Notice2025-19054
David Payne, M.D.; Decision and Order
Primary source
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Published
September 30, 2025
Issuing agencies
Justice DepartmentDrug Enforcement Administration
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 46925-46927]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19054]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
David Payne, M.D.; Decision and Order
On November 20, 2024, the Drug Enforcement Administration (DEA or
Government) issued an Order to Show Cause (OSC) to David Payne, M.D.,
of Santa Ana, California (Registrant). Request for Final Agency Action
(RFAA), Exhibit (RFAAX) 1, at 1. The OSC proposed the revocation of
Registrant's DEA Certificate of Registration, No. BP3113963, alleging
that Registrant is ``currently without authority to prescribe,
administer, dispense, or otherwise handle controlled substances in the
State of California, the state in which [he is] registered with DEA''
and has been mandatorily excluded from participation in Medicare,
Medicaid, and all Federal health care programs pursuant to 42 U.S.C.
1320a-7(a). Id. at 2 (citing 21 U.S.C. 824(a)(3), (5)).\1\
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\1\ According to the OSC and Agency records, Registrant's
registration expired on March 31, 2025. RFAAX 1, at 1. The fact that
a registrant allows his registration to expire during the pendency
of an administrative enforcement proceeding does not impact the
Agency's jurisdiction or prerogative under the Controlled Substances
Act to adjudicate the OSC to finality. Jeffrey D. Olsen, M.D., 84 FR
68,474, 68,476-79 (2019).
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The OSC notified Registrant of his right to file a written request
for hearing, and that if he failed to file such a request, he would be
deemed to have waived his right to a hearing and be in default. Id.
(citing 21 CFR 1301.43). Here, Registrant did not request a hearing.
RFAA, at 1, 4.\2\ ``A default, unless excused, shall be deemed to
constitute a waiver of the registrant's right to a hearing and an
admission of the factual allegations of the [OSC].'' 21 CFR 1301.43(e).
Further, ``[i]n the event that a registrant . . . is deemed to be in
default . . . 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 [21 CFR] 1316.67.'' Id. 1301.43(f)(1). Here, the Government
has requested final agency action based on Registrant's default
pursuant to 21 CFR 1301.43(c), (f), and 1301.46. RFAA, at 4-5; see also
21 CFR 1316.67.\3\
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\2\ The Government's submissions in its RFAA, dated May 1, 2025,
include a declaration indicating that a DEA Diversion Investigator
(DI) personally served Registrant with the OSC on January 23, 2025.
RFAAX 2, at 1-2. The declaration claims that Registrant signed a DEA
Form 12, Receipt for Cash or Other Items, confirming receipt;
however, the Government failed to include the signed receipt with
the RFAA. Id. Furthermore, the declaration omits the statutory
language: ``. . . the foregoing is true and correct.'' 28 U.S.C.
1746(2). Nevertheless, the declaration begins with the statement,
``I, [DI], under penalty of perjury, declare and state the following
. . . ,'' and DI's claim of personally serving Registrant is
uncontroverted. RFAAX 2, at 1. Thus, the Agency finds that service
of the OSC on Registrant was adequate.
\3\ The RFAA states that ``the Administrator is authorized to
render the Agency's final order, without . . . making a finding of
fact in this matter.'' RFAA, at 4 (citing 21 CFR 1301.43(c), (f),
and 1301.46). However, 21 CFR 1316.67 requires that the
Administrator's final order ``set forth the final rule and findings
of fact and conclusions of law upon which the rule is based.'' See
JYA LLC d/b/a Webb's Square Pharmacy, 90 FR 31,244, 31,246 n.7
(2025).
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I. Loss of State Authority
A. Findings of Fact
The Agency finds that, in light of Registrant's default, the
factual allegations in the OSC are admitted. Accordingly, Registrant is
deemed to admit that on or about March 2, 2023, Registrant was
convicted of one felony
[[Page 46926]]
count of conspiracy to commit fraud and one felony count of use of
interstate facility in the aid of bribery, in violation of 18 U.S.C.
1343, 1346. RFAAX 1, at 2. Pursuant to this conviction, Registrant was
sentenced to serve 33 months in federal prison. Id. As a result, on
January 3, 2024, the State of California placed an automatic suspension
on Registrant's medical license. Id.
According to California's online records, of which the Agency takes
official notice, Registrant's California medical license remains
suspended.\4\ California DCA License Search, <a href="https://search.dca.ca.gov/">https://search.dca.ca.gov/</a>
(last visited date of signature of this Order). Accordingly, the Agency
finds substantial record evidence that Registrant is not licensed to
practice medicine in California, the state in which he is registered
with DEA.\5\
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\4\ Under the Administrative Procedure Act, an agency ``may take
official notice of facts at any stage in a proceeding--even in the
final decision.'' United States Department of Justice, Attorney
General's Manual on the Administrative Procedure Act 80 (1947) (Wm.
W. Gaunt & Sons, Inc., Reprint 1979).
\5\ Pursuant to 5 U.S.C. 556(e), ``[w]hen an agency decision
rests on official notice of a material fact not appearing in the
evidence in the record, a party is entitled, on timely request, to
an opportunity to show the contrary.'' The material fact here is
that Registrant, as of the date of this Order, is not licensed to
practice medicine in California. Accordingly, Registrant may dispute
the Agency's finding by filing a properly supported motion for
reconsideration of findings of fact within fifteen calendar days of
the date of this Order. Any such motion and response shall be filed
and served by email to the other party and to the Office of the
Administrator, Drug Enforcement Administration, at
<a href="/cdn-cgi/l/email-protection#385c5d5916595c5c5716594c4c574a565d414b785c5d59165f574e"><span class="__cf_email__" data-cfemail="4d29282c632c292922632c3939223f2328343e0d29282c632a223b">[email protected]</span></a>.
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B. Discussion
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized
to suspend or revoke a registration issued under 21 U.S.C. 823 ``upon a
finding that the registrant . . . has had his State license or
registration suspended . . . [or] revoked . . . by competent State
authority and is no longer authorized by State law to engage in the . .
. dispensing of controlled substances.''
With respect to a practitioner, DEA has also long held that the
possession of authority to dispense controlled substances under the
laws of the state in which a practitioner engages in professional
practice is a fundamental condition for obtaining and maintaining a
practitioner's registration. Gonzales v. Oregon, 546 U.S. 243, 270
(2006) (``The Attorney General can register a physician to dispense
controlled substances `if the applicant is authorized to dispense . . .
controlled substances under the laws of the State in which he
practices.' . . . The very definition of a `practitioner' eligible to
prescribe includes physicians `licensed, registered, or otherwise
permitted, by the United States or the jurisdiction in which he
practices' to dispense controlled substances. Sec. 802(21).''). The
Agency has applied these principles consistently. See, e.g., James L.
Hooper, M.D., 76 FR 71,371, 71,372 (2011), pet. for rev. denied, 481 F.
App'x 826 (4th Cir. 2012); Frederick Marsh Blanton, M.D., 43 FR 27,616,
27,617 (1978).\6\
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\6\ This rule derives from the text of two provisions of the
Controlled Substances Act (CSA). First, Congress defined the term
``practitioner'' to mean ``a physician . . . or other person
licensed, registered, or otherwise permitted, by . . . the
jurisdiction in which he practices . . . , to distribute, dispense,
. . . [or] administer . . . a controlled substance in the course of
professional practice.'' 21 U.S.C. 802(21). Second, in setting the
requirements for obtaining a practitioner's registration, Congress
directed that ``[t]he Attorney General shall register practitioners
. . . if the applicant is authorized to dispense . . . controlled
substances under the laws of the State in which he practices.'' 21
U.S.C. 823(g)(1). Because Congress has clearly mandated that a
practitioner possess state authority in order to be deemed a
practitioner under the CSA, DEA has held repeatedly that revocation
of a practitioner's registration is the appropriate sanction
whenever he is no longer authorized to dispense controlled
substances under the laws of the state in which he practices. See,
e.g., James L. Hooper, M.D., 76 FR at 71,371-72; Sheran Arden
Yeates, M.D., 71 FR 39,130, 39,131 (2006); Dominick A. Ricci, M.D.,
58 FR 51,104, 51,105 (1993); Bobby Watts, M.D., 53 FR 11,919, 11,920
(1988); Frederick Marsh Blanton, M.D., 43 FR at 27,617.
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According to California statute, ``dispense'' means ``to deliver a
controlled substance to an ultimate user or research subject by or
pursuant to the lawful order of a practitioner, including the
prescribing, furnishing, packaging, labeling, or compounding necessary
to prepare the substance for that delivery.'' Cal. Health & Safety Code
Sec. 11010 (2024). Further, a ``practitioner'' means a person
``licensed, registered, or otherwise permitted, to distribute,
dispense, conduct research with respect to, or administer, a controlled
substance in the course of professional practice or research in [the]
state.'' Id. Sec. 11026(c).
Here, the undisputed evidence in the record is that Registrant
currently lacks authority to practice medicine in California. As
discussed above, a physician must be a licensed practitioner to
dispense a controlled substance in California. Thus, because Registrant
currently lacks authority to practice medicine in California and,
therefore, is not currently authorized to handle controlled substances
in California, Registrant is not eligible to obtain or maintain a DEA
registration in California. Accordingly, the Agency will order that
Registrant's DEA registration in California be revoked.
II. Mandatory Exclusion From Federal Health Care Programs <SUP>7</SUP>
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\7\ Although the Agency may revoke Registrant's DEA registration
because he lacks state authority, the Agency considers Registrant's
mandatory exclusion from federal health care programs as a separate,
independent ground to revoke Registrant's DEA registration.
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A. Findings of Fact
Registrant is deemed to admit that as a result of Registrant's
criminal conviction, the U.S. Department of Health and Human Services,
Office of Inspector General (HHS/OIG), mandatorily excluded Registrant,
effective May 20, 2024, from participation in Medicare, Medicaid, and
all federal health care programs pursuant to 42 U.S.C. 1320a-7(a) for a
period of fourteen years. RFAAX 1, at 2.
B. Discussion
Pursuant to 21 U.S.C. 824(a)(5), the Attorney General is authorized
to suspend or revoke a registration upon finding that the registrant
``has been excluded (or directed to be excluded) from participation in
a program pursuant to section 1320a-7(a) of Title 42.'' The Agency
finds substantial record evidence that Registrant has been, and
remains, mandatorily excluded from federal health care programs
pursuant to 42 U.S.C. 1320a-7(a).\8\ Accordingly, the Agency finds that
substantial record evidence establishes the Government's prima facie
case for revocation of Registrant's registration under 21 U.S.C.
824(a)(5).
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\8\ The underlying conviction forming the basis for mandatory
exclusion from participation in federal health care programs need
not involve controlled substances to provide the grounds for
revocation or denial pursuant to Section 824(a)(5). Jeffrey Stein,
M.D., 84 FR 46968, 46971-72 (2019); see also Narciso Reyes, M.D., 83
FR 61678, 61681 (2018); KK Pharmacy, 64 FR 49507, 49510 (1999)
(collecting cases).
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C. Sanction
Where, as here, the Government has met its prima facie burden of
showing that Registrant's registration should be revoked, the burden
shifts to Registrant to show why he can be entrusted with a
registration. Morall v. Drug Enf't Admin., 412 F.3d. 165, 174 (D.C.
Cir. 2005); Jones Total Health Care Pharmacy, LLC v. Drug Enf't Admin.,
881 F.3d 823, 830 (11th Cir. 2018); Garrett Howard Smith, M.D., 83 FR
18882 (2018). The issue of trust is necessarily a fact-dependent
determination based on the circumstances presented by the individual
respondent. Jeffrey Stein, M.D., 84 FR 46968, 46972 (2019); see also
Jones Total Health Care Pharmacy, 881 F.3d at 833. Moreover, as past
performance is the best predictor of
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future performance, DEA Administrators have required that a registrant
who has committed acts inconsistent with the public interest must
accept responsibility for those acts and demonstrate that he will not
engage in future misconduct. Jones Total Health Care Pharmacy, 881 F.3d
at 833. A registrant's acceptance of responsibility must be
unequivocal. Id. at 830-31. In addition, a registrant's candor during
the investigation and hearing has been an important factor in
determining acceptance of responsibility and the appropriate sanction.
Id. Further, DEA Administrators have found that the egregiousness and
extent of the misconduct are significant factors in determining the
appropriate sanction. Id. at 834 & n.4. DEA Administrators have also
considered the need to deter similar acts by the respondent and by the
community of registrants. Jeffrey Stein, M.D., 84 FR at 46972-73.
Here, Registrant failed to request a hearing or answer the
allegations contained in the OSC and did not otherwise avail himself of
the opportunity to refute the Government's case. Thus, there is no
record evidence that Registrant takes responsibility, let alone
unequivocal responsibility, for the misconduct. Accordingly, he has not
convinced the Agency that his future controlled-substance-related
actions will comply with the CSA such that he can be entrusted with the
responsibilities of a registration.
Further, the interests of specific and general deterrence weigh in
favor of revocation. Registrant's conduct in this matter concerns the
CSA's strict requirements regarding registration, and, therefore, goes
to the heart of the CSA's ``closed regulatory system'' specifically
designed ``to conquer drug abuse and to control the legitimate and
illegitimate traffic in controlled substances.'' Gonzales v. Raich, 545
U.S. 1, 12-14 (2005). To permit Registrant to continue to maintain a
registration under these circumstances would send a dangerous message
that compliance with the law is not essential to maintaining a
registration.
In sum, Registrant has not offered any credible evidence on the
record to rebut the Government's prima facie case for revocation of his
registration, and Registrant has not demonstrated that he can be
entrusted with the responsibility of registration. Accordingly, the
Agency will order the revocation of Registrant's registration.
Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21
U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No.
BP3113963 issued to David Payne, M.D. Further, pursuant to 28 CFR
0.100(b) and the authority vested in me by 21 U.S.C. 823(g)(1), I
hereby deny any pending applications of David Payne, M.D., to renew or
modify this registration, as well as any other pending application of
David Payne, M.D., for additional registration in California. This
Order is effective October 30, 2025.
Signing Authority
This document of the Drug Enforcement Administration was signed on
September 25, 2025, by Administrator Terrance Cole. That document with
the original signature and date is maintained by DEA. For
administrative 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.
Heather Achbach,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2025-19054 Filed 9-29-25; 8:45 am]
BILLING CODE 4410-09-P
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