Davenport v. United States Department of Justice , 122 F. App'x 224 ( 2005 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0094n.06
Filed: February 8, 2005
No. 04-3069
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
LARRY E. DAVENPORT, M.D., )
)
Petitioner, )
)
v. )
) PETITION FOR REVIEW FROM THE
UNITED STATES DEPARTMENT OF ) UNITED STATES DEPARTMENT OF
JUSTICE, ) JUSTICE, DRUG ENFORCEMENT
) ADMINISTRATION
Respondent. )
)
)
Before: GIBBONS and ROGERS, Circuit Judges, and BELL, District Judge.*
JULIA SMITH GIBBONS, Circuit Judge. On September 21, 2001, the United States
Department of Justice, Drug Enforcement Administration (“DEA”) issued an order to show cause
proposing to deny an application submitted by Larry E. Davenport, M.D. for registration as a
practitioner to dispense controlled substances pursuant to 21 U.S.C. § 823(f), for the reason that
Davenport’s registration would be inconsistent with the public interest. Davenport requested a
hearing, which was held in Knoxville, Tennessee on August 28 and 29, 2002, before an
administrative law judge (“ALJ”). The ALJ found that the government had met its burden of proof
for denial of Davenport’s application for a DEA certificate of registration, but recommended that
*
The Honorable Robert Holmes Bell, Chief United States District Judge for the Western
District of Michigan, sitting by designation.
No. 04-3069
Davenport v. DOJ
the DEA certificate of registration be granted to Davenport with restrictions and DEA oversight.
On December 18, 2003, the DEA issued its final order. The Deputy Administrator, after reviewing
the entire record, did not adopt the ALJ’s decision. The Deputy Administrator found that granting
Davenport’s application for a DEA certificate of registration was inconsistent with the public
interest and therefore denied Davenport’s application. Davenport filed a timely petition for review
to this court on January 16, 2004.
For the following reasons, we affirm the Deputy Administrator’s final order denying
Davenport’s application for a DEA certificate of registration.
I.
After completion of his medical education, Dr. Larry Davenport worked as an emergency
room physician for two years before opening the MediCenter, a walk-in clinic in Pigeon Forge,
Tennessee in July 1991. Davenport hired other physicians as well as support staff for this office.
Davenport first obtained a certificate of registration from the DEA on July 25, 1989. This certificate
was renewed on May 25, 1995, and expired on June 30, 1998. Davenport submitted a new
application for registration with the DEA on January 10, 2000. Davenport ended his work at the
MediCenter in April 2002.
In October 1998, the Division of Tennessee Health Related Boards received a complaint that
Davenport was using Demerol, a Schedule II controlled substance pursuant to 21 C.F.R. §
1308.12(c)(18), while seeing patients. Marianne Cheaves, a former investigator for the Tennessee
-2-
No. 04-3069
Davenport v. DOJ
Health Related Boards, Office of Investigations,1 and Rhonda Phillips, a diversion investigator with
the Drug Enforcement Administration, became involved in the investigation of Davenport to
determine whether Davenport was in fact abusing Demerol, as well as to investigate other possible
instances of misconduct in Davenport’s dealings with controlled substances. The investigation
involved interviewing several physicians and support staff that worked with Davenport, interviewing
Dr. Kris Houser,2 and conducting an audit of the Demerol ordered and dispensed by the MediCenter
between November 12, 1997, and October 6, 1998. This investigation revealed that there were
10,100 milligrams of Demerol ordered for which the MediCenter could not account.
Also in connection with the investigation, Pam Runyon-Dean, a certified medical assistant
at the MediCenter, began to keep a journal of the daily activities at the MediCenter. Runyon-Dean’s
journal entries documented several noteworthy occurrences. First, Runyon-Dean noted that she had
provided Davenport with tuberculin syringes at his request so that he could administer allergy shots
to his daughter at home. However, when Runyon-Dean mentioned the request to the MediCenter
office manager, she claims that the manager told her that Davenport’s daughter did not take allergy
shots. Second, on several occasions, Runyon-Dean noted that Davenport appeared groggy and
sleepy with glassy eyes. Davenport claimed that many of the instances in which he appeared groggy
1
The Tennessee Health Related Boards, Office of Investigations is the office within the
Tennessee Department of Health responsible for conducting investigations of complaints regarding
the unprofessional performance or conduct of health care practitioners within the state.
2
Davenport has been treated by Dr. Houser, a psychiatrist who practices in Tennessee, for
Attention Deficit Hyperactivity Disorder (“ADHD”), insomnia and severe obstructive sleep disorder,
and tension headaches. Davenport currently takes Xanax for his ADHD, Ambien and Halcion with
an extra dose of Xanax for his sleeping ailments, and an anti-inflammatory medication, a muscle
relaxant, and hydrocodone for his tension headaches.
-3-
No. 04-3069
Davenport v. DOJ
and sluggish were a result of the medications he took for his various medical conditions, rather than
a result of a Demerol abuse problem. Runyon-Dean further observed on several occasions that
Davenport spent a lot of time in the bathroom, and frequently after he came out, she noticed blood
spots on tissues in the trash, on various fixtures in the employee bathroom, and, occasionally, on
Davenport’s clothing. Runyon-Dean also noticed a syringe wrapper in a previously empty bathroom
trash can on one occasion. Runyon-Dean noted that during the course of one particular day, the
office bottle of Demerol periodically disappeared and reappeared from the office safe throughout
the day. Runyon-Dean further noted that the times when the Demerol was missing corresponded
with Davenport’s trips to the bathroom. On one occasion, a female patient of Davenport saw him
enter the bathroom with a syringe and emerge with blood and a bandage on his arm. The patient
also observed Davenport holding a bloody tissue to his arm. When the patient asked Davenport why
he was bleeding, he told her that an office employee had drawn his blood to check his cholesterol
level. Runyon-Dean claims she asked the office employee whether he had drawn any blood from
Davenport that day, to which question the office employee had responded negatively.
Davenport denied ever abusing Demerol at the office. He stated that because Demerol had
disappeared from the office on occasion, he removed it from the clinic. Davenport also stated that
he had undergone two substance abuse evaluations in 1995, prior to the investigations at issue in this
case, in response to allegations that he was abusing medications, and both evaluations showed that
he did not abuse any substance.
Several physicians stated in affidavits or other writings that they did not authorize various
prescriptions for Davenport that were made in their names. Another physician reported to the FBI
that he believed that Davenport had called a pharmacy pretending to be that physician and asked the
-4-
No. 04-3069
Davenport v. DOJ
pharmacy to post-date a chart for another physician’s wife to make it appear that a given prescription
was medically necessary. Dr. Houser, Davenport’s treating physician, signed a witnessed letter
stating that some of the prescriptions for Davenport in Dr. Houser’s name were made in greater
quantities than Dr. Houser would as a general rule prescribe. A pharmacist also submitted a
witnessed writing stating that Davenport called in prescriptions to a local pharmacy with the request
that a different doctor’s name be placed on the prescription label.
Runyon-Dean also identified physicians at the hearing in whose names Davenport called in
prescriptions. Runyon-Dean claimed that she heard Davenport call in prescriptions and tell the
pharmacist to put the prescription under the name of a different physician. Davenport explained that
he never attempted to call in prescriptions under another physician’s name without the physician’s
authorization. He explained these occurrences by stating that he generally called in the prescription
to a medical technician at the MediCenter and asked the technician to contact other physicians to
obtain their authorization. Davenport inferred that the medical technician must have failed to get
the appropriate physician’s approval, despite Davenport’s admonitions to do so.
Davenport acknowledged that he became aware in November 1998 that his DEA certificate
had expired. Nonetheless, the record contains information showing that Davenport wrote
prescriptions for controlled substances after this date. Davenport testified at the hearing that he
stopped writing controlled substance prescriptions after he became aware that his DEA certificate
had expired. Davenport acknowledged the fact that controlled substance prescriptions were called
in under his name even after the time that he admitted knowing his DEA certificate had expired, but
he surmised that these prescriptions were mostly refills. He also stated that he did call in a
-5-
No. 04-3069
Davenport v. DOJ
prescription for Lomotil, an anti-diarrheal medication, after he learned of his certificate’s expiration,
but at the time, he was unaware that Lomotil is a controlled substance.
On August 7, 2000, the Tennessee Board of Medical Examiners3 (“the Board”) issued a
notice of charges and memorandum of assessment of civil penalty to Davenport. This notice of
charges was amended on August 10, 2000. The notice of charges was based on the following
allegations: (1) Davenport wrote at least sixteen prescriptions for controlled substances after his
DEA certificate had expired, and (2) Davenport, both before and after his certificate had expired,
prescribed at least thirty-three controlled substances for himself and at least twenty-nine
prescriptions for his wife using another physician’s name or DEA certificate number without the
physician’s knowledge or approval. The Board asserted that the factual allegations were sufficient
to establish violations of three provisions of the Tennessee Medical Practice Act, Tenn. Code Ann.
§ 63-6-101 et seq.
Davenport and the Board entered into an agreed order on January 24, 2001. The agreed
order found that (1) Davenport negligently wrote eight prescriptions for controlled substances after
the expiration of his DEA certification, and (2) Davenport intentionally or negligently failed to
obtain permission from physicians before obtaining fourteen prescriptions for himself and twenty-
seven prescriptions for his wife using another physician’s name and DEA number. The amended
3
The Tennessee Board of Medical Examiners is a Division of the Tennessee Health Related
Boards responsible for issuing and regulating the licenses of qualified physicians within the state.
The Board investigates individuals who have allegedly violated the Tennessee Medical Practice Act
and disciplines individuals found guilty of violations through written reprimands, suspensions, and
license revocations.
-6-
No. 04-3069
Davenport v. DOJ
order held that these actions were sufficient to establish a violation of Tenn. Code Ann. § 63-6-
214(b)(1), which prohibits unprofessional, dishonorable, or unethical conduct.
The agreed order suspended Davenport’s license for three months followed by a two year
probationary period. Davenport was also required to attend a three-day course on prescribing
controlled drugs and a medical ethics course and pay $4,900 in civil penalties.
On September 21, 2001, the DEA issued an order to show cause to Davenport, seeking to
deny his application for a DEA certificate of registration as a practitioner submitted on January 3,
2000, under 21 U.S.C. § 823(f), because granting his application would be inconsistent with the
public interest. The order to show cause cited as evidence of this contention the following
allegations and occurrences: (1) the Tennessee Department of Health investigation revealed that
Davenport had telephoned in prescriptions for himself and his wife under the names and DEA
numbers of several physicians without their authorization; (2) the investigation revealed that
Davenport took controlled substances, including Demerol, from his office for his own personal use;
(3) Davenport called in a prescription for Vicodin for his wife, pretending to be another physician
and asked the physician when he became aware of the actions to post-date his wife’s patient chart;
(4) Davenport issued at least eleven prescriptions under Davenport’s authorization after his
certificate had expired; and (5) the Tennessee Board of Medical Examiner’s disciplinary actions
against Davenport, pursuant to the agreed order. Davenport timely filed a request for a hearing on
the order to show cause on October 19, 2001. The hearing was held in Knoxville, Tennessee, on
August 28 and 29, 2002. The government produced three witnesses (Runyon-Dean, Cheaves, and
Phillips) as well as documentary evidence. Davenport was the only witness to testify on his behalf.
-7-
No. 04-3069
Davenport v. DOJ
Following the hearing, the ALJ weighed the five factors set forth in 21 U.S.C. § 823(f) used
to determine whether the issuance of a certificate would be against the public interest: (1) the
recommendation of the state licensing board or professional disciplinary committee; (2) the
applicant’s experience in dispensing controlled substances; (3) any conviction against the applicant
under federal or state law for illegal manufacture, distribution, or dispensing of controlled
substances; (4) compliance with state and federal law regarding controlled substances; and (5) other
conduct which would threaten the public health or safety.
With respect to the first factor, the ALJ noted that the agreed order issued by the Tennessee
Board of Medical Examiners did not limit Davenport’s ability to handle controlled substances after
the reinstatement of his license, despite the fact that the Board had found that Davenport was
prescribing himself and his wife medication under other physician’s names without their
authorization. The ALJ also noted that the Board’s suspension of Davenport’s license was relatively
brief. The ALJ found that these actions by the Board arguably reflected favorably on Davenport,
as they indicated that the Board felt that Davenport was not a danger to the public safety or health.
With respect to the second and fourth factors, dealing with Davenport’s experience with
dispensing controlled substances as well as his compliance with federal and state laws relating to
controlled substances, the ALJ found that Davenport had displayed a “serious lack of attention,”
based on the fact that he failed to renew his DEA certificate when it expired, continued to prescribe
controlled substances after the expiration of his certificate, caused prescriptions to be issued for
himself and his wife without proper physician authorization, and failed to account for a significant
amount of Demerol that had been ordered for office use. The ALJ found Davenport’s testimony
stating that these actions were unintentional to be credible, but nonetheless found such negligence
-8-
No. 04-3069
Davenport v. DOJ
on Davenport’s part “troubling.” The ALJ concluded that Davenport’s “past conduct in prescribing
controlled substances without federal authority and in failing to pay attention to his DEA
registration[] provides strong evidence in support of denial of his pending application.” However,
the ALJ did credit Davenport’s assumption of responsibility and strong desire to attain DEA
registration to be “strong and credible indicators” that he would be able to handle DEA registration
with DEA oversight.
With respect to factor five, any other conduct that would threaten the public safety, the ALJ
found that though Davenport had failed to establish a protocol for call-in prescriptions by office
staff, Davenport’s assumption of responsibility and willingness to modify his behavior indicated that
he would benefit from DEA oversight of his future dealings with controlled substances. The ALJ
also found that the government had failed to establish that Davenport was using Demerol for his own
personal use. Despite finding Runyon-Dean to be a credible witness, the ALJ relied on the fact that,
in two past evaluations, Davenport had not been found to have any substance abuse problems to
conclude that the government had not produced sufficient evidence on this point.
Ultimately, the ALJ found that the government had met its burden of proof for denial of
Davenport’s application for a DEA certificate of registration. Notwithstanding this fact, the ALJ
recommended that Davenport be issued a DEA certificate of registration subject to several
restrictions and conditions.
On December 18, 2003, the Deputy Administrator for the DEA published a final order
regarding Davenport’s DEA application. In this final order, the Deputy Administrator chose not to
adopt the findings of fact, conclusions of law, and decision of the ALJ. Instead, the Deputy
Administrator denied Davenport’s application for a DEA certificate of registration based on a
-9-
No. 04-3069
Davenport v. DOJ
finding that Davenport’s registration would be inconsistent with the public interest. In so finding,
the Deputy Administrator, upon review of the record, found that there was substantial evidence in
the record to support a finding that Davenport was diverting Demerol for his own personal use. In
reaching this conclusion, the Deputy Administrator relied heavily on the testimony of Runyon-Dean
regarding her observations of Davenport’s behavior at the office. The Deputy Administrator further
found that the government “adduced plentiful evidence” that Davenport was calling in prescriptions
for himself and his family using the names of other physicians without their authorization. The
Deputy Administrator relied on Davenport’s admission in the Tennessee Board’s agreed order that
he had issued forty-one prescriptions for himself and his wife under the names of other physicians,
as well as the testimony elicited from the physicians, Runyon-Dean, and Phillips at the hearing in
reaching this conclusion. Finally, the Deputy Administrator found that the government had
produced evidence that Davenport had continued to call in prescriptions under his own name after
his DEA certificate had expired. The Deputy Administrator weighed these factual findings utilizing
the five factors set forth in 21 U.S.C. § 823(f) and concluded that it would not be in the public
interest to grant Davenport’s application for DEA registration.4
II.
4
In the final order denying Davenport’s application, the Deputy Administrator cited 21
U.S.C. § 823(f), but proceeded to recite instead the five factors to be considered when reviewing an
application under 21 U.S.C. § 823(h). However, Davenport’s opening brief did not challenge the
Deputy Administrator’s decision on this ground, and we therefore do not consider it as a basis for
reversal. See Am. Trim, LLC v. Oracle Corp., 383 F.3d 462, 477-78 (6th Cir. 2004); Priddy v.
Edelman, 883 F.2d 438, 446 (6th Cir. 1989).
- 10 -
No. 04-3069
Davenport v. DOJ
This court must accept the DEA’s findings of facts as conclusive, provided that they are
supported by substantial evidence. 21 U.S.C. § 877. Substantial evidence exists when, on the record
as a whole, evidence is “adequate, in a reasonable mind, to uphold the [DEA’s] decision.” Turnbull
Cone Baking Co. v. NLRB, 778 F.2d 292, 295 (6th Cir. 1985). This court must uphold the DEA’s
decision if supported by substantial evidence even if this court would have made a different choice
had the matter been before the court de novo. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488
(1951).
The Deputy Administrator is empowered to deny an application for a DEA certificate of
registration to dispense controlled substances pursuant to 21 U.S.C. § 823(f) where the issuance of
such a certificate would be inconsistent with the public interest. The government bears the burden
of showing that the issuance of the certificate is not in the public interest. Shatz v. DOJ, 873 F.2d
1089, 1091 (8th Cir. 1989).
Davenport asserts on appeal that there was not substantial evidence in the record to support
the Deputy Administrator’s finding that Davenport was diverting Demerol from the office for his
own personal use. In so arguing, Davenport asserts that Runyon-Dean, the main source of the
evidence in the record supporting the Deputy Administrator’s finding, is not credible. Additionally,
Davenport stresses his own testimony in the record in an attempt to rebut Runyon-Dean’s
observations.
The ALJ found that there was not enough evidence to support a finding that Davenport was
abusing Demerol. However, upon review of the record, the Deputy Administrator found that there
was indeed enough evidence in the record to support a finding that Davenport was abusing Demerol
at the office. In reaching this determination, the Deputy Administrator relied heavily on the
- 11 -
No. 04-3069
Davenport v. DOJ
testimony and documentary evidence produced by Runyon-Dean regarding her observations of
Davenport’s behavior and the frequent appearance of blood in the bathroom and on Davenport’s
person following his emergence from the employee bathroom. The ALJ explicitly found Runyon-
Dean to be a credible witness, but did not afford as much weight or explore in as great detail
Runyon-Dean’s testimony as did the Deputy Administrator. The Deputy Administrator also relied
on the fact that 10,100 milligrams of Demerol could not be accounted for during Cheaves’s audit,
a fact that is undisputed by Davenport. The Deputy Administrator’s finding that Davenport abused
Demerol thoroughly discusses the evidence in the record that supports this conclusion. We therefore
hold that this finding was supported by substantial evidence and affirm the final order on this
ground. Davenport argues next on appeal that substantial evidence does not exist in the record
to support a finding that Davenport intentionally (1) caused prescriptions to be issued for himself
and his family members under the names of other physicians without their authorization, or (2)
issued prescriptions for controlled substances after his DEA certificate for registration had expired.
In both cases, Davenport argues that any such instance of wrongdoing were a product of internal
office mistakes or his own negligence. Davenport further alleges that there are contradictory
statements in the record regarding the unauthorized prescriptions.
Contrary to Davenport’s assertions, there is substantial evidence in the record to find both
that Davenport caused prescriptions to be issued for himself and his family without authorization
and that he issued prescriptions for controlled substances after his DEA certificate had expired.
First, in the agreed order between Davenport and the Tennessee Board, Davenport explicitly
admitted to intentionally or negligently causing forty-one prescriptions to be issued for himself and
his wife under another physician’s name without the physician’s authorization and to negligently
- 12 -
No. 04-3069
Davenport v. DOJ
writing eight prescriptions for controlled substances after the expiration of his DEA certification to
prescribe such substances. Furthermore, there was ample testimony elicited at the hearing as well
as documentary evidence sufficient to support a factual finding that both of these things in fact
occurred.
Though Davenport argues that there is not substantial evidence in the record to support a
finding that he engaged in this misconduct intentionally, the argument is beside the point. First, the
Deputy Administrator did not explicitly rely on a finding that Davenport’s actions were intentional.
The findings merely stated that he “called in or caused to be called in controlled substance
prescriptions for himself and his wife using other physician’s names; and negligently issued
prescriptions for controlled substances after his DEA registration had expired.” More importantly,
it is not necessary for the Deputy Administrator to make a finding of intentional conduct before
denying an application; instead, the only inquiry is whether the issuance of an application would be
“inconsistent with the public interest.” 21 U.S.C. § 823(f). The Deputy Administrator’s findings
regarding the unauthorized prescriptions were supported by substantial evidence in the record and
thus should not be disturbed on appeal.
Finally, Davenport argues that substantial evidence is lacking in the record to support the
Deputy Administrator’s ultimate decision to deny Davenport’s application for a DEA certificate of
registration as inconsistent with the public interest. Davenport bases this argument upon the fact
that mitigating factors, such as Davenport’s acknowledgment of his mistakes with respect to
maintaining and dispensing controlled substances, “render his registration at the present time
consistent with the public interest.”
Although the ALJ found that the government had met its burden of proof for a denial of
- 13 -
No. 04-3069
Davenport v. DOJ
Davenport’s application, she nonetheless recommended that the certificate be issued to Davenport
subject to several restrictions and conditions. The Deputy Administrator rejected that
recommendation and instead ordered that Davenport’s application be denied. This court’s ability
to review the sanctions imposed by a deputy administrator is very limited. See Butz v. Glover
Livestock Comm’n Co., 411 U.S. 182, 185 (1973) (“[W]here Congress has entrusted an
administrative agency with the responsibility of selecting the means of achieving the statutory policy
the relation of remedy to policy is peculiarly a matter for administrative competence.”) (internal
quotation marks and citation omitted). The sanction may only be set aside where it is unwarranted
in law or without justification in fact. Id. at 185-86.
The DEA is explicitly authorized pursuant to 21 U.S.C. § 823(f) to reject an application for
a certificate of registration where the issuance of the certificate is inconsistent with the public
interest. The Deputy Administrator made such a finding, based on detailed reasoning supported by
substantial evidence in the record. This court owes deference to the DEA’s chosen sanction in this
case. See Murphy v. DEA, No. 96-9507, 1997 WL 196603, at *6 (10th Cir. Apr. 22, 1997)
(upholding DEA sanction of revoking physician’s DEA certificate of registration because DEA is
explicitly authorized to do so by statute, despite court’s opinion that the sanction was, on the facts
of the case, “troublesomely severe”).
III.
For the foregoing reasons, we affirm the Deputy Administrator’s final order denying
Davenport’s application for a DEA certificate of registration.
- 14 -