Hoxie v. DEA

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 05a0346p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Petitioner, -
DAVID A. HOXIE, M.D.,
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No. 04-4122
v.
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DRUG ENFORCEMENT ADMINISTRATION, -
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Respondent. -
DEPARTMENT OF JUSTICE,
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On Petition for Review of a Decision from the United States
Department of Justice, Drug Enforcement Administration.
No. 03-01.
Submitted: July 26, 2005
Decided and Filed: August 16, 2005
Before: ROGERS and SUTTON, Circuit Judges; FORESTER, District Judge.*
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COUNSEL
ON BRIEF: Kevin R. Conners, VORYS, SATER, SEYMOUR & PEASE LLP, Columbus, Ohio,
for Petitioner. Teresa A. Wallbaum, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Respondent.
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OPINION
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ROGERS, Circuit Judge. David A. Hoxie, M.D. petitions this court for review of the DEA
Deputy Administrator’s decision to revoke Dr. Hoxie’s certificate of registration to prescribe
controlled substances. The Deputy Administrator’s determination that Dr. Hoxie materially falsified
his applications for a certificate of registration is supported by substantial evidence, based on an
arrest record indicating that Dr. Hoxie pled nolo contendere to possession of a controlled substance.
Further, the Deputy Administrator’s determination that Dr. Hoxie committed acts that rendered his
continued registration inconsistent with the public interest was also supported by substantial
evidence. Dr. Hoxie failed to comply with California controlled substance law, as evidenced by
several arrests for controlled substance violations, misled DEA investigators by denying his prior
*
The Honorable Karl S. Forester, United States District Judge for the Eastern District of Kentucky, sitting by
designation.
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No. 04-4122 Hoxie v. Drug Enforcement Admin. Page 2
criminal history, failed to testify at the hearing on his registration, and offered no evidence to explain
or rebut the DEA’s contentions regarding his registration. Based on the DEA’s factual conclusions,
the revocation of Dr. Hoxie’s certificate of registration based on his actions was not arbitrary,
capricious or an abuse of discretion. Therefore, Dr. Hoxie’s petition for review is denied.
I.
Dr. Hoxie is a physician practicing at the Waverly Health Clinic near Columbus, Ohio. He
holds medical licenses in Virginia and Ohio, and received a DEA certificate of registration in 1995.
A physician must possess a DEA certificate of registration to dispense prescription drugs that appear
on the DEA’s controlled substances schedules. 21 U.S.C. § 823(f) (2000). Dr. Hoxie renewed his
certificate of registration in 1998 and in 2001. On the initial registration application and on two
renewal applications, Dr. Hoxie answered “no” to the question, “Has the applicant ever been
convicted of a crime in connection with controlled substances under state or federal law?” In 2001,
the DEA and the Ohio medical board began to investigate whether this was a false statement.
DEA diversion investigators Dwight Cokeley and Dawn Mitchell looked into Dr. Hoxie’s
background. Their investigation revealed arrest records indicating that Dr. Hoxie had been arrested
seven times between 1973 and 1985 in and around Los Angeles, California. The arrest records show
that Dr. Hoxie was arrested on a number of misdemeanor charges, including: (1) possession of
marijuana on December 15, 1973; (2) possession of a controlled substance on September 19, 1978;
(3) driving under the influence of drugs on July 6, 1980; (4) driving under the influence of alcohol
and drugs on July 11, 1981; (5) possession of PCP, being under the influence of PCP, and a vehicle
code infraction on August 7, 1983; (6) being under the influence of PCP on January 26, 1984; and
(7) driving with a suspended license on September 25, 1984. There is no indication of the
disposition of these charges, with the exception of the 1983 arrest. An arrest disposition report
indicates that Dr. Hoxie entered a plea of “nolo” to two charges, “11550 (b) H&S,” an apparent
reference to § 11550(b) of the California Health and Safety Code, which prohibits being under the
influence of a controlled substance, and “23152(a) VC Traffic Off,” what appears to be a traffic
offense. This disposition was confirmed by a document from the California probation department
requesting notification should Dr. Hoxie be arrested at any time prior to November of 1985.
In March of 2002, Ms. Mitchell and investigator Randy Beck of the Ohio medical board
came to Dr. Hoxie’s office and interviewed him regarding his certificate of registration applications.
During the interview, Dr. Hoxie made a series of denials. He denied ever being arrested, ever being
arrested for controlled substance violations, ever having been convicted of a crime, ever having been
on probation, and ever entering into a plea bargain. During the same interview, according to Ms.
Mitchell and Mr. Beck, when asked why it took so long to complete his education, Dr. Hoxie stated
that he had been in jail many times. On August 21, 2002, the DEA issued Dr. Hoxie an order to
show cause, proposing that the DEA revoke his certificate of registration because: (1) he materially
falsified his applications, and (2) he had committed acts which rendered his continued registration
inconsistent with the public interest. In a letter to the DEA dated September 15, 2002, Dr. Hoxie
reiterated his denials of past legal trouble. Dr. Hoxie requested an administrative hearing on the
order to show cause, and the hearing was held in August of 2003.
At the hearing, the DEA presented three witnesses. Mr. Cokeley testified that he had
searched law enforcement databases using Dr. Hoxie’s name, date of birth and social security
number. The search yielded the arrest reports described above, which were introduced into evidence
over Dr. Hoxie’s objection that the arrest reports were inadmissible hearsay. Regarding the August
1983 arrest, Mr. Cokeley testified that the custodian of records of the California Department of
Justice had clarified the arrest report. According to Mr. Cokeley’s conversation with the California
official, Dr. Hoxie entered a plea of nolo contendere to a misdemeanor controlled substance
violation and a misdemeanor violation of the vehicle code, and received a suspended 90-day jail
No. 04-4122 Hoxie v. Drug Enforcement Admin. Page 3
sentence and three years’ probation. Mr. Peck and Ms. Mitchell both testified to the denials that Dr.
Hoxie made during their interview. Both further testified that a criminal background check of Dr.
Hoxie revealed arrests and convictions in California. Neither Mr. Beck nor Ms. Mitchell was
specific as to the charges Dr. Hoxie was convicted of in California.
Dr. Hoxie cross-examined the DEA’s three witnesses but presented no evidence in his
defense. On cross-examination, Mr. Cokeley admitted that he had no knowledge of how the arrest
records were maintained, that the records were not court disposition records, and that he had not
contacted the police departments involved in Dr. Hoxie’s arrests. Ms. Mitchell testified on cross-
examination that she had not located any court record that serves as a record of conviction of Dr.
Hoxie for a controlled substance act violation.
Based on the information adduced at the hearing, the ALJ determined that the DEA
established by a preponderance of the evidence that Dr. Hoxie had been convicted of a controlled
substance violation in November of 1983. The ALJ concluded that the August 1983 arrest report
and related documents were sufficient to establish that Dr. Hoxie pled nolo contendere to a
controlled substance violation. The ALJ further noted that Dr. Hoxie made no attempt to explain
his actions by testifying and offered no evidence in mitigation. The ALJ concluded that Dr. Hoxie
materially falsified his applications for a DEA certificate of registration. The ALJ recommended
revoking Dr. Hoxie’s DEA certificate based on the material falsification of his application. The ALJ
also determined that Dr. Hoxie’s actions rendered his continued registration inconsistent with the
public interest. The ALJ found that the arrest records demonstrated that Dr. Hoxie repeatedly
violated California controlled substance law. Further, the ALJ considered Dr. Hoxie’s dishonesty
with Ms. Mitchell during the investigation and his failure to take responsibility for his past
misconduct to be other conduct that may threaten the public health and safety. Therefore, the ALJ
concluded that the public interest was served by revoking Dr. Hoxie’s DEA certificate.
The Deputy Administrator of the DEA, in her final order, considered the record in its entirety
and adopted in full the ALJ’s decision. 69 Fed. Reg. 51,477 (Aug. 19, 2004). Based on the August
1983 arrest report and related documents, the Deputy Administrator concluded that Dr. Hoxie
materially falsified his applications for a certificate of registration. The Deputy Administrator
therefore revoked Dr. Hoxie’s DEA registration because he had materially falsified his applications.
The Deputy Administrator also concluded that Dr. Hoxie’s registration was inconsistent with the
public interest because of: (1) his violations of California law and past substance abuse, as evidenced
by the arrest records; (2) his dishonesty in denying he had ever been arrested during the
investigation; and (3) his failure to testify at the hearing. The Deputy Administrator revoked Dr.
Hoxie’s DEA certificate because his lack of candor and forthrightness rendered his continued
registration inconsistent with the public interest. Dr. Hoxie now petitions this court for review of
the DEA’s decision to revoke his certificate of registration.
II.
Contrary to Dr. Hoxie’s primary argument on appeal, the August 7, 1983, arrest report and
related documents indicating that Dr. Hoxie pled “nolo” to two charges are sufficient to prove by
a preponderance of the evidence that Dr. Hoxie was convicted of a controlled substance violation.
Therefore, the DEA’s decision to revoke Dr. Hoxie’s certificate of registration because he made a
material misrepresentation in his application is supported by substantial evidence. The August 1983
arrest report and related documents, in addition to the testimony regarding the meaning of those
documents and Dr. Hoxie’s silence, are substantial evidence that supports the DEA’s conclusion that
Dr. Hoxie made a material misrepresentation in his applications for a certificate of registration. The
DEA’s further determination that Dr. Hoxie’s actions rendered his continued registration
inconsistent with the public interest is also supported by substantial evidence. Based on these
No. 04-4122 Hoxie v. Drug Enforcement Admin. Page 4
factual findings, the DEA’s decision to revoke Dr. Hoxie’s certificate of registration was not
arbitrary, capricious or an abuse of discretion. Therefore, Dr. Hoxie’s petition for review is denied.
Under the Controlled Substances Act, physicians who dispense prescription medications that
are controlled substances are required to obtain proper registration from the Attorney General.
21 U.S.C. § 822(a)(2) (2000). The authority to deny, revoke or suspend a physician’s certificate of
registration has been delegated to the Administrator of the DEA, and re-delegated to the Deputy
Administrator. See 28 C.F.R. §§ 0.100(b), 0.104 & App. § 12 (2004). A physician’s certificate of
registration to dispense controlled substances may be suspended or revoked if the physician “has
materially falsified any application filed” with the DEA or “has committed such acts as would render
his registration . . . inconsistent with the public interest.” 21 U.S.C. § 824(a)(1) & (4) (2000). The
Deputy Administrator considers the following factors in determining the public interest:
(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 the public health and safety.
21 U.S.C. § 823(f) (2000). The Deputy Administrator is not required to make findings as to all of
the factors, and can give each factor the weight she determines is appropriate. Morall v. DEA, 412
F.3d 165, 173-74 (D.C. Cir. 2005).
The factual findings of the Deputy Administrator are conclusive if supported by substantial
evidence. 21 U.S.C. § 877. “Substantial evidence ‘means evidence which is substantial, that is,
affording a substantial basis of fact from which the fact in issue can be reasonably inferred.
Substantial evidence is more than a scintilla, and must do more than create a suspicion of the
existence of the fact to be established.’” Morall, 412 F.3d at 176 (quoting NLRB v. Columbian
Enameling & Stamping Co., 306 U.S. 292, 299-300 (1939)). With regard to review of the exercise
of discretion by the Deputy Administrator, as opposed to her factfinding, the Administrative
Procedure Act provides the applicable standard in the absence of a more specific standard in the
Controlled Substances Act. Therefore, the Deputy Administrator’s revocation of Dr. Hoxie’s DEA
certificate will be set aside if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(a)(2). The Deputy Administrator must “examine the relevant
data” and the record must reflect “a rational connection between the facts found and the choice
made.” Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983) (citations and internal quotation marks omitted).
The Deputy Administrator’s determination that Dr. Hoxie materially falsified his applications
for a certificate of registration is supported by substantial evidence. The arrest records indicate that
Dr. Hoxie pled nolo contendere to being under the influence of PCP, a disposition confirmed by
documents from the California probation department and a records custodian in the California
Department of Justice. Dr. Hoxie argues that the arrest records are hearsay and possibly inaccurate.
However, hearsay can provide substantial evidence for an agency’s factual determinations. See
Richardson v. Perales, 402 U.S. 389, 402 (1971). Further, Dr. Hoxie failed to dispute the accuracy
of the records through contradictory evidence, such as his own testimony. Taken together, the arrest
No. 04-4122 Hoxie v. Drug Enforcement Admin. Page 5
records and associated documents, the testimony regarding the meaning of those documents, and the
failure of Dr. Hoxie to dispute the disposition of the charges indicated by the documents constitute
“relevant evidence that a reasonable mind might accept as adequate to support [the] conclusion” that
Dr. Hoxie materially falsified his application for a certificate of registration. Id. at 401 (quoting
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
The Deputy Administrator’s determination that Dr. Hoxie’s actions rendered his continued
registration inconsistent with the public interest is also supported by substantial evidence. The arrest
records, while hearsay, are sufficient to demonstrate that Dr. Hoxie failed to comply with California
controlled substances law. Dr. Hoxie’s refusal to testify at the hearing, refusal to offer any
explanation of his past trouble with the law, and his denials of past legal trouble, which are
contradicted by the arrest records, provide substantial evidence of other conduct threatening the
public health and safety. Candor during DEA investigations, regardless of the severity of the
violations alleged, is considered by the DEA to be an important factor when assessing whether a
physician’s registration is consistent with the public interest. See Morall, 412 F.3d at 182-83
(discussing several DEA decisions to continue registrations where physician cooperated with DEA
investigators); Vincent D. Scolaro, D.O., Grant of Restricted Registration, 67 Fed. Reg. 42,060
(Jun. 20, 2002) (granting registration as consistent with the public interest despite recent substance
abuse and felony convictions based in part on physician’s acceptance of responsibility). Dr. Hoxie’s
lack of candor and failure to take responsibility for his past legal troubles, evidenced by his arrest
records, his denials to DEA investigators, and failure to testify, provide substantial evidence that his
registration is inconsistent with the public interest.
Dr. Hoxie argues that the negative inference drawn from his failure to testify is
“fundamentally unfair.” This contention lacks merit. The Supreme Court has held that a negative
inference can be drawn from a failure to testify in civil proceedings, and that drawing such an
inference violates neither the Fifth Amendment nor Due Process. Baxter v. Palmigiano, 425 U.S.
308, 318-19 (1976). The Supreme Court has also commented in other contexts that silence can be
evidence of a negative inference. In United States v. Hale, 422 U.S. 171, 176 (1975), the Court
noted that “[s]ilence gains more probative weight where it persists in the face of accusation, since
it is assumed in such circumstances that the accused would be more likely than not to dispute an
untrue accusation.” And the Supreme Court has repeatedly explained in the immigration context
that “[s]ilence is often evidence of the most persuasive character. . . . [There] is no rule of law which
prohibits officers charged with the administration of the immigration law from drawing an inference
from the silence of one who is called upon to speak.” INS. v. Lopez-Mendoza, 468 U.S. 1032, 1043-
44 (1984) (quoting United States ex rel. Bilokumsky v. Tod, 263 U.S. 149, 153-54 (1923)). In the
particular context of an administrative hearing, an agency adjudicator’s reliance on silence as
evidence has been upheld. See Anderson v. Dep’t of Transp., 827 F.2d 1564, 1572-73 (Fed. Cir.
1987). Therefore, Dr. Hoxie’s silence was evidence on which the DEA could rely to conclude that
Dr. Hoxie materially falsified his application and that his actions rendered his continued registration
inconsistent with the public interest.
The DEA’s decision to revoke Dr. Hoxie’s certificate of registration, based on his material
falsification of his application and on his other actions, was not arbitrary, capricious or an abuse of
discretion. The DEA properly considers the candor of the physician and his forthrightness in
assisting in the investigation and admitting fault important factors in determining whether the
physician’s registration should be revoked. Barry H. Brooks, M.D., Continuation of Registration,
66 Fed. Reg. 18,305, 18,309 (Apr. 6, 2001) (despite grounds to revoke registration as inconsistent
with the public interest, registration continued because physician “readily admitted fault, [took]
responsibility for his past misconduct, and . . . fully cooperated with and assisted in the
investigations concerning his illicit activities”). Dr. Hoxie’s sanction was neither “unwarranted in
law” nor “without justification in fact.” See Butz v. Glover Livestock Comm’n Co., 411 U.S. 182,
185 (1973); Pearce v. United States Dep’t of Justice, 867 F.2d 253, 256 (6th Cir. 1988). The DEA’s
No. 04-4122 Hoxie v. Drug Enforcement Admin. Page 6
decision to revoke Dr. Hoxie’s registration was consistent with the DEA’s view of the importance
of physician candor and cooperation.
III.
Based on the foregoing, the petition for review is DENIED.