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.
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.
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.
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.
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.”
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.
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.
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).
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 (“
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).
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
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.
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
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.”
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.”
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.
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),
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.
I make the following factual findings.
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.
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.
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 . . .,
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.
The Superior Court began the April 8, 2016 hearing by stating that “apparently there is a motion to continue.”
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.
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.
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.”
[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.
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.
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
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”);
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.
In advance of the May Superior Court hearing, the MBC filed the MBC Notice and the MBC Memorandum.
The MBC Memorandum made multiple points. First, it reiterated the
Second, it stated that Respondent held a valid physician's license that “will expire on January 31, 2018, unless renewed.”
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.
Fourth, the MBC Memorandum cited California Penal Code § 23,
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.”
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.
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.”
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.
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.”
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 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.
According to the evidence in the record, Respondent and the Government eventually agreed that Respondent's California medical license was current.
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.
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.”);
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.”
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.
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.
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.