Rule2022-24425
Default Provisions for Hearing Proceedings Relating to the Revocation, Suspension, or Denial of a Registration
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 14, 2022
Effective
November 14, 2022
Issuing agencies
Justice DepartmentDrug Enforcement Administration
Abstract
The Drug Enforcement Administration (DEA) is amending its regulations by adding and revising provisions which enable DEA to hold registrants or applicants in default when they fail to timely request a hearing, or otherwise fail to participate in hearings. DEA is also amending its regulations to include an answer provision which will regulate how registrants respond to an Order to Show Cause (OTSC). These changes involve the revocation, suspension, or denial of a registration and do not affect other types of hearings.
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 218 (Monday, November 14, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 218 (Monday, November 14, 2022)]
[Rules and Regulations]
[Pages 68036-68046]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-24425]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
21 CFR Parts 1301, 1309, and 1316
[Docket No. DEA-438]
RIN 1117-AB36
Default Provisions for Hearing Proceedings Relating to the
Revocation, Suspension, or Denial of a Registration
AGENCY: Drug Enforcement Administration, Department of Justice.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Drug Enforcement Administration (DEA) is amending its
regulations by adding and revising provisions which enable DEA to hold
registrants or applicants in default when they fail to timely request a
hearing, or otherwise fail to participate in hearings. DEA is also
amending its regulations to include an answer provision which will
regulate how registrants respond to an Order to Show Cause (OTSC).
These changes involve the revocation, suspension, or denial of a
registration and do not affect other types of hearings.
DATES: This final rule is effective 30 days from November 14, 2022.
FOR FURTHER INFORMATION CONTACT: Scott A. Brinks, Diversion Control
Division, Drug Enforcement Administration; Mailing Address: 8701
Morrissette Drive, Springfield, VA 22152, Telephone: (571) 776-3882.
SUPPLEMENTARY INFORMATION:
I. Background
A. Regulatory History
DEA implements and enforces Titles II and III of the Comprehensive
Drug Abuse Prevention and Control Act of 1970 and the Controlled
Substances Import and Export Act (21 U.S.C. 801-971), as amended, and
referred to as the Controlled Substances Act (CSA).\1\ The CSA is
designed to prevent, detect, and eliminate the diversion of controlled
substances and listed chemicals into the illicit market while providing
for a sufficient supply of controlled substances and listed chemicals
for legitimate medical, scientific, research, and industrial purposes.
Controlled substances have the potential for abuse and dependence and
are controlled to protect the public health and safety. To this end,
controlled substances are classified into one of five schedules
[[Page 68037]]
based upon: the potential for abuse, currently accepted medical use,
and the degree of dependence if abused. 21 U.S.C. 812. Listed chemicals
are separately classified based on their use in and importance to the
manufacture of controlled substances (list I or list II chemicals). 21
U.S.C. 802(33)-(35).
---------------------------------------------------------------------------
\1\ The Attorney General's delegation of authority to DEA may be
found at 28 CFR 0.100.
---------------------------------------------------------------------------
In accordance with the Attorney General's authority to ``promulgate
and enforce any rules, regulations, and procedures which he may deem
necessary and appropriate for the efficient execution of his
functions'' under the Act, 21 U.S.C. 871(b), DEA's predecessor agency,
the Department of Justice's Bureau of Narcotics and Dangerous Drugs,
first issued regulations in 1971 to implement the Comprehensive Drug
Abuse Prevention and Control Act of 1970, which included administrative
hearing provisions.\2\ With a few exceptions, the administrative
hearing provisions of those 1971 regulations are virtually identical to
the ones in place today.
---------------------------------------------------------------------------
\2\ See Regulations Implementing the Comprehensive Drug Abuse
Prevention and Control Act of 1970, 36 FR 7776 (Apr. 24, 1971).
---------------------------------------------------------------------------
The changes in this action apply only to hearings relating to the
denial, revocation, or suspension of a DEA registration pursuant to 21
U.S.C. 823, 824, and 958. This rule does not implement changes for any
other type of hearings that DEA may conduct, including hearings
relating to quota issuance, revision, or denial, or those relating to
the scheduling of controlled substances.
B. Existing Regulations
The general administrative hearing provisions which apply to all
hearings brought pursuant to 21 U.S.C. 823, 824 and 958 are found at 21
CFR part 1316, subpart D. Specific administrative hearing provisions
relating to the registration of manufacturers, distributors,
dispensers, importers, and exporters of controlled substances are in 21
CFR 1301.32, 1301.34-37, and 1301.41-46, as well as 21 CFR 1316.41-68.
Administrative hearing provisions relating to the registration of
manufacturers, distributors, importers, and exporters of list I
chemicals are in 21 CFR 1309.42, 1309.43, 1309.46, 1309.51-55, and 21
CFR 1316.41-68.
In contrast to the hearing regulations of many other federal
agencies, current DEA regulations contained in 21 CFR parts 1301, 1309,
and 1316 relating to actions to deny, suspend, or revoke a DEA
registration do not contain a responsive pleading to an OTSC (i.e., an
answer provision) or a default provision. The changes in this final
rule apply only to hearings relating to the denial, revocation, or
suspension of a DEA registration pursuant to 21 U.S.C. 823, 824, and
958. This rulemaking does not amend any other type of hearings
regulations that DEA may conduct, including hearings relating to quota
issuance, scheduling of controlled substances, etc.
II. Purpose and Need for Rulemaking
DEA is revising its regulations by adding new provisions to
increase the efficiency of, and facilitate the processing of, its
administrative hearings. In the current practice, the lack of an answer
provision or default provision resulted in agency inefficiencies where
litigants waive their right to a hearing or otherwise fail to
participate in the administrative hearing process. DEA is promulgating
several new provisions for the purpose of mitigating the issues of
litigants failing to participate generally in the administrative
process.
A. Need for New Provisions
DEA needs to revise its regulations in order to expedite the
administrative hearing process as the current provisions may cause
administrative waste for DEA and potential delays for registrants.
First, the lack of a default provision has led to excessive extension
requests in circumstances where the registrant eventually decides to
not request a hearing. Additionally, the lack of clear provisions
regarding responsive pleadings has led to confusion and inefficiency,
and it unnecessarily slowed down the administrative hearing process.
The absence of a default provision has led to inefficiencies in
circumstances where DEA prepared extensively for hearings that never
occurred, or occurred later than they should due to respondents not
complying with orders in the case. Respondents presently are permitted
30 days to request a hearing upon receipt of an OTSC. If a request for
an extension was granted by the presiding officer, this gives
respondents up to an additional 30 to 60 days to respond. DEA could
thus be preparing for litigation for up to 90 days under some
circumstances, which is excessively long for the filing of a request
for hearing. This problem is exacerbated in light of the absence of any
default provision, as DEA could be preparing for litigation for 90 days
in cases where no hearing is actually requested.
Furthermore, as noted, DEA regulations currently have no default
provision which permits the government's (or respondent's) entry of
default upon a litigant's failure to participate. Additionally, if
respondents fail to otherwise participate in the hearing process, DEA
must submit an entry for final order to the Administrator. This final
order requires a voluminous record providing evidence in support of
every factual allegation that was included in the OTSC. This results in
a very large time and resource investment for DEA to review the record
and draft the final order.
Last, DEA lacks a comprehensive set of rules for responsive
pleadings, or the answer. The existing rules are unclear what the
answer should contain, thus resulting in ambiguity for the general
public (pro se litigants in particular). As a result, DEA occasionally
receives responsive pleadings that were incomplete or insufficient,
thus leading to an unnecessary delay of the administrative process.
Furthermore, the regulations lack a provision dictating what happens
procedurally should the respondent fail to file an answer. Thus, DEA
needs amendments to its administrative hearing regulations in the form
of adding default provisions and updating responsive pleading rules.
B. Purpose and Description of Changes
DEA is amending its administrative hearing regulations by adding
certain provisions and revising other provisions to increase the
efficiency of the administrative hearing process. As stated above,
these changes are necessary to prevent the unnecessary expenditure of
agency resources, to clarify obligations, and to expedite the hearing
process for both parties. The changes in this action apply only to
hearings relating to the denial, revocation, or suspension of a DEA
registration pursuant to 21 U.S.C. 823, 824, and 958. Again, this
rulemaking does not contemplate changes for any other types of hearings
that DEA may conduct, such as hearings relating to the scheduling of
controlled substances, quota issuance, etc.
15 Days To Request a Hearing
In the Notice of Proposed Rulemaking (NPRM), DEA had proposed to
revise the existing regulations to decrease the deadline for submitting
a request for a hearing from the current 30 days to 15 days. In light
of the public comments and upon further consideration of the issues,
DEA has decided to maintain the current deadline for requesting a
hearing and the final rule retains the 30-day deadline after receipt of
the OTSC for submitting a request for a hearing.
As a result of this decision, DEA is thus revising the provisions
pertaining to this deadline as follows: 21 CFR
[[Page 68038]]
1301.37(d) by adding paragraph (1); \3\ Sec. 1309.46(d) by adding
paragraph (1); and Sec. 1316.47 by amending paragraphs (a) and (b).
These changes reflect the requirement of respondents, should they
desire to contest the OTSC, to file a request for a hearing in response
to an OTSC within 30 days of receipt of the OTSC.\4\ DEA believes these
changes will achieve the desired ends of administrative efficiency
while not materially changing the burden of respondents as the time in
which to request a hearing is not changed. Allowing 30 days for
requesting a hearing is consistent with the 30-day time period for
respondents to file an answer.
---------------------------------------------------------------------------
\3\ This rule is revising 21 CFR 1301.37(d) (relating to
controlled substance registrations) by replacing paragraph (d) with
paragraphs (d)(1) through (d)(4). New paragraph (d)(1) relates to
requests for hearings, and new paragraphs (d)(2) through (d)(4)
relate to the filing and amendment of the answer. 21 CFR 1309.46(d)
(relating to listed chemical registrations) is similarly being
revised according to the same structure.
\4\ Receipt by the registrant, for the purposes of this
paragraph, will be determined by when the registrant receives the
OTSC via certified mail at the location listed on the registration.
---------------------------------------------------------------------------
Filing an Answer
DEA is amending the following provisions, which require that
respondents who request a hearing will file an answer to the OTSC
within 30 days of the receipt of the OTSC: Sec. 1301.37(d) by adding
paragraph (2); Sec. 1309.46(d) by adding paragraph (2); and Sec.
1316.47 by revising paragraph (b).
First, Sec. 1301.37(d)(2) permits the presiding officer, the
Administrative Law Judge, to consider an answer that was filed after
the deadline upon a showing of good cause. DEA anticipates that, in
contrast to simply requesting a hearing, preparing an answer will take
more time and effort than simply requesting a hearing. Thus, DEA
believes the 30-day requirement to file an answer, with a good cause
provision in the event of delay, is sufficiently tailored to balance
the needs of the public with the interest in administrative efficiency.
Next, DEA is amending Sec. 1301.37(d) by adding paragraph (3), and
Sec. 1309.46(d) by adding paragraph (3). These provisions require
respondents to admit, deny, or state they are unable to answer each
factual allegation contained in the OTSC. It also provides that any
allegation not denied shall be deemed admitted. This addition is
necessary to clarify the requirements of an answer to the general
public, in order to limit the scope of the proceeding to issues which
are genuinely in dispute. Last, DEA is amending Sec. 1301.37(d) by
adding paragraph (4), and Sec. 1309.46(d) by adding paragraph (4),
which state that a party may amend its answer as a matter of right once
before the prehearing ruling. These provisions also grant the presiding
officer leave to permit amendments to the answer as justice so
requires.
The changes to these provisions are needed to clarify, to the
general public, when and under what circumstances an answer is
required. As stated, prior to adopting this rule it has been unclear to
respondents when and under what circumstances an answer must be filed,
and what must be contained in the answer. These changes elucidate
exactly when an answer is required and what must be contained, and
grant authority to the presiding officer to make exceptions when
merited.
Default Provisions
DEA is amending its regulations to permit the entry of default
where a party fails to timely request a hearing, or fails to
participate in the administrative hearing process. DEA is amending its
regulations by revising Sec. 1301.43(c)(1) and Sec. 1309.53(b)(1),\5\
to permit DEA's entry of default where the respondent fails to timely
request a hearing in response to an OTSC. Respondents who fail to
request a hearing are nevertheless able to waive the default by filing
a motion with the Office of Administrative Law Judges within 45 days
after the date of receipt of the OTSC. The presiding officer may rule
on the motion timely filed within 45 days, and may waive the default
after the 45-day period lapsed. The presiding officer is authorized to
grant the motion. DEA believes this rule is necessary to prevent
administrative waste while also providing sufficient discretion for the
presiding officer to nevertheless permit a hearing in circumstances
which merit excuse.
---------------------------------------------------------------------------
\5\ As mentioned above in the discussion of the answer and
request for hearing provisions, part 1301 relates to controlled
substance registrations, and part 1309 relates to listed chemical
registrations.
---------------------------------------------------------------------------
Under this rule, once a registrant is in default for failure to
timely file a request for a hearing or file an answer, this means that
the respondent is deemed to agree to all of the factual allegations in
the OTSC.\6\ Without this provision, DEA would be required to prepare
an administrative record providing evidence sufficient to support every
factual allegation in the OTSC, regardless of whether the respondent
wishes to contest those allegations or whether, had he so contested, he
would have challenged every factual allegation.
---------------------------------------------------------------------------
\6\ See 21 CFR 1301.43(e), 1309.53(d).
---------------------------------------------------------------------------
Next, DEA is amending its regulations by adding several instances
where a party can be held in default for generally failing to
participate in the administrative hearing process. First, DEA is adding
Sec. 1301.43(c)(2), as well as Sec. 1309.53(b)(2), which state that
respondents who request a hearing, but fail to timely file an answer
(and fail to demonstrate good cause) are considered to have waived
their opportunity for a hearing and are in default. Once a party is
held in default for failing to timely file an answer and fails to
establish good cause, the presiding officer is required to enter an
order terminating the proceedings once DEA files a motion. Moreover,
DEA is adding Sec. 1301.43(c)(3), as well as Sec. 1309.53(b)(3),
which states a party shall also be in default for failing to plead or
otherwise defend. Upon motion, the presiding officer must enter an
order terminating the proceeding unless the party can demonstrate good
cause to stay the order. After termination of the proceeding, a party
may also file a motion to excuse default with the Office of the
Administrator.
DEA is amending its regulations by revising Sec. 1301.43(e) and
1309.53(d) to state that in all instances of default, the party's
default shall be deemed to constitute a waiver of their right to a
hearing, and an admission of the factual allegations of the order to
show cause. Moreover, DEA is amending its regulations by adding Sec.
1301.43(f)(1)-(3) and Sec. 1309.53(e)(1)-(3), which specify the
required procedure to follow once a respondent is in default. Once a
respondent is in default, and the presiding officer has issued an order
terminating the proceedings, DEA may file a request for a final agency
action with the Administrator. Respondents have the right to appeal
either the termination of proceeding or the final order by following
the procedures contained therein.
The aforementioned provisions allow the entry of default in
circumstances in which the respondent essentially waives their right
and opportunity to participate in the hearing process by failing to
request a hearing, failing to respond, or otherwise failing to
participate. These provisions are necessary, as DEA is needlessly
expending significant resources in common circumstances where the
respondent fails to litigate. Under the default provisions in this
final rule, this admission of the factual allegations of the OTSC in
the event of default facilitates the enforcement process by eliminating
the need for DEA to provide
[[Page 68039]]
evidentiary support for every factual allegation. DEA believes these
provisions will preserve scarce agency resources by eliminating excess
time and resources spent on cases where respondents fail to contest the
allegations of the OTSC on the merits. Additionally, DEA believes that
the procedures in place grant sufficient ability for respondents to
appeal the actions of the presiding officer and the Administrator.
Thus, DEA believes these provisions will substantially expedite the
administrative hearing process while preserving respondents' due
process rights.
Other
DEA is also amending its regulations by revising Sec. 1316.49 to
exclude respondents engaged in proceedings held under parts 1301 or
1309 from the ability to file a waiver of a hearing and a statement in
lieu of a hearing. DEA believes that matters litigated under parts 1301
and 1309 are uniquely enhanced by the hearing setting, namely
credibility determinations and resolutions of factual disputes. Thus,
DEA is limiting this exception to only matters adjudicated under Sec.
1301 or Sec. 1309, and other proceedings continue to be eligible for
the waiver.
These regulatory changes and this rulemaking generally apply only
to OTSCs and associated hearings issued on or subsequent to the
effective date listed above.
III. Public Comments on the NPRM
DEA received four comments during the 60-day comment period. All
four commenters referenced Sec. 1301.37(d)(1), stating that the 15-day
time limit to request a hearing was too short. Two commenters
referenced Sec. 1301.37(2), arguing the 30-day time limit to file an
answer was too short. One commenter referenced Sec. 1309.46, arguing
registrants should have up to three times to amend an answer as a
matter of right. Last, one commenter argued that respondents engaged in
proceedings under parts 1301 or 1309 should be permitted to submit a
written statement in lieu of requesting a hearing.
DEA has closely reviewed and considered every comment and has
decided for the following reasons to promulgate the regulations as
drafted, with one change regarding the time limit for requesting a
hearing.
15-Day Period for Requesting a Hearing, Sec. 1301.37(d)(1)
The proposed rule would have required registrants to request a
hearing within 15 days of receipt of an OTSC, instead of the 30 days
allowed under the current regulations. This proposal received the most
criticism during the comment period, as all commenters believe the 15-
day requirement would generally be too prohibitive for registrants.
Based on the comments from the public, DEA has decided not to adopt
this provision from the proposed rule. The final rule permits
registrants 30 days to request a hearing, rather than 15 days.
First, commenters generally stated the 15-day period is too short
as it would not leave sufficient time to complete typical prehearing
tasks. Specifically, commenters noted this was insufficient time to
contact an attorney, contact and gather information from parties who
may be involved, as well as investigate. Alternatively, the commenters
proposed allowing 30-60 days to request a hearing because, according to
their view, this would be sufficient time to prepare for a hearing.
Moreover, one commenter argued that this short time period would lead
to multiple requests for an extension, thereby contradicting the
purpose of the new rule by further delaying the administrative process.
DEA Response: DEA has examined all comments related to this
provision, and has decided to retain the existing 30-day period in this
final rule to request a hearing, instead of shortening that period to
15 days. First, DEA believes this time period is reasonable, namely
that this 30-day period provides sufficient time for the respondent to
request a hearing. DEA understands and appreciates that the decision to
request a hearing is often done after consulting with counsel to
deliberate on the merits of the case; therefore, it makes sense to set
the same 30-day deadline for requesting a hearing and for submission of
an answer to the OTSC.
When drafting this rule, and after consideration of all the
comments, DEA considered the option of providing registrants/applicants
up to 60 days to request a hearing. Although this would provide the
registrant/applicant maximum opportunity to evaluate all contingencies
related to the hearing, DEA does not consider this necessary. This 30-
day period should allow sufficient time for registrants/applicants to
contact parties, conduct factual investigations, and otherwise prepare
for the hearing should they choose to do so.
Requesting a hearing within this time period would eliminate a
substantial amount of administrative waste, as most registrants who are
served with an OTSC do not request a hearing. The provisions of this
rule requiring the request for a hearing and the answer on the merits
to both be filed within 30 days of the receipt of the OTSC will provide
DEA a means of quickly and efficiently processing cases, as the
majority will then be processed at an expedited pace. One commenter
noted, and DEA agrees, that some cases will result in a request for an
extension. DEA anticipates that this provision will, on balance, save
more time by facilitating cases than will be lost by considering
extension requests.
Last, DEA finds this provision reasonable and preserves the
registrants' due process rights as it creates a means for registrants
to file a motion to set aside default when good cause is shown within
45 days of the receipt of the OTSC. Thus, even in those circumstances
where registrants are in default, they would be able to still request a
hearing when good cause is shown.
30 Days To File Answer, Sec. 1301.37(2)
DEA has closely reviewed all the comments relating to the
requirement to file an answer in 30 days under Sec. 1301.37(2) and has
decided to promulgate the section as written. One commenter argued the
requirement for a registrant to file an answer within 30 days of
receipt of the OTSC is arbitrary, and does not permit sufficient time
to contact parties involved or conduct factual investigations.
Moreover, another commenter argued that 30 days is insufficient time to
adequately respond to the OTSC, favoring 60 days instead.
DEA acknowledges that filing an answer will likely require more
time and effort than simply requesting a hearing. DEA believes,
however, the requirement to file an answer within 30 days is reasonable
and sufficient time to adequately prepare a response to the OTSC.
First, requiring a response within such a time frame is commonplace
among other administrative regulations as well as other state and
federal level courts.\7\ Although there are important differences
between administrative hearings and federal court cases, it is telling
that the Federal Rules of Civil Procedure require a responsive pleading
within 21 days of being served, which is 9 days less than what DEA
rules require.\8\ Thus, even though the answer will likely require more
time and effort than simply requesting a hearing, the time allotted is
generous when compared to federal civil practice.
---------------------------------------------------------------------------
\7\ See 85 FR 61662, 61664.
\8\ Fed. R. Civ. P. 12(a)(A)(i).
---------------------------------------------------------------------------
Moreover, as stated in the NPRM, this requirement will
significantly improve efficiency by narrowing the scope of the
[[Page 68040]]
factual issues to only that which is in genuine dispute. This
efficiency will result in expediting cases significantly, benefitting
both DEA and registrants.
Last, registrants are permitted to amend their answer should they
choose, which cures many of the concerns raised by comments. DEA grants
leave to amend the answer once as a matter of right under Sec.
1309.46(d)(4), and permits the presiding offer to grant leave to amend.
Thus, on balance, this provision allows DEA to process cases quickly
and efficiently while enabling the registrants to adequately prepare
for hearings.
Other Comments
DEA has closely reviewed all other comments and has decided to
promulgate these regulations as written. First, one commenter stated
the 30-day limit to file a motion to set aside default was too short,
and should be 90 days. Another commenter stated that registrants should
be able to amend their answer as a matter of right up to three times.
Additionally, one commenter stated that requiring a hearing, rather
than accepting a statement in lieu of requesting a hearing, creates
administrative waste. Last, one commenter requested DEA to stay the
proposed 15-day period to request a hearing until the COVID-19 pandemic
is over.
First, as stated above, DEA believes the 45-day period to file
motion to set aside default is reasonable and preserves the due process
rights of registrants. In circumstances where registrants fail to
request a hearing, they will then have 30 days from the entry of
default to provide the presiding officer with an explanation as to why
the request could not be filed. This safe harbor provision will enable
registrants to set aside default where good cause is shown, and provide
yet another opportunity for the registrant to present their case.
Permitting 90 days to set aside default is unnecessary as this task
only requires the filing of one motion. Moreover, this extended period
would likely result in prolonging cases, contradicting the purpose and
goal of default rules.
Next, DEA believes that granting leave to amend as a matter of
right once, and subsequently granting the presiding officer the ability
to amend when justice so requires, provides registrants sufficient
opportunity to be heard. Granting leave to amend as a matter of right
multiple times will likely result in a significant delay of processing
cases. Registrants would then have no incentive to gather evidence,
contact parties, prepare written statements, or otherwise respond to
DEA in a comprehensive manner the first time. Moreover, DEA creates a
safe harbor by granting authority to the presiding officer to grant
leave to amend in circumstances which are justified, such as when
evidence was recently discovered and could not have been discovered
prior to filing the original answer. Thus, DEA believes this provision
is reasonable and preserves the registrant's due process rights.
DEA closely reviewed the comment regarding statements in lieu of
hearings and has decided to promulgate the regulations as written. This
commenter argues that the elimination of a statement in lieu of
requesting a hearing would be wasteful for both DEA and the registrant
in circumstances where the registrant has clearly exculpatory
information. This, in theory, would remove the requirement for a
hearing and would allow the expedited processing of that case. As
stated previously, these hearings deal specifically with the
revocation, suspension, or denial of a registration which is
substantially benefitted by the presiding officer being able to resolve
factual disputes and make credibility determinations. DEA believes that
simply permitting a statement in lieu of this hearing would be a
detriment to both DEA and respondents, and requiring a hearing would be
optimal for both parties.
Last, DEA has closely reviewed the statements regarding the COVID-
19 pandemic. As noted above, the final rule does not adopt the 15-day
time limit proposed in the NPRM, and this final rule retains the
existing 30-day deadline for filing a request for hearing. Although DEA
is sympathetic to the difficulties that are associated with this global
change, DEA believes that the 30-day deadline will allow sufficient
flexibility under the circumstances, because the filing of a request
for a hearing is a routine action. Since this final rule is not making
any change in the current 30-day deadline, there is no reason to
consider ``staying'' the effective date of this regulation.
Conclusion
In sum, DEA has reviewed all comments extensively and has taken
them in full consideration when drafting these regulations.
Accordingly, DEA is promulgating these regulations as written, with the
exception of the 15-day period to request a hearing, as they create
reasonable obligations which promote administrative efficiency while
maintaining the due process rights of registrants.
Regulatory Analyses
Introduction
DEA received, and closely reviewed, all four comments that were
submitted regarding this rulemaking. None of the comments raised issues
that would require amendment of the analysis contained in the NPRM,
with the exception of maintaining the 30-day deadline to request a
hearing. Thus, the regulatory analyses here closely mirror the data and
conclusions contained in the NPRM, and are repeated here for
convenience.
Executive Orders 12866, and 13563 (Regulatory Planning and Review and
Improving Regulation and Regulatory Review)
This rule was developed in accordance with the principles of
Executive Orders (E.O.) 12866 and 13563. E.O. 12866 directs agencies to
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity). E.O. 13563 is supplemental to and reaffirms the
principles, structures, and definitions governing regulatory review as
established in E.O. 12866. E.O. 12866 classifies a ``significant
regulatory action,'' requiring review by the Office of Management and
Budget (OMB), as any regulatory action that is likely to result in a
rule that may: (1) have an annual effect on the economy of $100 million
or more or adversely affect in a material way the economy, a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities; (2) create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) materially alter
the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients thereof; or (4)
raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the E.O. The
Office of Management and Budget (OMB) has determined that this rule is
not a ``significant regulatory action'' under E.O. 12866, section 3(f),
and it has not been reviewed by OMB.
DEA estimates that there are both costs and cost savings associated
with this rule. The provisions of this rule apply only to the small
minority of applicants and registrants who are issued an OTSC.
Therefore, a very small
[[Page 68041]]
minority of registrants will be economically impacted. From 2016 to
2018, there were on average 81 OTSCs issued annually. These 81 OTSCs
fall into one of three categories: (1) an average of 29 cases in which
the registrant/applicant surrendered and/or withdrew their application,
thus mooting the case; (2) an average of 11 cases in which the
registrant/applicant properly requested a hearing; and (3) the
remaining 41 registrants/applicants per year who failed to timely file
a request for a hearing and were deemed to have waived their right to a
hearing and who would be in default under this rule. The 11
registrants/applicants per year who properly requested a hearing are
estimated to incur costs while the registrants/applicants in the
remaining two categories do not.
This rulemaking requires that a registrant/applicant must file an
answer responding to every factual allegation in the OTSC. The average
of 29 cases in which the registrant/applicant surrenders or withdraws
their application, thus mooting the case, will not result in the
registrant/applicant filing an answer to the OTSC. Therefore, these
registrants/applicants will not incur any costs. The average of 11
cases per year where a registrant/applicant requests a hearing may
incur a cost associated with answering the factual allegation(s) of the
OTSC. To estimate the cost of this change, DEA estimates that, on
average, it will take five hours for a registrant's/applicant's
attorney to review the OTSC and prepare an answer to all allegations.
Thus, the total estimated cost of this change is $36,190 per year.\9\
---------------------------------------------------------------------------
\9\ Hourly rate using Laffey Matrix for lawyers with 8-10 years
of experience from 6/1/18 to 5/31/19 is $658 per hour. Total Cost =
($658 x 5 x 11). While it is possible the fees incurred for legal
review and to answer the allegations would be offset by a reduction
in fees later in the process. This is a new requirement and DEA
conservatively estimates this requirement as a new cost.
---------------------------------------------------------------------------
The remaining 41 cases, where there was neither a registration
surrendered nor a hearing conducted, would be differently impacted by
this rule. This rule provides that where a party defaults, the factual
allegations of the OTSC are deemed admitted. For these 41 cases, where
there was registrant/applicant inaction, the registrant's/applicant's
cost of inaction is the same under current rules. There is no
additional cost to registrants/applicants. This rule provides that a
default may only be set aside upon a party establishing good cause to
excuse its default. DEA has no basis to estimate the number of affected
parties who may seek to establish good cause to set aside a default and
any costs associated with such activities. However, under Kamir Garces
Mejias, 72 FR 54931 (2007), a party seeking to be excused from an
Administrative Law Judge (ALJ) order terminating a proceeding for
failing to comply with the ALJ's orders is required to show good cause
to excuse its default. Thus, because this requirement of the rule
simply codifies case law, it imposes no additional cost to registrants.
Finally, this rulemaking will result in cost savings for DEA by
streamlining the Administrator's review process using the default
determination. The rule provides that when a registrant/applicant is
deemed to be in default, DEA may then file a request for final agency
action along with a record to support its request with the
Administrator who may enter a default. This record should include, for
instance, documents demonstrating adequate service of process and,
where a party held to be in default asserted that the default should be
excused, any pleadings filed by both the parties addressing this issue.
A registrant/applicant who has defaulted under this rule is deemed to
admit all of the factual allegations in the OTSC.
In contrast, under the current rules, in cases where the
registrant/applicant waives their right to a hearing, DEA counsel must
provide the Administrator with a much more voluminous record, including
evidence to support each factual allegation which DEA seeks to
establish. Because DEA's current rules do not provide that a
registrant's/applicant's waiver of their right to a hearing constitutes
an admission of the factual allegations of the OTSC, both the
preparation of the record by DEA counsel for submission to the
Administrator and the process of reviewing the record and drafting the
Administrator's final order require a significant investment of agency
resources. The changes implemented here would thus save these
resources, which can then be devoted to other pending matters in which
the registrant/applicant does contest the allegations in the OTSC, and
reduce the time it takes for the Administrator's final order to issue
in those cases where registrants/applicants choose not to challenge the
proceeding or fail to properly participate in the proceeding.
To estimate the cost savings of this rule, DEA first estimates the
amount of time and resources that would be saved for cases that would
be resolved via entry of a default. The complexity of a given case
would impact both how much time it would take to prepare the request
for final agency action and for the Administrator's Office to draft the
final order based on that final agency action request, which
cumulatively would represent the amount of resources saved in a given
case. For a case based solely on allegations related to a lack of state
authority, or an exclusion from federal health care programs, the
gathering of the evidence, including declarations, and preparation of
the final agency action motion take, on average, approximately 10-15
hours. For cases with substantive allegations (most commonly, improper
prescribing or filling of prescriptions), the preparation of the final
agency action materials is considerably longer--approximately 30-40
hours per case. It is estimated that of the cases in which there was
neither a hearing request nor a registration surrender, roughly 30-40
percent are No State License (NSL) cases, and 60-70 percent of cases
would be considered other non-NSL cases. For the purpose of this
analysis, DEA estimates that of the 41 cases this rule would impact on
average each year, 65 percent would be considered non-NSL cases and
take 35 hours per case to prepare a final agency action, while 35
percent would be considered NSL cases and take 13 hours per case to
prepare a final agency action. Applying the loaded wage \10\ for GS-15
Step 5 employees,\11\ DEA estimates the cost savings of this rule for
the time it would take to prepare the final agency action request is
around $134,065 per year.\12\
---------------------------------------------------------------------------
\10\ The loaded wage includes the average benefits for employees
in the government. Therefore, the loaded wage is the estimated cost
of employment to the employer rather than the compensation to the
employee.
\11\ Hourly rate for GS-15 Step 5 employees in the Washington,
DC region is $74.86. 2019 General Schedule Locality Pay Tables for
the Washington-Baltimore-Arlington area, Office of Personnel
Management, <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/DCB_h.pdf">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2019/DCB_h.pdf</a>. Average benefits
for state government employees is 37.5% of total compensation.
Employer Costs for Employee Compensation--December 2018, Bureau of
Labor Statistics, <a href="https://www.bls.gov/news.release/archives/ecec_03192019.pdf">https://www.bls.gov/news.release/archives/ecec_03192019.pdf</a>. The 37.5% of total compensation equates to 60%
(37.5%/62.5%) load on wages and salaries. The loaded hourly rate is
$119.78 ($74.86 x 1.6). The ECEC does not provide figures for
Federal Government employees; therefore, figures for state employees
are used as estimate.
\12\ ($119.78 x 41 x 65% x 35) + ($119.78 x 41 x 35% x 13).
---------------------------------------------------------------------------
Additionally, there are cost savings from the time it would take
the Administrator's Office to draft the final order based on that final
agency action request. The cost savings for the Administrator's review
process would be the most significant for all substantive cases that
would be subject to the rule. The Administrator's review process
consists of the time to review
[[Page 68042]]
the final agency action request, evaluate the evidence submitted by DEA
counsel, draft a decision, and the time the Administrator must spend
reviewing the proposed decision. On average, there are four substantive
cases per year that would be subject to the rule. Currently, the
estimated time it takes for the substantive cases is 30 days or 240
hours per case. With the rule promulgated, the estimated time it will
take for these substantive cases will be between one day and two weeks
depending on the complexity of the case. For the purpose of this
analysis, DEA estimates it will take seven days or 56 hours per case.
Using the loaded hourly wage of a GS-15 Step 5 employee, the estimated
cost savings for substantive cases is $88,155 per year.\13\ There is
also cost savings for non-substantive cases, but DEA believes this cost
savings to be minimal for the Administrator's review process. Also,
while there is a difference in the legal definition of ``deemed to have
waived'' versus ``deemed to be in default,'' there is no enhancement of
potential savings. The Administrator will continue to issue the final
order based on the same set of circumstances regarding the OTSC and the
default determination, versus the current ``deemed to have waived''
determination with the additional voluminous record provided.
Therefore, the cost savings due to the Administrator's review process
is estimated to be around $88,155 per year.
---------------------------------------------------------------------------
\13\ (4 x 240 x $119.78)-(4 x 56 x $119.78) = $88,155.
---------------------------------------------------------------------------
In sum, there are both costs and cost savings associated with this
rule. DEA has no basis to estimate the additional litigation costs for
registrants who are ``deemed to be in default'' as a result of their
failure to comply with the requirements of the rule as compared to
registrants who are ``deemed to have waived'' under the prior
regulations, but believes this additional litigation cost to be minimal
due to the small number of these cases occurring each year. The total
cost to registrants due to the requirement that a registrant/applicant
must file an answer to an OTSC is $36,190 per year. This rule has an
estimated cost savings of $222,220 ($134,065 + $88,155) per year for
DEA by streamlining the Administrator's review process using the
default determination. The estimated net cost savings of this rule is
$186,030 ($222,220-$36,190) per year.
Executive Order 12988 (Civil Justice Reform)
This rule meets the applicable standards set forth in sections 3(a)
and 3(b)(2) of E.O. 12988, Civil Justice Reform, to eliminate drafting
errors and ambiguity, minimize litigation, provide a clear legal
standard for affected conduct, and promote simplification and burden
reduction.
Executive Order 13132 (Federalism)
This rule will not have substantial direct effects on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government. Therefore, in accordance with E.O. 13132, the DEA
has determined that this rule does not have sufficient federalism
implications to warrant the preparation of a federalism assessment.
Executive Order 13175 (Consultation and Coordination With Indian Tribal
Governments)
This rule does not have tribal implications warranting the
application of E.O. 13175. It does not have substantial direct effects
on one or more Indian tribes, on the relationship between the Federal
government and Indian tribes, or on the distribution of power and
responsibilities between the Federal government and Indian tribes.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) requirements do not apply
to ``the collection of information . . . during the conduct of . . . an
administrative action or investigation involving an agency against
specific individuals or entities.'' \14\ These rules involve the
collection of information pursuant to administrative actions, orders to
show cause specifically, against specific registrants. Thus, this
rulemaking is exempted from the requirements under PRA.
---------------------------------------------------------------------------
\14\ 44 U.S.C. 3501 et. seq.
---------------------------------------------------------------------------
Regulatory Flexibility Act
The Administrator, in accordance with the Regulatory Flexibility
Act (5 U.S.C. 601-12) (RFA), has reviewed this rule and by approving it
certifies that this rule will not have a significant economic impact on
a substantial number of small entities.
In accordance with the RFA, DEA evaluated the impact of this rule
on small entities. This rule adds provisions allowing the entry of a
default where a party served with an OTSC fails to request a hearing,
fails to file an answer to the OTSC, or otherwise fails to defend
against the OTSC. Cf. Fed. R. Civ. P. 55(a). The rule provides that
where a party defaults, the factual allegations of the OTSC are deemed
admitted. Further, the rule removes the current provisions allowing a
recipient of an OTSC to file a written statement while waiving their
right to an administrative hearing.
As all DEA registrants are subject to the amended administrative
enforcement procedures, the rule could potentially affect any person
holding or planning to hold a DEA registration to handle controlled
substances and those manufactures, distributors, importers, and
exporters of list I chemicals. As of March 2019, there were
approximately 1.8 million DEA registrations for controlled substances
and list I chemicals. Registrants include individual practitioners
(such as physicians, dentists, mid-level practitioners, etc.), business
entities (such as offices of physicians, pharmacies, hospitals,
pharmaceutical manufacturers, distributors, importers, exporters,
etc.), and governmental or tribal agencies that handle controlled
substances or list I chemicals.
In practice, a very small minority of DEA registrants are served
with OTSCs in connection with the denial or cancellation of
registration, and thus a very small minority of DEA registrants would
be impacted by the rule. Over the three-year period 2016-2018, there
was an average of 81 OTSCs served per year. These 81 OTSCs fall into
one of three categories: (1) an average of 29 cases in which the
registrant/applicant surrendered the registration and/or withdrew their
application, thus mooting the case; (2) an average of 11 cases in which
the registrant/applicant properly requested a hearing; and (3) the
remaining 41 registrants/applicants per year who failed to timely file
a request for a hearing and were deemed to have waived their right to a
hearing (and would be in default under this rule). The 11 registrants
per year who properly requested a hearing are estimated to incur costs
while the registrants in the remaining two categories do not.
This rulemaking requires that a registrant/applicant must file an
answer responding to every allegation in the OTSC. The average of 29
cases in which the registrant/applicant surrenders or withdraws their
application, thus mooting the case, would not result in the registrant/
applicant filing an answer to the allegations in the OTSC. Therefore,
these registrants/applicants would not incur any costs. The average of
11 cases per year where a registrant/applicant requests a hearing may
incur a cost associated with answering the allegation(s) of the OTSC.
To estimate the cost of this change, DEA estimates
[[Page 68043]]
that, on average, it will take five hours for a registrant/applicant's
attorney to review the OTSC and prepare an answer to all allegations,
or an average of $3,290 per registrant.\15\
---------------------------------------------------------------------------
\15\ Hourly rate using Laffey Matrix for lawyers with 8-10 years
of experience from 6/1/18 to 5/31/19 is $658 per hour. $658 x 5 =
$3,290.
---------------------------------------------------------------------------
The remaining 41 cases, where there was neither a registration
surrendered nor a hearing conducted, would be differently impacted by
this rule. This rulemaking provides that where a party defaults, the
factual allegations of the OTSC are deemed admitted. This rulemaking
also provides that a default may only be set aside upon a party
establishing good cause to excuse its default. DEA has no basis to
estimate the number of affected parties who will seek to establish good
cause to set aside a default and any costs associated with such
activities. However, under Kamir Garces Mejias, a party seeking to be
excused from an ALJ order terminating a proceeding for failing to
comply with the ALJ's orders is required to show good cause to excuse
its default. 72 FR 54931 (2007). Thus, because this requirement of the
rule simply codifies case law, it imposes no additional cost to
registrants.
In summary, it is estimated that there will be an average of 11
cases per year, in which the registrant/applicant properly requests a
hearing and will incur an economic impact of $3,290. Because the
subject of the 11 cases can be an individual or entity (i.e., offices
of physicians, pharmacies, hospitals, pharmaceutical manufacturers,
distributors, importers, exporters, governmental or tribal agencies,
etc.), DEA compared the estimated cost of $3,290 to the average revenue
of the smallest entities for some representative North American
Industry Classification System (NAICS) codes for DEA registrants using
data from U.S. Census Bureau, Statistics of U.S. Businesses (SUSB).
For example, there are a total of 174,901 entities in NAICS code,
621111-Office of Physicians (Except Mental Health Specialists). Of the
174,901 total entities, DEA estimates that 97.6% are small entities.
DEA compared the estimated cost of $3,290 to the revenue of the
smallest of small entities, those with 0-4 employees. There are 95,494
entities in the 0-4 employee category with a combined total annual
revenue of $42,823,012,000, or an average of $448,000 per entity
(rounded to nearest thousand).\16\ The estimated cost of $3,290 is
0.73% the average annual revenue of $448,000. The same analysis was
conducted for each representative NAICS code. The cost as percent of
average revenue for the smallest of small entities ranges from 0.24% to
1.30%. The table below summarizes the analysis and results.
---------------------------------------------------------------------------
\16\ Data for NAICS codes are based on the 2012 SUSB Annual
Datasets by Establishment Industry, June 2015. SUSB annual or static
data include number of firms, number of establishments, employment,
and annual payroll for most U.S. business establishments. The data
are tabulated by geographic area, industry, and employment size of
the enterprise. The industry classification is based on 2012 North
American Industry Classification System (NAICS) codes.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Smallest employment size category analysis
Estimated -----------------------------------------------------------------
Total number of Employment
NAICS code NAICS code-description number of small size (number Number of Estimated Average Cost as %
entities entities of firms receipts revenue per of revenue
employees) ($000) firm ($000)
--------------------------------------------------------------------------------------------------------------------------------------------------------
325412....................... Pharmaceutical Preparation 930 863 0-4 297 N/A N/A N/A
Manufacturing.
424210....................... Drugs and Druggists' Sundries 6,618 6,348 0-4 3,628 4,962,687 1,368 0.24
Merchant Wholesalers.
446110....................... Pharmacies and Drug Stores... 18,852 18,481 0-4 6,351 6,803,003 1,071 0.31
541940....................... Veterinary Services.......... 27,708 27,032 0-4 8,878 2,594,724 292 1.13
621111....................... Offices of Physicians (except 174,901 170,634 0-4 95,494 42,823,012 448 0.73
Mental Health Specialists).
621112....................... Offices of Physicians, Mental 10,876 10,611 0-4 8,977 2,279,458 254 1.30
Health Specialists.
621210....................... Offices of Dentists.......... 125,151 122,097 0-4 50,711 16,801,830 331 0.99
621320....................... Offices of Optometrists...... 19,731 19,250 0-4 10,913 2,946,400 270 1.22
621391....................... Offices of Podiatrists....... 8,122 7,924 0-4 5,284 1,529,293 289 1.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
In conclusion, this rulemaking will have an estimated cost of
$3,290 on an average of 11 small entities per year. The $3,290 is
estimated to represent 0.24%-1.30% of annual revenue for the smallest
of small entities, entities with 0-4 employees. Therefore, DEA
estimates this rulemaking will not have a significant economic impact
on a substantial number of small entities.
Unfunded Mandates Reform Act of 1995
DEA has determined that this action would not result in any Federal
mandate that may result ``in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more (adjusted for inflation) in any 1 year.'' \17\
Therefore, neither a Small Government Agency Plan nor any other action
is required under the UMRA.
---------------------------------------------------------------------------
\17\ 2 U.S.C. 1532(a).
---------------------------------------------------------------------------
Congressional Review Act
This rulemaking is not a ``major rule'' under the Congressional
Review Act, 5 U.S.C. 801 et seq.\18\ DEA has submitted a copy of this
final rule to both Houses of Congress and to the Comptroller General.
---------------------------------------------------------------------------
\18\ 5 U.S.C. 804(2)(A)-(C), 804(3); see 5 U.S.C. 551(4).
---------------------------------------------------------------------------
List of Subjects
21 CFR Part 1301
Administrative practice and procedure, Drug traffic control,
Exports, Imports, Security measures.
21 CFR Part 1309
Administrative practice and procedure, Drug traffic control,
Exports, Imports.
21 CFR Part 1316
Administrative practice and procedure, Authority delegations
(Government agencies), Drug traffic control, Research, Seizures, and
forfeitures.
For the reasons stated in the preamble, DEA amends 21 CFR parts
1301, 1309, and 1316 as follows:
PART 1301--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, AND
DISPENSERS OF CONTROLLED SUBSTANCES
0
1. The authority citation for part 1301 continues to read as follows:
Authority: 21 U.S.C. 821, 822, 823, 824, 831, 871(b), 875, 877,
886a, 951, 952, 956, 957, 958, 965 unless otherwise noted.
[[Page 68044]]
0
2. In Sec. 1301.37, revise paragraph (d) to read as follows:
Sec. 1301.37 Order to show cause.
* * * * *
(d)(1) When to File: Hearing Request. A party that wishes to
request a hearing in response to an order to show cause must file with
the Office of the Administrative Law Judges and serve on DEA such
request no later than 30 days following the date of receipt of the
order to show cause. Service of the request on DEA shall be
accomplished by sending it to the address, or email address, provided
in the order to show cause.
(2) When to File: Answer. A party requesting a hearing shall also
file with the Office of the Administrative Law Judges and serve on DEA
an answer to the order to show cause no later than 30 days following
the date of receipt of the order to show cause. A party shall also
serve its answer on DEA at the address, or the email address, provided
in the order to show cause. The presiding officer may, upon a showing
of good cause by the party, consider an answer that has been filed out
of time.
(3) Contents of Answer; Effect of Failure to Deny. For each factual
allegation in the order to show cause, the answer shall specifically
admit, deny, or state that the party does not have and is unable to
obtain sufficient information to admit or deny the allegation. When a
party intends in good faith to deny only a part of an allegation, the
party shall specify so much of it as is true and shall deny only the
remainder. A statement of a lack of information shall have the effect
of a denial. Any factual allegation not denied shall be deemed
admitted.
(4) Amendments. Prior to the issuance of the prehearing ruling, a
party may as a matter of right amend its answer one time. Subsequent to
the issuance of the prehearing ruling, a party may amend its answer
only with leave of the presiding officer. Leave shall be freely granted
when justice so requires.
* * * * *
0
3. Amend Sec. 1301.43, by revising the section heading and paragraphs
(c), (d), and (e), and by adding paragraph (f) to read as follows:
Sec. 1301.43 Request for hearing or appearance; waiver; default.
* * * * *
(c)(1) Any person entitled to a hearing pursuant to Sec. 1301.32
or 1301.34 through 36 who fails to file a timely request for a hearing
shall be deemed to have waived their right to a hearing and to be in
default, unless the registrant/applicant establishes good cause for
failing to file a timely hearing request. Any person who has failed to
timely request a hearing under paragraph (a) of this section may seek
to be excused from the default by filing a motion with the Office of
Administrative Law Judges establishing good cause to excuse the default
no later than 45 days after the date of receipt of the order to show
cause. Thereafter, any person who has failed to timely request a
hearing under paragraph (a) of this section and seeks to be excused
from the default shall file such motion with the Office of the
Administrator, which shall have exclusive authority to rule on the
motion.
(2) Any person who has requested a hearing pursuant to this section
but who fails to timely file an answer and who fails to demonstrate
good cause for failing to timely file an answer, shall be deemed to
have waived their right to a hearing and to be in default. Upon motion
of DEA, the presiding officer shall then enter an order terminating the
proceeding.
(3) In the event DEA fails to prosecute or a person who has
requested a hearing fails to plead (including by failing to file an
answer) or otherwise defend, said party shall be deemed to be in
default and the opposing party may move to terminate the proceeding.
Upon such motion, the presiding officer shall then enter an order
terminating the proceeding, absent a showing of good cause by the party
deemed to be in default. Upon termination of the proceeding by the
presiding officer, a party may seek relief only by filing a motion
establishing good cause to excuse its default with the Office of the
Administrator.
(d) If any person entitled to participate in a hearing pursuant to
this section fails to file a notice of appearance either as part of a
hearing request or separately, or if such person so files and fails to
appear at the hearing, such person shall be deemed to have waived their
opportunity to participate in the hearing, unless such person shows
good cause for such failure.
(e) A default, unless excused, shall be deemed to constitute a
waiver of the registrant's/applicant's right to a hearing and an
admission of the factual allegations of the order to show cause.
(f)(1) In the event that a registrant/applicant is deemed to be in
default pursuant to paragraph (c)(1) of this section, and has not
established good cause to be excused from the default, or the presiding
officer has issued an order terminating the proceeding pursuant to
paragraphs (c)(2) or (c)(3) of this section, DEA may then file a
request for final agency action with the Administrator, along with a
record to support its request. In such circumstances, the Administrator
may enter a default final order pursuant to Sec. 1316.67 of this
chapter.
(2) In the event that DEA is deemed to be in default and the
presiding officer has issued an order terminating the proceeding
pursuant to paragraph (c)(3) of this section, the presiding officer
shall transmit the record to the Administrator for his consideration no
later than five business days after the date of issuance of the order.
Upon termination of the proceeding by the presiding officer, DEA may
seek relief only by filing a motion with the Office of the
Administrator establishing good cause to excuse its default.
(3) A party held to be in default may move to set aside a default
final order issued by the Administrator by filing a motion no later
than 30 days from the date of issuance by the Administrator of a
default final order. Any such motion shall be granted only upon a
showing of good cause to excuse the default.
PART 1309--REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, IMPORTERS
AND EXPORTERS OF LIST I CHEMICALS
0
4. The authority citation for part 1309 continues to read as follows:
Authority: 21 U.S.C. 802, 821, 822, 823, 824, 830, 871(b), 875,
877, 886a, 952, 953, 957, 958.
0
5. In Sec. 1309.46, revise paragraph (d) to read as follows:
Sec. 1309.46 Order to Show Cause.
* * * * *
(d)(1) When to File: Hearing Request. A party that wishes to
request a hearing in response to an order to show cause must file with
the Office of the Administrative Law Judges and serve on DEA such
request no later than 30 days following the date of receipt of the
order to show cause. Service of the request on DEA shall be
accomplished by sending it to the address, or email address, provided
in the order to show cause.
(2) When to File: Answer. A party requesting a hearing shall also
file with the Office of the Administrative Law Judges and serve on DEA
an answer to the order to show cause no later than 30 days following
the date of receipt of the order to show cause. A party shall also
serve its answer on DEA at the address, or email address, provided in
the order to show cause. The presiding officer may, upon a showing of
good cause by the party, consider an answer that has been filed out of
time.
(3) Contents of Answer; Effect of Failure to Deny. For each factual
[[Page 68045]]
allegation in the order to show cause, the answer shall specifically
admit, deny, or state that the party does not have, and is unable to
obtain, sufficient information to admit or deny the allegation. When a
party intends in good faith to deny only a part of an allegation, the
party shall specify so much of it as is true and shall deny only the
remainder. A statement of a lack of information shall have the effect
of a denial. Any factual allegation not denied shall be deemed
admitted.
(4) Amendments. Prior to the issuance of the prehearing ruling, a
party may as a matter of right amend its answer one time. Subsequent to
the issuance of the prehearing ruling, a party may amend its answer
only with leave of the presiding officer. Leave shall be freely granted
when justice so requires.
* * * * *
0
6. Amend Sec. 1309.53, by revising the section heading and paragraphs
(b), (c), and (d), and adding paragraph (e) to read as follows:
Sec. 1309.53 Request for hearing or appearance; waiver; default.
* * * * *
(b)(1) Any person entitled to a hearing pursuant to Sec. 1309.42
or 1309.43 who fails to file a timely request for a hearing, shall be
deemed to have waived their right to a hearing and to be in default,
unless the registrant/applicant establishes good cause for failing to
file a timely hearing request. Any person who has failed to timely
request a hearing under paragraph (a) may seek to be excused from the
default by filing a motion with the Office of Administrative Law Judges
establishing good cause to excuse the default no later than 45 days
after the date of receipt of the order to show cause. Thereafter, any
person who has failed to timely request a hearing under paragraph (a)
and seeks to be excused from the default, shall file such motion with
the Office of the Administrator, which shall have exclusive authority
to rule on the motion.
(2) Any person who has requested a hearing pursuant to this section
but who fails to timely file an answer and who fails to demonstrate
good cause for failing to timely file an answer, shall be deemed to
have waived their right to a hearing and to be in default. Upon motion
of DEA, the presiding officer shall then enter an order terminating the
proceeding.
(3) In the event DEA fails to prosecute or a person who has
requested a hearing fails to plead (including by failing to file an
answer) or otherwise defend, said party shall be deemed to be in
default and the opposing party may move to terminate the proceeding.
Upon such motion, the presiding officer shall then enter an order
terminating the proceeding, absent a showing of good cause by the party
deemed to be in default. Upon termination of the proceeding by the
presiding officer, a party may seek relief only by filing a motion
establishing good cause to excuse its default with the Office of the
Administrator.
(c) If any person entitled to participate in a hearing pursuant to
this section fails to file a notice of appearance either as part of a
hearing request or separately, or if such person so files and fails to
appear at the hearing, such person shall be deemed to have waived their
opportunity to participate in the hearing, unless such person shows
good cause for such failure.
(d) A default, unless excused, shall be deemed to constitute a
waiver of the applicant's/registrant's right to a hearing and an
admission of the factual allegations of the order to show cause.
(e)(1) In the event that a registrant/applicant is deemed to be in
default pursuant to paragraph (b)(1) of this section and has not
established good cause to be excused from the default, or the presiding
officer has issued an order termination the proceeding pursuant to
paragraphs (b)(2) or (b)(3) of this section, DEA may then file a
request for final agency action with the Administrator, along with a
record to support its request. In such circumstances, the Administrator
may enter a default final order pursuant to Sec. 1316.67 of this
chapter.
(2) In the event that DEA is deemed to be in default and the
presiding officer has issued an order terminating the proceeding
pursuant to paragraph (b)(3) of this section, the presiding officer
shall transmit the record to the Administrator for his consideration no
later than five business days after the date of issuance of the order.
Upon termination of the proceeding by the presiding officer, DEA may
seek relief only by filing a motion with the Office of the
Administrator establishing good cause to excuse its default.
(3) A party held to be in default may move to set aside a default
final order issued by the Administrator by filing a motion no later
than 30 days from the date of issuance by the Administrator of a
default final order. Any such motion shall be granted only upon a
showing of good cause to excuse the default.
PART 1316--ADMINISTRATIVE FUNCTIONS, PRACTICES, AND PROCEDURES
0
7. The authority citation for part 1316, subpart D, continues to read
as follows:
Authority: 21 U.S.C. 811, 812, 871(b), 875, 958(d), 965.
0
8. Revise Sec. 1316.47 to read as follows:
Sec. 1316.47 Request for hearing; answer.
(a) Any person entitled to a hearing and desiring a hearing shall,
within the period permitted for filing, file a request for a hearing
that complies with the following format (see the Table of DEA Mailing
Addresses in Sec. 1321.01 of this chapter for the current mailing
address):
(Date)-----------------------------------------------------------------
Drug Enforcement Administration, Attn: Hearing Clerk/OALJ
(Mailing Address)------------------------------------------------------
Subject: Request for Hearing
Dear Sir:
The undersigned ___ (Name of the Person) hereby requests a hearing
in the matter of: ___ (Identification of the proceeding).
(State with particularity the interest of the person in the
proceeding.)
All notices to be sent pursuant to the proceeding should be
addressed to:
(Name)-----------------------------------------------------------------
(Street Address)-------------------------------------------------------
(City and State)-------------------------------------------------------
Respectfully yours,
(Signature of Person)--------------------------------------------------
(b) A party shall file an answer as required under Sec. Sec.
1301.37(d) or 1309.46(d) of this chapter, as applicable. The presiding
officer, upon request and a showing of good cause, may grant a
reasonable extension of the time allowed for filing the answer.
0
9. Revise the first sentence of Sec. 1316.49 to read as follows:
Sec. 1316.49 Waiver of hearing.
In proceedings other than those conducted under part 1301 or part
1309 of this chapter, any person entitled to a hearing may, within the
period permitted for filing a request for hearing or notice of
appearance, file with the Administrator a waiver of an opportunity for
a hearing, together with a written statement regarding his position on
the matters of fact and law involved in such hearing. * * *
Signing Authority
This document of the Drug Enforcement Administration was signed on
November 3, 2022, by Administrator Anne Milgram. That document with the
original signature and date is maintained by DEA. For administrative
[[Page 68046]]
purposes only, and in compliance with requirements of the Office of the
Federal Register, the undersigned DEA Federal Register Liaison Officer
has been authorized to sign and submit the document in electronic
format for publication, as an official document of DEA. This
administrative process in no way alters the legal effect of this
document upon publication in the Federal Register.
Scott Brinks,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2022-24425 Filed 11-10-22; 8:45 am]
BILLING CODE 4410-09-P
</pre></body>
</html>Indexed from Federal Register on November 14, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.