82 FR 11238 - Frank D. Li, M.D.; Decision and Order

DEPARTMENT OF JUSTICE
Drug Enforcement Administration

Federal Register Volume 82, Issue 33 (February 21, 2017)

[Federal Register Volume 82, Number 33 (Tuesday, February 21, 2017)]
[Notices]
[Pages 11238-11241]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-03272]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 16-34]


Frank D. Li, M.D.; Decision and Order

    On August 22, 2016, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Frank D. Li, M.D. (hereinafter, Respondent), of Tukwila, 
Washington and Beverly Hills, California. The Show Cause Order proposed 
the revocation of four separate Certificates of Registration held by 
Respondent (three of which are for locations in Washington State and 
one which is for a location in California), pursuant to which he is 
authorized to dispense controlled substances in schedules II through V, 
as a practitioner, on the ground that he does hold authority to 
dispense controlled substances in these States. Id. at 1 (citing 21 
U.S.C. 823(f) and 824(a)(3)).
    With respect to the Agency's jurisdiction, the Show Cause Order 
alleged that Respondent holds three registrations in Washington State: 
(1) No. FL0680947, for the location of 1536 N 115th St., Suite 310, 
Seattle, which does not expire until March 31, 2017; (2) No. FL1688235, 
for the location of 801 SW 16th St., Suite 121, Renton, which does not 
expire until March 31, 2018; and (3) No. FL2601335, for the location of 
3624 Colby Ave., Suite B, Everett, which does not expire until March 
31, 2017. Show Cause Order, at 2. The Show Cause Order also alleged 
that Respondent holds registration No. BL7067261, for the location of 
8641 Wilshire Blvd., Suite 200, Beverly Hills, California, and that 
this registration does not expire until March 31, 2019. Id.
    As for the substantive basis of the proposed action, the Show Cause 
Order alleged that the State of Washington, Department of Health, 
issued an ex parte order, which suspended Respondent's authority to 
practice medicine and surgery in that State effective on July 14, 2016. 
Id. at 2. The Show Cause Order also alleged that the Medical Board of 
California issued an order which suspended his authority to practice 
medicine in that State effective on August 5, 2016. Id. The Show Cause 
Order thus alleged that Respondent is currently without authority to 
handle controlled substances in Washington and California, the States 
in which he is registered with the Agency, and subjecting his DEA 
registrations to revocation.\1\ Id. at 2 (citing 21 U.S.C. 802(21), 
823(f), and 824(a)(3)).
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    \1\ The Show Cause Order also 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, and the procedure 
for electing either option. Show Cause Order, at 2-3 (citing 21 CFR 
1301.43). It also notified Respondent of his right to submit a 
corrective action plan. See 21 U.S.C. 824(c)(2)(C).
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    On September 20, 2016, Respondent, through his counsel, requested a 
hearing on the allegations. Resp. Hrng. Req. The matter was then placed 
on the docket of the Office of Administrative Law Judges, and assigned 
to ALJ Charles Wm. Dorman.
    On September 21, 2016, the ALJ issued an order directing the 
Government to submit evidence supporting the allegation and an 
accompanying dispositive motion by October 5, 2016. Briefing Schedule 
For Lack Of State Authority Allegations, at 1. The ALJ also ordered 
that if the Government filed such a motion, Respondent was to file his 
reply by October 12, 2016. Id.
    On September 22, 2016, the Government filed its Motion for Summary 
Disposition. See Gov. Mot. for Summ. Disp. As support for its Motion, 
the Government provided a copy of Respondent's registration information

[[Page 11239]]

for each registration in Washington State and California, an affidavit 
from a Diversion Investigator (DI), and certified copies of the 
Suspension Orders the DI obtained from the Washington Department of 
Health, Medical Quality Assurance Commission (MQAC) and the Medical 
Board of Californian (MBC). Id., at Appendices A-G. Based on the 
suspensions of his medical licenses by the MQAC and the MBC, the 
Government moved for summary disposition and a recommendation by the 
ALJ that Respondent's DEA certificates of registration as a 
practitioner be revoked. Govt. Mot., at 4.
    On October 12, 2016, Respondent filed his Reply. Respondent's 
Reply, at 1. While Respondent admitted that his licenses to practice 
medicine in Washington and California had been suspended, he stated 
that ``he has challenged the Boards' suspension and has every 
confidence that the current suspensions will be lifted and [that he] 
will have his medical license restored.'' Id. at 2. Respondent further 
stated that he has ``provided a detailed rebuttal to the Boards' 
unfounded allegations'' and provided a copy of this document (which was 
his answer in the MQAC proceeding). Resp's Reply, at 1-2; see also 
Resp's. Appendix A.
    Respondent also argued that the authority contained in 21 U.S.C. 
824(a)(3) is discretionary with respect to a practitioner's 
registration and that ``[t]here are numerous factors that the [Agency] 
should consider prior to summarily revoking [his] [r]egistration.'' 
Resp's Reply, at 3 (citing Bio-Diagnostic International, 78 FR 39327 
(2013)). And he maintains that the Agency is required to consider that 
he is appealing the state suspensions and that the DEA proceeding 
should be resolved ``through a suspension . . . and not a full 
revocation . . . given the many serious shortcomings that have been 
identified in the Boards' actions.'' Id. at 3-4.
    On October 20, 2016, the ALJ granted the Government's motion and 
recommended that Respondent's registrations be revoked. Order Granting 
Summary Disposition And Recommended Rulings, Findings Of Fact, 
Conclusions Of Law, And Decision, at 5. The ALJ noted various 
authorities holding that a practitioner must possess state authority in 
order to maintain a DEA registration. Id. at 3 (citations omitted). The 
ALJ then rejected Respondent's contention that Bio-Diagnostic 
International requires the Agency to consider various factors prior to 
ordering the revocation of his registration, noting that Bio-Diagnostic 
did not involve a practitioner, but rather a list I chemical 
distributor, and that the Agency has made clear ``that both the [CSA's] 
`definition of the term ``practitioner'' and the registration provision 
applicable to practitioners make clear that a practitioner must be 
currently authorized to dispense controlled substances by the State in 
which he practices in order to obtain and maintain a registration.' '' 
R.D. 4 (quoting Rezik A. Saqer, 81 FR 22122, 22125 (2016)). The ALJ 
then explained that even though Respondent has not yet been provided 
with a hearing to challenge the MQAC's action, revocation of his DEA 
registration was still warranted based on his lack of state authority. 
Id. (citing cases). Because ``the disposition of the Government's 
Motion depends only on whether the Respondent possess states authority 
to handle controlled substances,'' and ``it is undisputed that [he] 
lacks state authorization to handle controlled substances in'' both the 
States of Washington and California, the ALJ granted the Government's 
motion and recommended that his registrations be revoked. Id. at 4-5.
    Neither party filed exceptions to the ALJ's Recommended Decision. 
Thereafter, the record was forwarded to my Office for Final Agency 
Action. Having considered the record and the Recommended Decision, I 
adopt the ALJ's Recommended Decision. I make the following factual 
findings.

Findings

    Respondent holds four separate certificates of registration, 
pursuant to which he is authorized to dispense controlled substances in 
schedules II-V as a practitioner:
    1. Certificate of Registration FL0680947, at the registered address 
of 1536 N 115th St., Suite 310, Seattle, Washington, which does not 
expire until March 31, 2017.
    2. Certificate of Registration FL1688235, at the registered address 
of 801 SW 16th St., Suite 121, Renton, Washington, which does not 
expire until March 31, 2018.
    3. Certificate of Registration FL2601335, at the registered address 
of 3624 Colby Ave., Suite B, Everett, Washington, which does not expire 
until March 31, 2017.
    4. Certificate of Registration BL7067261, at the registered address 
of 8641 Wilshire Blvd., Suite 200, Beverly Hills, California, which 
does not expire until March 31, 2019.

Govt. Mot., at Appendices A-D.
    On July 14, 2016, the State of Washington, Department of Health, 
MQAC, issued an ex parte order which summarily suspended Respondent's 
physician's and surgeon's license; the order alleged that Respondent 
violated Washington statutes and regulations regarding professional 
conduct and pain management in his treatment of patients at the Seattle 
Pain Center clinics he operated. Govt. Mot., at Appendix E, 1-2. The 
MQAC reviewed a statement of charges and supporting evidence submitted 
by an investigator and physician, and concluded that its factual 
findings ``establish an immediate danger to the public health, safety 
or welfare,'' and that ``summary suspension of the Respondent's medical 
license is necessary and adequately addresses the danger to the public 
health, safety or welfare.'' Id. at 1-4. According to the online 
records of the Washington Department of Health, of which I take 
official notice,\2\ Respondent's Washington physician's and surgeon's 
license remains suspended as of the date of this Decision and Order. 
See https://fortress.wa.gov/doh/providercredentialsearch/SearchCriteria.aspx.
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    \2\ In accordance with the Administrative Procedure Act (APA), 
an agency ``may take official notice of facts at any stage in a 
proceeding-even in the final decision.'' U.S. Dept. of Justice, 
Attorney General's Manual on the Administrative Procedure Act 80 
(1947) (Wm. W. Gaunt & Sons, Inc., Reprint 1979). In accordance with 
the APA and DEA's regulations, Respondent is ``entitled on timely 
request to an opportunity to show to the contrary.'' 5 U.S.C. 
556(e); see also 21 CFR 1316.59(e). To allow Respondent the 
opportunity to refute the facts of which I take official notice, 
Respondent may file a motion for reconsideration within 15 calendar 
days of the date of service of this Order which shall commence on 
the date this Order is mailed.
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    On August 5, 2016 the Medical Board of California issued a Notice 
of Out of State Suspension Order to Respondent, summarily suspending 
his California medical license on the basis of the suspension ordered 
by the MQAC. Govt. Mot. Appendix F, at 1. According to the online 
records of the MBC, Respondent's California Physician's and Surgeon's 
license remains suspended as of the date of this Decision and Order. 
See https://www.breeze.ca.gov/datamart/detailsCADCA.do.

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 (CSA), ``upon a finding that the registrant . 
. . has had his State license . . . suspended [or] revoked . . . by 
competent State authority and is no longer authorized by State law to 
engage in the . . . dispensing of controlled substances.'' Moreover, 
DEA has long held that the possession of authority to dispense 
controlled substances under the laws of the State

[[Page 11240]]

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, 76 FR 71371 (2011), pet. for 
rev. denied, 481 Fed. Appx. 826 (4th Cir. 2012); Frederick Marsh 
Blanton, 43 FR 27616 (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 Act, 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 medicine. See, e.g., Hooper, 76 
FR at 71371-72; Sheran Arden Yeates, M.D., 71 FR 39130, 39131 (2006); 
Dominick A. Ricci, 58 FR 51104, 51105 (1993); Bobby Watts, 53 FR 11919, 
11920 (1988); Blanton, 43 FR at 27616.
    In his reply to the Government's Motion for Summary Disposition, 
Respondent argued that the authority contained in 21 U.S.C. 824(a)(3) 
is discretionary with respect to a practitioner's registration and that 
``[t]here are numerous factors that the [Agency] should consider prior 
to summarily revoking [his] [r]egistration.'' Resp's Reply, at 3 
(citing Bio-Diagnostic, 78 FR 39327). He maintains that the Agency is 
required to consider that he is appealing the state suspensions and 
that the DEA proceeding should be resolved ``through a suspension . . . 
and not a full revocation . . . given the many serious shortcomings 
that have been identified in the Boards' actions.'' Id. at 3-4.
    In Hooper v. Holder, 481 Fed. Appx. 826 (4th Cir. 2012), a 
practitioner challenged the Agency's order which revoked his 
registration after his state license was suspended for a one-year 
period. Id. at 826. Dr. Hooper argued that the revocation of his 
registration was ``arbitrary and capricious'' because the 
Administrator's ``decision . . . failed to recognize the discretion 
under Sec.  824(a) to revoke or suspend a registration and that it was 
impermissible for the [Administrator] to conclude that the CSA requires 
revocation of a practitioner's DEA registration when the practitioner's 
State license is suspended.'' Id. at 828. He further argued that the 
Agency's decision had `` `read[] the suspension option [in Sec.  
824(a)] out of the statute.' '' Id. (quoting Pet. Br. 11).
    The court of appeals rejected Hooper's contentions. While 
acknowledging that ``[s]ection 824(a) does state that the [Agency] may 
`suspend or revoke' a registration,'' the court noted that ``the 
statute provides for this sanction [suspension] in five different 
circumstances, only one of which is loss of a State license.'' Id. 
Continuing, the court explained that ``[b]ecause Sec.  823(f) and Sec.  
802(21) make clear that a practitioner's registration is dependent upon 
the practitioner having state authority to dispense controlled 
substances, the [Agency's] decision to construe Sec.  824(a)(3) as 
mandating revocation upon suspension of a state license is not an 
unreasonable interpretation of the CSA.'' Id. The court further 
explained that the Agency's decision did not ``read[ ] the suspension 
option'' out of the statute, because that option may still be available 
for the other circumstances enumerated in Sec.  824(a). Id. See also 
Maynard v. DEA, 117 Fed.Appx. 941 (5th Cir. 2004) (rejecting 
physician's contention that DEA could not revoke his registration based 
on summary suspension of state medical license).
    As for Respondent's contention that Bio-Diagnostic requires that 
the Agency consider various factors before revoking his registration, 
that case involved a list I chemical distributor and not a 
practitioner. See 78 FR at 39327, 39330. Unlike a practitioner, which 
the CSA defines, in relevant part, as ``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), neither the definition of a distributor 
nor the registration provision applicable to a list I chemical 
distributor explicitly requires that an applicant/registrant holds a 
state license authorizing the applicant/registrant to engage in such 
activity. See id. Sec.  802(11) (``The term `distribute' means to 
deliver . . . a controlled substance or a listed chemical. The term 
`distributor' means a person who so delivers a controlled substance or 
a listed chemical.''); id. Sec.  823(h) (``The Attorney General shall 
register an applicant to distribute a list I chemical unless the 
Attorney General determines that registration of the applicant is 
inconsistent with the public interest.'').\3\ See also 78 FR at 39330. 
Thus, as the ALJ recognized, Bio-Diagnostic provides no comfort to 
Respondent.
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    \3\ This is not to say that the Agency cannot deny an 
application or revoke a registration where an applicant/registrant 
does not possess authority under state law to engage in the 
distribution of a list I chemical. What it is to say is that the 
loss of such authority does not automatically require the denial or 
revocation of a registration. See Bio-Diagnostic, 78 FR at 39331.
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    Finally, Respondent contends that revocation is not warranted 
``given the many serious shortcomings that have been identified in the 
Boards' actions.'' Resp. Reply, at 4. DEA, however, has no authority to 
adjudicate the validity of the decisions of state boards, which are 
deemed to be presumptively lawful for the purpose of the Controlled 
Substances Act. See Kamal Tiwari, et al., 76 FR 71604, 71607 (2011) 
(quoting George S. Heath, 51 FR 26610 (1986) (``DEA accepts as valid 
and lawful the action of a state regulatory board unless that action is 
overturned by a state court or otherwise pursuant to state law.'')). 
Rather, Respondent is required to litigate his claims challenging the 
validity of the suspensions in the administrative and judicial fora 
provided by the States of Washington and California. See Tiwari, 76 FR 
at 71607 (quoting Heath, 51 FR at 26610); Zhiwei Lin, 77 FR 18862, 
18864 (2012); Sunil Bhasin, 72 FR 5082, 5083 (2007).
    Here, there is no dispute that by virtue of the suspensions ordered 
by the MQAC and MBC, Respondent is currently without authority to 
dispense controlled substances in the States of Washington and 
California. Because he no longer satisfies the statutory requirement of 
holding authority to dispense controlled substances under the laws of 
the States in which he is registered, he is not a practitioner within 
the meaning of the Act and it is of no consequence that he has yet to 
be afforded a hearing by the MQAC (or MBC) to challenge the 
suspensions. See Saqer, 81 FR at 22126; Bourne Pharmacy, 72 FR 18273, 
18274 (2007); Wingfield Drugs, 52 FR 27070, 27071 (1987). Accordingly, 
he is not entitled to maintain his DEA registrations in Washington and 
California and I will therefore order that his registrations be 
revoked.

ORDER

    Pursuant to the authority vested in me by 21 U.S.C. 824(a), as well 
as 28 CFR

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0.100(b), I order that DEA Certificates of Registration FL0680947, 
FL1688235, FL2601335, and BL7067261, issued to Frank D. Li, M.D., be, 
and they hereby are, revoked. Pursuant to the authority vested in me by 
21 U.S.C. 823(f), as well as 28 CFR 0.100(b), I further order that any 
pending application of Frank D. Li, M.D., to renew or modify any of the 
aforesaid registrations, be, and it hereby is, denied. This Order is 
effective immediately.\4\
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    \4\ For the same reasons that the MQAC summarily suspended 
Respondent's medical license, I conclude that the public interest 
necessitates that this Order be effective immediately. 21 CFR 
1316.67.

    Dated: February 13, 2017.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2017-03272 Filed 2-17-17; 8:45 am]
 BILLING CODE 4410-09-P