[Federal Register Volume 59, Number 113 (Tuesday, June 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14333]
[[Page Unknown]]
[Federal Register: June 14, 1994]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Part 1301
Registration of Manufacturers and Importers of Controlled
Substances
AGENCY: Drug Enforcement Administration (DEA).
ACTION: Supplemental notice of proposed rulemaking (SNPRM).
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SUMMARY: On October 7, 1993, DEA published a notice a proposed
rulemaking (NPRM) in the Federal Register (58 FR 52246) to amend its
regulations to eliminate the mandatory administrative hearing
requirement for objections to the registration of certain bulk
manufacturers and importers of controlled substances. This SNPRM
revises the NPRM by proposing to eliminate the hearing provision
relating to bulk manufacturers altogether and leave unaltered the
hearing provision relating to registration of importers.
DATES: Written comments and objections to this SNPRM must be received
on or before August 15, 1994.
ADDRESSES: Comments and objections should be submitted in quintuplicate
to the Administrator, Drug Enforcement Administration, Washington, DC
20537, Attention: DEA Federal Register Representative/CCR.
FOR FURTHER INFORMATION CONTACT:
Julie C. Gallagher, Associate Chief Counsel, Diversion and Regulatory
Section, Office of Chief Counsel, Drug Enforcement Administration,
Washington, DC 20537, telephone (202) 307-8010.
SUPPLEMENTARY INFORMATION: On October 7, 1993, DEA published a NPRM in
the Federal Register (58 FR 52246). The DEA proposed to amend two
sections of its regulations, specifically 21 CFR 1301.43(a) and
1311.42(a), in which the Administrator is required to hold an
administrative hearing on an application for registration to
manufacture or import a bulk Schedule I or II controlled substance when
requested to do so by any current bulk manufacturer of the substance(s)
or by any other applicant for a similar registration. Because the
proposals in this SNPRM differ in some respects from the NPRM, DEA
encourages interested persons to file comments in response to this
SNPRM even if they have already commented on the NPRM. Comments
previously received under the NPRM will be considered under the SNPRM
to the extent they are relevant to the changes in the SNPRM.
Section 1311.42(a)
In the NPRM, DEA proposed to remove the provision which enabled a
person registered as a bulk manufacturer of a controlled substance or
applicant thereof to request a hearing on the application of an
importer of that controlled substance. As several commentators argued,
the proposed amendment to 21 CFR 1311.42, cannot be reconciled with the
hearing provisions of 21 U.S.C. 958(i). The relevant portion of 21
U.S.C. 958(i) states: ``prior to issuing a registration under this
section . . . the Attorney General shall give manufacturers holding
registrations for the bulk manufacture of the substance an opportunity
for a hearing.'' In keeping with the above requirement, 21 CFR 1311.42,
allows current bulk manufacturer registrants to request an
administrative hearing regarding their objections to the registration
of certain importers of Schedule I and II controlled substances. With
an existing statute in effect, DEA is not empowered to adopt
regulations that contravene the express language of that statute.
Therefore, based on the hearing provisions under 21 U.S.C. 958(i), 21
CFR 1311.42, Application for importation of Schedule I and II
controlled substances, shall remain unchanged.
Section 1301.43(a)
Unlike the registration of importers, the Controlled Substances Act
(21 U.S.C. 801, et seq.) does not require that current registrants be
allowed to request a hearing on an application for registration as a
bulk manufacturer of a controlled substance. The NPRM proposed to
modify Sec. 1301.43(a) and provide for a hearing only when ``the
Administrator determines that a hearing is necessary to receive factual
evidence and/or expert testimony with respect to issues raised by the
application or objections thereto.'' The SNPRM goes one step further
and eliminates this hearing provision entirely. However, the
Administrator would still be required to hold hearings when requested
by the applicant pursuant to an order to show cause, Sec. 1301.44, and
current registrants and applicants would still be permitted to submit
comments or objections concerning an application for registration. In
addition, current registrants and applicants would be granted an
opportunity to participate in any hearings conducted pursuant to
Sec. 1301.44.
DEA recognizes that the antecedent for this hearing provision
derives from statutory acknowledgement that limiting the number of
registrants may increase the capability to control diversion. The
regulations clearly state, however, that the Administrator is not
required to limit the number of manufacturers even if the current
registrants can provide an adequate supply, as long as DEA can maintain
effective controls against diversion. 21 CFR 1301.43(b). In addition,
as stated in the NPRM, the Administrator has never denied an
application solely on the basis of increased danger of diversion or
adverse impact upon domestic competition.
DEA also agrees that current registrants and applicants should be
allowed to object to an additional registration by filing comments on
grounds that it would adversely affect diversion or competition in a
highly regulated industry. But DEA finds that registrants and
applicants have abused the mandatory hearing requirement in the past
and it remains a future source of abuse where these individuals deter
or delay new registrations and retaliate by opposing annual renewals.
Most important, the proposed change as provided herein does not
violate statutory intent but instead comports with sound principles of
substantive and procedural due process. First, eliminating the hearing
requirement except when requested by the applicant after issuance of an
order to show cause, supports the statutory and regulatory mandate that
an applicant for registration as a bulk manufacturer shall have the
burden of proof at ``any hearing'' that the requirements of
registration are met. See 21 CFR 1301.55. The Administrative Procedure
Act (APA) which controls these matters further provides that ``[e]xcept
as otherwise provided by statute, the proponent of a rule or order has
the burden of proof.'' See 5 U.S.C. 556(d).
Second, the proposed change eliminates the potential for multiple
hearings which not only promotes judicial economy but also avoids the
anomalous result of DEA conducting administrative hearings which are
not dispositive of the ultimate issue of whether an applicant should be
registered. For example, because DEA must issue an order to show cause
whenever it takes action to deny an application, 21 U.S.C. 824(c),
under the current regulation a second hearing would likely be required
when DEA decided to deny an application after a hearing held pursuant
to a ``third-party'' request. Further, this second hearing would
involve many of the same issues raised in the prior proceeding.
Finally, the proposed change continues to permit current
registrants and applicants to submit written comments and objections
concerning an applicant's registration. There is no reason to believe
that this procedure does not provide an adequate mechanism for these
individuals to convey the substance and criticality of any objections
or that DEA would fail to consider such evidence prior to making a
final determination. Moreover, these individuals could still
participate in any hearing conducted contemporaneous with an
application, thereby providing an additional opportunity to present
evidence.
Accordingly, the Deputy Assistant Administrator for Diversion
Control is proposing to delete the hearing requirement from this
regulation. The notice requirement and the opportunity to comment upon
and oppose applications shall be retained, while current registrants
and other applicants will retain the opportunity to participate in any
hearing requested by the Applicant pursuant to an order to show cause.
The Deputy Assistant Administrator hereby certifies that the SNPRM
will have no significant impact upon those entities whose interests
must be considered under the Regulatory Flexibility Act, 5 U.S.C. 601,
et seq. The registrants and applicants who use, or are affected by, the
hearing covered by these regulations are typically not small entities.
The proposed rule is not a significant regulatory action pursuant
to Executive Order 12866 and therefore, has not been submitted to the
Office of Management and Budget centralized review. This action has
been analyzed in accordance with the principles and criteria in E.O.
12612, and it has been determined that the proposed rule does not have
sufficient federalism implications to warrant the preparation of a
Federalism Assessment.
List of Subjects in 21 CFR Part 1301
Administrative practice and procedure, Drug traffic control and
security measures.
Therefore, pursuant to the authority vested in the Attorney General
by 21 U.S.C. 821 and 871(b), as delegated to the Administrator of the
Drug Enforcement Administration, and redelegated to the Deputy
Assistant Administrator, Office of Diversion Control by 28 CFR 0.100
and 0.104, the Deputy Assistant Administrator, Office of Diversion
Control hereby proposes that part 1301 of Title 21, Code of Federal
Regulations be amended as follows:
PART 1301--[AMENDED]
1. The authority citation for part 1301 continues to read as
follows:
Authority: 21 U.S.C. 821, 822, 823, 824, 871(b), 875, 877.
2. Section 1301.43 is proposed to be amended by revising paragraph
(a) to read as follows:
Sec. 1301.43 Application for bulk manufacture of Schedule I and II
substances.
(a) In the case of an application for registration or
reregistration to manufacture in bulk a basic class of controlled
substance listed in Schedule I or II, the Administrator shall, upon the
filing of such application, publish in the Federal Register a notice
naming the applicant and stating that such applicant has applied to be
registered as a bulk manufacturer of a basic class of narcotic or
nonnarcotic controlled substance, which class shall be identified. A
copy of said notice shall be mailed simultaneously to each person
registered as a bulk manufacturer of that basic class and to any other
applicant therefor. Any such person may, within 30 days from the date
of publication of the notice in the Federal Register, file with the
Administrator written comments on or objections to the issuance of the
proposed registration.
* * * * *
3. Section 1301.44 is proposed to be amended by redesignating
paragraph (b) as paragraph (c) and adding a new paragraph (b) to read
as follows:
Sec. 1301.44 Certificate of registration; denial of registration.
* * * * *
(b) If a hearing is requested by an applicant for registration or
reregistration to manufacture in bulk a basic class of controlled
substance listed in Schedule I or II, any person entitled to file
comments or objections to the issuance of the proposed registration
pursuant to Sec. 1301.43(a) may participate in the hearing by filing a
notice of appearance in accordance with Sec. 1301.54. Notice of the
hearing shall be published in the Federal Register and shall be mailed
simultaneously to the applicant and to all persons to whom notice of
the application was mailed. Notice of the hearing shall contain a
summary of all comments and objections filed regarding the application
and shall state the time and place for the hearing, which shall not be
less than 30 days after the date of publication of such notice in the
Federal Register.
* * * * *
4. Section 1301.54 is proposed to be amended by revising paragraphs
(a), (b), (c) and (d) to read as follows:
Sec. 1301.54 Request for hearing or appearance; waiver.
(a) Any person entitled to a hearing pursuant to Secs. 1301.42,
1301.44, or 1301.45 and desiring a hearing shall, within 30 days after
the date of receipt of the order to show cause, file with the
Administrator a written request for a hearing in the form prescribed in
Sec. 1316.47 of this chapter.
(b) Any person entitled to participate in a hearing pursuant to
Sec. 1301.44(b) and desiring to do so shall, within 30 days of the date
of publication of notice of the hearing in the Federal Register, file
with the Administrator a written notice of his intention to participate
in such hearing in the form prescribed in Sec. 1316.48 of this chapter.
Any person filing a request for a hearing need not also file a notice
of appearance.
(c) Any person entitled to a hearing or to participate in a hearing
pursuant to Secs. 1301.42, 1301.44, or 1301.45 may, within the period
permitted for filing a request for a hearing or a notice of appearance,
file with the Administrator a waiver of an opportunity for a hearing or
to participate in a hearing, together with a written statement
regarding his position on the matters of fact and law involved in such
hearing. Such statement, if admissible, shall be made a part of the
record and shall be considered in light of the lack of opportunity for
cross-examination in determining the weight to be attached to matters
of fact asserted therein.
(d) If any person entitled to a hearing or to participate in a
hearing pursuant to Secs. 1301.42, 1301.44, or 1301.45 fails to file a
request for a hearing or a notice of appearance, or if he so files and
fails to appear at the hearing, he shall be deemed to have waived his
opportunity for the hearing or to participate in the hearing, unless he
shows good cause for such failure.
* * * * *
5. Section 1301.55 is proposed to be amended by revising paragraph
(a) to read as follows:
Sec. 1301.55 Burden of proof.
(a) At any hearing on an application to manufacture any controlled
substance listed in Schedule I or II, the applicant shall have the
burden of proving that the requirements for such registration pursuant
to section 303(a) of the Act (21 U.S.C. 823(a)) are satisfied. Any
other person participating in the hearing pursuant to Sec. 1301.44(b)
shall have the burden of proving any propositions of fact or law
asserted by him in the hearing.
* * * * *
Dated: May 26, 1994.
Gene R. Haislip,
Deputy Assistant Administrator, Office of Diversion Control.
[FR Doc. 94-14333 Filed 6-13-94; 8:45 am]
BILLING CODE 4410-09-M
