[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Notices]
[Pages 66747-66750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28072]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 2018-48]


Stephen R. Kovacs, D.O.; Decision and Order

    On August 2, 2018, the Assistant Administrator, Diversion Control 
Division, Drug Enforcement Administration (hereinafter, DEA or 
Government), issued an Order to Show Cause to Stephen R. Kovacs, D.O. 
(hereinafter, Respondent), of Owasso and Claremore, Oklahoma. Order to 
Show Cause (hereinafter, OSC), at 1. The Show Cause Order proposes the 
revocation of Respondent's Certificates of Registration on the ground 
that he has ``no state authority to handle controlled substances'' in 
Oklahoma, the State in which he is registered with the DEA. Id. (citing 
21 U.S.C. 824(a)(3)). It also proposes the denial of ``any applications 
for renewal or modification of such registrations and any applications 
for any other DEA registrations.'' OSC, at 1 (citing 21 U.S.C. 
824(a)(3)).
    Regarding jurisdiction, the Show Cause Order alleges that 
Respondent holds DEA Certificate of Registration No. BK9173840 at the 
registered address of 10314 N 138th E Ave., Suite 101, Owasso, Oklahoma 
74055. OSC, at 2. This registration, the OSC alleges, authorizes 
Respondent to dispense controlled substances in schedules II through V 
as a practitioner-DW/275. Id. The Show Cause Order alleges that this 
registration expires on December 31, 2019. Id.
    The Show Cause Order further alleges that Respondent holds DEA 
Certificate of Registration No. BK7370492 at the registered address of 
985 West Will Rogers Blvd., Claremore, OK 74017, with a mailing address 
of 13616 E 103rd St. N, Ste. A, Owasso, Oklahoma 74055. Id. This 
registration, the OSC alleges, authorizes Respondent to dispense 
controlled substances in schedules II through V as a practitioner. Id. 
The Show Cause Order alleges that this registration expires on December 
31, 2018. Id.
    The substantive ground for the proceeding, as alleged in the Show 
Cause Order, is that Respondent is

[[Page 66748]]

``currently without authority to handle controlled substances in the 
State of Oklahoma, the state in which . . . [he is] registered with 
DEA.'' Id. Specifically, the Show Cause Order alleges that, on May 31, 
2018, the Oklahoma State Bureau of Narcotics and Dangerous Drugs 
Control immediately suspended Respondent's Oklahoma controlled 
substances registration OBN#29222, and that this registration is 
associated with Respondent's practice location at 10314 N 138th E Ave., 
Suite 101, Owasso, Oklahoma 74055. Id. The Show Cause Order further 
alleges that Respondent's Oklahoma controlled substances registration 
OBN#33269, associated with Respondent's practice location at 985 West 
Will Rogers Blvd., Claremore, Oklahoma 74017, expired on October 31, 
2017 and is listed as ``INACTIVE.'' Id.
    The Show Cause Order notifies 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 procedures for electing each 
option, and the consequences for failing to elect either option. Id. at 
2-3 (citing 21 CFR 1301.43). The Show Cause Order also notifies 
Respondent of the opportunity to submit a corrective action plan. OSC, 
at 3-4 (citing 21 U.S.C. 824(c)(2)(C)).
    By letter dated September 7, 2018, Respondent timely requested a 
hearing.\1\ Hearing Request, at 1. According to the Hearing Request, 
the Oklahoma Bureau of Narcotics & Dangerous Drugs Control 
(hereinafter, OBNDDC) immediately suspended ``for imminent 
endangerment'' Respondent's State controlled substances registration 
based on ``allegations of professional misconduct.'' Id. Respondent 
contests the OBNDDC allegations. Id. The Hearing Request admits that 
Respondent ``is currently suspended under the State order from 
prescribing medications.'' Id. at 2. It states that, ``upon a full and 
fair hearing of the facts,'' Respondent ``should not have his State or 
Federal Certificates of Registration revoked or modified.'' Id.
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    \1\ Attached to the Government's Motion for Summary Disposition 
is a DEA-12 (Receipt for Cash or Other Items) that, according to the 
Government's allegations, Respondent executed when the Government 
served the OSC on August 8, 2018. Respondent does not challenge the 
Government's service-related allegations. The Government does not 
contest the timeliness of Respondent's request for a hearing. 
Government's Motion for Summary Disposition dated September 19, 2018 
(hereinafter ``Summary Disposition Motion''), at 2. Thus, I find 
that Respondent's Hearing Request was timely since it was filed 
within 30 days of service of the OSC. 21 CFR 1301.43(a).
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    The Office of Administrative Law Judges put the matter on the 
docket and assigned it to Chief Administrative Law Judge John J. 
Mulrooney, II (hereinafter, CALJ). On September 10, 2018, the CALJ 
issued an Order directing the filing of evidence of lack of State 
authority and a briefing schedule.
    The Government filed a timely Summary Disposition Motion ``based on 
Respondent's lack of state authority to handle controlled substances.'' 
Summary Disposition Motion, at 1. The Government attached to its 
Summary Disposition Motion a certified copy of the OBNDDC's letter to 
Respondent notifying him of his ``Immediate Suspension Due to Imminent 
Danger'' dated May 31, 2018. Id. at Exh. 4. According to the Summary 
Disposition Motion, Respondent ``is not authorized to possess a DEA 
registration'' in Oklahoma ``[a]bsent authority by the State of 
Oklahoma to dispense controlled substances.'' Id. at 4. Citing Agency 
precedent, the Government argues that ``even if the period of 
suspension is temporary or if there is the potential that Respondent's 
state controlled substances privileges will be reinstated, summary 
disposition is warranted.'' Id.
    On September 27, 2018, Respondent timely filed a Response to the 
Summary Disposition Motion. Attached to the Response is an email from 
the Deputy General Counsel of the Oklahoma Bureau of Narcotics dated 
September 13, 2018. The email asks Respondent's attorney if he 
``[w]ould . . . be opposed to continuing . . . [Respondent's] hearing 
until October 25, 2018.'' Response, Exh. 1, at 1. Counsel for 
Respondent did not object to the continuance. Id. at 1. According to 
the Response, ``Respondent's rights have been severely prejudiced by 
delaying the state hearing.'' Id. at 2.
    Respondent ``admits that the OBNDDC filed the Notice of Immediate 
Suspension of Respondent's Oklahoma controlled substances registration 
on May 31, 2018.'' Id. at 1. He states, however, that he ``has had no 
opportunity to present evidence or cross-examine witnesses, defenses to 
which he is absolutely entitled under Oklahoma law'' and that ``but 
for'' the continuance, he ``would have had that opportunity today.'' 
Id. at 3. Respondent argues that the Agency precedent on which the 
Government relies ``allowed some form of process with the state . . . 
before the Government's motion for summary disposition was granted.'' 
Id. at 2. He states that the ``state administrative hearing will be 
concluded in less than one month . . . [at which] time both sides will 
have a much more complete understanding of the facts, and the ALJ will 
be able to more effectively rule on the status of Respondent's DEA 
registration.'' Id. at 3. Respondent asks that the Summary Disposition 
Motion be denied or, in the alternative, that the deadline for his 
response be ``extended . . . beyond the date of his state 
administrative hearing.'' Id.
    The CALJ granted the Summary Disposition Motion and recommended 
that Respondent's registration be revoked. Order Denying the 
Respondent's Request for Extension, Granting the Government's Motion 
for Summary Disposition, and Recommended Rulings, Findings of Fact, 
Conclusions of Law, and Decision of the Administrative Law Judge dated 
September 28, 2018 (hereinafter, R.D.). The CALJ notes Respondent's 
concession that his Oklahoma registration was suspended on May 31, 
2018. Id. at 3. Citing Agency precedent about stay requests, the CALJ 
denied Respondent's request for an extended response deadline. Id. 
After summarizing Agency precedent concerning a registrant's loss of 
State authority to dispense controlled substances, the CALJ recommended 
that Respondent's registration be revoked and that pending applications 
for renewal be denied. Id. at 4-7.
    By letter dated October 18, 2018, the CALJ certified and 
transmitted the record to me for final Agency action. In that letter, 
the CALJ advises that neither party filed exceptions.
    I issue this Decision and Order based on the entire record before 
me. 21 CFR 1301.43(e). I make the following findings of fact.

Findings of Fact

Respondent's DEA Registrations

    Respondent holds two DEA Certificates of Registration. First, 
Respondent holds DEA Certificate of Registration No. BK9173840, 
pursuant to which he is authorized to dispense controlled substances in 
schedules II through V as a practitioner DW/275, at the registered 
address of 10314 N 138th E Ave., Suite 101, Owasso, Oklahoma 74055. 
Summary Disposition Motion, Exh. 1 (Certification of Registration 
Status), at 1. This registration expires on December 31, 2019. Id.
    Second, Respondent holds DEA Certificate of Registration No. 
BK7370492, pursuant to which he is authorized to dispense controlled 
substances in schedules II through V as a practitioner, at the 
registered address of 985 West Will Rogers Blvd., Claremore, Oklahoma 
74017. Id. at Exh. 2 (Certification of Registration Status), at

[[Page 66749]]

1. This registration expires on December 31, 2018. Id.

The Status of Respondent's State License

    On May 31, 2018, the OBNDDC immediately suspended due to imminent 
danger Respondent's ``privileges to possess, administer, dispense, 
prescribe and/or distribute scheduled controlled dangerous 
substances.'' Id. at Exh. 4, at 1. According to the immediate 
suspension, the OBNDDC found ``by clear and convincing evidence . . . 
[that Respondent's] continuing status as an Oklahoma Bureau of 
Narcotics registrant represents an imminent danger to the public 
health, safety and welfare of the citizens of Oklahoma.'' Id. at Exh. 
4, at 3. The OBNDDC's action was based on information that Respondent 
wrote false Oxycodone (30mg) prescriptions for a patient with the 
intention of diverting the narcotics back to himself; that Respondent 
urged a patient to include a false report of stolen Oxycodone on a 
police report with the intention of getting another refill; that 
Respondent deleted messages pertaining to his illegal activity from a 
patient's electronic device; that a patient witnessed Respondent snort 
Oxycodone between meetings with patients; and that Respondent was 
opioid dependent. Id. at Exh. 4, at 2-3.
    Respondent admits that the OBNDDC filed the Notice of Immediate 
Suspension on May 31, 2018. Response, at 1. There is no evidence in the 
record that the OBNDDC lifted this Immediate Suspension. Further, 
according to the online records of the State of Oklahoma, of which I 
take official notice, I find that this Immediate Suspension is still in 
effect today and that no Oklahoma controlled substances registration 
ever assigned to Respondent is currently active.\2\ OBNDDC Registration 
Search Lookup, https://pay.apps.ok.gov/obndd/_app/search/index.php 
(last visited December 11, 2018).
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    \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 15 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 15 calendar days to file a response.
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    Accordingly, I find that Respondent currently is without authority 
to dispense controlled substances in Oklahoma, 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 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.
    Under longstanding Agency precedent, DEA revokes the registration 
of a practitioner who lacks State authority to handle controlled 
substances even when the practitioner's State authority was suspended 
summarily or pending a final decision on the merits. See, e.g., Bourne 
Pharmacy, Inc., 72 FR 18,273, 18,274 (2007). Similarly, as the CALJ 
made clear, the facts that a State immediately suspended a respondent's 
registration and that the respondent may, some day, regain his State 
registration to dispense controlled substances do not change the 
salient fact--the respondent is not currently authorized to handle 
controlled substances in the State in which he is registered.\3\ Mehdi 
Nikparvarfard, M.D., 83 FR 14,503, 14,504 (2018).
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    \3\ The CALJ's denial of Respondent's request for an enlargement 
of time is the correct result. Also, as already discussed, 
Oklahoma's online records still indicate that Respondent's Oklahoma 
controlled substances registrations are inactive or inactivated.
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    Here, Respondent admits that the OBNDDC suspended his Oklahoma 
controlled substances registration. Further, there is no evidence in 
the record that Respondent holds any active Oklahoma registration to 
handle controlled substances. As such, according to Oklahoma law, 
Respondent currently does not have authority to handle controlled 
substances in Oklahoma. Okla. Stat. tit. 63, Sec.  2-302 (Westlaw, 
current with legislation of the Second Regular Session of the 56th 
Legislature (2018)) (Every person who dispenses any controlled 
dangerous substance within Oklahoma shall obtain a registration issued 
by OBNDDC.). Respondent, therefore, is not eligible for a DEA 
registration. Accordingly, I will order that Respondent's DEA 
registrations be revoked and that any pending application for the 
renewal or modification of those registrations be denied. 21 U.S.C. 
824(a)(3).

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 Nos. 
BK9173840 and BK7370492 issued to Stephen R. Kovacs, D.O., be, and they 
hereby are, revoked. I further order that any pending application of 
Stephen R. Kovacs, D.O., to renew or modify these registration, as well 
as any other pending application by him for registration in the State 
of Oklahoma, be, and it hereby is, denied. This Order is effective 
immediately.\4\
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    \4\ For the same reasons the OBNDDC found by clear and 
convincing evidence that Respondent's continuing status as an 
Oklahoma Bureau of Narcotics registrant represents an imminent 
danger to the public health, safety and welfare of the citizens of 
Oklahoma, I find that the public interest necessitates that this 
Order be effective immediately. 21 CFR 1316.67.


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    Dated: December 11, 2018.
Uttam Dhillon,
Acting Administrator.
[FR Doc. 2018-28072 Filed 12-26-18; 8:45 am]
BILLING CODE 4410-09-P