2018-26046. 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.

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.

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 . . . [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).

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. § 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. § 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. § 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. § 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 § 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. § 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. § 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.

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.

Footnotes

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