifications, functions, 
or duties of a licensee.''
     ``O.R. release'' refers to a bail release on one's own 
recognizance.
    \12\ The prosecutor did not elaborate on what he meant by to do 
``this.''
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    The Superior Court began the April 8, 2016 hearing by stating that 
``apparently there is a motion to continue.'' Id. at 1, lines 22-23. 
One of Respondent's attorneys acknowledged the motion ``due to the 
unavailability of . . . a witness allowed him to confront.'' Id. at 1, 
lines 24-26. As the hearing proceeded, Respondent's counsel argued that 
his client was entitled to due process because placing a no-medical-
practice bail condition on Respondent's medical license was tantamount 
to placing it under interim suspension. He stated that he brought a 
``motion'' because ``basically we are talking about an interim 
suspension, it's another way of saying . . . a restriction on someone's 
license, and . . . that . . . requires that the evidence . . . be shown 
through affidavit . . . that the . . . licensee [ ] have . . . an 
effective right to confront those evidence.'' \13\ Id. at 4-5, lines 
28-14.
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    \13\ The motion Respondent's counsel referenced was not put in 
the record of this proceeding.
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    The Superior Court stated that a co-defendant of Respondent had 
previously raised the issue of ``whether or not this court should or 
has the power to actually suspend'' a doctor's medical license. Id. at 
2, lines 7-8. The Court indicated the response it had given to the co-
defendant:

    I am not the Medical Board. I am not an attorney licensing 
board, I am not a real estate licensing board. The way I have framed 
this, frankly, is whether or not as a condition, . . . if somebody 
has a fourth DUI, and is asking for their own recognizance, as a 
part of bail there are conditions, one, they can't drive . . . if 
they make bail or are released.

    Id. at 2, lines 16-25. At the hearing, the Superior Court 
consistently indicated that ``the real issue here [ ] is whether or 
not, as a condition of Dr. Tran's O.R. release, . . . he should be 
practicing medicine, not that I would be suspending a license. I don't 
have any power to suspend a license.'' Id. at 3, lines 4-8. Stating 
that ``[t]here is no right to confront . . . for the Court considering 
safety purposes,'' the Superior Court rejected the due process 
arguments of Respondent's counsel and invited them to appeal her 
ruling. Id. at 12, lines 2-4; see also id. at 7, lines 21-24; id. at 
11, lines 24-25. Throughout the April hearing, the Superior Court 
continuously and consistently stated that she was not able to suspend a 
license, whether the license in question was a truck driver's license, 
a license to practice law, or a medical license. Id. at 3, lines 22-23; 
at 4, lines 22-23; at 6, lines 12-15; at 9, lines 7-8.
    The Superior Court explained the extent of her authority with an 
analogy to a person put on probation. She stated, ``as a condition of 
probation, the Court can impose, you can't practice accounting, you 
can't drive a truck, you can't practice medicine . . . [and if] the 
person doesn't wish to accept it, they go to prison.'' Id. at 9, lines 
10-14. She provided another example:

    [E]ven if I was placing a person on probation, a lawyer, who 
committed fraud, I can't say and a condition of probation is I am 
taking away your license. I don't have a power to take away a 
license. The State Bar only has the power to take away a license. I 
can say as a condition of probation, you are not to practice law. He 
can still pay his Bar dues. It means when he's done with probation 
in two years, he's still a practicing attorney.

Id. at 9, lines 15-23. The Superior Court reiterated that she was not 
able to ``yank'' a person's license and ``[w]hether it's as a condition 
of bail, or probation, it's a condition one can accept or not accept.'' 
Id. at 9, lines 24-26.
    In the criminal case against Respondent, according to the Superior 
Court, she was able to place a no-medical-practice condition on 
Respondent's own recognizance release and she continued the hearing to 
May 13, 2016 for the purpose of determining whether to do so. Id. at 
29, lines 8-25; see also id. at 10, lines 9-12.
    Some statements at the April hearing suggested that the MBC had 
filed a pre-hearing statement recommending the suspension of 
Respondent's medical license. The Superior Court had stated, ``Through 
the Attorney General's office, they \14\ have requested, pursuant to 
Penal Code Section 23, to bring me the information . . . and in the 
moving papers everybody talks about whether or not this Court should or 
has the power to actually suspend Dr. Tran's license.'' Id. at 2, lines 
3-8; see also id. at 21, lines 21-27 (A prosecutor stating that 
``[c]ommonly these questions are initiated by a request by the Attorney 
General, a recommendation as it's termed, . . . to take some action on 
a person's license. Just to be clear, . . . we are not joining in the 
request that any action be taken on the defendant's license.''); May 
Transcript, at 2, lines 11-14 (Superior Court noting that ``[t]here are 
numerous briefs here from the People'' and Respondent's counsel 
suggesting that, ``That's probably from the prior set of P[enal] C[ode] 
23 brief [sic].'').
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    \14\ The reference to ``they'' is not specified.
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    Other statements tended to oppose that possibility. April 
Transcript, at 19-20, lines 26-3 (Superior Court stating that, under 
Penal Code section 23, the State agency that issued a license to a 
criminal defendant may voluntarily appear to ``furnish pertinent 
information, make recommendation [sic], regarding specific conditions 
of probation''); id. at 30, lines 21-28 (MBC provided notice to 
Respondent of its appearance ``to make a recommendation to provide 
information . . . not to ask for suspension, but to place a condition 
on his bail O.R. release.'').
    If there were any written submission by the MBC or a party in 
connection with the April Superior Court hearing recommending the 
suspension of Respondent's medical license or registration, it is not 
in the record before me.
    Thus, based on the evidence in the April Transcript, I conclude 
that the Superior Court did not suspend or revoke Respondent's 
California medical license at the Superior Court April hearing, and 
that the suspension, revocation, or denial of Respondent's medical 
license or registration was not recommended by competent California 
State authority in connection with the Superior Court April hearing.

The Medical Board of California Notice and Memorandum

    In advance of the May Superior Court hearing, the MBC filed the MBC 
Notice and the MBC Memorandum. Supra. The MBC Notice stated, in 
pertinent part, that the MBC will appear before the Superior Court ``to 
recommend that the Court issue an Order prohibiting . . . [Respondent] 
from practicing or attempting to practice medicine as a physician in 
the State of California, as a condition of any bail or own recognizance 
release, during the pendency of . . . [the] criminal proceedings.'' MBC 
Notice, at 2. The MBC Notice explained the grounds for its 
recommendation, stating that ``if allowed to continue to practice 
medicine as a physician, . . . [Respondent] poses a continuing danger 
to the public health, safety, and welfare.'' Id. It referenced the 
Superior Court's statutory authority to consider public protection when 
imposing bail and own recognizance release conditions. Id. The MBC 
Notice did not state that the MBC was recommending the suspension, 
revocation, or denial of Respondent's medical license or registration.
    The MBC Memorandum made multiple points. First, it reiterated the

[[Page 31074]]

MBC's recommendation to, and request of, the Superior Court that 
Respondent, ``as a condition of any bail or own recognizance release, . 
. . be prohibited from practicing medicine until resolution of the . . 
. criminal proceedings.'' MBC Memorandum, at 2; see also id. at 4, 8.
    Second, it stated that Respondent held a valid physician's license 
that ``will expire on January 31, 2018, unless renewed.'' Id. at 2. The 
MBC Memorandum further explained that Respondent's physician's license 
enabled Respondent ``to provide medical services including issuing 
prescriptions for controlled substances to patients and conducting 
serious surgeries.'' Id.
    Third, the MBC Memorandum stated that the MBC was responsible for 
enforcing the disciplinary and criminal provisions of the California 
Medical Practice Act, and that protecting the public was its highest 
priority in exercising its licensing, regulatory, and disciplinary 
functions. Id. at 3. It explained that it had the ``power to suspend, 
revoke, or otherwise limit physicians and surgeons from practicing 
medicine for, among other things, unprofessional conduct and criminal 
convictions substantially related to the qualifications, functions, or 
duties of a physician and surgeon.'' Id.
    Fourth, the MBC Memorandum cited California Penal Code Sec.  23, 
supra, as authority for the MBC to appear in a criminal proceeding 
against a person to whom the MBC had issued a license to ``furnish 
pertinent information, make recommendations regarding specific 
conditions of probation, or provide any other assistance necessary to 
promote the interests of justice and protect the interest of the 
public.'' Id. at 4. It also cited California law to support the 
reasonableness of a bail condition prohibiting Respondent from 
practicing medicine during the pendency of the criminal case.\15\ MBC 
Memorandum, at 5-8.
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    \15\ The MBC Memorandum cited Penal Code Sec.  1275 (the public 
safety is the primary consideration for judges in setting, reducing, 
or denying bail) and California Penal Code Sec.  1318 (interpreted 
to require defendants released on their own recognizance to promise 
to obey all reasonable conditions related to public safety).
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    Fifth, the MBC Memorandum stated that, ``The felony charges in this 
case are extremely serious and are substantially related to the 
qualifications, functions, and duties of a physician and surgeon.'' Id. 
at 6; see also id. at 8. It stated that Respondent's alleged conduct 
``is not only unprofessional, but also dangerous, and evinces poor 
character, a lack of integrity and an inability or unwillingness to 
follow the law.'' Id.
    Nowhere in the MBC Notice or the MBC Memorandum did the MBC 
recommend the suspension, revocation, or denial of Respondent's medical 
license or registration.
The Superior Court Hearing in May, 2016
    On May 13, 2016, the Superior Court resumed the hearing it began in 
April. The May Transcript contained more information about the criminal 
charges against Respondent and the MBC's request of the Superior Court.
    The prosecutor stated that Respondent was indicted for giving 
kickbacks for access to patients and filing fraud-based insurance 
claims based on those kickbacks. May Transcript, at 4-7, 11-12. The 
attorney representing the MBC stated that, ``[i]n setting[,] 
reducing[,] and denying bail, . . . [t]he public safety shall be the 
primary consideration.'' Id. at 13, lines 22-28. He argued:

    When patients are sold for money, . . . [Respondent is] going 
after patients, patients aren't coming after him, to seek medical 
help. He's seeking patients to make money. When patients are sold as 
commodities, does that pose a risk . . . to the public? Patient 
care? And when their patient's safety is at risk, is that a risk of 
the public safety? Well of course it is, Your Honor.

    Id. at 14, lines 6-12. The MBC attorney asserted that ``[t]his was 
one of the largest insurance and worker's compensation fraud cases in 
the history of this county . . . , a sophisticated large scale criminal 
enterprise.'' Id. at 14, lines 24-28. He summarized what the MBC sought 
from the Superior Court when he stated, ``We ask the Court, as a 
condition of bail, to prohibit . . . [Respondent] from practicing 
medicine during the pendency of this case.'' Id. at 15, lines 22-24.
    The Superior Court ruled that ``until the case is resolved, . . . 
[Respondent] not be allowed to practice medicine. . . . So that will be 
a condition of his continued bail.'' Id. at 20, lines 11-14. On August 
17, 2016, the Court denied Respondent's request for reconsideration of 
this ruling. Government's Motion, Attachment 5, supra.
    Thus, the Superior Court, at its May hearing, conditioned 
Respondent's own-recognizance bail release on his not practicing 
medicine. At the May hearing, the Superior Court did not suspend or 
revoke Respondent's California medical license, and no competent 
California State authority recommended the suspension, revocation, or 
denial of Respondent's medical license or registration.

The MBC Attorney Declaration

    The MBC Attorney Declaration contained five numbered paragraphs. 
The first paragraph stated that its declarant worked in the California 
Attorney General's Health Quality Enforcement Unit. MBC Attorney 
Declaration, at 1. Its second paragraph stated that Respondent was 
charged with 45 counts of felony crimes related to workers' 
compensation and insurance fraud. Id. Its third paragraph stated that, 
in April of 2016, the MBC attorney declarant ``voluntarily appeared'' 
on behalf of the MBC and recommended that the Superior Court issue an 
order, as a condition of bail, prohibiting Respondent from practicing 
medicine during the pendency of the criminal proceedings. Id. The 
fourth paragraph stated that the Superior Court, ``as a condition of 
bail, . . . issued an order prohibiting Dr. Tran from practicing 
medicine, effective June 3, 2016, during pendency of above criminal 
proceedings.'' Id. at 2. The last paragraph stated that the Superior 
Court denied Respondent's request for modification and/or removal of 
the bail condition. Id. While the MBC Attorney Declaration stated that 
it was sworn under penalty of perjury, neither the day of its execution 
in September, 2016 nor the signature on it was visible. For these 
reasons, I cannot give any credit to the MBC Attorney Declaration.\16\
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    \16\ Even if the date and signature on it were visible, the MBC 
Attorney Declaration contained no evidence tending to show that 
competent California State authority recommended the suspension, 
revocation, or denial of Respondent's medical license or 
registration.
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The Status of Respondent's California Medical License

    According to the evidence in the record, Respondent and the 
Government eventually agreed that Respondent's California medical 
license was current.\17\ Respondent's Motion, at 1 (``Respondent's 
professional medical license itself is currently active . . . .''); 
Government's Opposition, at 2 (``[T]his tribunal, as well as the 
Respondent in his pending summary disposition motion, have correctly 
pointed out that Respondent currently retains his state authority to 
practice medicine.''); see also id. at 5. Thus, there ended up being no 
dispute that Respondent's California medical license was current. As of 
the date of this Decision and Order, Respondent's California medical 
license

[[Page 31075]]

is current; it has not been suspended or revoked.\18\
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    \17\ California medical license number 74233.
    \18\ According to the Web site https://www.breEZe.ca.gov, 
Respondent's medical license has practice limits due to the Superior 
Court's imposition of an ``own recognizance'' bail condition.
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Discussion \19\
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    \19\ I need not address, and therefore decline to address, much 
of the content of the Recommended Decision, including most of the 
matters with which the Government took exception: Whether the 
Government sufficiently noticed action against Respondent based on 
the second prong of 21 U.S.C. 824(a)(3) and whether a prerequisite 
for invocation of the second prong of 21 U.S.C. 824(a)(3) is a 
recommendation concerning a ``DEA registration.'' I need not reach 
either of these matters because I find that the Government has not 
established that there was a suspension, revocation, or denial 
recommendation by competent State authority.
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    Under Section 304 of the Controlled Substances Act (hereinafter, 
CSA), ``[a] registration . . . to . . . dispense a controlled substance 
. . . may be . . . revoked by the Attorney General 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 . . . or has had the suspension, revocation, or 
denial of his registration recommended by competent State authority . . 
. .'' 21 U.S.C. 824(a)(3).
    Moreover, DEA has long held 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 registration. This rule 
derives from the text of two provisions of the CSA. First, Congress 
defined ``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 CSA, DEA has held repeatedly that revocation of 
a practitioner's registration is the appropriate sanction whenever a 
practitioner is no longer authorized to dispense controlled substances 
under the laws of the State in which he practices medicine. Frederick 
Marsh Blanton, 43 FR 27,616 (1978) (``State authorization to dispense 
or otherwise handle controlled substances is a prerequisite to the 
issuance and maintenance of a Federal controlled substances 
registration.''). See also James L. Hooper, 76 FR 71,371 (2011) 
(collecting cases), pet. for rev. denied, 481 Fed. Appx. 826 (4th Cir. 
2012).

Registrant's California Medical License Has Not Been Suspended or 
Revoked

    In this case, the Government and Respondent eventually agreed that 
Respondent's California medical license was neither suspended nor 
revoked. Respondent's Motion, 1 (``Respondent's professional medical 
license itself is currently active . . . .''); Government's Opposition, 
2 (``[T]his tribunal, as well as the Respondent in his pending summary 
disposition motion, have correctly pointed out that Respondent 
currently retains his state authority to practice medicine.''); see 
also Government's Opposition, 5. Thus, there was no dispute between the 
parties concerning the status of Respondent's California medical 
license. I, therefore, conclude that the first prong of 21 U.S.C. 
824(a)(3) does not support revocation of any of Registrant's 
registrations.

Competent State Authority Suspension or Revocation Recommendation

    The Government's Opposition argues that revocation of Respondent's 
registrations is appropriate under the second prong of 21 U.S.C. 
824(a)(3). However, the Government cites no case interpreting that 
provision. Given the clear factual record before me, there is no need 
to opine on it, including on the requisite ``recommendation'' and 
whether ``registration'' refers to a State license/controlled substance 
registration or a DEA registration. In other words, the record simply 
contains no evidence that a ``competent State authority'' 
``recommended'' the ``suspension, revocation, or denial'' of any 
``registration.'' Supra.
    Having thoroughly examined all of the evidence in the record, 
including the evidence from the MBC, the Superior Court, and every 
attorney representing California, I found evidence only that the MBC 
recommended a no-medical-practice condition on Respondent's own 
recognizance bail release. While the record hints at the possibility 
that the MBC made a suspension or revocation recommendation, the record 
contains no evidence of such a recommendation.
    The evidence in the record is clear that the Superior Court did not 
believe she had authority to suspend or revoke a license of any sort, 
let alone a DEA registration, and that she did not intend her orders to 
do so. The evidence in the record is equally clear that neither the 
Superior Court, the prosecutor, nor the MBC attorney recommended any 
suspension, revocation, or denial of any registration. Finally, the 
Government did not cite any decision holding that a no-medical-practice 
bail condition constitutes a recommendation of suspension, revocation, 
or denial.
    In sum, viewing the evidence in the record in the light most 
favorable to the Government, the non-moving party, I find no evidence, 
let alone substantial evidence, that the factual predicates for 
applying either prong of 21 U.S.C. 824(a)(3) have been established.\20\ 
Thus, in this case, the record does not support revocation of 
Respondent's registrations under either the first or second prong of 21 
U.S.C. 824(a)(3).
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    \20\ Although the Government cited 21 U.S.C. 823(f) and 21 
U.S.C. 823(f)(1) in the Order to Show Cause, it did not squarely 
present, let alone develop, the theory that Respondent's 
registrations should be revoked based on 21 U.S.C. 823(f)(1) in 
conjunction with 21 U.S.C. 824(a)(4). Further, the cases the 
Government cited in the Order to Show Cause as providing ``a summary 
of the legal basis for this action'' did not rely on 21 U.S.C. 
824(a)(4) and 823(f)(1) as legal bases.
    When invited by the CALJ to amend the Order to Show Cause, which 
included the possibility of developing a revocation theory under 21 
U.S.C. 824(a)(4) and 21 U.S.C. 823(f)(1), the Government explicitly 
declined. Order Denying Government's Motion, at 8; Government's 
Notice Regarding the Filing of Superseding Order to Show Cause. As 
warranted with the passage of time and the garnering of relevant 
evidence, the Government is free to issue a new Order to Show Cause 
concerning Respondent's registrations based on appropriate legal 
authority. Supra.
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Order

    Pursuant to the authority vested in me by 21 U.S.C. 824(a)(3) and 
28 CFR 0.100(b), I grant Respondent's Motion for Summary Disposition. I 
further order the dismissal of the Order to Show Cause. This order is 
effective August 4, 2017.

    Dated: June 24, 2017.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2017-14070 Filed 7-3-17; 8:45 am]
BILLING CODE 4410-09-P