MacKay v. Drug Enforcement Administration ( 2011 )

FILED
United States Court of Appeals
Tenth Circuit
December 23, 2011
Elisabeth A. Shumaker
Clerk of Court
PUBLISH
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
DEWEY C. MACKAY, M.D.,
Petitioner,
v.
No. 10-9556
DRUG ENFORCEMENT
ADMINISTRATION,
Respondent.
ON PETITION FOR REVIEW
OF A DECISION BY THE
DRUG ENFORCEMENT ADMINISTRATION
(DEA No. 09-28)
Peter Stirba (Nathan A. Crane and Miles W. Millard with him on the briefs) of
Stirba & Associates, Salt Lake City, Utah, for Petitioner.
Anita J. Gay, Attorney, United States Department of Justice, Criminal Division,
Narcotic and Dangerous Drug Section, Washington, D.C., for Respondent.
Before BRISCOE, Chief Judge, and SEYMOUR, and LUCERO, Circuit Judges.
SEYMOUR, Circuit Judge.
Dewey C. MacKay, M.D., petitions for review of a decision of the Deputy
Administrator of the Drug Enforcement Administration (“DEA”) revoking his
registration to dispense controlled substances and denying all pending requests for
renewal or modification. 1 Dewey C. MacKay, M.D., 75 Fed. Reg. 49,956 (DEA
Aug. 16, 2010). Because the DEA’s decision is supported by substantial evidence
and is not arbitrary or capricious, we deny the petition.
I.
Dr. MacKay is a medical doctor who, at the time of the underlying
proceedings, held a DEA certificate of registration that authorized him to
dispense controlled substances in schedules II through V. 2 He also held a
physician’s license issued by the State of Utah and has been a board-certified
orthopedic surgeon for over thirty years.
Around 2001, Dr. MacKay underwent cardiac bypass surgery. Thereafter,
1
The Controlled Substances Act requires persons who dispense controlled
substances to obtain proper registration from the Attorney General. See 21 U.S.C.
§ 822(a)(2). The authority to deny, revoke, or suspend administrations has been
delegated to the Administrator of the DEA, see 21 U.S.C. § 824; 28 C.F.R.
§ 0.100(b), and redelegated to the Deputy Administrator, see 28 C.F.R. § 0.104 &
App. § 12.
2
The Controlled Substances Act classifies controlled substances in five
schedules. Substances in schedules II through V have accepted medical uses in
the United States and may be dispensed (prescribed) by physicians registered with
the DEA. See 21 U.S.C. § 812. Drugs in lower numbered schedules have a
higher abuse potential. See id. Updated schedules of controlled substances are
published in the Code of Federal Regulations. See 21 C.F.R. §§ 1308.11-.15.
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he gradually reduced the number of surgeries he performed, until he stopped
performing surgeries altogether around 2006. As Dr. MacKay decreased his
orthopedic surgical practice, he began treating chronic pain patients. By 2007,
approximately eighty-five percent of his practice involved pain patients. This
case concerns his prescribing behavior from 2005 to early 2009, when his practice
focused primarily on chronic pain management.
A.
The DEA began investigating Dr. MacKay after receiving information from
local authorities that he was issuing unlawful prescriptions for controlled
substances. As part of this investigation, the DEA interviewed several of Dr.
MacKay’s former patients and executed search warrants on his office in June
2008 and January 2009, seizing patient records and related documents. In
addition, the DEA gained cooperation of patients M.R. and K.D., both of whom
agreed to record undercover visits with Dr. MacKay. They recorded a total of
eight in-person visits and one phone call with Dr. MacKay, from October 2007 to
December 2008. 3
On February 26, 2009, the Deputy Administrator of the DEA issued an
order to show cause why the DEA should not revoke Dr. MacKay’s registration
3
In particular, M.R. recorded visits on October 9, November 27, December
24, 2007, and January 29, 2008. K.D. recorded visits on November 3, November
24, December 1, and December 22, 2008, and a phone call on November 20,
2008.
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on the ground that his continued registration is inconsistent with the public
interest. See 21 U.S.C. §§ 823(f); 824(a)(4). The order stated that Dr. MacKay’s
registration would be immediately suspended, pending the show cause
proceedings. 4
The order to show cause alleged that from “June 2005 to the present,” Dr.
MacKay “issued numerous purported prescriptions for controlled substances
without a legitimate medical purpose and outside the usual course of professional
practice.” MacKay, 75 Fed. Reg. at 49,956 (quoting Order to Show Cause at 1-2)
(internal quotation marks omitted). As factual support, the order asserted, among
other things, that Dr. MacKay had issued prescriptions for controlled substances
to a patient even after she told him she shared her prescription drugs with another
person, had exchanged prescription drugs for sexual favors, had issued
prescriptions for controlled substances without a legitimate medical purpose and
without conducting appropriate diagnostic evaluations, and had been prescribing
extraordinarily large amounts of highly addictive opioids.
Dr. MacKay filed a motion for a temporary restraining order in federal
district court, seeking reinstatement of his registration. After holding a hearing,
the district court stayed the immediate suspension of Dr. MacKay’s registration
4
The Controlled Substances Act authorizes immediate suspension of a
physician’s registration at the commencement of show cause proceedings if the
DEA finds “there is an imminent danger to the public health or safety.” 21
U.S.C. § 824(d).
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pending a final administrative decision on the underlying order to show cause.
Based on the limited evidence then in the record, the court held the DEA had not
demonstrated that Dr. MacKay’s continued registration would result in “imminent
danger to public health or safety,” as required for immediate suspension. See 21
U.S.C. § 824(d).
B.
After the district court issued its order, an administrative law judge (“ALJ”)
held a hearing at which both sides presented evidence. The DEA’s evidence
included testimony of cooperating patients M.R. and K.D., audio-recordings and
transcripts of their undercover conversations with Dr. MacKay, medical records
of several patients, and testimony of Dr. Bradford Hare, a medical expert.
M.R. was Dr. MacKay’s patient from May 2004 through January 2008.
When she began seeing Dr. MacKay, it was for “wrist pain.” Later her
complaints shifted to “back pain.” However, she testified that her pain
complaints were fabricated. Instead, she went to see Dr. MacKay to obtain
prescriptions for Lortab to use for recreational purposes. According to M.R., Dr.
MacKay conducted no examination on her first visit, except for feeling her wrist
for about ten seconds. Similarly, when she feigned back pain, the extent of Dr.
MacKay’s examination was to ask her to bend over and stand up again. He never
ordered any tests or X-rays to diagnose or verify her claimed ailments. M.R.
explained that during her appointments, she was not asked to discuss her pain at
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all before Dr. MacKay gave her prescriptions for controlled substances. She
mentioned her pain to him only two or three times over several years. Yet she
consistently received prescriptions for controlled substances including Lortab,
Valium, and Xanax.
M.R.’s recorded undercover appointments corroborate her testimony.
During her first such appointment, M.R. was accompanied by an undercover DEA
agent posing as her friend, “Rebecca.” Rebecca and M.R. attempted to obtain a
Lortab or OxyContin prescription for Rebecca. Dr. MacKay refused to write a
prescription for her without a referral from her doctor and an appointment. The
entire appointment focused on whether Dr. MacKay would write a prescription for
Rebecca; there was no discussion of M.R.’s pain or medical condition.
Nevertheless, M.R. emerged from the appointment with a prescription for ninety
Lortab with a refill.
During M.R.’s second undercover visit, Dr. MacKay asked her, “How are
you today?” She replied, “Good. How are you?” Dr. MacKay did not ask any
questions about her pain, but said, “You want a refill again?” She replied,
“Yeah.” MacKay, 75 Fed. Reg. at 49,965. 5 During this appointment, M.R. told
5
The administrative record was submitted to this court with a motion to
seal the documents and exhibits contained therein because the documents reveal
medical records and private personal information about Dr. MacKay’s patients.
The unopposed motion was provisionally granted. We now permanently grant the
motion and allow the administrative record to remain under seal. Because the
administrative record is sealed, we instead quote from the Deputy Administrator’s
(continued...)
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Dr. MacKay that she had shared some of her drugs with Rebecca. She asked him
whether that was “okay to do.” Dr. MacKay told her that was “against the
law. . . . Just don’t, uh, don’t tell me about it.” Id. Despite knowing that she was
diverting drugs, Dr. MacKay gave her another prescription for ninety Lortab with
one refill.
At M.R.’s third undercover appointment, Dr. MacKay told her that although
he had been seeing her about once a month, she needn’t come back for two
months because he was going to give her a prescription and a refill. He then
asked her, “Lortab ten?” M.R. replied, “Yeah.” Id. After the sound of paper
tearing from a pad, Dr. MacKay asked her, “You been doing okay?” M.R. said,
“Yeah. I’m doing good.” Id. There was no discussion of M.R.’s pain or the
efficacy of her medication and no physical examination. She left the appointment
with a prescription for ninety Lortab and a refill.
M.R.’s fourth undercover visit was about a month later. Dr. MacKay began
the appointment by asking how she was doing. She replied, “Good. How are
you?” He said, “Good,” then asked her, “Lortab ten #90?” Id. After she said
yes, he also asked her if she wanted a refill, to which she again replied, “Yes.”
Dr. MacKay asked M.R. whether she was “getting pills from any other doctor,”
and whether she was “abusing them, selling them, buying them” or “doing
5
(...continued)
decision, which is not sealed. In so doing, we omit all internal quotation marks.
-7-
anything illegal?” Id. (alteration omitted). She said she was not. He did not
mention that she had come back a month earlier than she was supposed to. He did
not inquire about her pain, nor does the transcript suggest a physical exam was
performed. Nevertheless, M.R. again emerged from the appointment with a
Lortab prescription and a refill.
Dr. Hare, the DEA’s expert witness, reviewed the transcripts of M.R.’s
recorded appointments. As he testified, M.R.’s appointments were more social
than medical with little, if any, discussion of her medical condition. Dr. Hare
compared the transcripts of M.R.’s undercover visits with her patient records for
those appointments. He explained that although the medical records indicated
physical examinations were conducted during her appointments, it appeared from
the transcripts that no such exams occurred.
According to Dr. Hare, although the usual course of professional practice
requires a physician to document the justification for switching between
controlled substances, Dr. MacKay failed to provide such justification when
changing M.R.’s prescriptions. Dr. Hare testified that Dr. MacKay’s records were
superficial, with little useful information beyond the nature of her complaint.
They did not even indicate whether his treatment improved her condition. Dr.
Hare also noted that documents in M.R.’s file show Dr. MacKay was aware she
was receiving duplicate prescriptions for controlled substances from another
doctor, suggesting M.R. was overusing or abusing her medication. Despite these
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indications of diversion, Dr. Hare saw no changes in Dr. MacKay’s prescribing
practices to address the problem. In Dr. Hare’s view, M.R.’s medical records did
not “support the long-term prescribing of controlled substances” to M.R. Id. at
49,966.
K.D. was Dr. MacKay’s patient beginning in November 2004. K.D.
testified that she had a legitimate pain condition when she began seeing Dr.
MacKay for a neck injury, but she said Dr. MacKay performed no tests or X-rays
to diagnose her neck pain. 6 Other than a brief examination during her first
appointment, he never performed another physical exam on her. According to her
testimony, after the first appointment if her pain was discussed at all, it was
because she raised the subject. She testified that she was addicted to pain
medication and that ninety percent of the medication she received from Dr.
MacKay was for recreational use.
K.D. also testified that Dr. MacKay engaged in sexual activities with her on
multiple occasions. For their first encounter, he asked her to meet him at a motel
room, where he gave her a topless massage and then wrote her a prescription for a
controlled substance. The government presented a receipt showing Dr. MacKay’s
payment for the motel room to corroborate K.D.’s account. K.D. testified that she
6
This statement was contradicted by evidence in her medical record
indicating that Dr. MacKay took an X-ray of K.D.’s neck in 2004 to evaluate her
initial complaint of neck pain.
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and Dr. MacKay met four or five other times at her friend’s house. During these
encounters, he gave her topless massages and once digitally penetrated her; he
also gave her prescriptions for controlled substances and, on some occasions,
money for filling the prescriptions.
The recordings of K.D.’s appointments with Dr. MacKay reflect a lack of
evaluation of her medical needs. At the first undercover visit, K.D. told Dr.
MacKay that she had “been in a lot of pain.” Dr. MacKay responded only by
commenting, “I’ll bet you have,” id. at 49,968, and by asking her what drugs she
wanted. She recited the drugs and quantities she wanted. No further inquiries
were made into how well her medication was working, whether the source or
severity of her pain had changed since her last appointment, or any side effects
she might be experiencing. Instead, Dr. MacKay expressed concern that he was
under investigation by the DEA and asked her if she was a plant from the police
or the DEA. He told her the DEA had “actually sent people in with wires.” Id. at
49,969. Despite knowing the DEA was investigating his office, Dr. MacKay gave
K.D. prescriptions for 90 tablets of OxyContin 40 mg., 120 tablets of oxycodone
30 mg., 30 tablets of Ambien, and 60 tablets of Fioricet.
Three weeks later, on November 24, 2008, K.D. returned for another
appointment, which was also recorded. After she discussed problems she had
encountered filling a prescription, which she ultimately received in its entirety,
Dr. MacKay explained that he could not write a refill for her “less than four
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weeks” after her last visit, or before December 1. Id. He told her he would give
her sixty oxycodone to carry her through Thanksgiving, and she could come back
December 1 for the rest. He promised not to bill her for the next appointment.
He then asked her “And you’re not working with the DEA, or wearing a wire,
right?” Id. She said she was not. During the rest of the appointment, they
discussed the DEA investigation and Dr. MacKay’s dispute with his former
business partner. There is no indication he performed an exam or asked any
questions about K.D.’s pain.
K.D. returned on December 1, 2008. Dr. MacKay asked what she needed,
and she replied, “Everything. My OxyContin, my Roxicet, my Fioricet, my
Ambien, and I have been so stressed out, so I was going to see if I could get some
Xanax, too.” Id. Dr. MacKay asked her how many Xanax she wanted. They
decided thirty would be good. He warned her that with Xanax, Soma, Klonopin,
and Ambien she would run the risk of over sedating.
The rest of the appointment was spent discussing personal issues. They
both complained about their money troubles, and Dr. MacKay talked about the
DEA’s investigation. Dr. MacKay asked K.D. whether he had her newest phone
number and promised her that “if anything goes better for me I’ll . . . give you a
call.” Id. K.D. complained about how swollen her neck was and said “I need a
massage.” Dr. MacKay replied, “Right through there, yeah.” K.D. then asked,
“That means no more massages? No more help – at all?” Dr. MacKay laughed
-11-
and later told her, “Well, let’s see if things get any better for us here.” Id.
K.D. then asked Dr. MacKay if one of his employees “get[s] mad that I
close the door?” Id. (alteration in original). He told her, “She does. She thinks
your [sic] doing nasty things in here.” K.D. replied, “[N]o, I would never do that.
. . . Well, not in the office.” Id. (second alteration in original). After discussing
personal issues a bit more, the appointment ended. K.D. left with prescriptions
for 90 tablets of OxyContin 40 mg., 120 tablets of oxycodone 30 mg., 30 tablets
of Xanax, and 60 tablets of Fioricet.
During the four years K.D. was Dr. MacKay’s patient, the number of
controlled substances he prescribed for her escalated, along with their dosages.
Dr. Hare testified there was nothing in Dr. MacKay’s file on K.D. to justify the
changes in drugs that he was prescribing for her. Similarly, when Dr. MacKay
changed his recorded diagnosis of K.D.’s ailment from cervical spine pain to low
back pain, Dr. Hare found no indication that Dr. MacKay conducted any
evaluation to warrant the change in diagnosis. Dr. Hare testified Dr. MacKay’s
notes were “quite superficial on the initial evaluation, [and had] very little in the
way of history or physical exam . . . .” Id. at 49,972. According to Dr. Hare,
K.D.’s medical records were inadequate to justify the prescribing of controlled
substances.
Dr. Hare also found in Dr. MacKay’s files numerous common indicators
that K.D. was abusing drugs. Her file contained reports from the State of Utah
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showing she was receiving controlled substances from multiple physicians and
multiple pharmacies at the same time. A 2008 fax from the local narcotics task
force stated that K.D. had obtained controlled substances from five prescribers
and twelve pharmacies between December 2006 and December 2007. A 2005
police report in her file indicated that she and her husband had an altercation over
her ongoing drug abuse problem. She repeatedly sought replacement
prescriptions after claiming her medications were stolen. Dr. Hare noted several
points in K.D.’s file in which Dr. MacKay seemed to be concerned about K.D’s
behavior and wrote that he was going to place her on probation and limit her to
one prescriber and one pharmacy. But, Dr. Hare explained, whatever limitations
Dr. MacKay imposed were brief, and then K.D. would return to her old habits. In
Dr. Hare’s view, “the records indicate an ongoing problem of drug misuse,
abuse,” id., meaning that Dr. MacKay should have addressed these issues more
appropriately. He concluded that “the evaluation . . . and the record don’t support
the long-term prescribing of controlled substances [to K.D.]” Id.
Dr. MacKay introduced testimony by a different medical expert, Dr. Perry
Fine, along with affidavits and testimony by patients and medical professionals
from the community in which he practiced, all in support of his continued
registration. Dr. MacKay’s numerous patients and colleagues relayed their
positive experiences with him, his well-regarded reputation in the community, and
their impressions that he provided excellent care to his patients. Several of Dr.
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MacKay’s patients testified that he had given them beneficial treatment for
legitimate pain problems.
Dr. Fine reviewed some of Dr. MacKay’s patient files, including the
medical records of K.D. and M.R. Based on the files he reviewed, he testified
that the medical care given by Dr. MacKay to these patients was justified, and
that Dr. MacKay treated these patients in a professional medical environment. He
did not specifically discuss K.D. and M.R.’s patient files. Instead, he said his
general conclusion that Dr. MacKay’s treatment of his patients was medically
appropriate also applied to M.R. and K.D. When he was asked to discuss the
transcripts of M.R. and K.D.’s recorded appointments, Dr. Fine testified that he
was unable to “make sense out of” the transcripts. Id. at 49,966. Without access
to a “full audiovisual recording” of the appointments, he said he could not draw
conclusions about what had transpired during those appointments. Id.
Dr. MacKay did not testify. 7
II.
On July 31, 2009, the ALJ issued his recommended decision, finding the
DEA presented sufficient evidence to establish that Dr. MacKay had “committed
7
Both sides presented other evidence which we do not recount here. For a
more thorough description of the evidence presented during the hearing, see
MacKay, 75 Fed. Reg. at 49,959-72.
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acts that are inconsistent with the public interest.” Id. at 49,958 (citing ALJ
Recommendation at 114). The described acts included exchanging prescription
drugs with K.D. for sexual favors, dispensing prescription drugs to patients
without first conducting appropriate diagnostic evaluations, providing
prescription drugs to K.D. despite being aware she was drug-dependent, and
maintaining inaccurate, incomplete, and misleading patient records – all in
violation of Utah law. The ALJ recommended that the Deputy Administrator
revoke Dr. MacKay’s registration and deny any pending application to renew it
because Dr. MacKay “‘ha[d] not accepted responsibility for his actions, expressed
remorse for his conduct at any level, or presented evidence that could reasonably
support a finding that the [DEA] should continue to entrust him with a
registration.’” Id. (quoting ALJ Recommendation at 114). Dr. MacKay filed
exceptions to the ALJ’s recommendation, contending it was based on insufficient
evidence.
The Deputy Administrator adopted the ALJ’s recommendation. After
reviewing all of the evidence and Dr. MacKay’s objections, she agreed with the
ALJ that Dr. MacKay “has committed acts which render his continued registration
inconsistent with the public interest.” Id. She endorsed the ALJ’s analysis and
found that evidence of Dr. MacKay’s conduct with respect to M.R. and K.D.
constituted a prima facie showing that his continued registration would be
inconsistent with the public interest. See id. at 49,977. Even assuming Dr.
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MacKay complied with the law in treating all of his other patients, the Deputy
Administrator concluded that fact would not refute the evidence of intentional
diversion of controlled substances to K.D. and M.R. Id. Based on Dr. MacKay’s
failure to testify, she concluded that he “does not accept responsibility for his
misconduct, and therefore, he has not rebutted the Government’s prima facie
showing that his continued registration is inconsistent with the public interest.”
Id. She held that Dr. MacKay’s “egregious misconduct,” coupled with his failure
to acknowledge wrongdoing or show remorse, warranted revoking his registration
and denying any pending requests to renew or modify the registration. Id. at
49,978.
Dr. MacKay asks us to reverse the Deputy Administrator’s decision and to
reinstate his registration. See 21 U.S.C. § 877.
III.
The Controlled Substances Act requires practitioners who dispense
controlled substances to obtain a valid registration. 21 U.S.C. § 822(a)(2). The
Deputy Administrator may revoke a practitioner’s registration if she determines
the practitioner “has committed such acts as would render his registration . . .
inconsistent with the public interest.” Id. § 824(a)(4); see also 28 C.F.R.
§§ 0.100(b), 0.104. The agency is required to consider five factors “[i]n
determining the public interest”:
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(1) The recommendation of the appropriate State licensing board or
professional disciplinary authority.
(2) The applicant’s experience in dispensing, or conducting research
with respect to controlled substances.
(3) The applicant’s conviction record under Federal or State laws
relating to the manufacture, distribution, or dispensing of controlled
substances.
(4) Compliance with applicable State, Federal, or local laws relating
to controlled substances.
(5) Such other conduct which may threaten public health and safety.
21 U.S.C. § 823(f). Although the Deputy Administrator must consider each of
these factors, she “need not make explicit findings as to each one and can ‘give
each factor the weight [she] determines is appropriate.’” Volkman v. DEA, 567
F.3d 215, 222 (6th Cir. 2009) (quoting Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir.
2005)); see also Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005) (similar).
“Registrants dispensing controlled substances must comply with a number
of statutory and regulatory requirements.” Morall, 412 F.3d at 174. As relevant
here, DEA regulations provide that a prescription is lawful only if “issued for a
legitimate medical purpose by an individual practitioner acting in the usual course
of his professional practice.” 21 C.F.R. § 1306.04(a). “The responsibility for the
proper prescribing and dispensing of controlled substances is upon the prescribing
practitioner . . . .” Id. Similarly, with the exception of circumstances irrelevant
to this case, in Utah it constitutes “unprofessional conduct” for a physician to
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issue a prescription for a drug “without first obtaining information in the usual
course of professional practice, that is sufficient to establish a diagnosis, to
identify conditions, and to identify contraindications to the proposed treatment.”
Utah Code Ann. § 58-1-501(2)(m)(i). Not surprisingly, it is “unprofessional
conduct” for a licensed physician to “sexually abus[e] or exploit[] any person
through conduct connected with the licensee’s practice.” Id. § 58-1-501(2)(k).
Under Utah administrative rules, unprofessional conduct also includes:
(4) failing to maintain controls over controlled substances which
would be considered by a prudent practitioner to be effective against
diversion, theft, or shortage of controlled substances;
...
(6) knowingly prescribing, selling, giving away, or administering,
directly or indirectly, or offering to prescribe, sell, furnish, give
away, or administer any controlled substance to a drug dependent
person, as defined in Subsection 58-37-2(s), except for legitimate
medical purposes as permitted by law . . . .
Utah Admin. Code r. 156-37-502.
The DEA has the ultimate burden of proving that revocation is warranted.
21 C.F.R. § 1301.44(e). Cognizant of this, the Deputy Administrator has
consistently held that once the government establishes a prima facie case showing
a practitioner has committed acts which render his registration inconsistent with
the public interest, the burden shifts to the practitioner to show why his continued
registration would be consistent with the public interest. See, e.g., Medicine
Shoppe-Jonesborough, 73 Fed. Reg. 364, 387 (DEA Jan. 2, 2008) (citing cases).
If the Deputy Administrator’s findings of fact are supported by substantial
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evidence, they are conclusive. See 21 U.S.C. § 877. We have recognized that
substantial evidence is “more than a scintilla, but less than a preponderance.” Lax
v. Astrue, 489 F.3d 1080, 1084 (10th Cir. 2007). It “is such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.” Id.(internal quotation marks omitted); see also Rapp v. Office of Thrift Supervision,
52 F.3d 1510, 1516 (10th Cir. 1995).
Under the Administrative Procedure Act, we may set aside the Deputy
Administrator’s decision only if it is “arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law . . . [or] unsupported by substantial
evidence . . . .” 5 U.S.C. § 706(2). An agency decision is arbitrary and
capricious if the agency “relied on factors which Congress has not intended it to
consider, entirely failed to consider an important aspect of the problem, offered
an explanation for its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to a difference in view or
the product of agency expertise.” Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v.
State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
“The scope of our review under the ‘arbitrary or capricious’ standard is
narrow and we are not to substitute our judgment for that of the agency.” Colo.
Wild, Heartwood v. U.S. Forest Serv., 435 F.3d 1204, 1213 (10th Cir. 2006)
(citing Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43). To uphold the Deputy
Administrator’s decision under this standard, we must satisfy ourselves that she
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“examined the relevant data and articulated a satisfactory explanation for [her]
decision, including a rational connection between the facts and the decision
made.” See id. (citing Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43). If we are so
convinced, her decision must stand.
A.
Dr. MacKay contends the Deputy Administrator’s decision is arbitrary and
capricious and not supported by substantial evidence. He argues the Deputy
Administrator failed properly to consider and weigh the five statutory
public-interest factors as required by 21 U.S.C § 823(f) and ignored evidence in
his favor. For these reasons, he submits, we must reverse the Deputy
Administrator’s revocation decision.
In her discussion of the five statutory public interest factors, the Deputy
Administrator first examined factors one and three. She acknowledged that Dr.
MacKay held a valid medical license in Utah and that there was “no
‘recommendation’ one way or the other from the State Board as to whether [Dr.
MacKay] should retain his registration (factor one).” MacKay, 75 Fed. Reg. at
49,973. She also observed that Dr. MacKay “had not been convicted of an
offense related to controlled substances . . . (factor three).” 8 Id. Nevertheless, as
8
After oral argument in this appeal, Dr. MacKay was found guilty of
committing forty violations of the Controlled Substances Act. These convictions
included illegally dispensing and distributing controlled substances to K.D. and
M.R. on the days of their recorded appointments. See Indictment at 10-11, United
(continued...)
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she explained, “[A] State’s failure to take action against a registrant’s medical
license is not dispositive in determining whether the continuation of a registration
is in the public interest,” because the DEA has separate oversight responsibility
with respect to controlled substances. Id. (internal quotation marks omitted).
Similarly, she noted that “while a history of criminal convictions for offenses
involving the distribution or dispensing of controlled substances is a highly
relevant consideration, . . . the absence of such a conviction is of considerably
less consequence in the public interest inquiry.” Id.
Regarding factors two and four, the Deputy Administrator found clear and
convincing evidence that Dr. MacKay knowingly diverted controlled substances
in violation of state and federal law through various acts including: giving
inadequate examinations to support prescriptions for controlled substances,
prescribing drugs to M.R. despite knowing she was not a legitimate pain patient,
prescribing drugs to K.D. despite obvious indications that she was overusing and
abusing drugs, and providing prescriptions for controlled substances to K.D. in
exchange for sexual favors. Id. at 49,973-77. The Deputy Administrator found it
unnecessary to make findings under factor five in light of her findings under
8
(...continued)
States v. MacKay, 1:10-cr-00094 (D. Utah Aug. 5, 2010) (counts 4-7 and 11-14);
Jury Verdict at 2, MacKay, 1:10-cr-00094 (D. Utah Sept. 26, 2011). He was also
found guilty of illegally dispensing and distributing a controlled substance to
K.D. on September 23, 2006 – the day the Deputy Administrator found Dr.
MacKay met K.D. in the motel room. See Indictment at 10-11, MacKay, 1:10-cr-
00094 (count 8); Jury Verdict at 2, MacKay, 1:10-cr-00094.
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factors two and four. See id. at 49,977 n.38.
Our review of the record persuades us that substantial evidence supports the
Deputy Administrator’s findings under factors two and four. As we have detailed
above, testimony and patient records reflect that Dr. MacKay failed to determine
a medical need for prescribing controlled substances to K.D. and M.R., either
initially or over the course of seeing these patients. K.D. and M.R. both testified
that their appointments with Dr. MacKay rarely involved either a physical
examination or a discussion of their pain. The recorded undercover appointments
confirm that Dr. MacKay discussed little – if anything – about M.R. or K.D.’s
medical conditions before issuing prescriptions for controlled substances to them.
Dr. MacKay even continued to prescribe controlled substances to M.R. after she
told him she had shared her drugs with a friend. The DEA’s expert, Dr. Hare,
testified that the medical records were totally inadequate to support the
prescriptions Dr. MacKay wrote for these patients.
Similarly, substantial evidence supports the Deputy Administrator’s
determination that Dr. MacKay prescribed escalating amounts of controlled
substances to K.D. despite obvious indicators that she was misusing or abusing
the medication. According to documents in the medical file, she repeatedly
claimed she lost her drugs or that someone had stolen them. She requested refills
early. She received prescriptions from multiple doctors and pharmacies at the
same time, a fact known to Dr. MacKay. Substantial evidence also supports the
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Deputy Administrator’s determination that on multiple occasions while K.D. was
Dr. MacKay’s patient, Dr. MacKay engaged in sexual activities with her in
exchange for giving her prescriptions for controlled substances.
Despite Dr. MacKay’s claim to the contrary, the Deputy Administrator
considered the entire record, including the evidence in Dr. MacKay’s favor. She
determined, however, that none of Dr. MacKay’s evidence negated the DEA’s
prima facie showing that Dr. MacKay had intentionally diverted drugs to K.D.
and M.R. Id. at 49,977. Indeed, she found that even if Dr. MacKay had provided
proper medical care to all of his other patients, that fact would not overcome the
government’s evidence with regard to M.R. and K.D.
None of the evidence presented by Dr. MacKay undermines the evidence
relating to M.R. and K.D. Although numerous patients and colleagues of Dr.
MacKay related their positive experiences with him, none had any personal
knowledge regarding his treatment of M.R. and K.D. Notably, Dr. MacKay’s
medical expert, Dr. Fine, failed to specifically discuss and justify Dr. MacKay’s
treatment of M.R. and K.D. As a result, none of Dr. MacKay’s evidence
contradicts the testimony and evidence presented by the DEA relating to the
knowing diversion of drugs to these two patients.
Nor did the Deputy Administrator misweigh the five statutory factors for
determining the propriety of revocation, see 21 U.S.C. § 823(f). In light of Dr.
MacKay’s misconduct relating to factors two and four, the government made a
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prima facie showing that Dr. MacKay’s continued registration is inconsistent with
the public interest. See MacKay, 75 Fed. Reg. at 49,977. Although Dr. MacKay
may have engaged in the legitimate practice of pain medicine for many of his
patients, the conduct found by the Deputy Administrator with respect to K.D. and
M.R. is sufficient to support her determination that his continued registration is
inconsistent with the public interest. 9
B.
Dr. MacKay contends the Deputy Administrator violated the statutory
mandate by considering an additional factor not prescribed by statute: failure to
admit fault. Dr. MacKay argues that the Deputy Administrator should not have
9
Dr. MacKay raises several challenges to the ALJ and Deputy
Administrator’s credibility determinations. The Deputy Administrator deferred to
the ALJ’s findings that M.R. and K.D. were credible with regard to testimony of
their interactions with Dr. MacKay and his treatment of them. See MacKay, 75
Fed. Reg. at 49,964, 49,968 n.29. She also deferred to the ALJ’s judgment that
“Dr. Fine ‘intentionally avoid[ed] direct answers that did not favor the
Respondent’s position’” and that his testimony “was ‘evasive’ and ‘bias[ed] in
favor of assuming the correctness of the actions of any doctor.’” Id. at 49,963
(quoting ALJ Recommendation at 88, 90) (alterations in original). We are not
persuaded that these credibility findings were erroneous. “Credibility
determinations are peculiarly the province of the finder of fact, and we will not
upset such determinations when supported by substantial evidence.” Diaz v.
Sec’y of Health & Human Servs., 898 F.2d 774, 777 (10th Cir. 1990). Substantial
evidence supports the findings that K.D. and M.R. were credible. The recorded
appointments substantiated their testimony. The DEA also offered Dr. MacKay’s
motel receipt to corroborate K.D.’s claims that she engaged in sexual contact with
Dr. MacKay in a motel room. Finally, a review of Dr. Fine’s testimony supports
the Deputy Administrator’s determination that his testimony was evasive and
should be given less weight than the testimony of Dr. Hare.
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reached an adverse conclusion from his decision not to testify.
Dr. MacKay’s argument lacks merit. The DEA may properly consider
whether a physician admits fault in determining if the physician’s registration
should be revoked. Hoxie, 419 F.3d at 483. When faced with evidence that a
doctor has a history of distributing controlled substances unlawfully, it is
reasonable for the Deputy Administrator to consider whether that doctor will
change his or her behavior in the future. And that consideration is vital to
whether continued registration is in the public interest. Without Dr. MacKay’s
testimony, the Deputy Administrator had no evidence that Dr. MacKay recognized
the extent of his misconduct and was prepared to remedy his prescribing
practices.
Nor was it improper for the Deputy Administrator to draw an adverse
inference from Dr. MacKay’s failure to testify. “[T]he Fifth Amendment does not
forbid adverse inferences against parties to civil actions when they refuse to
testify in response to probative evidence offered against them . . . .” Baxter v.
Palmigiano, 425 U.S. 308, 318 (1976). This rule applies with equal force to
administrative proceedings. See, e.g., Hoxie, 419 F.3d at 483 (holding DEA could
draw adverse inference from physician’s failure to testify during proceedings
involving revocation of his controlled substances registration); Keating v. Office
of Thrift Supervision, 45 F.3d 322, 326 (9th Cir. 1995) (“Not only is it
permissible to conduct a civil [administrative] proceeding at the same time as a
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related criminal proceeding, even if that necessitates invocation of the Fifth
Amendment privilege, but it is even permissible for the trier of fact to draw
adverse inferences from the invocation of the Fifth Amendment in a civil
[administrative] proceeding.”).
Despite his claims to the contrary, Dr. MacKay did not lose “his livelihood
because he did not testify.” Reply Br. at 12. Instead, he lost his livelihood
because the DEA presented sufficient evidence that he distributed controlled
substances illegally and he failed to offer evidence that he would alter his conduct
in the future. Substantial evidence supports the Deputy Administrator’s
conclusion that Dr. MacKay’s continued registration is inconsistent with the
public interest.
C.
Dr. MacKay alternatively argues that it would have been more appropriate
under DEA precedent to restrict his DEA registration rather than revoke it
entirely. We disagree.
Under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), the Deputy
Administrator’s choice of sanction “is entitled to substantial deference,” Chein v.
DEA, 533 F.3d 828, 835 (D.C. Cir. 2008), and we will set it aside only if her
decision is “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A).
Ordinarily, the mere unevenness in the application of a sanction will
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not render its application in a particular case “unwarranted in law.”
If the revocation represents a flagrant departure from DEA policy
and practice, however, and if the departure is not only unexplained,
but entirely unrecognized in the [Deputy Administrator’s] decision,
the agency’s sanction cannot withstand abuse of discretion review.
Chein, 533 F.3d at 835 (quoting Morall, 412 F.3d at 183) (internal quotation
marks, citations, and alterations omitted).
Here, the sanction of revocation is neither a flagrant departure from DEA
policy and practice nor unexplained in the Deputy Administrator’s decision. The
Deputy Administrator has previously explained that “this Agency has long held
. . . that findings under a single factor [of 21 U.S.C. § 824(a)] are sufficient to
support the revocation of a registration.” Jayam Krishna-Iyer, M.D., 74 Fed. Reg.
459, 462 (DEA Jan. 6, 2006). In this same decision, the Deputy Administrator
noted that if “some isolated decisions of this Agency may suggest that a
practitioner who committed only a few acts of diversion was entitled to regain his
registration even without having to accept responsibility for his misconduct, the
great weight of the Agency’s decisions are to the contrary.” Id. at 464 (citation
omitted). Because the diversion of controlled substances poses a “grave and
increasing harm to public health and safety,” the Deputy Administrator made
clear that even where only a few acts of diversion have been committed, “this
Agency will not grant or continue the practitioner’s registration unless he accepts
responsibility for his misconduct.” Id. Accordingly, the Deputy Administrator
overruled prior DEA decisions suggesting that a practitioner may regain his
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registration without accepting responsibility for his conduct. Id. at 464 n.9.
Because Dr. MacKay has not accepted responsibility for his conduct, revocation
of his registration is entirely consistent with DEA policy.
Dr. MacKay relies on several DEA decisions in which physicians were
given restricted registrations in arguing that the revocation of his registration is
inconsistent with DEA precedent. We agree with the Deputy Administrator that
each of these decisions is distinguishable, see MacKay, 75 Fed. Reg. at
49,977-78, and none of them suggests the revocation of Dr. MacKay’s registration
was an abuse of discretion.
Paul J. Caragine, Jr., 63 Fed. Reg. 51,592 (DEA Sept. 28, 1998), provides
the best support for Dr. MacKay’s argument, but does not undermine the Deputy
Administrator’s choice of sanction. The physician in Caragine engaged in many
actions similar to Dr. MacKay, including prescribing drugs in high quantities to
patients exhibiting drug-seeking behavior and maintaining incomplete or
inaccurate medical records. See id. at 51,594-98. Unlike Dr. MacKay, however,
the physician in Caragine acknowledged that he should have recognized some of
his patients were addicted, admitted he should have treated some of his patients
differently, and voluntarily underwent training to help him better identify and
treat drug-seeking patients. Id. at 51,594-98, 51,601. More importantly, the
Deputy Administrator explained in proceedings below that in light of Krishna-
Iyer, 74 Fed. Reg. at 464 & n.9, if a case like Caragine were to arise today she
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“would likely deny the petitioner’s application.” MacKay, 75 Fed. Reg. at 49,978
n.39. Thus, the precedential value of Caragine is questionable in light of the
DEA’s worry that in recent years the “diversion of controlled substances has
become an increasingly grave threat to this nation’s public health and safety.”
Krishna-Iyer, 74 Fed. Reg. at 463.
The physician in William P. Jerome, M.D., 61 Fed. Reg. 11,867, 11,867-68
(DEA Mar. 22, 1996), exchanged controlled substances for sexual favors, money,
and cocaine. Dr. Jerome voluntarily surrendered his registration when he pled
guilty to conspiracy to distribute controlled substances. Id. at 11,868. Six years
later, after serving his prison term and undergoing rehabilitation, he was granted a
restricted registration to dispense controlled substances. Id. at 11,869-70. Unlike
Dr. MacKay, however, Dr. Jerome admitted he had violated federal law and
“testified as to his remorse for his past misconduct and his determination that he
[would] not engage in such conduct in the future.” Id. at 11,870.
Larry L. Kompus, M.D., 55 Fed. Reg. 30,990 (DEA July 30, 1990), is
similarly distinguishable. In that proceeding, the physician had been convicted of
crimes relating to exchanging controlled substances for sexual favors. But the
misconduct occurred more than ten years before the physician was granted a
restricted registration and the evidence showed no misconduct by the physician
after his release from prison. Id. at 30,992. Moreover, the physician
“acknowledged the wrongfulness of his actions and [had] shown remorse for
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them.” Id.In Karen A. Kruger, M.D., 69 Fed. Reg. 7016, 7018 (DEA Feb. 12, 2004),
the physician was diverting drugs to herself, admitted fault, and had undergone
treatment for her drug dependency. Furthermore, nearly five years had passed
without any evidence of misuse of controlled substances. Id.Finally, in Wesley G. Harline, M.D., 65 Fed. Reg. 5665 (DEA Feb. 4,
2000), the physician admitted to having violated state law, id. at 5669, showed
remorse, id. at 5671, and testified that he was now complying with all state,
federal, and local laws, id. at 5669.
Unlike the physicians in those cases, Dr. MacKay has never admitted any
fault or taken responsibility for his misconduct. Nor can he point to any evidence
that he reformed his habits. Instead, he continued to illegitimately dispense
controlled substances even when he knew the DEA was investigating him. The
Deputy Administrator’s revocation of Dr. MacKay’s registration is consistent
with the DEA’s policy and practice of revoking registration under such
circumstances.
IV.
For these reasons, we DENY Dr. MacKay’s petition for review.
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