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“DEA Decisions: Clarifying a Respondent’s Right to the Presentation of Remedial Evidence and Discovery”

DEA Chronicles By Julia S. Hudson

On February 18, 2015, the DEA issued its final decision and order in the case against prescriber Hatem M. Ataya (“Ataya”). The Administrator ordered Ataya’s registration to be revoked and his pending applications for additional registrations to be denied on the grounds that Ataya has, since the proceedings began, lost the authority to dispense controlled substances under state law. Still, the Administrator’s decision also details the bases on which he agreed with the Administrative Law Judge’s (ALJ’s) findings that Ataya issued controlled substance prescriptions without a legitimate medical purpose (in violation of 21 CFR § 1306.04(a)) and violated federal and state law when he authorized more than five refills of schedule IV controlled substances, failed to include patients’ addresses on numerous prescriptions, and post-dated a prescription.

Although the Administrator agreed with the ALJ’s findings, he rejected the ALJ’s reasoning on numerous points of law. The Administrator’s discussion of two of these points, in particular, provide important clarification of DEA precedent:

The Right to Present Remedial Evidence

During a pre-hearing conference, the ALJ granted the Government’s motion to exclude the testimony of one of Ataya’s proposed witnesses, who would have testified about compliance training and related changes that Ataya was adopting into his practice. Part of the ALJ’s reasoning for granting this motion was that the Agency’s case law requires “full and unconditional acceptance of responsibility” in order for a respondent to present evidence of such remedial measures, but Ataya’s Pre-Hearing Statement “compels the conclusion that Respondent does not accept responsibility for any failure to conform to the requirements of the CSA.”

The Administrator explained that this reasoning misstates Agency precedent. In order for evidence of remedial measures to be relevant, a respondent is not required to admit to the Government’s allegations before the Agency has discussed the evidence put forward by the Government and determined which allegations have been proven. Consideration of remedial evidence thus hinges on whether a respondent has accepted responsibility for the knowing or intentional conduct that establishes the Government’s prima facie case against the respondent.

The Administrator also acknowledged the potential constitutional question of whether it is consistent with the principles of due process to require a respondent, as a condition of being able to subsequently present evidence of remedial measures, to admit to misconduct before it has been proven on the record. The Administrator then suggested that this question could be avoided if the Government were to wait until the hearing itself and then move to bar or strike any testimony or evidence of remedial measures when a respondent has failed to acknowledge proven misconduct.

The Right to Discovery

Instead of the ALJ’s assessment that DEA views its obligation to release exculpatory evidence as “just trust me,” the Administrator explained that the Agency follows McClelland v. Andrus, 606 F.2d 1278 (D.C. Cir. 1979). Under the holding in that case, “discovery must be granted if in the particular situation a refusal to do so would so prejudice a party as to deny him due process.” Id. at 1285-86. Agency precedent requires a respondent to meet this standard by relying on more than speculation to show that the evidence is relevant, material, and that the denial of access to the evidence is prejudicial. See Beau Boshers, 76 Fed. Reg. 19401, 19403.

The Take-Aways

This decision and order is especially important for any registrant that wants to persuade the Agency that its continued registration is not inconsistent with the public interest. These registrants should keep in mind the following take-aways from this case:

  • Be as detailed as possible in describing proposed testimony about remedial measures. The failure to describe a proposed witness’s testimony “with sufficient particularity” remains a valid basis to bar this evidence.
  • Consider admitting as little responsibility for alleged misconduct as possible prior to the hearing. This requires balancing the need to preserve your right to testify about any misconduct for which you accept responsibility against the goal of admitting to only that misconduct, if any, proven by the Government.
  • Be prepared to raise potential substantive or procedural issues relating to the introduction of remedial evidence, including due process considerations.