[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)]
[Notices]
[Pages 61675-61678]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26046]


-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 2018-27]


Steve Fanto, M.D.; Decision and Order

    On April 4, 2018, the Assistant Administrator, Diversion Control 
Division, Drug Enforcement Administration (hereinafter, DEA or 
Government), issued an Order to Show Cause to Steve Fanto, M.D. 
(hereinafter, Respondent), of Scottsdale, Arizona. Order to Show Cause 
(hereinafter, OSC), at 1. The OSC proposes the revocation of 
Respondent's Certificate of Registration (hereinafter, COR) on the 
ground that he is without authority to handle controlled substances in 
Arizona, the State in which he is registered with the DEA. Id. The OSC 
cites the operative statutory provisions that spell out the 
requirements for registration upon which the DEA alleges that 
Respondent is deficient, and the DEA's alleged authority to revoke his 
registration. 21 U.S.C. 823(f) and 824(a)(3). Id. at 1-2.

Jurisdiction

    This Agency has jurisdiction to decide this case based upon the OSC 
allegation that Respondent holds a DEA Certificate of Registration (No. 
BF3649312) at the registered address of 7320 Deer Valley Road, J100, 
Scottsdale, Arizona 85255. Id. at 1. That registration authorizes 
Respondent, as a practitioner, to dispense controlled substances in 
schedules II through V. Although Respondent's COR reflects an 
expiration date of September 30, 2017, the OSC alleges that 
Respondent's COR is current by virtue of his having submitted a timely 
application for renewal of this COR on September 21, 2017. Id.

[[Page 61676]]

Substantive Ground for Revocation of COR Alleged in OSC

    The substantive ground for the proceeding, as alleged in the OSC, 
is that Respondent is ``prohibited from practicing medicine in the 
state in which . . . [he is] registered with the DEA.'' Id. at 2. 
Specifically, the OSC alleges that, according to Arizona Medical Board 
(hereinafter, AMB) records, Respondent ``engaged in medical practices 
(including the prescribing of controlled substances) that constitute[ ] 
`significant deviations from the standard of care.' '' Id. at 1, 
quoting AMB Interim Consent Agreement for Practice Restriction 
(hereinafter, Interim Consent Agreement) (ellipse omitted). As a 
result, according to the OSC, Respondent entered into an Interim 
Consent Agreement whereby he is ``prohibited from engaging in the 
practice of medicine in the State of Arizona'' until he applies to the 
AMB and receives permission to do so. Id. at 1-2. Registrant signed the 
Interim Consent Agreement on July 11, 2017. Id. at 1. The OSC states 
that since Respondent is not licensed to dispense controlled substances 
in Arizona, his DEA COR must be revoked pursuant to 21 U.S.C. 823(f) 
and 824(a)(3). Id. at 2.
    The OSC notified Respondent of his right to request a hearing on 
the allegations or to submit a written statement if he chooses to waive 
his right to a hearing. Id. at 2. The OSC explained the procedures for 
electing each option, the consequences for failing to elect one of 
those options, and the regulations that govern the rules for responding 
to the OSC (21 CFR 1301.43). Id. at 2. The OSC also notified Respondent 
of the opportunity to submit a corrective action plan, the specific 
procedures for filing a corrective action plan, and the statutory 
provision that governs such a plan. Id. at 2-3 (citing 21 U.S.C. 
824(c)(2)(C)).

Adequacy of Service

    In his April 30, 2018, Request for Extension/Hearing, Respondent 
acknowledged receipt of the OSC ``on or after April 4, 2018.'' \1\ 
Request for Extension/Hearing, at 1. Since the OSC was issued on April 
4, 2018 and Respondent admitted receiving the OSC ``on or after April 
4, 2018,'' I find that the Government's service of the OSC was legally 
sufficient and that Respondent's request for a hearing was timely. OSC, 
at 1; Request for Extension/Hearing, at 1.
---------------------------------------------------------------------------

    \1\ Respondent's April 30, 2018, Request for Extension/Hearing 
is stamped ``received'' by the Office of Administrative Law Judges 
on May 1, 2018.
---------------------------------------------------------------------------

Respondent's Request for Extension of Time

    Respondent argued in his Request for Extension/Hearing that he 
should be allowed an extension of time to request a hearing ``pending 
the resolution of . . . [AMB] actions regarding his Arizona medical 
license.'' Request for Extension/Hearing, at 1. The gravamen of his 
argument is that an extension should be allowed, because if Respondent 
is successful before the AMB, his medical license will be returned to 
him. Id. The request for extension asked in the alternative for a 
hearing if the request for extension of time is not granted.

CALJ Denial of Request for Extension of Time

    The Office of Administrative Law Judges put the matter on the 
docket and assigned it to the Chief Administrative Law Judge, John J. 
Mulrooney, II (hereinafter, CALJ). On May 4, 2018, the CALJ denied the 
request for an extension of time, stating that ``[a]n extension of time 
that has the potential to exist in perpetuity, at least on the present 
record, will not serve the interests of justice.'' Order Denying the 
Respondent's Request for Extension and Directing the Filing of 
Government Evidence of Lack of State Authority Allegation and Briefing 
Schedule dated May 4, 2018 (hereinafter, Order Denying Extension), at 
2. In the Order Denying Extension, the CALJ ordered the DEA to file 
evidence in support of its allegation that Respondent lacks State 
authority to handle controlled substances. Id. The CALJ further 
established a briefing schedule for any Government motion for summary 
disposition based upon its allegation that Respondent lacks State 
authority to handle controlled substances. Id.

Government Motion for Summary Disposition

    On May 16, 2018, the Government filed a motion for summary 
disposition. The motion by the Government alleged, in pertinent part, 
that Respondent lacks authority to handle controlled substances in 
Arizona and, therefore, pursuant to 21 U.S.C. 823(f) and 824(a)(3), 
Respondent's DEA COR should be revoked. Government's Motion for Summary 
Disposition and Argument in Support of Finding that Respondent Lacks 
State Authorization to Handle Controlled Substances (hereinafter, 
Summary Disposition Motion), at 4.

Respondent's Motion for Extension of Time To File Response

    By motion dated May 25, 2018, Respondent requested an extension of 
time until December 3, 2018 to respond to the Government's motion for 
summary disposition. The essence of Respondent's argument was that the 
AMB ``is expected to have acted on and reinstated . . . [Respondent's] 
authority to practice medicine by such date. Motion for Extension of 
Time to File Response to Government's Motion for Summary Disposition 
and Argument in Support of Finding that Respondent Lacks State 
Authorization to Handle Controlled Substances and Response to 
Government's Motion for Summary Disposition, at 1 (hereinafter, 
Respondent's Motion). Respondent alleged that he entered into the 
Interim Consent Agreement with the AMB, wherein he agreed to be 
prohibited from engaging in the practice of medicine in the State of 
Arizona until he applies to the Board and receives permission to do so, 
``based on coercive assertions'' by the AMB at a time when he was 
unrepresented by counsel. Id. at 2.

CALJ Order Denying Respondent's Request for an Extension and Granting 
the Government's Motion for Summary Disposition

    On May 31, 2018, the CALJ issued an Order (hereinafter, R.D.) 
denying Respondent's request for an extension and granting the 
Government's motion for summary disposition.

Findings of Fact

Respondent's DEA Registration

    Respondent is the holder of DEA Certificate of Registration No. 
BF3649312, pursuant to which he is authorized to dispense controlled 
substances in schedules II through V as a practitioner, at the 
registered address of 7320 Deer Valley Road, J100, Scottsdale, Arizona 
85255. Summary Disposition Motion, Attachment 1, at 1.

The Status of Respondent's State License

    The AMB and Respondent entered into an Interim Consent Agreement. 
Summary Disposition Motion, Attachment 2. The effective date of the 
Interim Consent Agreement is July 12, 2017. Id. at 7, 10. According to 
its terms, Respondent ``elect[ed] to permanently waive any right to a 
hearing and appeal with respect to this Interim Consent Agreement for 
Practice Restriction'' and is ``prohibited from engaging in the 
practice of medicine in the State of Arizona . . . until he applies to 
the . . .

[[Page 61677]]

[AMB] and receives permission to do [so].'' Id. at 1, 7.
    On May 8, 2018, a DEA Diversion Investigator (hereinafter, DI) 
contacted an AMB Investigator who informed the DI that Respondent's 
medical license remains under practice restriction. Summary Disposition 
Motion, Attachment 4, at 2. The DI averred that ``the result of DEA's 
investigation has shown that . . . [Respondent] remains currently 
prohibited from practicing medicine in the State of Arizona.'' Id. at 
3.
    There is no evidence in the record that the AMB lifted the Practice 
Restriction on Respondent's medical license. Further, according to the 
online records of the State of Arizona, of which I take official 
notice, I find that the Interim Consent Agreement is still in effect 
today.\2\ Arizona Medical Board Licensee Search, https://www.azmd.gov 
(last visited November 19, 2018).
---------------------------------------------------------------------------

    \2\ Under the Administrative Procedure Act, an agency ``may take 
official notice of facts at any stage in a proceeding--even in the 
final decision.'' United States Department of Justice, Attorney 
General's Manual on the Administrative Procedure Act 80 (1947) (Wm. 
W. Gaunt & Sons, Inc., Reprint 1979). Pursuant to 5 U.S.C. 556(e), 
``[w]hen an agency decision rests on official notice of a material 
fact not appearing in the evidence in the record, a party is 
entitled, on timely request, to an opportunity to show the 
contrary.'' Accordingly, Respondent may dispute my finding by filing 
a properly supported motion for reconsideration within 20 calendar 
days of the date of this Order. Any such motion shall be filed with 
the Office of the Administrator and a copy shall be served on the 
Government; in the event Respondent files a motion, the Government 
shall have 20 calendar days to file a response.
---------------------------------------------------------------------------

    Accordingly, based on all of the evidence in the record before me, 
I find that Respondent currently is without authority to practice 
medicine in Arizona, the State in which he is registered.

Discussion

    Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized 
to suspend or revoke a registration issued under section 823 of the 
Controlled Substances Act (hereinafter, CSA), ``upon a finding that the 
registrant . . . has had his State license or registration suspended . 
. . [or] revoked . . . by competent State authority and is no longer 
authorized by State law to engage in the . . . dispensing of controlled 
substances.'' With respect to a practitioner, the DEA has also 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 practitioner's registration. See, e.g., James L. Hooper, 
M.D., 76 FR 71,371 (2011), pet. for rev. denied, 481 Fed. Appx. 826 
(4th Cir. 2012); Frederick Marsh Blanton, M.D., 43 FR 27,616, 27,617 
(1978).
    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 CSA, the 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. See, e.g., Hooper, supra, 76 
FR at 71,371-72; Sheran Arden Yeates, M.D., 71 FR 39,130, 39,131 
(2006); Dominick A. Ricci, M.D., 58 FR 51,104, 51,105 (1993); Bobby 
Watts, M.D., 53 FR 11,919, 11,920 (1988); Blanton, supra, 43 FR at 
27,617.
    Section 32-1401(22) of the Arizona Revised Statutes, cited in the 
``Interim Consent Agreement for Practice Restriction,'' in pertinent 
part, defines the ``practice of medicine'' as the diagnosis or 
treatment of any and all human diseases, injuries, ailments, 
infirmities, or deformities, whether they be physical or mental, ``by 
any means, methods, devices or instrumentalities.'' Ariz. Rev. Stat. 
Ann. Sec.  32-1401(22) (Westlaw, current through the First Special and 
Second Regular Session of the Fifty-Third Legislature (2018)). 
``Medicine'' means ``allopathic medicine as practiced by the recipient 
of a degree of doctor of medicine.'' Ariz. Rev. Stat. Ann. Sec.  32-
1401(19) (Westlaw, current through the First Special and Second Regular 
Session of the Fifty-Third Legislature (2018)). Under Arizona law, a 
``doctor of medicine'' is a ``natural person holding a license, 
registration or permit to practice medicine pursuant to this chapter.'' 
Ariz. Rev. Stat. Ann. Sec.  32-1401(10) (Westlaw, current through the 
First Special and Second Regular Session of the Fifty-Third Legislature 
(2018)). See also Ariz. Rev. Stat. Ann. Sec.  32-1401(21) (Westlaw, 
current through the First Special and Second Regular Session of the 
Fifty-Third Legislature (2018)) (A physician is a ``doctor of medicine 
who is licensed pursuant to this chapter.''). Further, a physician who 
``wishes to dispense a controlled substance . . . shall be currently 
licensed to practice medicine in Arizona.'' Ariz. Admin. Code Sec.  R4-
16-301 (Westlaw, current through rules published in Arizona 
Administrative Register Volume 24, Issue 43, Oct. 26, 2018). 
``Dispense,'' under Arizona law, means ``the delivery by a doctor of 
medicine of a prescription drug or device to a patient . . . and 
includes the prescribing, administering, packaging, labeling and 
security necessary to prepare and safeguard the drug or device for 
delivery.'' Ariz. Rev. Stat. Ann. Sec.  32-1401(9) (Westlaw, current 
through the First Special and Second Regular Session of the Fifty-Third 
Legislature (2018)).
    As already discussed, the AMB and Respondent entered into an 
``Interim Consent Agreement for Practice Restriction.'' ``Restrict,'' 
in the context of this Interim Consent Agreement, means ``taking a 
disciplinary action that alters the physician's practice or 
professional activities if the board determines that there is evidence 
that the physician is or may be medically incompetent or guilty of 
unprofessional conduct.'' Ariz. Rev. Stat. Ann. Sec.  32-1401(23) 
(Westlaw, current through the First Special and Second Regular Session 
of the Fifty-Third Legislature (2018)).
    The conclusory language in Respondent's Motion that he imprudently 
entered into the Interim Consent Agreement based upon coercive 
assertions by the AMB at a time when he was unrepresented by counsel 
was not accompanied by specific facts indicating what was said that 
Respondent considered coercive. The legitimacy of the claim is 
undermined by the notable fact that Respondent did not submit any 
documentation indicating an effort by Respondent to bring the validity 
of the Interim Consent Agreement before the AMB, which, initially, 
would be the proper forum in which to raise that issue. Regardless, as 
pointed out by the CALJ citing long-standing Agency precedent, the 
controlling question is not the merits of Respondent's claim before the 
AMB, but rather, whether Respondent is currently authorized to handle 
controlled substances in the State of registration. R.D., at 3. In that 
regard, I adopt the following portion of the R.D. and agree with the 
CALJ's denial of Respondent's request for an extension of time/stay of 
proceedings. R.D., at 4.


[[Page 61678]]


Where a registrant has lost state authority to handle controlled 
substances, the Agency has repeatedly taken the position that 
``revocation is warranted even where a practitioner's state 
authority has been summarily suspended and the State has yet to 
provide the practitioner with a hearing to challenge the State's 
action and at which he . . . may ultimately prevail.'' Kamal Tiwari, 
M.D., 76 FR 71604, 71606 (2011) (citations omitted); see also Anne 
Lazar Thorn, M.D., 62 FR 12847, 12848 (1997) (``[T]he controlling 
question is not whether a practitioner's license to practice 
medicine in the state is suspended or revoked; rather, it is whether 
the Respondent is currently authorized to handle controlled 
substances in the [state of registration].''). Even when the 
Respondent is actively engaged in appealing a state decision, the 
Agency has noted that ``[i]t is not DEA's policy to stay 
[administrative] proceedings . . . while registrants litigate in 
other forums.'' Newcare Home Health Servs., 72 FR 42126, 42127 n.2 
(2007). Agency precedent has consistently affirmed recommended 
decisions where a respondent's request for a stay due to state 
medical board proceedings were denied by the Administrative Law 
Judge. See, e.g., Irwin August, D.O., 81 FR 3158, 3159 (2016); Pedro 
E. Lopez, M.D., 80 FR 46324, 46325-26 (2015). The Agency has stated 
in recent final orders that a stay in administrative enforcement 
proceedings is ``unlikely to ever be justified'' due to ancillary 
proceedings involving the Respondent. Grider Drug #1 & Grider Drug 
#2, 77 FR 44070, 44104 n.97 (2012).
    Even if the Agency's precedent were not fixed firmly against the 
granting of such a delay in principle, the Respondent here is unable 
to point to a reliably fixed date where state proceedings would 
reasonably be concluded. The Respondent's Motion includes a 
Declaration from the Respondent's counsel (Respondent's Board 
Counsel) in his Arizona Board proceedings. . . . [Respondent's 
Motion,] Attachment 1. In the Respondent's Board Counsel's 
declaration, the decisional timeframe is couched in the following 
tenuous terms:
    As for when the [Arizona Board] might take action, my best guess 
is that it will be at its August 20, 2018 meeting, although I would 
not be surprised if [the Respondent's] matter is not heard until the 
October 22 meeting, which is the next regularly scheduled meeting of 
the [Arizona Board].

Id. at 2-3 (emphasis supplied). The Respondent's Board Counsel 
further explained that the state process involves the actions and 
recommendations of an internal committee, and avers that he and the 
Respondent ``are hopeful that [the internal committee] will make 
those recommendations and share them with us in the not-too-distant 
future and if that occurs then the matter should be heard at the 
August 20 meeting.'' Id. at 3 (emphasis supplied). While the candor 
of the Respondent's Board Counsel is commendable, the language 
strikes as too aspirational and amorphous to be particularly 
supportive of the delay sought by the Respondent here--even if the 
Agency's precedent were not squarely opposed to the relief--which it 
is.

R.D., at 3-4.
    It is undisputed that Respondent is not currently authorized to 
practice medicine in Arizona due to the Interim Consent Agreement. 
Thus, according to Arizona law, Respondent does not have authority to 
handle controlled substances in Arizona, the State in which he is 
registered with the DEA. As already discussed, the practice restriction 
on Respondent's medical license is currently in effect. DEA has ``long 
and consistently interpreted the CSA as mandating the possession of 
authority under state law to handle controlled substances as a 
fundamental condition for obtaining and maintaining a registration.'' 
Hooper, supra, 76 FR at 71,371. That is the controlling question. 
Thorn, supra, 62 FR at 12,848. The CSA has consistently been 
interpreted to mean that ``DEA does not have statutory authority . . . 
to maintain a registration if the registrant is without state authority 
to handle controlled substances in the state in which he practices.'' 
Yeates, supra, 71 FR at 39,131. As succinctly explained by the CALJ, 
``The DEA has long held that possession of authority under state law to 
dispense controlled substances is not only a prerequisite to obtaining 
a DEA registration, but also an essential condition for maintaining 
it.'' R.D., at 5 (citations omitted). I agree with the CALJ's 
conclusion that ``as a matter of law, a DEA registration may not be 
granted or maintained where an applicant/registrant no longer falls 
within the CSA's definition of a practitioner.'' Id. Very simply, since 
Respondent is not authorized to handle controlled substances in 
Arizona, he is not eligible for a DEA registration. As such, I will 
order that Respondent's DEA registration be revoked.

Order

    Pursuant to 28 CFR 0.100(b) and the authority thus vested in me by 
21 U.S.C. 824(a), I order that DEA Certificate of Registration No. 
BF3649312 issued to Steve Fanto, M.D., be, and it hereby is, revoked. 
Pursuant to 28 CFR 0.100(b) and the authority thus vested in me by 21 
U.S.C. 823(f), I further order that any pending application of Steve 
Fanto, M.D., to renew or modify this registration, as well as any other 
pending application by him for registration in the State of Arizona, 
be, and it hereby is, denied. This order is effective December 31, 
2018.

    Dated: November 19, 2018.
Uttam Dhillon,
Acting Administrator.
[FR Doc. 2018-26046 Filed 11-29-18; 8:45 am]
 BILLING CODE 4410-09-P